Heart device firm attracts $2m in VC funding

VentureAxess Capital, a VC group with offices in Sydney and Perth, is to invest AUD$2 million over the next 12 months into Heart Assist Technologies, a medical device company that had its origins in the now defunct CRC for Cardiac Technology.

The company, which has been incorporated for around four years, is developing a heart pump patch device that directly compresses the heart chambers. The device does not involve connection to the bloodstream, and can be used to pump either or both of the two heart ventricles, providing assistance to a weakened heart, or even turned off if it is no longer needed.

According to VentureAxess chairman and Heart Assist director Geoff Mullins, who has been involved with the company for several years, the device should be ready for clinical trials in two years, once animal studies have been completed. But research over the past 10 years at the Royal North Shore Hospital in Sydney where the technology originated has already demonstrated that the device can be implanted swiftly. Still to be developed is an implantable pump -- the current system relies on an external pump system.

The Heart Assist device is likely to be used for acute salvage in patients who have suffered severe heart failure, as well as using it as a bridging device for patients awaiting heart transplants, said Mullins.

Heart failure rates in the developed world increase by about 15 per cent per annum.Heart Assist has estimated that the device could potentially access a little over 4 per cent of the market, which translates to a revenue forecast of up to AUD$1.25 billion. "The size, in terms of the revenue and market, is so big you blink a little bit," Mullins said.

VentureAxess Capital, a pooled development fund which is part of the VentureAxess group, is tentatively planning to float Heart Assist on the Australian Stock Exchange in the first half of this year, along with three others of its 11 investee companies, which span a variety of sectors including aquaculture and information technology and communications.

"Heart Assist Technologies is the first medical devices company that the fund has invested in but within the organisation we are nurturing several other biomedical organisations," said Mullins.

Unusually for a venture capital group, VentureAxess Capital looks for a relatively short timeframe of three years for companies to deliver liquidity to the investment. The fund invests in companies that are ready for their first substantial investment. Parent company VentureAxess provides advice and assistance to companies to help get them to this stage.

Mullins said he hoped Heart Assist would become a standout success in the model of Ventracor's (ASX:VHL) VentrAssist device, currently in clinical trials. "The Heart Assist device is a shining example of emerging business and Australia's leadership in medical devices. We see this in the same light as the successes of Cochlear, ResMed and Ventracor, and it is indicative of the sort of venture our group is seeking to invest in," he said.

VentureAxess Capital is also expected to list in the first half of this year, Mullins said.