San Antonio — Eric Mayes is in Texas to look for deals. As the CEO of Endomag, a medical device company from the U.K. with a magnetic-based technology used for cancer diagnosis, he’s no stranger to making them.
In 2014, Endomag acquired Boulder, CO-based Actium Biosystems, a company with a device that aims to use heat to help kill cancer. Earlier this year, Endomag signed an agreement with a subsidiary of Leica Biosystems to distribute its medical device used for locating tumors, which earned FDA approval in April, in the U.S.
This week, Mayes is taking a tour of Texas’ largest healthcare hubs—including, Houston, San Antonio, and Austin—with a group of British life science executives who are interested in the potential that the U.S. market holds. For Mayes, there’s the possibility that he could make new connections that may lead to new deals for Endomag, such as creating products or partnerships with other companies based on Endomag technology. For others in the group, which numbered about 20, the trip provides an opportunity to meet with physicians and others who they might convince to buy their technology.
The visit comes as European medical device regulators are implementing some stricter regulations on how devices get approved, which has sparked some additional interest in penetrating the U.S. market, Mayes says. The U.S. has always been a target market for European companies because of its size and spending, but some changes are spurring that additional focus here, Mayes says, including stricter guidelines for conducting clinical investigations and the types of risk and quality management systems manufacturers use.
“We want to facilitate what happens here because there’s been a shift in the regulatory environment,” says Mayes, who spoke to Xconomy between hospital tours during his visit to San Antonio. “The FDA used to be the last place you’d want to go.”
Endomag received FDA approval in breast cancer for a device called Magseed, which helps physicians keep track of tumors by using magnetic-based nanoparticles, before receiving approval in Europe, Mayes notes. The company is also seeking to gain approval in the U.S. for Sienna+, a similar magnetic-based formulation that aims to help surgeons diagnose whether cancer has spread from the breast.
Both products are used in tandem with a third device, Sentimag, which acts as a sort of metal detector—when a surgeon holds the Sentimag over a part of the body where Magseed or Sienna has been injected, the device makes a noise that increases in pitched based on proximity, Mayes says. Endomag has submitted an application to the FDA to make Sienna a medical device, and Mayes says he hopes to get the results next year. The product has already been approved in Europe.
Local life science groups jumped at the opportunity to meet with European companies considering U.S. expansion, such as Endomag, touting low business taxes, cost of living, and economic development incentives that cities like San Antonio offer, says Ann Stevens, the CEO of BioMed SA, the city’s life sciences advocacy organization. Businesses affiliated with the Association of British Healthcare Industries have been visiting San Antonio about twice a year since 2013, she says.
If things work out and Endomag gains greater market adoption in the U.S. and Europe, Mayes expects revenues to begin rising steadily from the approximately $3 million the company had this year. The magnetic-sensing Sentimag device is aiming to replace the common standard of care: Geiger counters.
Physicians currently inject radioactive drugs into a tumor site to see if the drug makes its way into the nearby lymph nodes—a sign that tumor cells might do so too, thus showing the cancer is spreading. They use a type of Geiger counter to find lymph nodes that the drug has spread to, and surgically remove those nodes to see if they’re cancerous, Mayes says.
Endomag’s products avoid the need for using radioactive material, Mayes says.
Beyond looking for deals here, Endomag has history in Texas. The technology was developed in 2003 by two academic researchers: one from the University College London and a second from Houston, Audrius Brazdeikis, who has appointments at the University of Houston and the UT Health Science Center at Houston. It wasn’t until 2010 that the company really took form and hired Mayes. It has raised $10 million in venture capital since.
Endomag also has a sales office in Austin,TX, where it has started selling its products in the U.S., Mayes says. And the company hopes to further develop the potential therapeutic product it acquired from Actium Biosystems.
“We want to exploit the space we’re in with magnetism and try to do as much as possible, from diagnostics to imaging to therapeutics,” Mayes says.