Sometimes entrepreneurship isn’t the provenance of the young and the quick— and sometimes innovation just won’t go gentle into the night.
Jim Hitchin, for example, is a 66-year-old San Diego entrepreneur who is working to revive biomedical technology acquired in 2004 from the bankruptcy of a Minneapolis, MN, medical device company. Hitchin previously served on the board of Southern California’s Tech Coast Angels, and occasionally worked on projects for venture capital firms. He sold his last company, an infant ventilator maker called Infrasonics, in 1996 for about $66 million.
Now he’s trying to resuscitate SpectraScience (OTCBB: SCIE), a recast medical device startup housed in a faded technology park in San Diego’s famed Sorrento Valley. “I just really like the pioneering part of it,” Hitchin told me during a tour of the 10-employee company. Hitchin estimates SpectraScience spent $55 million in its previous incarnation to develop “optical biopsy” technology that combines a low-power, fiber-optic blue laser with computerized spectroscopy.
Hitchin says he was part of a group that spent about $50,000 to acquire the technology in 2004 out of SpectraScience’s bankruptcy. After moving the company’s equipment from a Minnesota warehouse to San Diego, he’s spent the past five years updating SpectraScience’s technology and rebuilding the business.
The concept underlying the company’s medical device, known as WavSTAT, is fairly simple. The fiber optic laser is incorporated within an endoscope, the flexible medical instrument used to examine the colon and other internal organs. It is used to momentarily illuminate a small area on a polyp or other suspect tissue. The surface layer cells first absorb the laser light and then glow—and that fluorescence can be analyzed to determine if the cells are abnormal, and potentially pre-cancerous.
“Light is just energy,” Hitchin says. “If you pump it in, (the tissue) will give some energy back.” The important thing, he notes, is that healthy cells give off energy in way that looks different than the energy emitted by abnormal cells. The Food and Drug Administration approved the technology about nine years for use in colonoscopies, in which Hitchin says the WavSTAT instrument has a 96 percent accuracy rate in identifying pre-cancerous tissue.
Irving Bigio of Boston University’s Biomedical Optics Laboratory says the basic concepts of optical spectroscopy are sound, although there are a variety of different approaches under development. “To date, many of the systems have been very expensive, and require sophisticated training—practically a PhD level person to operate,” Bigio says. Getting doctors to adopt the technology also poses a challenge.
Hitchin acknowledged as much when he told me, “Getting the technology into a friendly user format has been a big barrier to entry.” In an effort to address such issues, and to expand commercialization efforts, Hitchins says SpectraScience raised about $5.5 million last year from individual investors, as well as Perkins Capital Management of Wayzata, MN, and Equity Dynamics, a Des Moines, IA, investment firm headed by entrepreneur John Poppajohn.
While SpectraScience faces some competition, such as Oncoscope of Durham, NC, it addressed one potential rival in 2006 by acquiring MediaSpectra of Lexington, MA. Hitchin says the San Diego company acquired the Massachusetts firm after the FDA had approved MediaSpectra’s Luma Imaging System as an aid for detecting precancerous cervix tissue following an abnormal Pap test.
Hitchin says one reason the deal came about was that financial giant AIG, which was among MediaSpectra’s backers, ended its support in 2006. “We were able to buy them because we are a public company and we issued them 11 million shares, which we valued at about $5 million,” Hitchin says.
Earlier this month, SpectraScience placed its first Luma Imaging System at Women’s Integrative Health, a clinic in Encinitas, CA, about 20 miles north of San Diego. The instruments are very expensive, Hitchin says, and the company is installing its equipment on a pay-for-service basis.
SpectraScience has been cleared by European regulators to use its WavSTAT instrument in both colonoscopies and esophagoscopies, Hitchin says. “The first order came in about two months ago. We’re basically setting up our distribution all over Europe.”
Hitchin says the company has just begun trying to market its WavSTAT system for colonoscopies in the United States. But he notes, “One of the problems in the U.S. is (getting health insurance) reimbursement. So we’re working now to get the codes.” Meanwhile, SpectraScience has also begun recruiting participants for a clinical trial intended to evaluate the use of WavSTAT as a way to detect throat cancer in U.S. esophagoscopies.
In each application, Hitchin contends his company’s optical biopsy technology saves time and offers better patient care. He estimates about 3 million Americans who undergo colonoscopies each year could benefit from the technology—and the potential market for detecting abnormal, pre-cancerous tissue in the throat is even bigger.