Disc Dynamics, a once-promising medical device start-up that raised about $65 million from investors, has shut down and is selling off its assets.
The Eden Prairie company, which developed a minimally invasive technique to treat low back pain, failed to win a go-ahead from the Food and Drug Administration (FDA) to conduct a pivotal clinical trial. The company hoped to use the study to gain FDA approval to market the device in the United States.
"The FDA kept asking us for more data and more data, and more and more time would pass," said Keith Eastman, the company's chief financial officer. "We just ran out of money."
Stung by a series of drug and medical device recalls and criticism that it had grown too close to industry, the FDA has become more cautious about approving new products.
Many small medical device companies now complain that the agency has grown too conservative in approving new medical products. These firms, typically funded by angel investors and venture capitalists, claim FDA approval and clinical trials have often become cost-prohibitive.
"If you don't approve anything, you don't get in trouble," said an exasperated Eastman.
An FDA spokeswoman said she could not comment on specific applications.
The company, which employed as many as 32 people at its peak, laid off most of its remaining employees at the end of 2009. Now, a skeleton crew of three is in the process of selling assets and, perhaps, the company's Dascor Disc Arthroplasty intellectual property, Eastman said. The basic idea behind the Dascor technology was originally developed at SpineTech, an Edina company that pioneered several devices commonly used in back surgery.
