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How Harpoon Medical’s Exit Can Produce Returns for Baltimore

Tuesday, December 19, 2017

This article appeared on Baltimore on December 18, 2017

Abell Foundation says money from the the acquisition will go toward its grant-making budget for community efforts. It illustrates why the foundation invests in medtech startups.

A startup’s exit can produce many ripple effects that help a tech community.

Right after it was announced, the acquisition of Harpoon Medical by Edwards Lifesciences showed how such a deal can create visibility.

The deal brings a big company to Baltimore, as California-based Edwards will maintain Harpoon’s offices inside the Camden Yards warehouse. And there’s added reach for the University of Maryland Baltimore, as the deal capped off a string of three exits this year for companies that spun out of research on the west side of downtown (Analytical Informatics and Living Pharma were the other two).

Harpoon CEO Bill Niland also talked about a desire to help other companies, showing the potential for one exit to spread business know-how to fuel another.

Of course, there’s also money involved. Along with helping the founders, the returns have an added impact when the investors are local.

After securing an option in 2015, Edwards agreed to acquire the medical device startup for $100 million. The payout has the potential to rise to as much as $250 million if certain milestones are met in the development of Harpoon’s device that allows for the open heart surgery procedure known as mitral valve repair to be performed while the heart is still beating.

Indications from investors have been positive, and one Baltimore-based investor offered a look at the numbers on Monday. In a press release, The Abell Foundation said that the recently-closed acquisition deal produced a 10x return, which happens to be the desired target for many venture investors. The foundation invested $500,000 into Harpoon Medical in 2014-15. When the deal closed, Abell earned $5.2 million, according to the Foundation. Again, with royalties, there is potential for that sum to grow.

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