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“Change is happening quickly. And we exist to help companies harness it.”


Tim Petersen
Managing Director

INVESTMENT STRATEGY FEATURED CASE STUDIES
Accuri Cytometers - Better, Faster, Cheaper
 
accuriAccuri Cytometers was founded in 2005 with technology licensed from the University of Michigan. The company’s flagship product was the C6 flow cytometer, which was dramatically cheaper, smaller, and easier to operate than existing flow cytometers. Even at a price two-thirds less than that of competitors, C6 achieved industry-leading performance standards. Prior to Accuri’s launch of the C6, flow cytometry was unavailable to many researchers due to prohibitive cost and complexity of existing systems. The C6’s low cost and accessibility could open new markets for flow cytometry within many disciplines of microbiology, immunology, pharmaceutical development, and diagnostics.

Investment Thesis

Arboretum’s initial investment into Accuri took place in 2007, as the company was nearing its commercial launch. Arboretum’s partners were acquainted with the company’s founding CEO (Jennifer Baird) and CTO (Collin Rich), and had tracked the company’s progress for several years prior to investing. Accuri had several features that aligned with Arboretum’s investment strategy:
• Meaningful value proposition based on significant cost reduction
• Capital efficient operating plan with commercial-ready product
• Minimal regulatory and reimbursement risk
• Talented management team located in Ann Arbor

Arboretum’s Impact

Arboretum co-led the $5 million Series B financing with Baird Venture Partners, and joined the board of directors. Following the Series B, Accuri completed product development, launched the product in the US and Europe, and achieved rapid revenue growth. The company raised two additional rounds of capital, and Arboretum played an important role in identifying and recruiting a new Series D investor and venture debt provider. Arboretum was also instrumental in recruiting a new CEO, Jeff Williams, after Jeff successfully sold HandyLab (another Arboretum portfolio company) to BD. Under Jeff’s leadership, the company continued its growth trajectory and in early 2011 BD acquired the company for $205 million, more than 10 times the company’s annual revenue.


NxThera - Less Invasive, Lower Cost, Improved Outcomes
 
NxTheraNxThera has developed vapor ablation-based treatments for benign prostatic hyperplasia (BPH) and other men’s health conditions. BPH, commonly referred to as an enlarged prostate, is highly prevalent among older men, resulting in frequent and sometimes painful urination. NxThera’s goal is to offer a minimally invasive, office-based procedure called Rezum, for patients who otherwise would require prostate resection surgery. Benefits of the Rezum procedure include reduced side effects, post-procedural pain, and cost, while providing similar clinical outcomes to surgery.



Investment Thesis

Arboretum led NxThera’s 2008 Series A investment after being introduced to the opportunity by the company’s founder, Michael Hoey. NxThera was very early in development at the time of Arboretum’s investment, but several factors made for a compelling investment thesis:
• Experienced and knowledgeable founder
• Novel technology backed by a solid intellectual property position
• Significant cost reduction potential while maintaining an excellent clinical outcome
• Strong investor syndicate partner

Arboretum’s Impact

Arboretum recruited Aberdare Ventures to join the investor syndicate for the $3.25 million Series A financing. Following the investment, Arboretum played critical roles in recruiting the company’s independent Board Chairman, Andre de Bruin, the company’s CEO, Bob Paulson, and a strategic investor for the company’s Series B round. NxThera has made excellent progress since Arboretum’s investment, completing product design and development, multiple clinical studies, and securing FDA clearance in 2015. The company is now commercializing the Rezum system and is gaining significant traction in urology practices.


Advanced ICU Care - A New Model of Healthcare Delivery
 
Advanced ICU CareAdvanced ICU Care (AICU) is a healthcare service company providing remote, outsourced physician services to intensive care units (ICUs) at community hospitals across the United States. Studies have shown that ICUs staffed by fellowship trained physicians in critical care medicine (intensivists) reduce both patient mortality and length of stay in the ICU. The US has a serious shortage of intensivists, making it extremely difficult to recruit these physicians to be physically present at community hospitals. AICU solves this problem by providing “telemedicine” to these ICUs, as it remotely staffs community hospitals with intensivists and ICU nurses from its operations center in St. Louis.

Investment Thesis

Arboretum invested in AICU’s Series A round just as the company was signing its first hospital customers in 2006. Factors contributing to Arboretum’s investment decision included:
• Capital efficient business model
• Near-term commercial opportunity
• Market with no venture-backed competition
• Innovative care delivery platform enabling improved patient outcomes

Arboretum’s Impact

Arboretum has held a seat on the board of directors since the initial investment in 2006 and has played key roles in shaping the company’s operational strategy and courting new investors, including Versant Ventures who led the $5 million Series B. A focus on capital efficiency has enabled AICU’s growth to a $40+ million revenue business with less than $20 million invested.


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