Averto Medical Gains $30 Million in Series A Funding

Averto Medical Inc. is $30.5 million richer, having closed an oversubscribed Series A financing round led by Cormorant Asset Management. Other participants included Venrock Healthcare Capital Partners, LifeSci Venture Partners, and CVF.
 
The financing will help advance Averto Medical’s clinical testing of the ColoSeal Intraluminal Diversion System for eventual regulatory submissions. ColoSeal can potentially help the more than 100,000 patients annually who undergo colorectal surgeries by avoiding the need to create an invasive temporary diverting ostomy. Early clinical data has already shown promising results to address this multi-billion dollar market opportunity.
 
In connection with this financing, Averto Medical has named Ken Song, M.D., as executive board chairman, and Dan Puckett and Bihua Chen as board members. “I am thrilled to welcome this group of investors as well as Ken, Dan and Bihua to our board,” Averto Medical Founder/CEO Kenton Fong, M.D., said. “We are committed to substantially improve the clinical care and outcome for patients undergoing colorectal surgeries.”

Song is a physician scientist and serial entrepreneur who has successfully led several companies (Ariosa Diagnostics, Omniome, RayzeBio) across the life sciences space, resulting in several launched products and more than $5 billion in realized company value through acquisitions. Puckett was most recently chief financial officer at Shockwave Medical Inc.; he helped lead Shockwave from a pre-commercial stage private company through its initial public offering in 2019, growing revenue to $730 million in 2023 and a multi-billion dollar market capitalization. Chen is a portfolio manager for Cormorant Asset Management, a healthcare-focused investment fund with more than $2 billion under management that has supported numerous successful companies from inception to exit.
 
“Averto Medical is developing a medical device to avoid the need for ostomy, which is a debilitating procedure,” Song stated. “As a former gastroenterologist that has taken care of patients with ostomies, the value proposition of ColoSeal for patients, providers, and payers is crystal clear. I felt compelled to become involved to work with the team to progress the device through clinical studies and ultimately approval.” 
 
Averto Medical, formerly known as Savage Medical Inc., is a clinical-stage medical device company dedicated to transforming gastrointestinal care. Its first product, the ColoSeal Intraluminal Colonic Diversion System, enables procedures such as colorectal cancer resection without the need to create an invasive temporary diverting stoma. The company is based in Fremont, Calif.