Abingworth's Bet On Lombard: Best Of Both Worlds For VCs

Article preview from IN VIVO - May 1, 2011

As venture investing in medical devices continues to split between early- and late-stage deals, investors increasingly face a choice: early-stage deals, where valuations are low, but risk is high and timelines are generally long; and late-stage opportunities, where risk is lower and timelines shorter, but the valuations are much higher. What if you could find an opportunity with the timelines and risk profile of a late-stage deal, at the valuation of an early-stage deal? That's what investors at Abingworth believe they've found in Lombard Medical Technologies PLC, a company with a novel approach to endovascular abdominal aortic aneurysm repair.

Abingworth's Bet On Lombard: Best Of Both Worlds For VCs

Article preview from IN VIVO - May 1, 2011

As venture investing in medical devices continues to split between early- and late-stage deals, investors increasingly face a choice: early-stage deals, where valuations are low, but risk is high and timelines are generally long; and late-stage opportunities, where risk is lower and timelines shorter, but the valuations are much higher. What if, however, you could find an opportunity with the timelines and risk profile of a late-stage deal, at the valuation of an early-stage deal? That's what investors at London-based Abingworth LLP believe they've found in Lombard Medical Technologies PLC, a company with a novel approach to endovascular abdominal aortic aneurysm (AAA) repair, that has just taken a £27.5 million investment that it expects will fund FDA approval and US commercialization of its novel Aorfix technology.

The £27.5 million that Abingworth and co-investor MVM Life Science Partners LLP will invest (together with existing investors) will come in two tranches, approximately £13 million in a first investment now and a second £14 million based upon Lombard's receipt of FDA approval. The funds will be applied to a variety of short- and long-term projects, including FDA approval of Aorfix and US launch through the hiring of a direct sales force; launch in Japan through a distribution partner; enhancement of the company's current European sales and marketing efforts; expansion of production capacity; and development efforts aimed at both improving the current technology design and creating a device for the treatment of thoracic aortic aneurysms.

Founded in the late 1990s, Lombard began as a coronary stent company before transitioning to abdominal aortic aneurysm grafts. The company, run by CEO Simon Hubbert and Chairman John Rush, is publicly traded on AIM and has already launched Aorfix in Europe, where sales have reached around £4 million.

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