ALung poised for sales in Germany
By Alex Nixon
Published: Friday, Feb. 3, 2012
ALung Technologies Inc. closed on a $10 million fundraising round last week as it prepares to begin selling its artificial lung in Germany this year, the company said on Thursday.
The South Side medical-device company has raised $40 million from investors since its founding in 1997. Alung, though, expects to need at least $25 million more before it's ready to start selling in the United States, said CEO Peter DeComo.
"It's become much, much more expensive to get a product fully approved" by the European Union and the U.S. Food and Drug Administration, he said.
Not only is approval more expensive. It's difficult convincing investors to fork over millions of dollars to a start-up after the financial crisis of 2008 and resulting recession, DeComo said.
The latest $10 million fundraising round, though, took about four months, he said, an "indication of investor satisfaction" in ALung's performance so far.
The company's artificial lung functions like a kidney dialysis machine, DeComo said. A patient's blood is pumped through the machine to remove carbon dioxide and add oxygen. The device is for patients who are having trouble breathing or as a supplement to a ventilator.
Many patients who have reduced lung function, because of COPD or other lung diseases, are placed on ventilators because there is no other option, DeComo said. But ventilators can cause lung infections and often, once a patient is on a ventilator, their lungs become dependent on it.
ALung's device is targeted at patients who still have some lung function and could be kept off a ventilator, which DeComo said would save money.
"In 60 to 80 percent of cases, we estimate our device could replace or supplement the ventilator," DeComo said.
The U.S. market for ALung's device could be $2.5 billion a year, but the company won't be selling the device here for several years. DeComo said many medical device companies introduce their products in European markets first to gain some sales before starting clinical trials in the United States -- a process that DeComo estimated would cost at least $25 million.
North Shore medical device company Cohera Medical Inc. began selling its surgical adhesive TissuGlu in Germany in September and could gain FDA approval by the end of 2013.
Before coming to ALung, DeComo founded Renal Solutions Inc., a Cranberry company that he sold to Fresenius Medical Care AG & Co. KgaA of Germany in 2007 for $190 million. ALung has 28 employees, all in Pittsburgh.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.