St. Jude Medical Signs Equity Investment and Option to Purchase Agreement with CardioMEMS

In September 2010, St. Jude Medical (NYSE: STJ) announced an agreement to make a $60 million equity investment in CardioMEMS, an Arboretum I portfolio company.  The agreement provided St. Jude Medical with an immediate 19% ownership in CardioMEMS and the exclusive option to acquire the company for an additional payment of $375 million upon successful completion of commercial milestones.

CardioMEMS is a medical device company that has developed and is commercializing wireless sensing and communication technology.  CardioMEMS’ wireless sensors can be placed directly in the pulmonary artery to assess cardiac performance by measuring pulmonary artery pressure (PAP).  PAP is a commonly-used measurement to assess heart failure patients in hospitals.  The implant procedure is fast, simple and can be performed by any physician who does right-heart catheterizations. The sensor transmits real-time data via an external monitor from the patient’s home to the clinic for review. With this vital information, physicians can more effectively direct treatments to keep patients out of the hospital.

CardioMEMS recently completed its CHAMPION randomized clinical trial and found a statistically significant 30 percent reduction in the rate of heart failure related hospitalization at six months and a 38 percent reduction at one year.  The results of the study were highlighted recently at the 2010 Medical Innovation Summit at Cleveland Clinic.  Cleveland Clinic named “Telehealth Monitoring for Individuals with Heart Failure/Implanted Wireless Cardiac Device for Monitoring Heart Failure” one of The Top 10 Medical Innovations for 2011.  This prestigious list is published annually by Cleveland Clinic and selects technologies deemed to be “game changing” and as potentially having the greatest impact on healthcare over the next year.

Arboretum Ventures Leads Two New Investments

In July 2010, Arboretum Ventures led the Series A financing of Life Magnetics, a University of Michigan spin-out.  Life Magnetics was founded by Brandon McNaughton, Ph.D. and is focused on a diagnostic platform technology.  The first product will be an in vitro diagnostic device and disposable card assay for rapid detection of bacterial infections and antibiotic susceptibility testing. Jan Garfinkle and George Dunbar joined the company’s Board of Directors upon closing of the financing.

In October 2010, Arboretum Ventures co-led the $10 million Series B financing of PathCentral.  PathCentral is a pathology services company based in Irvine, California.  The company provides an integrated software and services platform to community pathologists, allowing them to increase revenue and reduce operating costs. The financing will be used to support the company’s growth.  Okapi Venture Capital and Baird Venture Partners co-led the round with Arboretum.  Tim Petersen joined the company’s Board of Directors upon closing of the financing.