January 10, 2013 Oregon Bioscience Association

Sonivate Medical’s fingertip ultrasound speeds procedures, improves patient outcome

By Kate McPherron / Oregon Bioscience Association

Sonivate Medical‘s SonicEye® product got its start when company founder Ronald W. Schutz, MD, a well-known cardiologist and inventor, became interested in supporting cardiac surgeons in operating rooms with echocardiograms. Dr. Schutz observed that surgeons were very agile with their hands, and came up with the idea that they would benefit from a fingertip ultrasound transducer that would let them intuitively do the imaging themselves, rather than having another clinician using bulky equipment to perform the task. This would make the OR much less crowded, speed procedures by providing real-time imaging whenever a physician needed it during a procedure, and thus improve the outcome. Also, a miniaturized low profile probe is capable of obtaining views that standard probes could not, and could uniquely combine imaging with tactile feedback to the user.

Dr. Schutz is no stranger to start-ups. In 1982, he founded Heart Sounds, Inc., which provides echocardiography services for hospitals and clinics and he remains its president. In 2001, Schutz began to design a glove with an ultrasound transducer in it, and within a few years, he connected with technologist Scott Corbett, Sonivate CTO and cofounder. Corbett brought experience in two areas instrumental to the product: ultrasound transducer design and miniaturization and micro-connection. Together, Corbett and Schutz adapted existing ultrasound array, connection, and miniaturization technologies and developed the product that moved it toward its current incarnation: a finger-worn ultrasound probe.

The Sonivate SonicEye®:

Within the clinical environment, there are many procedures where ultrasound imaging can enhance the care of patients and the effectiveness of medical professionals. With the finger-mounted SonicEye®, ultrasound imaging becomes almost effortless, allowing the focus to be on providing the best care, potentially enhancing biopsies, nerve blocks, vascular access and a wide range of guided procedures and other protocols.

Availability of funding at first hinders, then drives company:

David Starr, President and CEO of Sonivate Medical, explains the rocky road the company has had to travel. “Schutz and Corbett did proof of concepts to focus the technical direction of the company, which was solidified around 2006. The company obtained a congressional earmark to fund some of the R&D – which was finally awarded in 2007. By 2008 when I joined, we had begun to make good progress with product development, but the funding was not sufficient to complete the design. With the shift in the economy, funding dried up and we could not bring the product to market.”

At that time (2008), it became clear that a follow-on congressional earmark that we were expecting was not going to come in – all earmarks were actually terminated. That’s when we went after a small business research grant (SBIR). However, while waiting for the grant to fund, we had to put the company on ice for a few years. In September 2010, with successful funding of a $750,000 Phase II grant we brought the current management team on board and reconstituted the company.

The SBIR grant is through the U.S. Department of Defense (Army). We’ve been working very closely with the U.S. Military’s Telemedicine and Advanced Technology Research Center (TATRC), which is part of the US Army Medical Research and Materiel Command.

“So, while the company has been around for a while, we’ve just been so cash-starved we didn’t get anywhere very quickly. With the SBIR grant and a small equity round, we started to gain traction and that allowed us to get FDA clearance. The management team comprised of myself, Scott Corbett, Ron Schutz, Elizabeth Ettling and Alan Andresen who together invested $125,000 which our shareholders matched with the same amount. Since then, we’ve been awarded additional SBIR grants with specific purposes: to interface with existing ultrasound imaging systems, for manufacturing, and Phase III money for developing a follow-on probe.”

In late Spring of 2012, Sonivate obtained FDA clearance of the technology‒that’s also when the company changed its name to better suit the market. Sonivate Medical was formerly Blacktoe Medical, named after the founder’s late Jack Russell terrier.

Partners & collaborators – critical to commercializing the technology:

“We have a manufacturing partner, TSE, that’s just down the road; they have lots of expertise in the kind of miniaturized manufacturing that we require.”

“Our business model calls for product development and driving clinical adoption, so we need to work with ultrasound system companies to be sure our probe works with their systems. We’ve already had discussions with all of the major companies like Sonosite, GE, Siemens, and others. These larger companies all say it looks interesting but want proof that doctors will buy it: they want real clinical studies.

Several end users are collaborating on those clinical studies. We’re working very closely with the U.S. subsidiary of a multi-million dollar Japanese company Fukuda Denshi based in Redmond, WA. Fukuda, Japan is trying to make headway in the U.S. market. Their head of ultrasound sales is a visionary and clearly saw the clinical benefits of Sonivate’s technology.

We’re working on a path for manufacturing release – to go to market with Fukuda early next year. We demonstrated our product on the Fukuda system at the Special Operations Medical Association conference in Tampa, in December 2012.

Proving the concept is essential to success:

It is really important that we have key clinical studies organized, because physicians want to see the data.

• Navy Medical Research Center in San Diego is starting a formal study for catheter placement and nerve blocks
• Brook Army Medical Center is using our technology in a breast biopsy study.

• OHSU is very enthusiastic about helping us and is providing great feedback. In addition to driving several studies, they will be helping Sonivate with training materials and we’ll get their feedback into better product specs for the next generation probe.

The Market and competitors:

Doing nothing is actually one of Sonivate’s biggest obstacles to overcome – a lot of procedures are being done “blind” because existing ultrasound probes are too difficult to use. “We need to convince doctors that using this highly effective ultrasound tool can result in less complications, and faster, more efficient procedures. It is even better than most of the competing technologies, such as fluoroscopy – continuous x-ray – for nerve blocks, which has the disadvantage of radiation. Luminescent technology can be useful for some procedures, but cannot be used in all locations, nor is it useful for nerve blocks.

“The ultrasound system market is highly competitive, but because SonicEye® is so innovative, we have no direct competition. We have the only finger-worn device, hold key patents in the United States and key design patents internationally.

The Market and competitors:

Doing nothing is actually one of Sonivate’s biggest obstacles to overcome – a lot of procedures are being done “blind” because existing ultrasound probes are too difficult to use. “We need to convince doctors that using this highly effective ultrasound tool can result in less complications, and faster, more efficient procedures. It is even better than most of the competing technologies, such as fluoroscopy – continuous x-ray – for nerve blocks, which has the disadvantage of radiation. Luminescent technology can be useful for some procedures, but cannot be used in all locations, nor is it useful for nerve blocks.

“The ultrasound system market is highly competitive, but because SonicEye® is so innovative, we have no direct competition. We have the only finger-worn device, hold key patents in the United States and key design patents internationally.

The future looks sunny:

“I’m going to be really focused on keeping funding available so we can achieve our goals. Right now, we’re in the process of closing a $1 million equity round and in September 2012 we won the Bend Venture Conference , which amounted to $265,000. We’re looking to top that off.”

“Then at the October 2012 Oregon Bio Conference, we were awarded $1,500 worth of free patent work by Law firm Alleman Hall McCoy Russell Tuttle (AHMRT).” Anna McCoy, one of the founding partners of AHMRT, who presented the prize, said, “We are happy to support the innovation economy in Oregon through this award.”

“We’d like to see the SonicEye probe become as ubiquitous as existing kinds of ultrasound probes. In future incarnations, we intend to add a wearable wireless system to eliminate the cable. This system would allow the probe to connect to SmartPhones, tablets and heads-up displays, and thus be device-independent,” states Starr.

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