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Financing

EndoGastric Solutions raises US$50m for GERD treatment

EsophyX technology
The company expects to use the new cash infusion for broad commercialisation of EsophyX, as well as for research and development to develop next-generation products that can also be useful in the TIF procedure.

EndoGastric Solutions has raised up to US$50 million to support its transoral incisionless fundoplication (TIF) EsophyX device to treat gastroesophageal reflux disease. (GERD). The company released a third-gen EsophyX device earlier in 2015. It was originally FDA cleared in 2007 and has already been used in more than 17,000 patients globally. The company expects to use the new cash infusion for broad commercialisation of EsophyX, as well as for research and development to develop next-generation products that can also be useful in the TIF procedure.

The new financing comes after the Esophyx device gained Current Procedural Terminology (CPT) code in October 2015 that is expected to make reimbursement for the procedure easier and will be in force at the start of 2016. Physician payment for CPT 43210 EGD esophagogastric fundoplasty has been given 12.43 relative value units (RVU); using the established Centers for Medicare and Medicaid (CMS) CY2016 conversion factor, 35.8279, this translates to a national unadjusted payment amount of US$445.34.

For hospital outpatient payment, CPT 43210 has been grouped to APC 5331 Complex GI Procedures. This has a national unadjusted payment amount of US$3,613.57. APCs are the federal government’s facility payments for outpatient Medicare services. Physicians and hospitals will be able to reference CPT Code 43210 EGD esophagogastric fundoplasty and APC 5331 Complex GI Procedures for TIF procedures.

Transoral Incisionless Fundoplication is performed without the need for external incisions through the skin and offers patients who require an anatomical repair another treatment option to correct the underlying cause of GERD. Studies show that for up to three years after the TIF procedure oesophageal inflammation (oesophagitis) is eliminated and most patients are able to stop using daily PPI medications to control symptoms. The EsophyX technology is used to reconstruct the gastroesophageal valve (GEV) and restore its function as a barrier, preventing stomach acids refluxing back into the oesophagus.

"Now that significant clinical data and reimbursement hurdles have been addressed, it is time to focus incremental resources into expanding access to millions of chronic GERD sufferers who could benefit from our TIF procedure," said ESG President and CEO, Skip Baldino.  “The APC classification assignment is also a significant step in the reimbursement process for the TIF procedure. We look forward to the increased economic value of the procedure for healthcare systems to provide chronic GERD patients this treatment option.”

This financing was led by CRG along with existing investors Advanced Technology Ventures, Canaan Partners, Chicago Growth Partners, Foundation Medical Partners, and Radius Ventures.

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