Pathway Medical raises $24.5 million for plaque device

Pathway Medical Technologies said Tuesday that it has raised $24.5 million in venture capital from existing investors — money geared to help the firm launch its first commercial product later this year.

The latest cash influx brings the total raised by the Kirkland-based medical-device maker to about $80 million, Chief Executive Tom Clement said. The company's newly padded war chest should last it until revenue starts coming in from sales of its system for clearing out arterial plaque.

"We shouldn't need another round of investment in the next year and a half, if that," Clement said.

Pathway seeks to market a device to treat peripheral-arterial disease by sending a catheter with rotating blades up an artery to bore through accumulated fat and vacuum the debris away.

The device, under review by the U.S. Food and Drug Administration, is to be used in patients' legs to improve circulation and prevent amputations. It could be an alternative to surgery and other methods, which include widening blood vessels and costly laser catheters that burn plaque away.

Pathway's main rival is Fox Hollow, of Redwood City, Calif., which sells the SilverHawk, a catheter to remove plaque from peripheral arteries.

Boston Scientific markets a similar product, called the Rotablator, for the treatment of coronary arterial disease. That device was developed by Redmond-based Heart Technology, which the Massachusetts company later acquired.

The fresh infusion of cash is the latest act in Pathway's revival. The company briefly shut down in late 2004 when it ran out of money. But Clement, a Heart Technology veteran who helped develop the Rotablator, persuaded investors to give the company a new start.

Confident that the market will embrace Pathway's product, the venture backers behind the previous financings — HLM Venture Partners, Latterell Venture Partners, Oxford Bioscience Partners, Forbion Capital Partners, Giza Venture Capital and other individual investors — didn't want anybody else admitted to the latest funding round, Clement said.

"They asked that we did the round internally," he said.

Pathway has some 100 employees. After receiving FDA approval, expected in the third quarter, the company intends to expand as it creates a sales and marketing team, but Clement declined to say how many jobs would be created.

Local medical-device companies have been enjoying venture capital's favor lately. Last month, Redmond-based Spiration raised $18.5 million from existing investors to fund the launch of a catheter-like technology to treat severe emphysema.

Ángel González: 206-515-5644 or agonzalez@seattletimes.com

Material from The Seattle Times archives is included in this story.

Information in this article, originally published April 16, 2008, was corrected June 30, 2008. A previous version of this story incorrectly stated that Pathway Medical Technologies' chief executive is Tom Clements. His name was misspelled.