Laser dermatology focused Ra Medical Systems has filed to raise $86 million in an IPO on the New York Stock Exchange.
The fundraising will enable Ra to expand its direct sales force and increase promotion of its minimally-invasive, laser-based treatment of vascular diseases.
Ra is competing against mechanical methods for treating vascular blockages that are sold by companies including Medtronic and Boston Scientific.
Endovascular surgical approaches such as angioplasty, stenting and atherectomy have significantly improved the treatment of vascular blockages in patients with peripheral artery disease. The details of these endovascular surgical procedures vary but each offers a catheter-based way to mitigate the threat posed by plaque in blood vessels.
While these procedures are associated with fewer complications than bypass surgery, they have shortcomings. Notably, the vessels of a significant proportion of patients narrow in the years after endovascular surgery, a process known as restenosis. Around one-third of patients treated with drug-eluting stents experience restenosis within 10 years, according to a 2017 analysis of data from the Veterans Affairs healthcare system.
Ra thinks it can improve on mechanical methods for removing blockages, vascular stents and other products sold by industry giants such as Abbott, Boston Scientific and Medtronic. Ra’s confidence is based on the novel mechanism of action of its DABRA device.
DABRA consists of an ultraviolet laser and a catheter. The laser photochemically ablates calcium, thrombus, atheroma and other causes of vascular blockages by breaking the bonds that bind the materials. This chemical, not mechanical, breakdown is designed to minimize the size of the debris left behind after the procedure. A single-arm pivotal trial of 64 patients associated DABRA with a 94% success rate and no serious adverse events.
Ra gained 510(k) clearance from the FDA in May 2017 and spent the next 12 months building up its sales, production and training operations. That done, Ra is ready to step up its commercialization efforts, starting with a push to get DABRA into outpatient based laboratories. Beyond that, Ra plans to target the hospital catheterization laboratory market.
These activities will cost Ra significant sums of money. To succeed, Ra will need to persuade physicians its product has advantages over incumbent devices and get them to undergo training in the nuances of its product. At the same time, other companies with far larger marketing budgets will be telling physicians to stick with existing endovascular methods.
Ra acknowledges the difficulty of the task facing it in the IPO filing but thinks its device will give it an edge. If Ra can raise funding from public investors, it will get a chance to learn whether the perceived edge translates into commercial success.