Minnesota’s Apnex Medical gains $14M investment for sleep apnea device

Apnex's implantable neurostimulator

ST. PAUL, Minnesota — Apnex Medical Inc. has raised $14 million in funding for an implantable device that treats sleep apnea, according to a regulatory filing.

The three-year-old company has sold $14.05 million of a $19.05 million offering, which represents at least the second significant fund-raise for Apnex. In 2006, it raised $16.1 million in a series A round.

The company is developing an implantable neurostimulation device that activates muscles in a patient’s upper airway to prevent the tongue from blocking the airway during sleep. The device turns on when a patient is asleep and turns off when the patient is awake.

Apnex Chief Executive Bob Atkinson said the company will use its latest funding to complete enrollment of clinical trials in Australia and the United States by the middle of 2010. Apnex also plans to complete a “next-generation” iteration of its device that will be smaller and easier to use, he said. Atkinson projects the device to be on the market outside the U.S. in 2011 and it could be available in the U.S. as early as the following year.

Apnex has no revenue, according to the filing.

Apnex is a spin-off company from Prospex Medical Inc., a device incubator founded in 2005. Another spin-off, BridgePoint Medical Inc., recently received European regulatory clearance for a guide wire placement device used to treat patients with completely blocked arteries.

Apnex isn’t the only Minnesota company that’s recently attracted funding and is developing a neurostimulator to treat sleep apnea. Inspire Medical Systems Inc., a Medtronic spin-off, said in June that it had raised $17 million in venture capital to fund clinical trials.

San Diego’s ImThera Medical is also developing a neurostimulation device to treat sleep apnea.