Versamed’s ventilator the iVent is computer based and weighs about 22 pounds. In years to come, Jerry Korten, president and CEO of Versamed, believes that his company’s ventilator will become as commonly available as a defibrillator, the medical device currently used to treat heart attacks.
Certainly Versamed’s ventilator – the iVent – which is used to help patients with breathing problems, fits all the necessary requirements. It can be used anywhere and in any place, from a hospital intensive care unit, to an ambulance, or even someone’s home. It also offers a vital treatment, which, with timely use, can save lives.
The increasing popularity of the iVent stems from its breakthrough technology. Unlike existing ventilators on the market, which are large and expensive mechanically operated devices, the iVent is computer based. The mobile device weighs about 22 pounds (10 kg.), and resembles a Macintosh desktop computer. At $16,000-18,000, it costs about a third of the price of an ordinary respirator, but has all the functionality you can find in a $35,000 to $40,000 ventilator made by Siemens, according to Korten.
Because the iVent is based on software, it is far more flexible than mechanical devices, and can easily be reconfigured or incorporated with new features. “A typical ventilator has control knobs and dials, and if you change the way the machine works you have to change the product, and retool the production line,” explains Korten to ISRAEL21c. “With our device all the control elements are built into the GUI (Graphic User Interface).”
Because the Versamed ventilator is based on such a high-powered computer, with built in intelligence, it also responds automatically to any changes in a patient’s requirements and modifies treatment accordingly. If a patient starts to hyperventilate during treatment, for example, the ventilator will automatically take this into account and readjust the airflow to the patient in a controlled manner, without any need for manual intervention.
Another advantage is its mobility. The device is powered by batteries and can be used virtually anywhere. The company is now working with US and Israeli health authorities, to help teach emergency medical personnel how to use this technology in the field. “We imagine that in future, this type of technology will soon become available everywhere,” says Korten.
The iVent is also, significantly, non invasive. Traditional ventilators developed by giant names like Viasys Healthcare – a spin off from Thermo Electron Corp., Drager Siemens, Puritan-Bennet and Tyco Healthcare, generally rely on the invasive technique of intubation, where a medical team inserts tubes through the trachea while the patient is under anesthetic. The Versamed device uses a mask, which is placed over the mouth and nose. This reduces risks, medical complications, costs associated with hospital stays, and also shortens recovery time.
Versamed, which is headquartered in New York, with R&D offices in Israel, first introduced its iVent ventilator to the market in 2000. Since then sales have grown quickly. In 2001, the company saw $3 million in revenues, a figure that grew to $5.7m. in 2002. In 2003, revenues reached $9.5m., and this year Korten said he expects sales to leap to between $16-18m., or more. This rapid growth brought the company first place in Deloitte-Touche’s list of Israel’s 50 fastest growing high-tech companies in 2002.
Versamed was founded in 1994, and spent the first six years developing its product. It received FDA approval in 1999, and finally introduced its first model 1.3 to the market in 2000. For the last 18 months the company has been selling version 1.4.
Today the company sells mostly to health care authorities – specifically hospitals and ambulance companies, and the military. Last year, the Israel Defense Force bought hundreds of devices in a deal worth an estimated $1m.
Versamed has identified the U.S. market as its key market, but at present, less than half of the company’s sales go to the U.S. Korten admits that the US market is developing more slowly than worldwide markets. “It’s conservatism in the US,” he says. “Several big players dominate the market and make it hard for small companies to move into this field.”
He specifically blames U.S. distributors, who he says have already signed contracts with the big name companies. “They don’t let small players get in too easily,” he says. Still, he adds, U.S. sales are growing as quickly as elsewhere.
Despite this delay, Korten believes that Versamed will become one of the more significant players in the worldwide market in years to come. “It’s difficult to say what our market share will be, but in two years it is not unreasonable to expect that we will be one of the three or four big players,” says Korten.
The reason, he believes, is that Versamed has a big advantage over existing players, despite their size and hold on the market, because of the quality of its R&D. The company employs about 12 engineers, out of a staff of 45.
“We have innovation and capacity that the other players don’t have,” says Korten. “Because of their size, they are very slow to respond to changes in market demand.”
Tyco Japan, for example, is now distributing Versamed’s product in Japan, even though it has its own ventilator. “This is significant for us,” says Korten. “It means that this group thinks our product can offer something that products in the Tyco production line cannot.”
Korten says that Versamed is about to close other significant deals in the near future.
Korten believes that company growth will double over the next four to five years. “It is extremely fast growth,” he admits. At present, the global respirator market is estimated at $1.2 billion a year, and 60% of sales are in the US. This market is expected to continue growing quickly over the next 5-10 years.
To date, the company has raised $28m., and investors include Aura Investments, Technoplus Ventures, Technorov Holdings, Dan-Li Investments, FIBI Holdings, Wheatley Capital, Scorpio, and other private investors.
Break-even point is expected in 2004. Korten says the company came within a hair’s breadth of it this year.
With the money raised from the offering last year, the company is now undertaking some “significant” product development, according to Korten. The company plans to improve its technology, and to build upon it, so that it can move into new areas, such as combined heart and lung care. “Until now people have been paying attention to the heart or the lungs, but the future of effective patient management will be developing a technology that can bring treatment for both the heart and lungs together in one device,” says Korten. “Our technology looks like the first that could make this happen.”
Korten is confident about the future. “We’ve just closed a terrific year, with good recognition, record performance and a reputation for reliability that has become well-known worldwide. I have the impression that our reputation is becoming a bit of a legend in the field,” says Korten. “We are very encouraged by all this.”