A ROLLER-COASTER RIDE TO SUCCESS IN THE MEDICAL DEVICE INDUSTRY
When someone gets a serious head injury, the prompt detection of intracranial bleeding can be a matter of life and death. Philadelphia, PA-based InfraScan Inc. has recently received approval from the U.S. Food and Drug Administration (FDA) to market a handheld device that rapidly and noninvasively detects brain hematomas — the Infrascanner Model 2000. During an interview with Ashton Tweed, President and CEO of InfraScan Inc. Baruch Ben Dor talks about the ups and downs he has experienced in developing and commercializing a medical device in today’s tumultuous economic environment.
How Does the Infrascanner Work?
The Infrascanner is a portable diagnostic device that incorporates near-infrared (NIR) technology to measure light absorption — in wavelengths that are sensitive to blood — in four locations on the right side of the head and the same four locations on the left side of the head. Because the head is symmetrical, asymmetrical readings indicate a hematoma. This technology was developed by the University of Pennsylvania’s Britton Chance — professor emeritus in the department of biochemistry and biophysics — in collaboration with Baylor College of Medicine neurosurgeon Claudia Robertson.
In 2002, Ben Dor was a medical optics specialist and entrepreneur looking to start his own company. He approached Dr. Chance, who was a renowned expert in the same field, about the technologies he was working on. Ben Dor recognized a commercial potential in the NIR brain scanner, which had already been through initial clinical trials and was ready to develop and market.
The Infrascanner Gains Traction Quickly
Unlike computed tomography (CT) scanners that are currently used to diagnose brain hematomas, the Infrascanner is unique because it is portable and can be used by medical professionals in the field or at the bedside in a hospital to quickly assess a patient with a head injury. Not all hospitals have the neurosurgical capabilities to treat patients with intracranial bleeding, so a timely assessment can ensure patients get to the right setting of care. And the market for such a device in the United States alone is significant: There are an estimated 1.5 million traumatic brain injuries in the United States each year that result in half a million hospitalizations. On a worldwide scale, approximately 10 million people seek treatment for head trauma annually.
Investors saw the potential market for this device, as well. By 2004, InfraScan was incorporated and had developed a prototype for testing, thanks to initial investments from BioAdvance and the military. Recognizing the benefits of the Infrascanner technology in combat situations, the U.S. Navy and Marine Corps partnered with InfraScan to develop the Infrascanner Model 2000. The Model 2000 is a “ruggedized, integrated, user-friendly unit” that includes upgrades from the original Infrascanner prototype to meet U.S. Marine Corps’ specifications.
InfraScan had received European marketing clearance for the device by late 2008, which allowed the company to sell it in Europe, as well as developing countries where CT scanners are not readily available for evaluating patients with head injuries. InfraScan hit a snag, however, in getting FDA clearance to market the Infrascanner in the United States. The FDA approval process Ben Dor was told would take about 3 months, ended up taking 4 years. The primary reason is that soon after InfraScan had submitted their application, the U.S. election resulted in a new administration in 2008 and subsequent changes to the top management at the FDA.
New Challenges to Overcome to Take InfraScan to the Next Level
Now that the Infrascanner has FDA approval, says Ben Dor, one of the biggest challenges the company currently faces is educating users about this new technology and how and why it can save lives, time, and money. “To meet the challenge, we have to launch it gradually,” he says, “and we realize we can’t do everything at once.” Ben Dor believes a key issue in making the right business decisions in marketing a product is to “always look at the decisions from the investors’ point of view.”
According to Ben Dor, the Infrascanner has potential in many different markets. In addition to military applications, prospective U.S. markets include ambulances, children’s hospitals, sports venues, emergency rooms, intensive care units, retirement communities where residents fall frequently, and prisons where officials are reluctant to evacuate victims of violence. “We’ll need to build bridges to experts in each field,” he notes. And for some markets, the company may need to run more clinical studies and get additional FDA approvals.
Another major challenge for InfraScan is the new medical device tax, which Ben Dor is working diligently to get repealed. The tax is based on a medical device company’s gross sales, taking a much greater percentage of the net income. So for small startup companies with little money, Ben Dor contends, the tax is an especially huge burden. Instead of hiring new people and adding product, for example, InfraScan must use that money to pay the tax. “The tax is a job killer,” Ben Dor explains, “and it goes against a major goal of the government, which is to create more jobs.” The recent published estimates show that this tax is costing the government 150,000 medical device jobs, including highly paid positions such as scientists and medical professionals.
InfraScan Gets Support from Medical Device-Friendly Pennsylvania
As harsh as the environment at the federal level has been, notes Ben Dor, InfraScan has gotten “huge support” from the medical device-friendly state of Pennsylvania. InfraScan garnered bipartisan support for the FDA approval, for example, from Pennsylvania Congressional representatives, specifically Allyson Schwartz (Democrat) and Jim Gerlach (Republican), as well as from Senators Pat Toomey (Republican) and Bob Casey, Jr. (Democrat). Plus, several Pennsylvania organizations have invested in InfraScan, including BioAdvance, Ben Franklin Technology Partners of Southeastern Pennsylvania, and Philadelphia Industrial Development Corporation.
Starting a Company as an Entrepreneur is Like a Roller-Coaster Ride
Ben Dor compares the entrepreneurial experience of starting a company to a roller-coaster ride: “There are times on the ride down that you don’t know if you’re going to pull up or crash,” he describes, “but it’s definitely not a dull experience.” For example, just when InfraScan was ready to launch, the economic crisis hit. “It was a struggle to survive,” Ben Dor recalls. For a couple of months, there was not even money for salaries.
Despite the struggles and inevitable downs, Ben Dor points out the upside of working in an entrepreneurial environment versus a large corporation: “You’re not a small screw in a big machine — you have more influence on what happens, whether you’re in marketing or an engineer.” He finds work more “pleasurable” as there’s usually less internal politics and less fighting for positions and salaries. He sums up, “You have the opportunity to actually work and do what you like to do.”
Ashton Tweed would like to thank Baruch Ben Dor for this interview. If your company needs help from members of the Ashton Tweed Life Sciences Executive Talent Bank, we can supply that assistance either on an interim or a permanent basis. Additionally, if you are among the many life sciences professionals affected by the changes in the industry, Ashton Tweed can help you find the right placement opportunity — from product discovery through commercialization at leading life sciences companies — including interim executive positions and full-time placements. In either case, please email Ashton Tweed or call us at 610-725-0290. Ashton Tweed is pleased to continue to present insightful articles of interest to the industry.