Actuated Medical, Inc. and TubeClear, Inc.
Medical device development companies
Thursday, September 17, 2015
Embassy Suites, Chesterbrook, Pennsylvania (directions)
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About
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Actuated Medical, Inc. (AMI) (Bellefonte, PA), utilizes their extensive experience in electronically controlled actuation technologies to develop medical devices that move in such a way that they improve patient outcomes. Their products enable clinicians to perform faster, easier, and safer procedures. They have developed multiple products from identification of unmet clinical needs through early sales. These successes are due to their highly qualified engineering team (10 with Ph.D./M.S. degrees), early and continued interaction with clinicians, and their systematic 7-stage product development cycle. Their FDA compliant quality management system is ISO 13485:2003 and ISO 14971:2007 certified by a CMDCAS recognized registrar.
A majority of the private capital invested into early-stage product development companies is used to finance high-risk research and development (R&D). In contrast, AMI promotes capital efficiency by funding a majority of their early technology development through non-dilutive federal contracts. They then use private funds to carry products through the last portion of their proven project cycle to market. This strategy is exemplified by the commercialization of TubeClear® ($750MM worldwide market) which they carried from bench-top through FDA 510(k) Clearance for $3.1MM. Of this total, $2.6MM was secured through non-dilutive federal contracts and the remainder via angel investment. This R&D funding strategy also allows AMI to simultaneously pursue development efforts in three distinct product platforms with a combined worldwide market of $2.3B: Occlusion Clearing, Tissue Penetrating, and Motion Gripping Products. This focused diversification of R&D resources further reduces risk by avoiding the “one product” approach of a majority of early-stage companies.
AMI holds 12 granted US patents: 6 in the area of Occlusion Clearing and 6 in Tissue Penetrating; 6 registered trademarks; and an IP exclusive licensing agreement with Stanford University. Their capital efficient mindset has allowed them to reach the post revenue milestone on two products. Their three year goal, in addition to expanding sales, is to bring three new products to market. For each product, acquisition by a market leader is the desired exit. But until product acquisition, they manufacture the products and utilize distributors for sales, marketing and distribution.
Since their products have different applications, market focus, and investment needs, they have established a subsidiary model to enable product separation and more directed investments opportunities. Their first subsidiary is TubeClear, Inc.
TubeClear, Inc. develops medical devices that provide quick, easy, and effective means to clear clogged feeding tubes while the tube remains in the patient. They have a FDA Cleared and CE Marked system that clears obstructions in feeding tubes with greater success - in a fraction of the time and cost, compared to alternatives. They have early sales with TubeClear. Their three year goal, in addition to expanding sales, is to bring three new TubeClear products to market. Feeding tubes are used to provide essential nutrition and medications to patients who are unable to swallow - and are therefore at risk of malnutrition and dehydration. Feeding tube lumens are necessarily small and therefore prone to clogging (1.75 million clogged tubes per year worldwide). The lack of effective ways to clear these clogs and quickly return patients to their regular nutrition and medication regimens often results in a trip to the ER and, in many cases, tube replacement. TubeClear is comprised of a reusable Control Box and single-use Clearing Stem. The Control Box applies a gentle backwards and forwards motion to the Clearing Stem which breaks up the clog - eliminating the need to remove and replace the clogged tube. The system is effective in clearing medication, feeding formula, ground food, and aspirate clogs. An estimated 7 million tubes are placed worldwide in a given year, approximately 25% of which will clog. Their goal is to provide products to prevent clogs, and if they do occur treat them quickly to restore patency. This presents a $750MM total available market opportunity for TubeClear. They project that a 500-bed hospital will save approximately $240,000 per year by replacing their existing treatment for clogged feeding tubes with TubeClear. TubeClear was carried from bench-top through FDA 510(k) Clearance for $3.1MM. Of this total, $2.6MM was secured through non-dilutive federal contracts and the remainder via angel investment. They have signed an exclusive worldwide distribution agreement with CORPAK MedSystems, Inc. (Buffalo Grove, IL) for TubeClear in the hospital setting. They have been approved for a contract with the MAGNET GROUP (Group Purchasing Organization) to expand TubeClear sales in the non-acute care setting, such as long term care facilities and home care. They anticipate that TubeClear, Inc. will exit via acquisition in 3-5 years by a market leader in enteral nutrition.
3 Major Issues
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- What are the pros and cons to the Angel and/or VC to investing in the parent (AMI) compared with a subsidiary (such as Tube Clear Inc.) companies?
- Generally, for medical devices, what stage does the product need to reach to be attractive for acquisition by a strategic partner?
- How do we engage a strategic partner sooner to enhance collaboration leading to earlier product acquisition?
Program:
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6:30 - Cocktails & Dinner (Cash bar and special 2-entree buffet menu)
8:00 - Maureen Mulvihill PhD, President and CEO of Actuated Medical and TubeClear, will deliver the Company's "Elevator" Pitch to the Group
8:20 - A Panel consisting of Michael Poisel, Erika Geimonen PhD and Jordan Warshafsky will address three major issues crucial to helping the Company reach the next level.
9:00 - Open discussion: members and guests
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 Slides
None available at this time
 Audio
None available at this time
 Video
None available at this time
 Webcast
Actuated Medical & TubeClear
Webcast 09-17-15
00:00:00 Opening with Maureen Mulvihill
00:20:12 Ira Wallace Intro
00:20:40 Erika Geimonen Intro
00:21:10 Jordan Warshafsky Intro
00:22:00 Ira Wallace comments
00:27:10 Erika Geimonen comments
00:33:28 Jordan Warshafsky comments
00:43:00 Ira Wallace on funding
00:44:25 Audience Q&A
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