PerkinElmer (NYSE: PKI), a Waltham, MA-based maker of tools for the life sciences industry, announced today that it has bought London-based Dexela, a developer of X-ray detection technology. Financial terms of the deal weren’t revealed. The acquisition adds to Perkin’s portfolio of medical imaging technology for surgery, dental CT, cardiology, and mammography applications, the company said.

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As an entrepreneur, sometimes it doesn’t matter how much money you raised, from whom, or even what your company is building. Sometimes it just matters that you’re alive.

Meet Gina Ashe, the co-founder and CEO of stealthy Internet startup Krush, based in Cambridge, MA. She isn’t talking much about her new business yet, but a report in Mass High Tech said the company recently raised a Series A round from Boston-area angel investors and outside institutions, and it put the firm’s pre-funding valuation at more than $6 million. Previously, Ashe was part of the founding team at Sermo, the online physician community, and she has senior executive experience in marketing and finance at a number of firms.

But the most important thing about Ashe is that she is a survivor. On the afternoon of August 19, 2010, she had just left an investor meeting and was driving home on Route 2 west of Boston, when an oncoming car crossed the median and smashed into her head-on at 85 mph. The driver of that car, Shannon Gwiazda, died in the crash. Four other people including Ashe were injured in the four-car pileup, which closed the highway for several hours.

Ashe survived—in part because she was driving a Cadillac CTS 4, a car that people had teased her about (who drives a Cadillac?); the mid-size luxury sedan had a huge engine up front and extensive airbags. “It truly saved my life,” she says.

But she sustained serious injuries, including a smashed heel and ankle, four broken ribs, and cuts and burns over much of her body. She spent weeks in the hospital and was told she wouldn’t walk again. But with help from Daniel Palestrant, Sermo’s CEO, she found a surgeon at Brigham & Women’s Hospital who performed a new procedure that she says accelerated her recovery by six months. The surgery involved putting a plate and seven screws in her leg.

Ashe was bedridden for weeks, but progressed to using a wheelchair and then crutches—on which she delivered her financing pitch at the Open Angel Forum in Cambridge in October (which won her some Boston-area investors). Meanwhile, her Krush co-founders, Alexis Kopikis and Alan Osman from Propel Consulting, stood by her and kept the project moving. The site was two weeks away from launching beta trials when the accident happened. “There were days I thought I couldn’t go on, but they said, ‘No you have to think about this [or that],’” she says.

The local business community also provided a lot of support. “Women CEOs rallied … Next Page »

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I have been intrigued by numerous articles written recently on how hospital administrators are looking to other industries to learn how to adopt processes to reduce errors and improve quality of care. One recent example is that of hospitals learning from the manufacturing sector and adopting their lean manufacturing techniques to improve the efficient flow of patients through their systems and to cut down on errors. Another article, following the publication of an Oxford University study in the British medical journal Quality and Safety in Health Care, says hospitals are looking to learn new tricks from the auto racing industry to improve operations and patient safety. Then there’s Atul Gawande’s new book The Checklist Manifesto, which shows how straightforward checklists like those used by airline pilots can reduce errors in the operating room, at the bedside, and in many other situations.

As I have come across these instances of hospitals trying to learn from outside industries, I couldn’t help but be reminded of that old poem by Robert Fulghum called “All I Really Need to Know I Learned in Kindergarten.” Here is an excerpt:

All I Really Need To Know about how to live and what to do
and how to be I learned in kindergarten. These are the things I learned:
Share everything.
Play fair.
Don’t hit people.
Put things back where you found them.
Clean up your own mess.
Don’t take things that aren’t yours.
Say you’re sorry when you hurt somebody.
Wash your hands before you eat.
Flush.
Warm cookies and cold milk are good for you.

The poem ends with:

And it is still true, no matter how old you
are—when you go out into the world, it is best
to hold hands and stick together.

In thinking about this classic of 1990s pop psychology, it struck me that while high technology fields such as auto racing, airlines, and manufacturing can offer some important ideas about process management to America’s hospitals, many of the ideas for how to run a high quality hospital were first learned in kindergarten—but just didn’t stick.

For instance:

1) Share everything. If hospitals did a better job of sharing data between caregivers, departments, and families, the process of care delivery would be vastly improved. Yes, this can be done with the electronic medical records (EMR) systems that everyone is talking about, but if kindergarteners know the importance of sharing, why is it so controversial for hospitals, many of which are still noodling about whether they need to adopt technology to manage patient information? According to the 21st Annual 2010 HIMSS Leadership Survey, only 22 percent of hospitals have EMR systems fully implemented across their entire organization and another 26 percent have EMRs implemented in one facility of their hospital system. That means that more than 50 percent aren’t in a position to effectively share data about patients to maximize quality of care and eliminate redundancies and error.

2) Put things back where you found them. This is a good one for the surgical suite, where there is a terrible problem of surgical sponges and other accoutrements accidentally being left inside of patients. Estimates have varied as to whether this happens in 1 out of every 1000 surgeries or 1 out of every 18,000 surgeries, but with about 50 million surgeries occurring each year in the U.S., … Next Page »

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Aptus Endosystems in Sunnyvale, CA, which makes devices for endovascular surgery to repair aortic aneurysms, said in a statement yesterday that it has raised $15 million in “Series AA” funding. U.S. Ventures and Longitude Capital led the round, which brings Aptus’s total venture funding to at least $65 million. The company said it will use the funds to pursue regulatory approval and commercialization of its “EndoStapling” system for aneurysm repair in the U.S. and Europe, and to develop thoracic and abdominal versions of the technology.

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EndoGastric Solutions in Redwood City, CA, said today that it has raised $30 million in Series F financing to support development and marketing of its devices for incisionless surgery to treat acid reflux and other gastrointestinal conditions. Canaan Partners and Radius Ventures led the round, which was joined by existing investors Advanced Technology Ventures, MPM Capital, Foundation Medical Partners, Chicago Growth Partners, and De Novo Ventures.

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Medical device maker RF Surgical Systems, which is based in Bellevue, WA, and has R&D operations in San Diego, has raised $2.5 million in equity financing out of a total offering of $5 million, according to a regulatory filing. The company confirmed the funding today. It says it had raised approximately $21 million before this latest round, which is an extension to its Series A financing and comes from existing investors. RF Surgical Systems was founded in 2004 and has developed patented technologies for detecting and preventing retained surgical sponges in patients undergoing surgery. The company’s product was approved by the FDA in 2006.

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Writing about life sciences innovation around the country, I hear stories every day of companies that envision transforming medical standards of care through new drugs or devices. San Diego-based NuVasive is living the dream right now.

NuVasive (NASDAQ: NUVA), as its name suggests, has developed a less invasive way for surgeons to do spinal fusion surgeries. It was a bold and innovative idea when the company was founded in 1995, and when it first brought this system to the U.S. market more than five years ago. Now the leading edge is becoming mainstream as more doctors learn the procedure, and patients like basketball Hall of Famer Bill Walton share their NuVasive success stories. Not even hard questions from insurers who balked at paying the bills seem to have slowed the company’s success—or the growth of NuVasive’s shares on Wall Street.

More than 5 million Americans suffer from some form of chronic back pain, and that has created a spinal fusion surgery market worth an estimated $5.1 billion a year in the U.S. Big medical device players like Medtronic, Johnson & Johnson, and Synthes are leaders in this market with replacement disks, screws and rods that surgeons use to hold the vertebrae in place. But NuVasive has been grabbing market share, and boosting sales at a greater than 40 percent annual clip for years. The company expects to grow sales by more than 30 percent this year, on its way to estimated annual sales of as much as $500 million.

When a couple major private insurers, Aetna and UnitedHealth, publicly stated last year they wanted to see more evidence that the NuVasive system was as good as advertised, spinal surgeons and patients leapt to the company’s defense. The insurers backed off within six months and said they would go back to reimbursing the product. Walton, who suffered from excrutiating back pain for years, recently told a Union-Tribune sports columnist that “I’m getting back into the game of life,” after he had the NuVasive surgery done.

“At the end of the day, this is a higher efficacy procedure. We really have a better, faster, cheaper procedure for our patients, the people we serve,” says Michael Lambert, NuVasive’s chief financial officer.

I got an in-depth overview of the company, and the spinal market, from Lambert and Patrick Williams, the company’s vice president of finance and investor relations, when I visited their office in San Diego a couple weeks ago. What NuVasive does is really different from what its competitors have been offering surgeons and their patients.

The anatomy is quite interesting. Around age 30, people have the maximum amount of water in the intravertebral tissues, which work like shock absorbers in the spine, Lambert says. But that gradually goes downhill as we age. The space between vertebrae shrinks, nerves get pinched, and … Next Page »

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Here’s where the rubber hits the road for Leon Amariglio, Doron Harlev, and the startup they co-founded, Rhythmia Medical. After spending years to create an advanced system for mapping hearts during cardiac procedures, Rhythmia plans to test its technology in humans for the first time this year, Amariglio tells Xconomy.

The Burlington, MA-based company’s investors will soon get to see whether the $12 million they’ve pumped into Rhythmia since its launch in 2004 was worth the gamble. Norwich Ventures, of Waltham, MA, and Wyomissing, PA, has the most riding on Rhythmia among the startup’s investors, most of whom are either individual doctors, or business experts like MIT entrepreneurship professor Ed Roberts. The firm plans to begin a clinical trial of its catheter-based system in Europe in the coming months, testing the technology in fewer than 100 patients who are undergoing procedures to correct their irregular heartbeats, according to the firm’s co-CEO, Amariglio.

When asked how he felt about entering human studies, Amariglio said, “It’s exciting because it’s real, and it’s great to finally to be here.”

Rhythmia is attempting to improve the speed and resolution of the catheter-based systems that cardiology specialists called electrophysiologists use to get a three-dimensional view of the heart and the location of tissue responsible for irregular heartbeats, or arrhythmias. These systems are key to pinpointing the problematic heart tissues before they are destroyed to treat a patient’s arrhythmia. But existing technologies often require electrophysiologists to spend two to three hours to get a clear picture of the heart and where the culpable tissue resides.

Amariglio and Harlev, the other co-CEO of Rhythmia, decided to start their company without having any technology to solve this problem. (They met in the early half of the last decade while Amariglio was a student at … Next Page »

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Every once in a while, I sit down with a businessperson who brings a unique perspective to a huge global trend—and helps me see things in a profound new light. In this case, that person is Kelly Jo MacArthur, and the global trend is the explosion of social media and its broader impact on corporations.

MacArthur was the former general counsel, senior vice president, and chief of staff at Seattle-based RealNetworks—and she also did a stint at Linden Lab, creators of the virtual world Second Life—so she has her digital media and Internet technologies down cold. A 10-year veteran of Real, she left the company in 2007 and has been focusing on consulting work with startups, big companies, and other organizations across the fields of social media, networking technologies, cleantech and sustainability, traditional media, and arts.

We were talking recently about the future of companies like Twitter and Facebook, and what struck me was the way MacArthur thinks of social media as an inevitable—and inherently predictable—evolution of communication technologies on the Internet. That means smart entrepreneurs and executives should be able to anticipate how all of this is affecting societal behavior, and what the new opportunities will be. What’s more, she’s finding that these technologies are forcing big companies and organizations to completely rethink their core strategy and value proposition—indeed, their very existence.

Here’s an edited transcript of our conversation:

Xconomy: So what are you hearing from companies out in the field?

Kelly Jo MacArthur: In my own work as a strategic advisor to CEOs, various boards, and executives on their corporate strategy, the inevitable conversation is, “What should we be doing with social media?” I’m not a marketing person—they work with their advertising and marketing agencies—but it leads you to the conversation that each business, especially in more traditional, entrenched industries, should be thinking about how they’re relevant in the future. And how we as citizens and consumers are demanding more, and also participating more, in the offerings and opportunities that these businesses have.

There’s a huge opportunity, no matter what business you’re in, if you’re constantly thinking ahead about how we as societies are shifting. Versus focusing on, “Should I be using this tool, or should I have a Facebook page?” You should be using these tools for your … Next Page »

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Salient Surgical Technologies of Portsmouth, NH, has raised $15 million in equity-based financing from a group of 10 unnamed investors, according to a regulatory filing published online yesterday. Established in 1999 and formerly known as Tissuelink Medical, Salient makes devices that stop bleeding and seal wounds by allowing surgeons to apply focused radio-frequency energy and saline solution to collagen fibers in the body. Salient raised $17.9 million in Series F funding in October 2008, with backing from, Piper Jafray Ventures, Arnerich Messina & Associates, Medtronic, and Rivervest Venture Partners; the Series F round came shortly after Salient withdrew plans for an $86 million initial public offering.

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Cambridge, MA-based Javelin Pharmaceuticals (AMEX:JAV) has agreed to be acquired by Myriad Pharmaceuticals (NASDAQ:MYRX) of Salt Lake City in an all-stock merger, the companies reported last week. The merger agreement would initially give Javelin shareholders control of 41 percent of the stock in the combined company and up to 45 percent ownership of the merged firm depending on the timing of the potential FDA approval of Javelin’s lead anti-pain drug, an injected formulation of diclofenac (Dyloject). The merger, which is expected to close in the first quarter of 2010, has been approved by the boards of both companies but must also be approved by the shareholders of each firm.

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Netherlands-based ProFibrix, which has a Seattle subsidiary, announced today it has raised $11 million in Series B funding, led by new investor Gilde Healthcare Partners and including existing investor Index Ventures. ProFibrix was founded in 2004 and makes a dry powder topical tissue sealant that stops bleeding during or after surgery. The product, called Fibrocaps, is currently in a clinical trial in the Netherlands. ProFibrix plans to submit an Investigational New Drug Application to the FDA in the first half of next year.

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Cardiorobotics, a medical device startup company with offices in Newport, RI and Pittsburgh, PA, said today it has raised $11.6 million in a Series A financing.  Investors in the company include Eagle Ventures, the Slater Technology Fund, and the Pittsburgh Life Sciences Greenhouse.  Cardiorobotics is developing what it calls snake robot technology, a minimally invasive surgical device for use in heart surgery.

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Before computer animation took hold of the movie industry, spaceships, exploding cities, dislodged body parts, and other scene-stealing special effects were crafted by highly skilled model makers. But after decades spent in entertainment, Lisa and Eric Chamberlain have taken their skills in the entertainment and special effects businesses and applied them to provide realistic anatomical models of human organs and tissues for the medical market.

In fact, the wife-and-husband team are running a growing western Massachusetts company, The Chamberlain Group, which counts among its customers medical devices powerhouses Boston Scientific (NYSE:BSX) and Medtronic (NYSE:MDT) as well as respected teaching hospitals like Baystate Medical Center in Springfield, MA, and Brigham and Women’s Hospital in Boston. The firm, which serves the medical market exclusively, deftly blends traditional model-making techniques with advances in imaging and computer-graphics technology to make models for surgical training and product demonstrations.

Take the company’s sinus trainer, which consists of a head and neck model with replaceable sinuses. Entellus Medical, a Maple Grove, MN, medical devices firm, began using the models last summer to train surgeons how to use its catheter-based surgical tool for treating chronic sinusitis.

“It’s extremely real in terms of the sinus anatomy,” says Dick Cassidy, vice president of sales at Entellus. Training with the surgical models takes about an hour in the surgeon’s office—much cheaper and more convenient than flying surgeons from around the country to be trained on the device in a central lab with real human cadavers, he notes.

How is it done? The Chamberlain Group, which began making surgical models in the late 1990s, has perfected a technique that … Next Page »

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[Updated, see below.--WR] Our stories last week about the shutdown of Innovative Spinal Technologies, a Mansfield, MA, company that raised $75 million in private funding to market devices for stabilizing injured spines, prompted a number of IST’s former employees and business associates to contact Xconomy to help flesh out the details of the company’s demise more fully. A picture is now emerging of an organization hobbled by management decisions that distanced it from its founding scientists in Texas, impaired its ability to sell its products to surgeons and hospitals, and exhausted its capital too quickly before it could get traction with enough sales of its spinal devices.

In particular, several sources I interviewed blame the company’s failure on IST president and CEO Scott Schorer. He’s a 40-year-old serial entrepreneur, real estate developer, and former Army Ranger who joined IST in 2002 when it was spun off by the Texas Back Institute under the name MusculoSkeletal Research Corporation. It was Schorer who transformed the company from a research incubator into a standalone medical device manufacturer, and Schorer who single-handedly raised the company’s crucial $39 million Series B venture funding round in 2005, sources agree. But the same person ultimately “drove this plane into the ground,” says Stephen Hochschuler, a spine surgeon who co-founded the Texas Back Institute and was a member of IST’s board until 2006.

IST “would make a great Harvard Business School case study of what not to do at a startup,” Hochschuler says.

As we’ve already reported, IST used much of its venture money to relocate to facilities in Massachusetts and to hire more staff, eventually growing to more than 100 employees. But disappointing sales of the company’s pedicle-screw system—marketed as a minimally invasive way to fuse or stabilize spinal segments in patients with damaged intervertebral discs—evidently meant it couldn’t sustain itself at that size. It shed staff drastically in 2008, shrinking to no more than 10 employees before finally closing its doors on January 23.

Executives tried to avert a shutdown by selling the company, and were close to a deal with Biomet Spine, a subsidiary of Warsaw, IN-based Biomet, according to one source I spoke with last week. But Biomet backed off in the end, the source says.

And now, according to a confidential IST memo shared by one source, IST is requiring customers to return all implants and surgical equipment to the company.* The memo from IST vice president of quality assurance Brian Callahan, issued January 23 (the day the company closed down), says all IST customers must immediately send back their inventory while the company works through “strategic and financial issues” and seeks a “different corporate partner” to sell the technology. Because the equipment is no longer supported by the company, the memo continues, anybody who uses it could be liable for civil and criminal penalties. It’s not known how many of IST’s devices were implanted in patients. [*Updated, 8:00 pm, 2/3/09: The first two sentences of this paragraph were edited for clarification.]

I reached Schorer by phone today, asking him about the state of affairs at IST and soliciting his responses to the criticisms lodged by former employees and associates. Contrary to an assertion from one source quoted in my January 27 story, the company has not filed for bankruptcy protection, Schorer says. “We hope to avoid that,” he says. “Obviously we’re trying to sell assets in order to take care of our liabilities and obligations to all of our constituents—the creditors, the shareholders, and the employees.”

Schorer said that as long as these negotiations were going on, he will not be able to respond in detail to questions or criticisms about the path the company has taken. “I’m happy when we are done with the process to come back and talk about what happened,” he says. “I just don’t want that to interfere with the process or cause issues for the process.”

“We have nothing to hide here,” Schorer continues. “I’m fine after we’re done with all of this for the truth to come out about what happened here, and shed a more credible and balanced light on what happened, as much as I can.”

If the criticisms of Schorer’s decisions were coming from a single source, it might be easy to write them off as the opinions of a disgruntled former employee. But a great many people seem to be disgruntled about IST’s fate. And the twists and turns in that story seem to merit further exploration, considering how much praise the company won for its early engineering efforts and how much money it eventually burned through before shutting down.

Hochschuler and other surgeons at the Texas Back Institute hatched MusculoSkeletal Research in 2002 with the idea of earning a financial return on the extensive research going on inside the institute. “Initially we kind of gave all our technology away through our non-profit research foundation,” Hochschuler says. “But after a while we said, ‘this is crazy—we have so many ideas, and we’re so connected in the spine world, why don’t we do something for-profit that would still help the community.’ ”

Hochschuler says Schorer, who had scored a big success by selling his previous company, a medical device shopping site called CentriMed, to Global Healthcare Exchange in 2000, approached TBI together with an associated named Fred Moll about investing in MusculoSkeletal Research. At that time, the organization was funded by investments from big medical-device companies such as GE Healthcare. Says Hochschuler, “I met with them and I liked them and I said, ‘We’re not taking any individual investments, but Scott, if you will become the CEO, I’ll let you guys invest.”

Schorer accepted the post, and the company was soon renamed Innovative Spinal Technologies. In 2003 the company raised a $6.2 million Series A funding round that included investments from device companies ANS, Orthofix, Synthes, and GE. But the company’s big break came two years later, when … Next Page »

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When nobody answers a company’s phones and its website turns into a big fat 404 error, it can’t be a good sign. That seems to be the situation at Innovative Spinal Technologies, a Mansfield, MA, medical device company that, according to our calculations, had raised some $63 million in venture and private equity funding to develop minimally invasive treatments for spinal problems.

Acting on a tip that the company may have closed down, we’ve been trying to raise someone at IST all afternoon, with no success. Calls to the company receptionist go unanswered; the voicemail inbox of a media relations staffer is full and no longer accepting new messages; and a message left in the personal voicemail inbox of IST CEO Scott Schorer had not been returned at the time of this writing. Nor have calls to some of the venture firms who invested in the company.

IST, founded in 2002, is a spinout of the Texas Back Institute, an academic spinal care center in Plano, TX. The company originally operated as a research consortium, with $6 million in initial funding from corporate partners such as GE, Orthofix, Orthovita, and Synthes. It relocated to the Boston area in 2005, the same year it raised a $39 million Series B funding round from Boston-based MPM Capital, New York-based OrbiMed Advisors, and JP Morgan.

In 2006, the company leased 38,000 square feet of laboratory and office space in the Cabot Business Park in Mansfield. And just four months ago, it topped off its venture coffers with an $18 million Series C round, according to VentureDeal. (The names of the Series C investors were not disclosed.) According to IST’s profile on the business networking site LinkedIn, it has (or had) somewhere between 51 and 200 employees.

The company markets a “dynamic fixation” device called Axient that’s designed to stabilize the spine in patients with spinal injuries or disease while still allowing some degree of motion. The devices use so-called pedicle screws that are inserted into individual spine segments, then connected to external rods. (IST received a United States patent for a system of lumbar pedicle screws and connecting rods in 2002 and for a way of locking these screws in place in 2004.) IST also sells (or sold) an instrumentation system called Paramount VBR (for vertebral body replacement) for delivering its implants into the spinal column.

The sailing for IST hasn’t been entirely smooth: the U.S. Food and Drug Administration warned the company in July 2007 that it was keeping inadequate records regarding pedicle screws intended for surgical implementation and that it wasn’t getting a grip on quality-control problems with suppliers. The company did, however, get FDA approval to market the Paramount VBR system in 2007.

Luke Evnin, a partner at MPM Capital who is on the board at IST, told the Boston Globe in 2005 that his firm saw devices for spinal surgery as an attractive investment opportunity. “Reimbursement rates in the U.S. have been really lucrative,” Evnin said then. “The demographics are great. And spine surgeons are really aggressive adopters of new technology. For all those reasons, this is a very exciting area to be an investor.”

But it’s unclear now whether MPM will recover any of its money. I’ve left messages with partners at MPM and fellow investor Orbimed Advisors and at the Texas Back Institute seeking information about IST’s fate. As of this writing, nobody has returned my calls.

Update, January 28, 2009: We’ve gathered more information about IST’s shutdown and have published an updated story here.

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PE Week Wire reports today, based on a regulatory filing, that stealth-mode medical device startup Soteira has closed a Series B financing round amounting to $12 million. Investors include Delphi Ventures, Federated Kaufman Fund, HLM Venture Partners, Partech International, and Prism VentureWorks, according to the report. Soteira, which is listed as having offices in either Dedham or Natick, MA, does not have an active website, but the website of investor Fletcher Spaght Ventures says that the company is developing new treatments for vertebral compression fractures in patients with osteoporosis, cancer, or traumatic injuries.

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RF Surgical, a Bellevue-based medical device company, said it has raised $8.2 million in a Series A round of venture capital from Menlo Ventures and Stanford University. The company markets an FDA approved system that alerts doctors if surgical material, like sponges, gauze or towels, are left inside a patient before incisions are closed back up. The company has raised $12 million this year, and more than $20 million since its inception.

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Abiomed of Danvers, MA, said today that the Centers for Medicare & Medicaid Services (CMS) has decided to reimburse hospitals that give patients Abiomed’s AbioCor artificial heart, reversing a 22-year-old policy against Medicare coverage for heart replacement surgery. The self-contained, fully-implantable AbioCor unit, which has no infection-prone tubes or wires that pierce the skin, is designed to extend the lives of patients dying from heart failure, and was approved for the second time by the Food and Drug Administration in January.

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A Dover, NH, company with a new way to seal blood vessels during surgery has filed for an initial public offering. Salient Surgical Technologies submitted the paperwork for an IPO to the Securities and Exchange Commission today, but didn’t disclose details of how many shares it plans to offer or how much money it hopes to raise. (The filing does say, however, that the maximum aggregate price for the offering would be $86.25 million.) No date for the IPO has been set.

From its founding in August 1999 until Wednesday, the day before the filing, the firm was known as TissueLink Medical. In a press release announcing the change, President and CEO Joe Army said the new name was intended to emphasize that Salient is a medical device company, not a biologics firm or tissue bank.

Salient uses what it calls “transcollation” technology to seal blood vessels. Its handheld device produces radio frequencies that heat up tissue and a saline solution to carry the radio frequencies to the desired site. The heat causes collagen—a major component of skin, muscles, blood vessels, and bone—to shrink, closing blood vessels and stopping bleeding. The traditional way to seal blood vessels has been to use electrodes to cauterize them.

Salient says an advantage of its technology is that the saline it provides carries away excess heat, so that a patient’s tissue never gets above about 100°C, compared to about 300°C for cauterizing systems. That reduces damage to surrounding tissue. Electrodes can also stick to dry cells, causing more bleeding when they tear away. Saline prevents that problem, the company says. And, it notes, because nothing is burned, there’s no smoke, and there’s less blood to obstruct the surgeon’s view of what he’s working on.

Salient also says its system cuts bleeding in half and reduces blood transfusions by 75 percent, tackling issues of blood shortage and possible immune reactions. It claims patients experience less swelling pain and swelling, recover faster, and have to spend less time in the hospital, all of which improve patient outcomes while cutting costs.

The main markets the company has targeted so far include orthopedic surgeries, such as hip and knee replacement, as well as spinal surgery and cancer surgery. Researchers are exploring other types of procedures that might benefit from the technology.

Salient launched its main product, the Aquamantys System, in March 2006. The company had sales of $29.5 million in 2007. In the prospectus, Salient says it has only penetrated about 10 percent of the hospitals in the U.S. that could use its equipment, and that even those could expand their use of the system.

Salient originally licensed the technology from medical device company Medtronic, and now licenses five patents owned by the Minneapolis-based firm. Salient owns another six U.S. patents and has 22 more pending. The company has also filed a number of patent applications in Europe and Japan.

Army, who had been the chief financial officer since 1999, became president and CEO last June. In July 2007, Salient closed a Series E round of financing for $20 million, bringing total funding to about $90 million. Investors include Medtronic, Brait SA, Vanguard Venture Partners, and other groups from the U.S., the U.K., and Japan.

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