This week, Dr. Glen House is shopping his catheter technology to investors in hopes of raising $1.5 million for a big push to get his product to market by December.
House, founder and CEO of Adapta Medical Inc. in Colorado Springs, has taken an age-old product, the catheter, a tube system placed in the body to drain and collect urine from the bladder, and modernized it so people with limited hand dexterity, like him, can use it.
He unveiled the product last weekend in Houston at the Abilities Expo, where new products and services for people with disabilities were on display. He’s feeling so confident about his product that he has ordered 100,000 units to be manufactured.
“It can change lives,” House said.
House broke his neck when he was 20 years old and is a C7 quadriplegic. His grip is very limited. He cannot, for example, grab a straw. That has meant his medical options for bladder management have been limited too.
He set out to make a product that he could use — that the estimated 48,000 C7 quadriplegics in the U.S. could use.
Maybe no one had thought about changing the catheter. Maybe no one had the cash to make it happen, House said.
But catheters have not been updated for 40 years, said Larry Martel, Adapta Medical chief operating officer. Martel has 25 years experience in medical devices and was previously vice president of operations at Springs-based medical device maker Spectrenetics.
“The people who designed all of these had full use of their hands,” Martel said as he looked over a half dozen catheters, Adapta Medical’s competition. House cannot open the package of any of the existing catheters.
There are two types of catheters, one called intermittent catheter and one called indwelling. House, a physiatrist and medical director of the Center for Neuro and Trauma Rehabilitation at Penrose Hospital, said studies show that indwelling catheters — those left inside the body — can lead to infections, increase risk of bladder cancer and increase risk of kidney stones. The problems are reduced with intermittent catheters.
But, the indwelling catheter is all he could use, he said.
In 2000, House designed his first intermittent catheter. Over the next 10 years the design changed, the materials changed and the engineering changed. He had one product manufactured in Mexico. It never went to market.
“It’s a lot of trial and error,” House said. “It’s a lot of back to the drawing board.”
Adapta Medical has spent nearly $2 million developing its catheter called PerfIC Cath.
“If we were going to call it the PerfIC Cath, it had to be perfect,” House said.
House’s product is packaged in a rip-away plastic bag that can be pulled open using two thumbholes. The catheter bag has a hook so that it can rest on a person’s wheel chair without risk of falling on the floor. There is a special gel chamber that releases gel for smooth insertion — but is not already pre-applied like the existing catheters, which makes it difficult to grasp for someone with limited dexterity.
In January, the PerfIC Cath received FDA approval. Then came the real test — House sent his product to rehabilitation hospitals around the country.
“People wanted to start ordering them right then,” House said. “We are now ready to take a giant step and make millions of these.”
The first 50,000 units will be made in the Springs at Adapta Medical’s warehouse, off north Cascade Avenue. House designed all the machine tools that specially cut and measure the product. But, in order to increase production the product will be contracted out.
The margin on catheters is low, Martel said. Medicaid reimburses each catheter at less than $10 per unit. So, it will be important for AdaptaMedical to take a big chunk of the market: there are 56 million catheters used each day, he said. That makes catheters a $500 million industry in the U.S. and $1.6 billion industry worldwide.
Adapta Medical needs 300 customers to break even, figuring that each customer uses about four to six catheters a day or 200 a month.
However, House predicts the company will have 1,000 customers in its first year and 4,000 by year three. The company is projecting revenue for its first year to be $2.8 million and $24.3 million by its third year.
“Our target, the bulls-eye market, is those with limited dexterity,” House said. “Then the next ring is anyone who catheterizes — it’s easier, it’s better.”
Hospitals will like the product too, he said. The closed system catheter design also helps reduce infection, House said.
The product has not had trouble finding investors, even in this economy, said Dolly Wong, Adapta Medical CFO. It’s a product that helps people go from dependent to independent, she said.
“(Investors) can see what we’ve done and where we are going,” she said. “This has been easier to invest in than putting money into the market — this has more potential.”
In the next four months, House will take his product to four more expos. He will start advertising in specialty magazines and he’ll pick up the phone and call his doctor friends.
“We won’t give up until we are successful,” House said. “We have a product people need.”