Finland's Nexstim gains €8m investment for brain diagnostics technology

13 September 2007

Nexstim Ltd, a medical device company developing a revolutionary brain diagnostics and therapy technology, has successfully completed a €8 million private placement. New investor HealthCap led the round, which also included new investors LSP (Life Sciences Partners) and Finnish Industry Investment Ltd. Sitra, an existing investor, also participated in the round.

The significant new equity investment will allow Nexstim to accelerate its international sales and marketing activities, and expand its customer base from mainly research institutions to the much larger market for clinical applications.

The financing will also enable the completion of a benchmark clinical trial necessary to gain US Food and Drug Administration (FDA) marketing clearance and allow Nexstim to begin commercial sales in the strategically important US market.

Jukka-Pekka Särkkä, Managing Director of Nexstim commented, "It is gratifying to note that leading European life science venture capital funds recognize the value of financing global sales and marketing strategies which are so vital for realizing the true potential of innovations in medical technology."

Nexstim is pioneering navigated brain stimulation (NBS) for brain diagnostics and therapy. NBS combines transcranial magnetic stimulation (TMS) with stereotactic navigation and ECG/EMG measurement.

In NBS, an operator places a small, hand-held coil over the patient's head and delivers a series of short magnetic pulses which briefly activate minute areas of cortex, the upper layer of the brain. EEG signals generated in the brain, or EMG signals from the patient's limbs, are detected by high resolution amplifiers, and a powerful computer analyzes the data in real-time.

A standard MR image of the brain structure aligned to the contours of the patient's head allows a technique called stereotactic navigation. From the system monitor the operator sees the exact location of the magnetic pulses relative to the cortex and can thus freely, and precisely, guide the coil over the surface of the brain, much like a car driver using a GPS navigation system. NBS is completely non-invasive, painless and has been shown to be safe over decades of research.

NBS systems have extensive applications in functional brain imaging, including accurate mapping of critical motor and sensory areas of the cortex prior to neurosurgery, evaluating brain damage following stroke, and testing spinal cord integrity. Nexstim believes that the ability of NBS to precisely and reproducibly target TMS within the brain will, in the near future, allow the development of effective therapies for a wide range of brain injuries and diseases, including stroke rehabilitation, major depression and tinnitus.

"Nexstim has developed a technology that has the potential to capture a unique position within the central nervous system (CNS) field. We believe that medical devices, such as Nexstim's NBS, will play an increasing role in the treatment and management of CNS diseases," said Dr. Johan Christenson, MD, PhD, Partner at HealthCap.

Dr René Kuijten, MD, PhD, MBA, General Partner at LSP commented, "We are very excited to become a shareholder in this company. Nexstim´s technology is addressing a clear unmet medical need and I look forward to playing a role in establishing this technology in clinical practice."

"Sitra is extremely pleased with Nexstim´s successful closing of this round of financing. This is the first time that leading European life sciences venture capital funds, HealthCap and LSP have invested together in a Finnish company. Sitra has had a significant role as an initial investor in the companys earlier financing rounds. The substantial size of this round ensures that the company has an excellent chance of succeeding in becoming a leading international player in its field," noted Juha Vapaavuori, Director, Sitra and member of the board of directors of Nexstim.

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