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A product recall leading to the closure of its Australian clinics last year has taken its toll on epilepsy treatment group Seer Medical which was this week placed into voluntary administration.
However, the Melbourne-based company’s administrators are confident that a restructure of the business is possible if they can secure “the right partner”.
The appointment of Lindsay Bainbridge and Andrew Yeo, from Pitcher Partners, was mooted by the company last month as the embattled medtech faced a cashflow crisis following the closure of its Australian clinics in August.
The closures were triggered after Seer Medical alerted Australian and US authorities of a recall of its key product, the Seer Home System, a portable diagnostic system for people with epilepsy.
The company’s problems have been compounded by an unfair dismissal claim by co-founder and former CEO Dr Dean Freestone which is currently still before the courts. Freestone left the company in April last year.
Bainbridge says the Seer Medical board decided to enter voluntary administration ahead of the company releasing its next-generation technology “to allow a potential sale or large-scale restructure with the right partner”.
“It is early days, but we are undertaking a review of the company with the intention to present the business to market for sale or restructure via a deed of company arrangement,” says the voluntary administrator.
“This is a good moment to restructure the business in readiness for the release of Seer’s new device.
“We will be working with the board and stakeholders to consider options and expect to release an Information Memorandum for the company by the end of next week.”
Seer Medical, which was heavily backed by Breakthrough Victoria to the tune of $30 million in 2022, has been in a world of pain for some time with The Australian last month reporting concerns from Freestone that Breakthrough Victoria could wind up the business to “avoid my legal action”.
Freestone also accused the major shareholder of “starving” the company of the resources required for medtech, although Breakthrough Victoria has denied the allegations.
The Victorian Government’s investment arm says it remains confident in the commercial potential of the company.
“Breakthrough Victoria looks forward to working with the administrator and remains a strong believer of the potential impact of Seer Medical’s technology to improve public health and people’s quality of life globally,” says a spokesperson, in a muted response to this week’s appointment of voluntary administrators.
Bainbridge says while Seer Medical’s first-generation video ECG-EEG system has been used by more than 19,000 Australians, he sees a bigger opportunity for the company in overseas markets with more than 50 million people living with epilepsy worldwide, including about three million in the US.
“The global market for home epilepsy monitoring is growing quickly, given the financial benefits of diverting patients from hospital bed observation and enabling at-home diagnosis,” says Bainbridge.
“Seer Medical has already attracted interest from significant investors including Cochlear, Mayo Clinic and Breakthrough Victoria, and companies pursuing similar solutions hold valuations in the tens and hundreds of millions.
“The work to identify partnerships, build markets and secure FDA (US Food and Drug Administration) clearance for the new system has already begun, so this marks an ideal time for a new investor or ownership arrangement to take Seer to the next level.”
After securing $34 million in a Series A round in 2021, backed by Cochlear (ASX: COH), EWM Group, SG Hiscock and Giant Leap, Seer Medical raised an additional $30 million from Breakthrough Victoria in July 2022.
The company, which was founded in 2017 by Freestone and George Kenley, developed technology that detects signs of various disorders, including epilepsy and heart conditions.
Seer Medical previously operated 18 clinics nationally where patients were fitted with the company's proprietary technology before taking home with them the monitoring kit, known as the Seer Home System.
Seer was named one of Australia’s fastest-growing companies in 2021 after making its debut on the AFR Fast Starters list that year.
The clinics were closed in August last year after Seer Medical alerted both the FDA and Australia’s Therapeutic Goods Administration that it was recalling its Seer Home System, despite the company considering the health risk for patients to be low.
Seer Medical reported a non-compliance with electromagnetic compatibility testing for its product and urged customers to discontinue use of the seizure cycle function in its epilepsy management app.
The voluntary administrators of Seer Medical anticipate making an announcement on the company’s future in the next few weeks.
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