Small Medical Biotech Companies Finding it Difficult To Survive Unless Additional Funding Arrives

Not all biotech companies make it and it is not always just the failure of a product or trial, many are running short of money, unless they happen to be purchased or financed by one of the big drug or other medical companies. It does make you wonder if we are on the losing end here sometimes with technology that is good for healthcare, but gets lost due to the same problem healthcare is facing everywhere, money. The first company had installations already in hospitals too, but as it states neither Medicare or private insurers were covering the billing.

In past interviews I have conducted, companies informed me that sometimes it can take years for Medicare or private insurance to approve a procedure and by that time, if the company is still doing well, they are on to the next phase or two of the development, so what does get approved for payment is already outdated. Some companies don’t have that option though if they are on a slim cash budget, such as these 3 and funding is tougher today than it ever has been. BD

BURLINGTON - Until last October, InfraReDx considered itself a symbol of the kind of science-based innovation that creates durable healthcare industry jobs.

Now, InfraReDx represents the perils of the recession for small companies working on promising medical technologies that hospitals and insurers see as experimental. The company, which makes a laser-scanning system that locates signs of heart disease, has been through two rounds of layoffs, reducing its work force to 72 from 92. It would have run out of money this month if its investors had not agreed to a new round of investment. So far, neither Medicare nor private insurers compensate hospitals for using the scanner.

Plenty of medical companies are sharing Muller's pain. PLC Medical Systems, for instance, a company in Franklin canceled a scheduled clinical trial last fall of a new hydration and urine collection system to protect patients with impaired kidneys from the side effects of X-ray procedures. "We had the hospitals and patients ready to go," said Mark R. Tauscher, the company's president and chief executive.

And OmniSonics Medical Technologies, based in Wilmington ceased operations in January. The end came without warning to doctors who were conducting studies on new applications of its federally approved device to break up blood clots with ultrasound pulses. "They shut it down cold turkey," said Paramjit Chopra, an OmniSonics scientific adviser and interventional radiologist in Chicago who had been a leader in the study. "Nobody returned my calls." (Messages requesting further details left last week on the answering machine of Richard G. Ganz, OmniSonics' president and chief executive, received no response.)