Envisioneering Signs Pact with BrachySciences
After years of research, development and trials, St. Louis-based Envisioneering Medical Technologies is poised to sell its prostate cancer diagnosing and treatment technology worldwide.
In January, Medicare began covering 3-D ultrasounds made with Envisioneering TargetScan technology. In March, Envisioneering signed an agreement with Oxford, Conn.-based BrachySciences, which Envisioneering executives expect will help get the medical technology to doctors globally.
TargetScan is a combination of computer and medical hardware and computer software that enables doctors to detect and treat prostate cancer. The equipment includes an endorectal probe, which is capable of taking 3-D ultrasound images of the prostate gland; a needle and probe carriage used to make precision biopsies; computer hardware and software; and a controller device that physicians use to guide probes or needles inserted into a patient.
TargetScan gained approval last year from the U.S. Food and Drug Administration and Underwriters Laboratories Inc., a Northbrook, Ill.-based nonprofit organization that certifies products for public use.
Some well-known medical institutions already are using Envisioneering's TargetScan, including medical schools at Washington University, Duke University, University of Southern California, and the Seattle Prostate Institute.
According to Dr. Gerald Andriole, professor of surgery and chief of urology at Washington University School of Medicine and director of the Urological Research Center at Barnes-Jewish Hospital, one of the advantages of TargetScan is the ability to keep its probes fixed. That positioning allows physicians to make a more accurate scan of the prostate gland and conduct biopsies.
Bob Mills, president of Envisioneering, said Medicare's approval of TargetScan this year and the firm's partnership with BrachySciences will help Envisioneering sell equipment internationally. Mills declined to disclose how much revenue the company expects to draw from the equipment -- which costs about $70,000 -- but he said the company is targeting a huge market.
"In the U.S, there are 5,000 urologists' offices, and there about 1.2 million biopsies done every year. And when you look at treatment, they do 50,000 procedures annually," Mills said. "The opportunities are tremendous." Currently, only two-dimensional ultrasounds are used widely to diagnose prostate cancer in the United States. Mills said TargetScan, while more expensive than the equipment producing two-dimensional images, will be competitive because of its accuracy and fixed position capability, and it is attracting higher Medicare reimbursement rates.
The distribution agreement Envisioneering signed with BrachySciences is important because the Connecticut medical equipment maker already has a good national distribution network, Mills said. BrachySciences develops markets, sells and distributes radioactive seeds as well as equipment used in brachytherapy procedures. Physicians treat cancer directly in brachytherapy procedures by inserting radioactive medication into the cancerous tissue of a patient.
Mills said Medicare coverage of TargetScan 3-D ultrasounds is likely to broaden insurance coverage for the device, because private-sector health insurers often follow the lead of the federal government.
Jim Taylor, former vice president of technology at Envisioneering, developed the concept for TargetScan in 2001, when he ran the company as Envisioneering Product Development Corp. Mills and Bruce Olson stepped in to recapitalize the company in 2003 and renamed it Envisioneering Medical Technologies.
Mills said Envisioneering Medical assumed ownership of all the technology patents that were previously held by Envisioneering Product Development.
Late last year Robert Hermann Jr., chief executive of holding company Hermann Cos., and Bill Holekamp, a former Enterprise Rent-A-Car executive who runs his own private investment fund, Holekamp Capital, along with other investors contributed an additional $4 million to finance Envisioneering. Mills said the new money brought the total capital invested to $8 million.
Olson, who is chairman at Envisioneering and provided the bulk of recapitalization at the company in 2003, also contributed in the investment round last year.
St. Louis Business Journal, May 12, 2006. Article by Patick L. Thimangu
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