MedRhythms raises $25M Series B as it nears commercialization

MedRhythms’ digital therapeutic platform helps stroke survivors regain mobility by digitizing an evidence-based intervention known as Rhythmic Auditory Stimulation, which uses music to target neural circuitry that controls movement. (Graphic/MedRhythms)

MedRhythms, a digital therapeutics startup in Portland, announced Wednesday that it has raised a $25 million Series B as it prepares to commercialize its first product, a medical device that uses music, software and sensors to help stroke survivors with walking deficits to regain their mobility.

The company, which was founded in 2015 by Brian Harris and Owen McCarthy, will use the funds from this Series B financing to expand its team and key corporate functions as it nears commercialization. The company currently employs 18 and Harris, who serves as CEO, said he expects to add 10-15 positions by year end.

The freshly infused capital will also allow the company to advance other products in its pipeline that address the negative effects of other neurologic injuries and diseases, including Parkinson’s, acute stroke and multiple sclerosis.

Morningside Ventures and Advantage Capital co-led the $25 million Series B, with participation from existing investor Werth Family Investment Associates. The company has raised a total of $34 million since its founding, including a $5 million Series A in 2018 and a seed round the year prior.

“We have made tremendous progress since founding the company, and this financing reflects strong support for our platform, people, strategy, and, most importantly, our mission,” Harris said in a statement. “This investment positions us to be able to bring our chronic stroke asset to market, advance our pipeline and further realize our vision of making a significant impact in the world.”

MedRhythms’ digital therapeutic platform helps stroke survivors regain mobility by digitizing an evidence-based intervention known as Rhythmic Auditory Stimulation, which uses music to target neural circuitry that controls movement. This mechanism is known as “entrainment,” a neurologic process in which the brain’s auditory and motor systems are synchronized with an external rhythmic cue. Entrainment can, over time, both enhance neuroplasticity and lead to improved functional outcomes in walking, according to the company.

Typically, this sort of intervention is only available while the patient is in the hospital or attends neurologic music therapy (or NMT) sessions. Harris, who started the NMT program at Spaulding Rehabilitation Hospital in Boston, set out to create a medical device that would allow stroke survivors to benefit from NMT from their own home when he and McCarthy founded the company in 2015.

“MedRhythms is at the forefront of the next-generation of digital therapeutics and is transforming healthcare which will improve the lives of millions of patients worldwide,” Chris Harris of Advantage Capital said in a statement. “The company’s leadership position and its breakthrough digital therapeutics pipeline makes MedRhythms a pioneer in the industry.”

Stephen Bruso of Morningside Ventures added: “MedRhythms has developed a powerful digital therapeutics platform founded on the premise that targeting electrophysiological networks in the brain can be broadly effective against neurologic disorders.”

The impact of MedRhytms’ patented medical device are currently being studied in a randomized controlled trial at the nation’s top rehabilitation hospitals and research centers and last summer received Breakthrough Device designation from the U.S. Food and Drug Administration.

As a result of the Series B financing, Morningside’s Bruso and Advantage’s Harris have joined MedRhythms’ board of directors. The board now consists of Harris; Owen McCarthy, MedRhythms co-founder and president; Jean Hoffman, a local angel investor who led the company’s 2017 seed round; Peter Werth of Werth Family Investment Associates, which led the company’s 2018 Series A round; and Ray Pawlicki, former chief information officer for Biogen and Novartis. Bill McKee, former CFO of Barr Pharmaceuticals and Putney, is a board observer.