Mainstay Medical Raises $108 Million in Equity Financing

Mainstay Medical Holdings plc has raised $108 million to support its ReActiv8 commercialization efforts.

Co-led by new investors Ally Bridge Group and Sofinnova Partners through its Crossover Fund, the equity financing also involved a large, global medical device company. Mainstay Medical did not identify the medical device firm.  Key existing investors who participated in the financing include Sofinnova Partners (Capital Fund), KCK Group and Fountain Healthcare Partners. 

“A financing of this magnitude, supported by such a quality global investor group, is testament to the confidence in the commercial opportunity for ReActiv8. We are now strongly capitalized to execute on our corporate objectives in 2021 and beyond, including the launch of ReActiv8 in the U.S. market and acceleration of our commercialization efforts in Europe and Australia,” said Jason Hannon, CEO of Mainstay Medical.

The money will be used to support the company’s commercial launch of ReActiv8 in the United States, continued expansion in Europe and Australia, additional post-market clinical studies and research, and general operations.

“We are thrilled to co-lead such a strong syndicate of investors in fuelling Mainstay’s commercial acceleration to make its first-in-class neurostimulation technology available in the U.S. and more extensively worldwide,” said Cédric Moreau, a partner at Sofinnova Partners, who also joins Mainstay Medical’s Board of Directors.
 
ReActiv8 is an active implantable medical device designed to treat adults with intractable chronic low back pain associated with dysfunction of the lumbar multifidus muscle, a key stabilizing muscle of the low back, as evidenced by imaging or physiological testing in adults who have failed therapy, including pain medications and physical therapy, and are not candidates for spine surgery. ReActiv8 provides bilateral electrical stimulation of the L2 medial branch of the dorsal ramus nerve as it crosses the transverse process at L3. This nerve supplies the multifidus muscle to elicit contraction of the muscle which can lead to restoration of control over time, allowing the back to recover from CLBP.
 
ReActiv8 has a CE Mark allowing for commercialization in the European Economic Area and has been focused on building clinical validation in Germany in select centers ahead of wider commercial availability. ReActiv8 has also been admitted to the Australian Register of Therapeutic Goods (ARTG), enabling commercialization throughout Australia, and has been approved for inclusion on the Protheses List of reimbursed products in Australia, effective as of July 1, 2020. The Prostheses List identifies implantable devices eligible for reimbursement from all private health insurance funds in Australia. In the U.S., ReActiv8 is approved by the U.S. Food and Drug Administration.
 
“This is an exciting time for Mainstay as they bring to market a restorative therapeutic option for patients suffering from disabling chronic low back pain,” said Charles Chon, partner and managing director at Ally Bridge Group, who also joins the Mainstay Medical Board of Directors. “We commend the company on all the progress it has achieved to-date and look forward to supporting it going forward.”
 
One of the root causes of CLBP is impaired control by the nervous system of the muscles that dynamically stabilize the spine. ReActiv8 is designed to electrically stimulate the nerves responsible for contracting these muscles to improve dynamic spine stability, allowing for improvement in CLBP and its disabling effects. 
 
People with CLBP usually have a greatly reduced quality of life and score significantly higher on scales for pain, disability, depression, anxiety and sleep disorders. Their pain and disability can persist despite the best available medical treatments, and only a small percentage of cases result from an identified pathological condition or anatomical defect that may be correctable with spine surgery. Their ability to work or be productive is seriously affected by the condition and the resulting days lost from work, disability benefits and health resource utilization put a significant burden on individuals, families, communities, industry and governments.