Auckland-based med-tech Kitea Health has raised $6 million in a seed round as its sensor implant nears human trials.
Founder and chief executive Simon Malpas says Kitea’s tiny implant can be used to monitor fluid pressure on the brain, or around the heart. It requires no battery. Readings are taken by a wireless wand (see graphic), then sent to a smartphone app that can share results with a health provider.
The implant is designed to address major challenges in the management of chronic conditions such as hydrocephalus - an incurable condition caused by the build-up of fluid on the brain that affects more than 1 million people in the US alone - and heart failure.
“The device is roughly the size of a few grains of rice and is capable of remotely monitoring changes to pressure - in the brain for hydrocephalus patients - and sending real-time, accurate information straight to the healthcare professional and patient,” Malpas says.
“Hydrocephalus is a condition that affects mostly young children or the elderly, and while shunts can help alleviate increased pressure, they fail at a high rate, particularly in children.”
In some situations, shunts can fail up to half the time.
“This leaves parents guessing whether every time their child suffers from what is considered an ordinary illness-type symptom - headaches, vomiting and irritability - that they’re actually suffering from increased pressure to the brain, which, unless treated urgently, could be fatal.”
Malpas sees the implant as a key mechanism for helping make our overloaded health system more efficient. The implant could, for example, provide an early warning that a shunt is starting to fail - or, conversely, help provide evidence that there’s no need to rush to A&E.
The technology has already been proved in trials involving sheep (which have a similar-sized skull to people).
The next steps will be human trials at Auckland Hospital, which Malpas hopes will take place next year. The founder is also shooting for clinical trials in the US in 2025 as part of the path to FDA approval.
The $6m will be used to push forward that process, in part by boosting staff numbers from 10 to 14.
The raise was led by Auckland-based venture capital firm Pacific Channel (whose investors include the Crown-backed NZ Growth Capital Partners, via its Elevate Fund; NZGCP’s Aspire fund is also a direct investor) and supported by Icehouse Ventures, the venture arm of Cure Kids and various local angel investors.
Kitea was formed in May 2022 by Malpas - a professor at Auckland University’s Bioengineering Institute; his long-time collaborator Natalia Lopez, who serves as chief operations officer (Lopez was previously with another of the Bioengineering Institute’s clutch of successful startups, Alimetry, which recently raised $16m) and CTO Bryon Wright, who earlier co-founded BWMG, a spinout from Auckland University sperm motility research.
But it was proceeded by years of research, funded by $14m in direct grants. The research team that preceded the company won a $12m grant in 2017 from MBIE Endeavour fund.
It also secured around $2m of funding from Cure Kids, the Neurological Foundation, the Health Research Council, the Auckland Medical Research Foundation, and individual philanthropists.
Malpas says the next major step in funding will be a Series A round. “We’ll be looking for a large US med-tech fund to come in as a cornerstone investor.”
While Kitea is committed to launching in NZ first, North America is the key market for medical devices, both in terms of regulatory influence and the size of the market. The startup needs a US VC who knows the lay of the land. The US medical scene being heavily private, Malpas is also sounding out the large American health insurance companies.
This isn’t the professor’s first time at the rodeo.
Malpas founded two earlier university spinouts, Telemetry Research - also based around wireless implants - which he founded in 2005 and saw through to its acquisition by US med-tech company Millar in 2012 and Kaha Sciences, a maker of wireless health sensors for animals bought by the multinational ADInstruments in 2020.
This time around, he’s shooting for an implant, wand and smartphone app setup that’s simple enough for anyone to perform DIY monitoring, sharing results with their GP or clinicians at a hospital via a portal.
“That’s what it’s all about,” he says. “Keep them at home; keep people safe, happy being at home.”
It could also keep investors happy.
Lopez told an Icehouse Showcase audience (see video above) that the total addressable market for micro-implants is “north of $30 billion”.
“Kitea Health has a strong team, led by a CEO with 20 years of experience in pressure-focused research and has two successful exits in the implantable sensor industry,” Pacific Channel partner Kieran Jina told the Herald.
The technology addresses a clear unmet need, Jina said.
“Shunts have a high failure rate, especially in children, so having a device that can distinguish between a simple headache and shunt failure will be invaluable.”
As a part of its diligence, Pacific Channel partners accompanied Malpas to the US Hydrocephalus Association Conference, which is largely attended by patients and physicians. “The ability to detect the failure of shunts was listed as one of the highest priority needs,” Jina said.
“The second application, monitoring of heart failure patients, could be a US$20 billion market,” he added.
“In the course of our due diligence, we also attended the world’s largest cardiology conference and established that this device could provide 20 days’ notice of an impending heart failure event.
“While there are existing devices, because they are analogue, their outputs cannot be relied on in the long term. Because Kitea’s technology is digital, it addresses this issue.”
New Zealand’s favourable clinical trial regulations will permit Kitea to start clinical studies earlier at significantly less cost, compared to performing first studies in the US, Jina said.
Malpas declined to give a post-money valuation.
A February 17 Companies Office update has the founder as the largest shareholder with a 25 per cent stake, followed by Kitea Shareholders (whose directors are Lopez and the another long-time Malpas collaborator, the Bioengineering Institute’s Daniel McCormick) with a 22 per cent stake, and Pacific Channel (13 per cent). Auckland University’s commercialisation arm, Uniservices, holds a 10 per cent stake, Icehouse ventures 5 per cent, NZGCP’s Aspire fund 2 per cent and Cure Kids Ventures 1.5 per cent.
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