Calypso Axes 15 Percent of Staff, Pares Down U.S. Sales Force for Prostate Cancer Technology
Calypso Medical Technologies, the Seattle-based maker of a device that pinpoints radiation treatments for prostate cancer patients to help reduce nasty side effects, has cut 15 percent of its workforce and reorganized its U.S. sales force, Xconomy has learned.
The cutbacks, announced internally last week, were concentrated among U.S. sales reps spread around the country, and affected some administrative staff at headquarters in Seattle, says Lorraine Marshall Wright, Calypso’s chief marketing officer. The company now has about 125 employees left, she says. The cuts were made after Calypso’s longtime CEO, Eric Meier, left the company, a story which Xconomy’s Thea Chard broke last week.
The company made the cuts to eliminate a structure in which more than one sales rep would sometimes call on a single customer, Wright says. “Our sales managers now should have a more direct relationship with the customer,” she says.
Wright adds that the staff cuts aren’t affecting R&D, the company’s plans to expand its technology into lung cancer treatment, or its international prostate cancer treatment expansion. She added in a follow up e-mail that “we also have a world-class board that steadfastly stands behind the company and its proprietary platform.”
Still, Calypso’s cuts are a morale-draining setback for a company that looked to be on the verge of breakout success a year ago. The company, founded in 1999, won FDA approval in 2006 for its technology, which allows technicians to track the precise spatial coordinates of a man’s prostate in real-time as he undergoes radiation therapy. This system is thought to be useful because it enables a hospital technician to see when radiation beams are falling off track. That can happen if a patient moves on an exam table, or gas builds up in the rectum that can cause the beams to miss the prostate. When that happens, it can lead to significant side effects like impotence and incontinence.
We have reported on layoffs at Calypso once before in December 2008, and the company struggled for years to get Medicare regional units around the country to fully reimburse doctors who perform its expensive procedure on expensive equipment. But the company appeared to have turned the corner last year when it secured $50 million in venture financing—the biggest such deal of 2009 in the Northwest. The plan was to use that money to boost Calypso’s U.S. sales, help develop other uses of radiation pinpointing for lung cancer and other malignancies, and to go international.
Calypso isn’t saying much specifically about its financial performance, and as a private company, it doesn’t have to. But I asked Wright about that anyway. The company has historically generated 30 percent annual revenue increases, and still expects to meet its target for this year, Wright says, without saying what that target or absolute dollar amount is. She wouldn’t say whether the company has turned profitable. She did say, however, that about 7,000 patients in the U.S. have been treated using the Calypso radiation pinpointing technology, and that 100 U.S. medical centers have the equipment and software installed to perform the procedure. The company has secured a couple influential new customers recently—Memorial Sloan-Ketting Cancer Center in New York, and Cedars-Sinai Medical Center in Los Angeles, Wright says.
Swedish Medical Center in Seattle, one of the early adopters of the Calypso technology, remains a happy customer, according to radiation oncologist Tim Mate. “There has been no change in Swedish’s ability to treat patients with Calypso,” Mate says. “In fact, we are treating more patients than ever. The Calypso technology has worked extremely well and we look forward to Calypso’s next applications in lung.”
The next big move to watch from Calypso will be to see who takes over for Meier as CEO. Calypso has installed an interim CEO in Ed Vertatschitsch. If the interim title sticks around a little too long, or the company doesn’t follow through on its growth ambitions, it could be a sign that Calypso’s investors are itching for a sale behind the scenes. Since Calypso is one of the more promising venture-backed medical device companies in the region, we’ll be sure to keep a close eye out for signs that the company is really on the right track, or falling off the rails.