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Indiana software firm growing with life sciences focus

October 29, 2011

Jumping into the software consulting business back in 1997, Tim DeFrench would have taken any work that came his way.

The former Software Artistry engineer was branching out on his own after his employer was bought by IBM Corp. and was eager to build his business with a varied client base. The first few projects in the door called for software that would run complex medical devices that are closely regulated by the U.S. Food and Drug Administration.

For DeFrench and his new company, RND Group Inc., a specialty was born.

“Our first couple of projects just happened to be related to the medical-device field and we just found that there was a different skill set needed than the average consulting company [had] to be able to do work for FDA-regulated devices,” he said.

Over the past 14 years, DeFrench and his ever-expanding cadre of engineers have written software for a range of medical devices, such as glucose meters, weight management tools and sophisticated laboratory testing equipment. Most of RND’s clients develop products that use a microprocessor, requiring custom software to analyze algorithms, connect to other applications and products, and test and configure the product.

RND often brings in the large equipment that requires the software, storing the proprietary devices under lock and key at its Castleton-area offices while engineers go about the software development process.

Once that stage is cleared, the company must complete rigorous testing to meet strict federal requirements for regulated devices.

“For the FDA, you generally have to perform formal testing on the equipment where you provide objective evidence in the way of printouts and screen shots that shows the testing was done and the device performed the way it was supposed to,” DeFrench said.

RND then passes the completed project back to the client and continues to provide support for the life of the device.

“They are a one-stop shop for the development and validation of the software. You’re able to just hand it over to them and they manage it,” said George Green, former director of molecular diagnostics at Johnson & Johnson who hired RND several years back to complete software development for metastatic breast cancer testing.

For the most part, RND’s competition comes from the clients themselves. When possible, medical-device makers handle software development in-house. RND is called in if the workload becomes excessive.

Medical-device companies “tend to be understaffed,” said Joe Meyer, formerly of Roche Diagnostics and now chief operating officer of the biomedicines unit at Eli Lilly and Co. “Often, they have a backlog, which presents an opportunity for companies like RND.”

Two large clients—San Diego-based molecular diagnostics firm Gen-Probe Inc. and Netherlands-based Qiagen N.V.—account for about half of RND’s business, while a handful of startups fill the remaining 50 percent. That mix was beneficial over the past couple of years.

“What we found in 2008, all of the smaller clients went away but now they are starting to come back. Our big customers easily kept us busy through the recession,” he said.

DeFrench credits word of mouth and executive mobility within medical-device circles for RND’s steady stream of business.

“What we find is that the medical-device market is very closely knit. Once we have successful product out to market, those people who went to work for different companies bring us in to work with them again,” he said.

Relationships and repeat customers are critical, even if key contacts switch employers. “Ninety percent of our marketing is through referrals and people who we have worked with in the past [who] changed jobs.”

That loyalty has propelled RND down a path of continuous growth, with the company posting several consecutive years of increased revenue. This year, DeFrench projects sales of $5.5 million, up from $5.2 million in 2010 and $2.3 million five years ago.

To keep up with growth, DeFrench is constantly mining the software-development and medical-research sectors for talent. This often means looking further afield than Indianapolis’ burgeoning life sciences work force.

“We really can’t find a lot of people locally that have a lot of experience in medical-device software,” he said. “Getting good, qualified people is our biggest challenge.”

Still, DeFrench, an Ohio native, appreciates the significant benefits of doing business in the low-cost Midwest and has high hopes for local life sciences initiatives, despite many stops and starts over the past several years.

“It seems like this time the push is for real,” he said.•

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