Acorn Cardiovascular liquidates; former president leads new venture

Late last year, Acorn Cardiovascular, a New Brighton, Minnesota company, liquidated its assets and formally […]

Late last year, Acorn Cardiovascular, a New Brighton, Minnesota company, liquidated its assets and formally shut down. It had  capitulated to the U.S. Food and Drug Administration from which it could not win a pre-market application approval for a mesh device to support the heart. Since 2002, the company had raised $100 million.

Steve Anderson, Acorn’s former president, will not identify the cardiovascular company that bought Acorn’s intellectual property, or how much it sold for. But Anderson is already on to a new medical device venture.

This time, though, the new company — Preceptis — is eschewing the PMA path for a lower risk device.

Anderson, who is Preceptis’ CEO,  said it is developing a solution that will allow ear, nose and throat specialists to perform ear tube surgeries safely on children right in their offices.

“Generally, kids that are 12 and older can withstand procedures in the office,” Anderson said.

He estimated that 1.3 million to 1.5 million ear tube surgeries are performed in the operating room every year on children.

“What we are doing is that we are trying to come up with solutions for moving those procedures out of the OR so that the kids do not have to undergo general anesthesia,” Anderson said in a phone interview. “We have come up with a way of safely delivering ear tubes right in the ENT’s office.”

While children’s safety is the No. 1 focus, an “added bonus” and one that will not go unnoticed these days, is the potential cost savings the device promises.

By transferring those surgeries out of hospitals and ambulatory surgical centers to the ENT’s office, health insurers can save 70 percent per procedure, Anderson said. Preceptis is also looking into moving those surgeries from the OR to the sedation units of hospitals.

Anderson and two co-founders have already raised some seed capital (he won’t say how much) that have funded prototypes and cadaver studies, but now more capital is required. Cognizant that raising capital is an uphill climb these days, Anderson is pursuing a dual capital model as he courts venture capitalists.

Based on market appetite, he wants to raise a minimum of $5 million and if he gets good traction, raise up to a maximum of $10 million.

“Both models will complete all pre-commercial tasks,” Anderson said. “The higher model will initiate a limited commercial release.”

He hopes to complete fundraising sometime this year.  So far, Anderson hasn’t seen any evidence of VC’s being gun-shy about Preceptis given the failure at Acorn Cardiovascular, which went from raising $100 million to insolvency.

“In fact, every large venture capital firm was having the same type of issues with the FDA with their Class III portfolio companies (as Acorn Cardiovascular),” Anderson countered. “We have had a lot of interest from different investment entities (regarding Preceptis).”

Currently operating as a virtual company, Preceptis will be based somewhere in the Twin Cities metro area in the future.

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