In a meeting today the Kansas Bioscience Authority's executive committee authorized up to $1.6 million in new investments for two Kansas City-area healthcare companies.
The investments include $600,000 to Olathe-based Novita Therapeutics LLC, a company formed in 2009 that develops medical devices for cardiovascular diseases. Another $1 million was approved for Innara Health, Inc. of Shawnee, also a medical device company.
Both companies have received investment funding from the authority in the past. Thomas Krol, director of commercialization at the authority, calls it the "2.0 model" for the Kansas Bioscience Authority, a description of how the authority has moved away from grant-based financing for companies in favor of investing and reinvesting in companies, with an expectation for returns.
The $600,000 authorized to Novita will add to three previous investments in Novita by the authority. The money will go to purchasing company equity, giving Novita capital to help it develop the Arteriovenous Fistula Eligibility System, a device meant to make it easier and safer for end-stage renal disease patients to get hemodialysis. It will also help finance development of devices that treat cerebral aneurysms and peripheral vascular occlusion.
The $1 million approved for Innara Health will be part of a royalty revenue sharing agreement, taking the form of a convertible promissory note, a type of security investment frequently used to fund startups.
Innara, formerly known as KC BioMedix, Inc., formed last year when it purchased KC BioMedix's physical and intellectual property. The acquisition was meant to boost sales of the NTrainerSystem, which helps premature infants learn suckling skills. The authority's investment is meant to help Innara build its sales and marketing staff, finish a clinical trial of the NTrainerSystem and finance the company's daily operations.
Both investments are designed as co-investments, meaning that the authority will match a certain percentage of outside funds similar in type.