Phagenesis, a pioneering UK company which has developed a revolutionary neurostimulation system to treat swallowing dysfunction, has closed a $42M Series D financing all equity investment round.
The combined European and United States investment syndicate was led by EQT Life Sciences, and co-led by Sectoral, with new investors British Patient Capital, Northern Gritstone and Aphelion Capital also joining the round. This substantial investment reflects their recognition of the transformative potential of Phagenesis’ cuttng-edge therapy, Phagenyx.
The Phagenyx neurostimulation system targets and restores the neurological components of swallowing coordination and control that are disrupted due to brain injury (including stroke) or because of prolonged mechanical ventilation. Patients with swallowing dysfunction (dysphagia) are unable to safely or effectively eat, drink, or manage their own saliva. Dysphagia can often lead to life threatening complications such as pneumonia and is also associated with substantially higher healthcare costs.
With the recent approval of Phagenyx by the FDA in the United States, the investment is primarily intended to support commercialisation in the United States and deepen penetration in Europe. It will also support clinical trials, regulatory activities, as well as research and development of pipeline products.
“This investment from a highly experienced international investor syndicate will accelerate access to and adoption of our therapy,” said Reinhard Krickl, CEO of Phagenesis. “We will invest in exceptional talent to scale up our customer outreach and to support passionate clinicians who want to bring our therapy to those who need it. Our novel and proven therapy can help the millions of patients every year who suffer from swallowing disorders.”
Drew Burdon, Partner at EQT Life Sciences, said: “Dysphagia is a severe medical condition that affects countless patients in hospital. It can increase hospital length of stay, the risk of complications, and lengthens recovery time.
“The Phagenyx System demonstrates significant reductions in hospital length of stay, with a corresponding and substantial reduction in healthcare costs, as evidenced by the Company’s strong portfolio of high-quality clinical studies”
He continues, “This is strongly aligned with EQT’s Health Economics strategy of transforming cutting-edge scientific innovation into impactful and cost-effective healthcare solutions. We‘re excited to support the next phase of Phagenesis’ journey.”
Michael Sjostrom , Co-Founder and Partner at Sectoral Asset Management, added, “Dysphagia associated complications are known to substantially increase mortality, but there is still a lack of adequate treatment modalities. That’s why Phagenyx is an amazing innovation with the potential to change care paradigms”. He adds:
“It allows treatment of dysphagia very early in the care pathway, which prevents later complications. Our investment will support the Phagenesis team to make Phagenyx more broadly available, specifically in the United States.”
Randomised controlled trials have demonstrated clinically significant improvements, which support faster recovery of patients and reduced length of hospital stay.
As part of this transaction, Drew Burdon, Michael Sjostrom and Mark Wyatt will join the Phagenesis’ Board of Directors.
Phagenesis has just showcased its product and the latest US data at ISC (International Stroke Conference) from Feb. 7-9 in Phoenix, Arizona.
