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Help For The Obese: Bariatric Partners Lands $12M In New Financing For Weight Loss Surgical Centers

CHARLOTTE, N.C. -- Bariatric Partners, one of two Charlotte-based startups focused on surgery as a means of helping obese people lose weight, has closed on $12 million in new venture capital.

The "B" round comes just over a year after Bariatric Partners launched in September of 2005 with $12.55 million financing.

Bariatric is derived from the Greek words for "weight" and "treatment." Bariatric surgery involves sealing off most of the stomach to reduce the amount a food can eat or rearrange the small intestine to reduce the amount of calories a body can absorb.

Bariatric Partners utilizes laparoscopic adjustable gastric band, or LAGB, surgery. A surgeon inserts an adjustable silicone band that is subsequently adjusted over time. This technique does not divide any portion of the stomach or intestine. LAGB, which received federal regulatory approval in the United States in 2001, is an increasingly popular one used to fight the obesity epidemic sweeping the country. Federal statistics show that 30 percent of adults are obese.

The number of bariatric procedures is expected to reach 177,600 this year, up nearly four times the number of weight-reducing surgical procedures performed in 2001, according to the American Society for Bariatric Surgery. Its figures are based on estimates made by member surgeons.

"This is something that is really exciting to be part of," said Edmund Bujalski, Bariatric Partners' chief executive officer. "This is life transforming, life enhancing."

A veteran executive in the healthcare industry who co-founded Hospital Group of America in 1983, Bujalski was an entrepreneur in residence with New Enterprise Associates when the firm decided to invest in Bariatric Partners. Bujalski teamed with Stephen Puckett, who launched MedCath, a national provider of cardiovascular services, and served as its chief executive officer from 1988-1999, to launch Bariatric Partners, Puckett serves as chairman.

The market for LAGB certainly is attractive to investors. NewHope Bariatrics, which was launched by two other former MedCath executives, also offers surgery as a means for obese people to lose weight. It closed earlier this month on $18.5 million in financing that included both debt and equity.

Since launching Bariatric Partners, Bujalski said he has been moved emotionally by people whose lives have been changed by the surgery.

"I've talked to lots of people who couldn't walk upstairs without pain or walk 100 yards without being out of breath," he said. "Obese people run into prejudice. They couldn't get jobs. A year later after the surgery, they have jobs or have received promotions and have regained their self-confidence. Their inner selves are allowed to come out."

Bariatric Partners plans to use the funds to speed up its build-out of "Journey Lite" facilities around the United States. The centers are owned by Bariatric Partners and physicians. Weight treatment plans include surgery as well as counseling and continuing care.

"Lifestyle changes are needed, too," Bujalski said. "I describe our approach as a concierge service. We meet the needs of the obese -- a special class of people. We treat them in a special way. We offer pre- and post-operative care. We help them meet their weight loss goals. Surgery is a critical piece, but it's only part of the plan. We also offer counseling and support groups. It's also important for patients to remain in touch with their physician."

Studies have shown that patients who receive assistance beyond surgery greatly improve their chances of keeping weight off, he added. "That's the goal," Bujalski said, "to lose the weight and keep it off."

Unlike other surgical techniques, the LAGB method can be performed in a day, and people can return to work within two or three days rather than a month.

"This is not gastric bypass surgery," Bujalski explained. "It's safe, it's reversible, and in a skilled surgeon's hands there are virtually no complications."

Bariatric Partners recently formed partnerships with physicians to open surgical centers in California and Texas. A third will open in Florida in December. The company also is discussing open a center in Charlotte. "We're working on that very actively," Bujalski said.

The company's growth plans are aggressive. "Ideally, within five years we'd like to have between 25 and 30 centers," Bujalski said.

The company's headquarters employs some 15 people. Each surgical center has a staff of at least seven people when it opens.

Bariatric Partners' new financing round included Frazier Healthcare Ventures as the lead along with New Enterprise Associates and Woodbrook Capital.

Bariatric Partners: www.bariatricpartners.com

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