Medtronic, GlaxoSmithKline team up in $40M equity deal for back-pain startup

Medtronic has joined in a $40 million round of equity financing for Saluda Medical, a med-tech company with operations in the Twin Cities.

Saluda is developing an implantable medical device to treat chronic back pain and other conditions using electrical pulses. The Australia-based company expanded into the United States two years ago, starting a seven-employee clinical research team in Bloomington, Minn.

The company plans to expand its Twin Cities operation following the round of funding, Saluda Medical Senior Vice President Dan Brounstein said in an email. “It is the place to start a medical device company and we are dedicated to continued growth.”

Action Potential Venture Capital, a venture arm of GlaxoSmithKline, led the round of funding. Medtronic was a return investor.

Saluda pans to put its recent round of funding, which totaled $53 million in Australian dollars, toward a U.S. clinical trial. It is also seeking regulatory approvals to sell its product, called the Evoke Spinal Cord Stimulator, in Europe and Australia.

Medtronic and other large medical-device makers already sell neurostimulators that treat pain and other conditions. Saluda’s device aims to distinguish itself from competing products by acting as a closed-loop system, adjusting the amount of electricity it delivers based on how a patient’s neural tissue responds to stimulation. Other devices require that a patient manually adjust stimulation levels.

Research and development of technology that can sense and respond to brain activity has been a longtime focus for Medtronic. The company’s efforts include building a so-called “brain radio.” Meanwhile, California-based NeruoPace Inc. makes a closed-loop stimulator that treats epilepsy.

Dublin-based Medtronic’s operational headquarters are in Fridley.

SOURCE Bizjournals