OAKMONT, PA, Cereve, a privately-held health care company preparing to launch its FDA-cleared insomnia device, announced today the closing of a $38 million Series B round of financing.
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The round was led by KKR, a leading global investment firm. Also participating in the financing are existing shareholders Versant Ventures, Arboretum Ventures, and Partner Ventures.
Fifty-five million Americans have insomnia, not only experiencing problems getting to sleep but also serious impairment in their daytime activities. Currently, sleeping pills are the most common medical treatment for insomnia. According to the National Center for Health Statistics, nearly nine million Americans have taken prescription sleeping pills in the last 30 days. Unfortunately, these pills come with well-established safety risks, including decreased mental alertness the morning after use, along with impairment of driving and other activities that require an individual's full attention -- leading physicians and consumers alike to seek the kind of drug-free alternative that Cereve is bringing to the market.
'We are thrilled to bring on KKR as a business partner to join our very strong and supportive current investor group and look forward to working together as we finalize preparations for our 2017 U.S. market launch,' stated Craig Reynolds, CEO of Cereve. 'Beyond the launch, this funding will enable rapid expansion to meet pent-up physician and patient demand for a safe, effective insomnia treatment.'
As part of the transaction, Justin Sabet-Peyman, Director on KKR's Health Care investing team, will join the company's Board of Directors. 'Cereve has developed a safe and differentiated solution for millions of people who suffer from insomnia,' said Mr. Sabet-Peyman. 'We are very excited to be partnering with an accomplished management team that has significant sleep sector expertise to bring this innovation to the market.'
Earlier this year, Cereve received FDA clearance for its insomnia therapy device that reduces the time it takes people with insomnia to get to sleep. Three independent clinical studies conducted on more than 230 patients over 3,800 research nights demonstrated the safety and efficacy of this novel device. With eight issued and twenty-one pending patents, the Cereve System is comprised of an intelligent bedside device that precisely cools and pumps fluid to a forehead pad worn throughout the night. Clinical subjects found the device easy to use and to wear, and commented that it was a calming and comfortable experience.
Cereve will initially deploy its funding to build out its infrastructure and prepare for product launch during the second half of 2017.
For KKR, the investment is part of the firm's health care growth equity strategy, which is focused on high-growth companies for which KKR can be a unique partner in helping reach scale.
Based near Pittsburgh, PA, the privately-held company was formed in 2008 after the company's Founder, Eric Nofzinger M.D., performed pioneering brain imaging studies on patients with insomnia at the University of Pittsburgh. The Cereve management team includes former executives from Respironics, a global leader in sleep and respiratory markets that was acquired by Philips in 2008 for $5 billion.
For more information, or to receive updates as Cereve becomes available, visit www.cerevesleep.com.
KKR is a leading global investment firm that manages investments across multiple asset classes including private equity, energy, infrastructure, real estate, credit and hedge funds. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and driving growth and value creation at the asset level. KKR invests its own capital alongside its partners' capital and brings opportunities to others through its capital markets business. References to KKR's investments may include the activities of its sponsored funds. For additional information about KKR & Co. L.P. (NYSE:KKR), please visit KKR's website at www.kkr.com and on Twitter @KKR_Co.
Roth T, Coulouvrat C, Hajak G, et al. Prevalence and perceived health associated with insomnia based on DSM-IV-TR; International Statistical Classification of Diseases and Related Health Problems, Tenth Revision; and Research Diagnostic Criteria/International Classification of Sleep Disorders, Second Edition criteria: results from the America Insomnia Survey. Biol Psychiatry. 2011;69(6):592-600.
Chong Y, Fryar CD, Gu Q. Prescription sleep aid use among adults: United States, 2005-2010. NCHS data brief, no 127. Hyattsville, MD: National Center for Health Statistics. 2013. http://www.cdc.gov/nchs/products/databriefs/db127.htm