Across the various surgical disciplines in the medical field, I have to say, the one that captures my imagination and guides my curiosity is neurosurgery. There is just something about the concept of the mind, the physical construct of the brain and the psychology of it all that I find fascinating. I follow this industry with great interest and one of the players that has been on my radar recently just picked up $30 million in a Series B infusion from The Vertical Group, with Birchview Capital leading the round, and with BDC Capital topping up on their initial investment. The company is in the commercial-stage, entirely VC funded and has raised more than $60 million.
Founded at the University of Manitoba, Monteris Medical Corp is now located in Plymouth, MN, making it a CAN-AM company. It has developed a medical laser system, dubbed the NeuroBlate System, that is designed to be used in surgical ablation of lesions in the brain. Among the foreign tissues that can be targeted are primary tumors, and some of the more invasive metastatic tumors. The NeuroBlate System is coupled with an MRI and provides pin-point accuracy in penetration and reaching the location of the tumor. The penetration is physically conducted by a highly skilled and precise robotic arm that is part of the development by Monteris.
Perspective
This is certainly not a product that will appeal to the market at large. You’re not going to see it on shelves at the nearest WalMart, so we shouldn’t put on our retail thinking caps when analyzing Monteris. This is a medical device company, and as such it needs to be marketed to a whole different industry - one that is sophisticated and specific in their needs and requirements (predominantly government health agencies and private hospitals).
The development of NeuroBlate will allow neurosurgeons to conduct procedures, that are usually invasive, in a way that significantly reduces the risk of surgery. The NeuroBlate essentially allows the neurosurgeon to treat the lesion on the brain without removing a large area of the cranium. The fact that only smaller entrances are made significantly reduces the chances of infection and secondary issues after the tumor is zapped (yes, ‘zapped’ is a medical term :).
Monteris’ Market
The global market, when it comes to neurosurgical products, is approximately $3 billion. Of course, the market varies across economies, but its growth has been consistent over time; not because more patients are developing neurosurgical issues, rather the diagnosis methods have been improving and this has resulted in steady growth of surgical cases. With that said, innovation in neurosurgery has lagged in comparison to other organs over the last three decades. This makes Monteris’ technology very timely… and overdue for the industry.
The market is also divided disproportionately between first world countries and the rest of the world. This is a significant factor in the success of companies like Monteris. Available funding is usually found in advanced economies.
Risks
Companies like Monteris thrive only when they have a strong R&D division. It remains to be seen how diverse and wide-reaching the company’s ambitions are in that respect. So my questions is, if the NeuroBlate proves to be widely adopted, does Monteris plan to do more?
For Monteris to go the distance with its NeuroBlate I think it has to open the gates to new products, borne out of credible development from similar or complementary devices.
The Future of Brain Surgery
I like this company because of the advances it has made in this critical area of invasive surgery and for the fact that it addresses a very real problem in the discipline of neurosurgery. I also like this company because most of the developmental risk is behind it as the product is cleared by the FDA and is able to necrotize as well as ablate, and if necessary, coagulate soft tissue. That makes the machine something that is highly needed in many neurology departments across the world.
With this device, it is not entirely necessary, in my view, that the neurosurgeon cleared to operate the machine is sitting in the same room as the patient - or in the same state for that matter. Because everything is controlled by a powerful computer, hitched to a robotic arm and an MRI machine, it might be possible for it to be controlled remotely by a doctor a thousand miles away. I like the futuristic aspect of it. Talk about doctors without borders!
Corporate Structure
The company is supported by three very competent early stage funding firms, two of which I’m very familiar with. BDC Capital has over a billion dollars under management and has significant industry experience. The BDC will have a position on the board for Monteris as well. The same applies to The Vertical Group, who have been involved with the medical technology industry for almost half a century. They will also be represented on the board.
While not a sexy, retail story, this company has revolutionary potential in the medical industry; and that serves a far greater purpose than some app or mobile device. Additionally, innovation in the neurosurgery space has been almost non-existent in the last 30 years, particularly in comparison to other organs in the body. So this company, and the innovation it hopes to bring to market, is due. While its story will likely remain relatively unknown throughout its life as a private company, you’ll want to pay attention to Monteris Medical Corp., especially if it goes public.
