Lantos Raises $3.8M to Push 3D Ear Scanner Closer to Market

7/26/12Follow @arleneweintraub

When Cambridge, MA-based Lantos Technologies filed SEC documents earlier this month indicating that it raised $3.8 of a planned $6.6 million funding round, the company was pretty much mum on the matter—no press releases or announcements of any kind. But when Xconomy reached Doug Hart, the MIT mechanical engineering professor who founded the company in 2009, he made it clear the financing marks an important milestone for the company. “It should take us well into product launch and hopefully to cash positive,” he says.

That product is the Lantos 3D Intra-Aural Digital Scanner, a handheld imaging device designed to give audiologists an easy and accurate way to fit patients for hearing aids. Lantos released a demo version of its device in March, and it has spent the last several months working out “some annoying manufacturing bugs,” Hart says. The company is completing its clinical trial program and working with the FDA on putting together a package for approval, he adds.

Lantos raised $5.7 million in two previous rounds, according to SEC filings. It is backed by several Boston-area investors, including Catalyst Health Ventures, Excel Venture Management, and Mass Medical Angels. Hart says existing investors participated in the most recent round along with one new investor whom he did not name.

Lantos’ technology is designed to shake up the antiquated audiology-fitting process, which until now has required physicians to make molds of patients’ ears out of silicon. “You can cause a great deal of pain by shoving silicon down someone’s ear,” Hart says. What’s more, the process is imprecise, because it only captures the ear in one position, when in fact, the ear canal’s shape changes whenever a patient moves. That’s why a lot of hearing aids don’t fit as well as they could, Hart says.

The company’s 3D scanner takes multiple images inside patients’ ear canals while they’re moving their heads. Its technology backbone was originally developed to detect the thickness of oil inside engines. Lantos adapted the technology to the ear by developing a flexible insert that expands in the ear canal. The insert contains dye and a fiber-optic camera that capture images based on light absorption.

Lantos debuted its 3D scanner at the American Academy of Audiology’s (AAA) annual meeting in March in Boston, and Hart says it was “extremely well received.”

That said, Lantos will likely face competition. Atlanta-based 3DM Systems also displayed its 3D camera at the AAA meeting, creating some buzz in the audiology world about a coming showdown between the two companies. Hart says he wouldn’t be surprised if even more rivals pop up in the future “Siemens and other major manufacturers have had their own development projects, but we don’t know what stage they’ve reached,” Hart says.

Lantos brings quite a bit of engineering prowess to its ear scanner. Before founding the company, Hart co-founded Brontes Technologies, which was bought by St. Paul, MN-based 3M for $95 million in 2006. Brontes, which developed a 3D oral imaging system, was co-founded by engineer Federico Frigerio, who joined Hart at Lantos and now serves as the company’s chief scientific officer.

Hart was inspired to move from the mouth to the ears by his father, who has struggled with hearing problems. ”My dad is an engineer himself and quite an inventor,” Hart says. “He was frustrated because he’d want to call me up on the phone and talk and we couldn’t do that. In the process, I realized that most hearing aids just don’t function properly.” After delving into the audiology industry, Hart learned that when it comes to typical problems people face with their hearing aids—such as pesky feedback or just plain ineffectiveness—poor fit is often the culprit.

Hart says he can’t predict when the FDA might approve the 3D ear scanner, but the company is already getting its commercialization plan in place, he says. Lantos plans to build its own sales force and to form distribution partnerships with other companies, he says. “We’re in negotiations with multiple companies. The [sales] model will be a combination of shared revenue as well as selling directly to audiologists.”

Hart envisions an audience for Lantos’s technology beyond the audiology community, too. “There’s also an emerging market of custom-fit audio devices, from headphones to tools for in-your-ear health monitoring,” Hart says. Lantos has already heard from companies that make audio earphones, such as Park City, Utah-based Skullcandy, Hart says. “We’re currently focused only on the hearing market, but when you look at other opportunities, there’s a huge list.”

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