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Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

June 26, 2012 at 3:42 PM

Medical ventures highlighted at Innovation Showcase

I’m at the Technology Alliance’s Innovation Showcase taking place at Intiman Theatre this afternoon.

Six companies, mostly developing medical products and services, are being highlighted at the event. The audience includes potential investors and tech industry leaders.

First up is Seattle’s Xylemed.

Founder Ben Anderson formerly worked at Harborview, where he realized how inefficient whiteboards are for tracking and treating patients.

In 2008, he began developing the “Xylemed Whiteboard,” a Web-based application that pulls patient information from hospital systems and displays it on PC screens and tablets.

“The information displayed is always as accurate as your medical record,” he said.

It also works as a workflow automation tool and real-time communication tool, he said.

Since its debut at Harborview four years ago, the system has spread to more than 50 locations, including 44 departments at Harborview, six at the University of Washington Medical Center and one at the Seattle Cancer Care Alliance.

Anderson is aiming to extend the system to 2,200 hospitals. The plan is to charge about $50,000 to set up the system and then charge departments annual subscriptions of about $36,000.

Underlying technology is being licensed from the UW, since it was first developed at Harborview.

Anderson hopes to grow the company from three employees to 145 and reach $60 million in sales over the next five years. But first it needs to raise $800,000 in seed capital to start its sales and marketing efforts.

Next up is Maple Valley-based Food Chain Safety, providing an update to the group after a presentation two years ago.

The company markets microwave-assisted thermal sterilization technology to food companies.

Washington State University spent nine years working on the technology with military grants since a purpose was to develop improved “meals ready to eat.”

Since 2010, the company has gone from having a single research prototype to two designs of commercial systems. It also has multiple approvals from the Food and Drug Administration and U.S. Department of Agriculture and initial customers. according to company president Kevin Petersen.

A prototype of the sterilization system received FDA approval in 2009. The company delivered its first system this month. It’s working on a new commercial version of the system that it plans to begin delivering to customers in the first quarter of 2013.

Its first systems cost more than $650,000. The next generation will be leased.

The company has raised $2.35 million so far, including $1.85 million in upfront customer payments. It’s now raising $2 million to cover the costs of patent legal fees, overseas market development and a new lab.

Next is Redmond-based KineMotion Health, a startup using Microsoft’s Xbox Kinect gesture-recognition technology to improve physical therapy.

The company is developing a system uploaded by physical therapists, then downloaded at home by patients. The system shows how to perform the exercises and tracks their performance.

Some 65 percent of patients don’t do their physical therapy exercises at home as

prescribed and 10 percent don’t complete their treatment, which increases the chances of a relapse and additional medical costs, Chief Executive Alistair Hirst said.

There are 200,000 physical therapists, and the market is expected to grow 39 percent over the next decade, according to Hirst.

The company needs FDA approval before going to market. Then it plans to target private clinics and patients willing to pay out-of-pocket for improved care.

Therapists would pay $5 per patient for the system and patients would pay $25. Part of the company’s revenue would be shared with Microsoft.

Hirst, a game-industry veteran who worked on “Need for Speed,” sees an addressable market of about $2 billion.

So far the company has an alpha build of the system and has filed for a provisional patent. It’s also working with Madigan Army Medical Center on a testing program, Hirst said. The company plans testing in the fall and a launch in early 2013.

Next up is Mobisante, a Redmond-based developer of mobile ultrasound systems that presented to the group two years ago. That led to the company finding an adviser and investors, Chief Executive Sailesh Chutani said.

Mobisante has since broken out. It’s about to finalize its series A funding, it has received widespread press coverage and it launched its system in October. Its devices are being used in clinics in Washington and Tennessee and has had trials in India, the Phillippines and Sierra Leone.


The company produces ultrasound devices that work with smartphone hardware, making them more portable and inexpensive than traditional ultrasound machines.

In addition to the hardware, the company is setting up support services and a network of radiologists to work with people using the devices in the field.

Chutani, a Microsoft veteran, said the company should have $1 million in sales in its fiscal year and reach $20 million in annual sales in three years.

Next up is Back on Track, an online system hatched at the UW for tracking the progress of mental health patients.

Co-founder Corey Fagan has been involved with mental health programs at the school for 23 years as a pyschologist and administrator.

Fagan said progress tracking leads to better outcomes for patients, reduces provider errors and reduces the dropout rates of patients. It’s so effective the federal government is offering incentives to providers who do outcome tracking and some states are mandating such tracking.

“Basically outcome tracking is trending,” she said.

The company’s system replaces paper-and-pencil questionnaires and proprietary computer programs.

Patients can use the company’s Web-based system to do questionnaires from phones, PCs and other devices with browsers. Providers get instant feedback with graphics showing patients’ progress over time and relative to norms.

The software is now being used at three clinics (not hospitals as I wrote initially), and is in beta testing at Children’s Hospital.

The market includes more than 1 million providers, but the company also is pursuing the analytics market. Its growing collection of data, with personal details removed, can be marketed to researchers and others.

The company has raised $100,000 and is trying to raise $900,000 more. It plans to use the money in part to spin out of the UW and begin operating independently.

Closing the presentations is another medical-device venture hatched at the UW.

EchoGuide Medical is developing devices for surgeons to provide them with “GPS ability for their fingers.”

The company is working on the problem of ventricular catheters for draining the brain that are placed by neurosurgeons in the wrong location 60 percent of the time, according to Chief Executive Tom Sanko.

In up to 10 percent of these cases there are complications, including paralysis and death, he said.

EchoGuide is developing an ultrasound-based device to navigate the placement of catheters. It’s a handheld, battery-powered device that can be used in mobile settings, as well as operating rooms. It places an ultrasound transducer at the tip of the catheter.

The company estimates there are 188,000 of these procedures done yearly in the U.S., resulting in a potential market of $150 million a year.

Competitors include a less accurate mobile system and a large, costly system for operating rooms, Sanko said.

Target customers include neurosurgeons and trauma surgeons.

The company is eight months old. It received a $10,000 grant from the school last November.

This summer the company will begin testing on pig brains and with a special model of the human brain.

It plans to finish developing its technology next year and will begin developing products outside the school, with pilot manufacturing planned in late 2014. A final product could launch in late 2015.

EchoGuide expects to have sales of $58 million and profits of $31 million in 2019. But first it needs to raise $1 million this summer and fall. It also need to line up strategic partners.

Comments | More in | Topics: Biotech, Entrepreneurs, Startups


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