Venture capitalist Mark Carnegie leads $65m wireless pacemaker funding

Australian Financial Review
by Ben Potter
14 Nov 2017

Venture capitalist Mark Carnegie was alerted years ago by a science adviser to a Californian developer of a wireless heart pacemaker that could save the lives of some patients, but he baulked at the terms.

Every month the adviser would call Mr Carnegie and say, "I have got another CRT patient who is going to die because he is not responding to treatment. When are you going to do something about this?" Mr Carnegie told The Australian Financial Review.

Now MH Carnegie & Co, Mr Carnegie's venture capital fund, and Chris Nave's Brandon Capital have led a $US50 million ($65 million) capital raising to fund clinical trials of EBR Systems' WiSE CRT pacemaker for 350 patients in the US, Australia and Europe.

The device is a wireless cardiac resynchronisation treatment (CRT) pacemaker for heart patients with left and right chambers beating out of sync, about 30 per cent of whom fail to respond to treatment by a conventional wired CRT pacemaker.

The WiSE-CRT pacemaker successfully treated 94 per cent of a group of 36 patients that had failed to respond to conventional treatment in a European trial, and is already approved for sale in Europe but not yet in the US or Australia.

MH Carnegie, Brandon Capital and their Australian co-investors contributed $US29 million of the new capital and will emerge with just under half of EBR Systems' capital, in a deal that upends the conventional "bleak" narrative of Australian tech companies selling out early for little reward to overseas owners.

Bringing tech to Oz

In this case Australia is taking advantage of its competitive advantage in running clinical trials for medical devices, global leadership in cardiac research and research and development tax breaks to bring a promising technology that is towards the end of a 17-year development cycle here.

"It's not very often you get an opportunity that is addressing such a huge market need and that is really at the end of its development program," Dr Nave said.

"Australia has been great at exporting technology early for little benefit."

Mr Carnegie added: "This is two Australian VC companies bringing technology to Australia that's going to save people's lives."

At least 100 of the 350 trial patients will be recruited for the Australian trials, which will be led by Prash Sanders, a world expert on heart rhythm management and who sits on the steering committee of the global trial. The goal is for the WiSE-CRT pacemaker to be approved for use in the US and Australia in 2020.

Some cardiac patients suffer decreased blood flow to the body because the left and right ventricles – or chambers – of the heart do not beat in harmony, dramatically reducing the efficiency of the body's vital pump.

Conventional wired CRT relies on wires to deliver "pacing pulses" to get the left and right ventricles of a heart suffering an attack beating in harmony again. But the wire can't be inserted inside the left ventricle for fear of causing clots and strokes, so it has to be embedded in a vein in the wall of the heart.

This shortcoming is the main cause of the 30 per cent failure rate of conventional wired CRT pacemakers, which means that about $US1.3 billion of the $US3.8 billion allocated from scarce health care funds spent annually on these patients is wasted.

Wireless CRT overcomes the problem by sending a wireless pulse from a batterypowered device embedded in the skin of the chest to a tiny receiver electrode – about the size of a large rice grain – embedded in the left ventricle. The receiver then transmits electrical pulses directly to the left ventricle.

Brandon Capital manages the federal government-backed $480 million Medical Research Commercialisation Fund. MH Carnegie manages more than $500 million and specialises in medical devices.