Everyone's interests at heart

Elutex offers a new method for coating stents, which is said to be beneficial for everyone, from patients to production line workers.

Most cardiac surgery patients with a drug-coated stent inside them after surgery have probably not given much thought to the method used to coat the stent. If they did, they would probably liken it to a Chinese calligraphic artist sitting and gingerly coating the fine spring with a watery fluid. Stent coating is, in fact, carried out using methods that conjure up a scene from the film “Who framed Roger Rabbit.” You either douse it with a spray or immerse it in a pot full of dough.

What is a coated stent, and what is the purpose of the coating? A stent is designed to ensure free blood circulation in blood vessels that are likely to become blocked. Sometimes, however, the stent irritates the internal tissue of the blood vessel and causes it to swell to the point where it blocks the blood vessel, the very problem that it aimed to prevent. The drug coating prevents the process of irritation until such time as the body accepts the stent.

Elutex is aiming to replace the existing mechanical coating method with an electrochemical method, by way of an electric current that is conveyed through the stent, drawing the coating towards it. Electrochemical coating is a well established process but it has not so far been used for coating medical devices. Elutex has patented its process.

”In the chemical process, as opposed to the mechanical process, every stent is identical to the previous one to be coated,” says Elutex CEO Norman Sandberg. “This method substantially reduces the number of faulty stents, and makes the quality control process easier. Moreover, we have managed to minimize the quantity of drug used and area to be coated, thereby saving drugs and reducing side effects.”

Elutex was founded by Abraham Domb, chairman of the department of Medicinal Chemistry department at the School of Pharmacology at the Hebrew University in Jerusalem. The company was formed under the auspices of technology incubator Meytav Technological Enterprises Innovation Center Ltd. (Meytav), and has received funding from the Chief Scientist and private investors.

Norman Sandberg was brought by the incubator from Johnson & Johnson (NYSE: JNJ), where he served for more than 15 years as business alignment and product commercialization director at a company subsidiary, Cordis Corporation. Elutex recently received a $300,000 loan from Clal Finance Underwriting Ltd., a deal that indicates Elutex’s intention to make an IPO on the Tel Aviv Stock Exchange (TASE).

Sandberg holds a business philosophy which he is keen to present to investors. “Our value is not created by our technology, but by precisely the same extent to which the technology suits customers’ requirements. People today make valuations of start-ups according to their ideas, and do not adequately address procedures.

Medical devices, however, have a variety of customers that must be given added value. Sandberg claims that every company in this field has to invest thought in all of the following: patients, the US Food and Drug Administration (FDA), hospitals, doctors, insurance companies, distribution operations, and even production workers. “The value for all these factors has to be in excess of the cost of the replacement to your product of the existing methods.”

How do you help in these respects?

Sandberg:”As I mentioned, we are replacing the mechanical method with an electrochemical method and all the screws come out the same. With the previous method, some of the screws were of a lesser quality and the shelf life of a packet of stents was determined by the screw with the least durability. Inventory management was more complicated, and we have now made this problem easier to deal with.

”Every stent should be identical to every other stent, and so the testing can be done on a sample basis with lower costs correspondingly. The manufacturing process is converted from a dirty process involving immersion and spraying to a cleaner, safer one, where the stent is placed inside a device and the process operated by the push of a button, after which it is removed. There is less room for mistakes.”

Doesn’t the device rob workers of their sense of expertise? Isn’t it likely to make some of them redundant?

”Quite the contrary. Our method shortens processes and enables the coating of a large number of stents in one go. The worker is freed from monotonous physical, dirty, and often dangerous work, and focuses instead on managing a process in a completely clean environment. We think that we won’t even have to fire any workers, since there is currently excess demand for stents.

”We give the company that manufactures the stents, our direct customer, maximum value: higher production capacity in a shorter time, with fewer spoiled products and a longer shelf life. We can provide stents that are much better and safer for patients with virtually no changes to the production process. Nevertheless, if we didn’t also think about the other factors in the process, it wouldn’t work.”

A natural move would appear to be to join forces with a big company like Johnson & Johnson or Boston Scientific (NYSE: BSX)

”Every company CEO would think like this, and indeed we are beginning to arouse interest among the big companies. However, investment must come after we reach certain milestones - this raises our company value and reduces the risk to the partner.”

If a partnership is your natural track, why are you planning an IPO on the TASE?

”A company sold at an early stage to a strategic partner does not add much value to the local market. My dream is to build a partnership without losing control. I owe this to the people who invested in me, the incubator, to create value for the Israeli economy. This will be our gift to future generations, just like the orchards in the 1950s. In the final event, I am only one person, but I feel that my investors will back me up.”

People are already talking about the product that will replace the stent. Does this worry you?

Abraham Domb: ”Stents are still the future. Drugs without a stent cause side effects. No one knows which way it will develop. The next generation of treatments for blocked vessels, will probably also come from this world - completely perishable stents. We have some ideas on this too. Incidentally, our patent protects the coating of any medical device, so we will manage to survive even in the unlikely event that an alternative is found to the stent.”

Published by Globes [online], Israel business news - www.globes.co.il - on July 11, 2006

© Copyright of Globes Publisher Itonut (1983) Ltd. 2006

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