San Antonio — When it comes to medical technology, what’s good for the military isn’t always good for the private sector.
It’s often difficult for military researchers to find investors who will help them privately commercialize the innovations they develop, in part because the duties of military physicians are different than those of civilian doctors. That’s the case when it comes to both treating patients and working with others to develop new healthcare tools. The military may want a product that is serviceable and can be used immediately to help an injured soldier in the field, while the private market needs something that has strong intellectual property protection and can withstand intense regulatory scrutiny.
But there are products that can be developed for both the private and public markets, said David Spencer. He’s an entrepreneur in San Antonio, TX, who’s commercializing a medical device invented in the military. The reason that military tech typically often isn’t brought to civilians? People give up, Spencer said.
“Each of you is working on a problem that no one in the industry cares about,” Spencer told a room of military medical researchers, entrepreneurs, and others involved in medical research at a conference in San Antonio Friday. “If you let them say no to you, they’re just going to say no.”
San Antonio researchers and entrepreneurs believe there is an opportunity to bring more military medical technology to the commercial market. San Antonio is a hub of military medical research, with numerous government institutions in town. They include the U.S. Air Force’s 59th Medical Wing, the Brooke Army Medical Center, a Navy Medical Research Unit, and the U.S. Army Institute of Surgical Research. Trauma Insight, a San Antonio clinical research organization, hosted the conference to discuss how the private sector and the military can better work together.
Commercializing more military research might not only save more lives, it might also provide taxpayers a better return on investment, said Sylvain Cardin, chief science director of the Navy Medical research Unit.
“We have a chance here to create the Silicon Valley of military medicine,” said Cardin, who is a physician, at the conference about San Antonio.
Spencer spoke at the conference alongside Col. Todd Rasmussen, a military vascular surgeon who co-invented a catheter that can be used to control hemorrhaging. Their talk was aimed at highlighting a military invention that was turned into a medical product that’s being commercialized. The device, the ER-REBOA Catheter, is the primary product sold by Prytime Medical Devices, a Bourne, TX, company Spencer leads as president and CEO.
Before meeting Spencer, Rasmussen’s prototype was crude and rudimentary, he said. It worked, but there wasn’t any interest in the early version of the catheter.
“We couldn’t get any companies to dig into this immature of a device,” said Rasmussen. “We came upon David and a group of willing experts through connections. The catalyst there wasn’t so much [him], but the people that Dave connected us to.”
In particular, Spencer introduced Rasmussen to the company’s first investor, Christopher Banas, an entrepreneur and investor. (Banas’ most recent company, Golden, CO-based Bio2 Medical, raised a $3 million round of debt funding in 2016; San Antonio-based CardioSpectra sold in 2007 for $25 million upfront to San Diego-based Volcano Therapeutics.)
Those introductions helped the company come into its own, and Prytime has since landed more funding (including a $5 million round in 2015), gained approval from the FDA and European regulators, and earned distribution deals. Spencer and Rasmussen were asked to speak at the conference as an example of commercializing military technology.
Prytime is still early in its development, and everything isn’t perfect, Spencer said. The company has made sales, but it is not yet profitable on an annual basis. Working through regulatory approval and hiring a sales team are expensive endeavors, he said. Spencer said he plans to seek more venture funding—possibly $6 million to $8 million—to keep pushing the product forward.
“The commercialization part of it is really hard,” Spencer said. “We are so far from being successful as a business, it makes me cry.”
Still, there is opportunity in San Antonio, according to George Peoples, a former military surgeon who is an executive at multiple businesses in the city, including Rapamycin Holdings. Peoples founded Trauma Insight and its sister clinical research organization Cancer Insight.
“There’s a reason why these great idea and products that are in the military haven’t gone out: there’s barriers, obstacles, a lack of connections,” Peoples said. “We have all the pieces we need to figure out how we fit them together.”