Posts Tagged ‘medical devices’
RTP oncology startup gears up to launch first product
Wednesday, April 20, 2011, 7:15 pm No Comments | Post a CommentEditor’s note: North Carolina’s Research Triangle is home to hundreds of young companies. Scientists and entrepreneurs started them to develop technologies and medicines for better detection and treatment of diseases. Some of the companies work on innovations that are the result of research done at one of the area’s universities. Others are outgrowths of established companies. CivaTech Oncology, a startup that’s been around since 2006, employs two full-time and three part-time and is about to launch its first product, is one of those young companies.
Much of the furniture in the about 2,500-square-feet that CivaTech occupies at Park Research Center, a 13-building complex in Research Triangle Park, is second-hand. As the company’s two full-time employees, Suzanne Troxler Babcock and Seth Hoedl have important-sounding titles - Babcock is executive chairwoman and Hoedl is chief science officer - but they rely on a team of part-time employees and consultants.
Suzanne Troxler Babcock
Like many startups, CivaTech operates on a tight budget. Since its inception, the company has raised about $2 million from private investors, most of them live in the RTP area.
But things are about to change, said Babcock.
“We think we’ll look quite different as an organization by the end of this year,” she said.
CivaTech is looking for a partner to start selling its first product, a next-generation alternative to radioactive seeds that have been used for about 20 years to help reduce tumors in the prostate, breast and cervix.
The Food and Drug Administration has already approved the product, called Civa-String, and Babcock said the first prostate cancer patient is expected to get a Civa-String implant this fall.
That would make the start-up a competitor in a growing market already occupied by some large, publicly traded companies.
Brachytherapy products, which is what the radioactive seeds are, generated $240 million in U.S. sales in 2008, according to a 2009 report by Bio-Tech Systems, a market research firm in the healthcare field. But by 2016, the market is projected to increase to about $2 billion in sales.
Radioactive seeds to treat prostate cancer accounted for about half of the 2008 sales, Bio-Tech Systems reported.
The biggest suppliers of the seeds are C.R. Bard, a New Jersey-based company that is publicly traded and reported $2.7 billion in sales last year; Oncura, a division of General Electric; and Theragenics, an Atlanta-based company with about $80 million in annual revenue.
The radioactive seeds are about the size of rice kernels - cylinders made of titanium and filled with radioactive material, iodine-125 or palladium-103. Worldwide, about 15,000 prostate cancer patients receive the seeds every year.
The radioactive seeds have side effects, frequent bathroom visits and sensitivity to many fruits and other foods. But the biggest problem with the seeds is that they can migrate, Hoedl said. About 120 seeds are implanted in a prostate for a therapeutic dose, he said. If one or two of them migrate, they can end up in the patient’s lung or kidney and do damage.
Civa-Strings shouldn’t migrate. They’re cheaper to make, because they require half the radioactive material to deliver the same therapeutic dose, Hoedl said. They dispense the radiation more uniformly and they’re made with palladium-103, an isotope that works more than three times faster than iodine-125.
A Civa-String, filled with palladium-103 and gold markers. The gold helps the doctor find the strip once it is implanted. Courtesy: CivaTech
The strings are flexible plastic tubes about the thickness of an angelhair spaghetti noodle that are loaded with palladium-103 and gold pellets. Depending on the dose prescribed for each patient, they come in lengths from less than an inch to about 2.5 inches. Radiation oncologists place the loaded strings with the same kind of 8-inch-long needle as the seeds.
Seth Hoedl
Instead of about 120 seeds, a prostate cancer patient would require only 20 to 25 of the strings, Hoedl said.
CivaTech worked with the N.C. State University’s nuclear engineering department to make sure the palladium-103 doesn’t leach out.
If the launch happens as planned, Babcock expected to hire four more full-time employees this year.
Meanwhile, development of the next product, a sheet with palladium-103 loaded strips, continues. The sheet is aimed at shrinking cancers in the lung, colon and esophagus. Last year, CivaTech received $200,000 from the National Institutes of Health to work on the sheet.
North Carolina’s medical device industry faces strong headwinds
Wednesday, December 1, 2010, 11:17 pm 1 Comment | Post a CommentStrengthening the emerging medical device industry in North Carolina, a state better known as a biotech hub, is a no-brainer no longer.
Sure, North Carolina’s universities are still brimming with ideas, students to test new technologies in a lab and professors to lend their expertise to startup companies, especially in the Research Triangle Park area, home to biomedical engineering departments at Duke University, the University of North Carolina at Chapel Hill and N.C. State University and two teaching hospitals.
But raising cash to pay for development has become more difficult in the past two years, according to two venture capitalists and an investment banker who addressed the challenges facing medical device companies Tuesday at North Carolina’s third Medtech conference, which took place in Durham.
Regulatory scrutiny and cost-saving pressures at hospitals have also increased, according to Ernst & Young’s medical technology report 2010.
Mike Constantino
The medical device business used to be a haven of gadget geekdom, “focused on the newness, the sexiness” of the latest technology, said Mike Constantino, Southeast area life sciences industry leader at Ernst & Young’s office in Raleigh. “Whether patients were getting better was secondary.”
Now, being new is no longer enough. The technology must increase efficiency and improve health outcomes.
Overall, the U.S. medical device industry has fared better than most other industries during the recession, according to Ernst & Young’s report.
Large companies have access to plenty of capital. For example, AGA Medical, a Minneapolis device maker with nearly $200 million in annual sales, raised $94.4 million in an initial public offering a year ago.
But the situation is different for companies with less than $50 million in annual revenue or startups relying on investors to develop a product and bring it to market. That’s the industry segment where many North Carolina device makers fit.
The state’s medical device industry consists of close to 400 companies, according to Ibility, an industry organization that was founded last year with the help of $2.5 million in state funding. A listing of about 250 of them shows that at least 40 percent of them have 20 or fewer employees.
About one-third of North Carolina’s 400 medical device companies have operations in the RTP area, including startups like Physcient, companies with products on the market like Bioptigen and Metabolon and publicly traded companies like New Jersey-based BD.
BD, which generates more than $7 billion in annual sales, this year finished a $12.7 million renovation of its technology and innovation center in RTP, opened a $14 million manufacturing facility west of Durham and announced plans to build a distribution center southeast of Raleigh. (Read about BD’s expansion in North Carolina here.)
With fewer than 20 employees and less than $5 million in annual revenue each, Metabolon and Bioptigen have to rely on venture capital and other private investors to develop new products and get regulatory approval to sell them.
Metabolon‘s latest product is a biomarker test that identifies people at high risk for diabetes. Bioptigen has developed scanners that map the back of the eye in microscopic detail and allow surgeons to identify diseases at early stages.
Physcient, a three-year-old startup, is working on its first product, an surgical tool that opens the rib cage for heart and lung surgeries. The tool, which can be operated electronically with a smart phone, inflicts less damage to tissue and bone than mechanical thoracic retractors that have been used in hospitals for more than 70 years.
Private investors are key to keep the lights on and the development going at Physcient.
All medical device companies, regardless of size, have to deal with more stringent regulatory scrutiny, which add time and costs to the approval process, as well as cost-savings pressures at hospitals and a new 2.3 percent excise tax on medical device sales that takes effect 2013, both results of health care reform. But small companies and startups face an additional challenge: A crunch in venture capital investments, particularly in early-stage rounds.
In 2009, medical device companies raised less than $3 billion in venture capital in the U.S., according to the Ernst & Young report. Only 13 percent of the rounds were early-stage, the least since 2001.
North Carolina was absent from the map of U.S. regions that led in funds raised by medical device companies, even though one company, Durham-based TransEnterix, made the top 10 venture rounds list with a $55 million fundraiser completed in October 2009.
