MedTech raises £33m to build on expansion into US and Europe

Manchester Science Park

Manchester University spin-out, Phagenesis, a medical device company specialising in the treatment of swallowing disorders, has secured funding worth £33.1m.

The Series D financing all equity investment round was funded by a combined European and US investment syndicate led by EQT Life Sciences, and co-led by Sectoral, with new investors British Patient Capital, Northern Gritstone and Aphelion also joining the round.

The investment will support commercialisation of the company’s Phagenyx treatment in the US and deepen penetration into Europe. It will also support clinical trials, regulatory activities, as well as research and development of pipeline products.

Swallowing disorders are a common effect of brain injuries, including strokes. The condition, called dysphagia, makes it difficult to eat, drink and manage saliva. Dysphagia can also lead to life-threatening complications such as pneumonia.

Phagenesis CEO, Reinhard Krickl, said: “This investment from a highly experienced international investor syndicate will accelerate access to and adoption of our therapy.

“We will invest in exceptional talent to scale up our customer outreach and to support passionate clinicians who want to bring our therapy to those who need it. Our novel and proven therapy can help the millions of patients every year who suffer from swallowing disorders.”

Drew Burdon, Partner at EQT Life Sciences, said: “Dysphagia is a severe medical condition that affects countless patients in hospital. It can increase hospital length of stay, the risk of complications, and lengthens recovery time.

“The Phagenyx System demonstrates significant reductions in hospital length of stay, with a corresponding and substantial reduction in healthcare costs, as evidenced by the company’s strong portfolio of high quality clinical studies.

“This is strongly aligned with EQT’s Health Economics strategy of transforming cutting-edge scientific innovation into impactful and cost effective healthcare solutions. We‘re excited to support the next phase of Phagenesis’s journey.”

Michael Sjöström , co-founder and Partner at Sectoral Asset Management, said: “Dysphagia associated complications are known to substantially increase mortality, but there is still a lack of adequate treatment modalities. That’s why Phagenyx is an amazing innovation with the potential to change care paradigms.

“It allows treatment of dysphagia very early in the care pathway, which prevents later complications. Our investment will support the Phagenesis team to make Phagenyx more broadly available, specifically in the United States.”

As part of this funding transaction, Drew Burdon, Michael Sjöström and Mark Wyatt will join the Phagenesis board of directors.

The Manchester Science Park-based company was founded by Dr Conor Mulrooney and Prof Shaheen Hamdy in 2007.