Medical-device maker Suros Surgical Systems was one of the fastest-growing companies in Indianapolis history. Just six years after forming it in 2000, founders sold it for $248 million.
Is it any wonder they want to work together again?
In late July, former Suros Chairman Jim Baumgardt and former Vice President of Sales Jeff Hanthorn joined locally based NICO Corp., the startup launched early this year by former Suros CEO Jim Pearson and Joseph Mark, one of Suros’ founders.
The mission of NICO-an acronym for Neural Introventional Co.-is to commercialize a new minimally invasive medical device that can remove tumors and tissues from the human brain.
Current technology for brain excision requires doctors to cut a hole in the skull the size of a bottle cap. NICO’s device would need a hole only the size of a pencil head.
The device is based on the same technology Suros used to create its innovative equipment for automated needle breast biopsies.
The new company licensed the technology from Suros’ purchaser, Bedford, Mass.-based Hologic Inc.
Pearson and Mark recently raised NICO’s first $1 million in capital from Suros’ original 45 investors. They also hired Rose-Hulman Ventures to help iron out engineering of NICO’s device-just as the technology incubator once did for Suros.
Baumgardt, a former Guidant Corp. executive, is coming aboard NICO as non-executive chairman. Hanthorn will serve as chief operating officer.
Talk about getting the band back together.
“We were blessed, having a list of people who helped us a lot on Suros. Some are going to fit this model very well. Some will not, because it’s obviously a different market,” Baumgardt said. “At least, there’s a core that’s starting to kick this one down the road.”
According to NICO’s market research, 200,000 people in the United States are diagnosed annually with brain tumors. Worldwide, the yearly count is more like 2 million.
Now that NICO has assembled a management team, its top priority is to develop a prototype medical device.
Under Suros, the technology already had limited human testing on 40 patients. Thanks to that effort, Baumgardt said, NICO has passed many of its regulatory hurdles. The company plans more tests this year.
NICO now is attempting to fine-tune its apparatus, which, like Suros’ Automated Tissue Excision and Collection system, includes a platform machine that uses handheld instruments that are disposed of after each surgery.
Brian Dougherty, Rose-Hulman Ventures’ manager of engineering, said he’s had a team of four working on NICO’s device for five months.
Once RHV completes its work, Dougherty said, the plan is to hand the project over to locally based Medivative Technologies LLC-the same U.S. Food and Drug Administration contract manufacturer that helped produce Suros’ device. NICO intends to launch its product early next year.
In the meantime, NICO’s other priority is to gather suggestions and validation from top physicians.
Early testimonials from the likes of New York’s Sloan-Kettering Cancer Center and the Mayo Clinic were key drivers of Suros’ ability to rapidly penetrate the hospital sales market.
Developing a new medical device isn’t cheap. Although it hasn’t yet established physical offices, NICO already has spent a fair share of the $1 million it raised. Baumgardt expects the company to return to investors before year’s end.
Dougherty believes NICO has a strong chance of replicating Suros’ success. He said that what sets the executives’ apart is their measured approach to building a company one brick at a time.
The company’s managers recently visited RHV and shared with the student staff some of the lessons they’d learned.
“They talked a lot about the growth of Suros and its company culture and how to maintain it,” Dougherty said. “A lot of the ideas are common sense, when you’re sitting back and not in the heat of the moment dealing with it, but they’re what everyone messes up.”
“[Many entrepreneurs] get overzealous. They oversell their manufacturing ability or can’t get product out the door,” he added. “But these guys execute where others fail.”