Despite the challenging economy, medical devices, particularly surgical instruments, are still wending their way to market and investors are still biting.

 

“Certainly, funding for these kinds of things has been down for the last couple of years, but I think there’s no question that it’s starting to pick up. The bottom line is when you have something like this that really works, with more and more data to prove that it really works, that becomes the issue,” said Howard Rosenberg, MD, a plastic surgeon in Mountain View, Calif. Rosenberg has been involved since the early stages with a startup company called PEAK Surgical, which has developed a product spun off from Stanford University research.

 

PEAK Surgical has raised more than $29 million in three rounds of private financing. In February 2008, the company closed a Series C financing that raised $21 million, and last October, the company signed a distribution and marketing agreement with Medtronic Inc. Rosenberg likes the product so much that he bought some shares himself.

 

The company’s flagship device is the PEAK Surgery System, which includes a generator and the PlasmaBlade™ that uses pulsed plasma radiofrequency energy to cut through all types of soft tissue, including skin, fat and muscle, and minimizes collateral tissue damage. The system replaces the traditional use of a scalpel and electrocautery. “Basically, it cuts without heat,” Rosenberg explained.

 

After the product received FDA clearance in July 2008, Rosenberg was one of the first surgeons to use it, and he participated in a 20-patient randomized, controlled, single-blinded study. He performed 10 tummy tucks using conventional methods and 10 using the PlasmaBlade. “What we found was a statistical significant improvement in all parameters when we used the PlasmaBlade – less pain, less pain medication, a faster return to normal diet and activities, less blood loss and less drainage. There was a dramatic difference,” he said. Today, he uses the PlasmaBlade almost exclusively.

 

Awaiting FDA approval is early-stage, Massachusetts-based NuOrtho Surgical, working simultaneously on three surgical platforms designed to preserve tissue during orthopedic procedures. In fact, the company, which was incorporated in September 2008, has trademarked the phrase Tissue Preservation™. NuOrtho holds nine patents and two more are pending.

 

“Our team feels that you want to preserve as much of the natural anatomy as possible,” said Jeff Morrill, NuOrtho’s president and chief executive officer. To accomplish the task, the technology employs low-level, radiofrequency energy that protects the treatment site, promotes tissue healing and hastens patient recovery. The three pieces of the NuOrtho puzzle are: an instrument used to deliver agents or molecules via arthroscopy to promote healing; a soft-tissue contouring device; and interfacing agents for bone. Morrill says that third platform is NuOrtho’s “game-changer,” adding, “We can fuse bone together, so you could potentially eliminate plates and screws in some orthopedic procedures.”

 

The company is first seeking clearance for the soft-tissue product, since the probe is needed to perform the bone fusion. “That’s been our strategy all along,” Morrill said. “We hope to have that in the market later on this year. We’ll target knee procedures, specifically the smoothing of articular cartilage lesions in the knee.”

 

In the spirit of keeping down healthcare costs, Morrill said NuOrtho designed its products in conjunction with a company that already produces a popular generator in use today.

 

In November 2009, NuOrtho secured $1 million in Series B financing from private investors and individuals involved in the orthopedic industry. “The economy is tough,” Morrill said, “but I think good products are recognized, and people find a way to get them to market.”

 

David Palmer, chief executive officer of ClearCount Medical Solutions in Pittsburgh, said much the same thing. “We’re very fortunate to have good, early investors who were investing for the long term. We have some venture-capital investors as well.”

 

ClearCount was founded by two researchers from Carnegie Mellon University, who based the company’s technology on a patent filed by a surgical nurse and her husband. What they had devised was a strategy to keep track of surgical sponges during a procedure. Today, ClearCount has the only sponge counting-and-detection system on the market. “Using radiofrequency identification technology, our SmartSponge® System allows us to uniquely identify and count surgical sponges to prevent the sponges from being left inside of the patient,” Palmer said, adding that elimination of this potential medical error is a risk-management plus. To keep track of the sponges, an RFID tag is embedded into each one during manufacturing.

 

In February, the company announced FDA clearance for its SmartWand-DTX. Nurses and other surgical assistants wave the wand over an unopened pack of sponges to get a count, then validate the number of used sponges with another wand. If the counts don’t match, the surgeon waves the wand over the patient to locate the missing sponge. The SmartWand technology displays how many sponges are inside the patient and what type of sponges they are.

 

ClearCount recently entered into a sales and distribution agreement with MedLine Industries and the product, which is manufactured locally, is on the market.

 

“We continue to explore other ways to leverage this Class I technology in the operating room,” Palmer said, “and we do have some things on the drawing boards right now.”