Faster Recovery

Faster Recovery

COMPANY by Dave Szymanski | Tampa Bay Editor

Ultroid Technologies, a St. Petersburg company, has developed a non-surgical product to treat hemorrhoids that cuts recovery time drastically.

It is an ailment affecting 80% of Americans over 50 and it used to require surgery and days of recovery time.

Now Ultroid Technologies, a St. Petersburg company, has developed a non-surgical product for doctors to treat hemorrhoids in eight to 12 minutes that allows a patient to resume regular activities, such as tennis, the same day.

The device, made in Pinellas County, does not cut, burn or cauterize a hemorrhoid. Instead, it uses electricity to create a chemical process, converting salt into sodium chloride to break down the hemorrhoid so the body can dissolve it.

It is now in clinics and doctors offices across the world. Ultroid, which has patents pending, started selling its device in July.

Michael Cau, the CEO, founded the company four years ago, buying it from the original inventors, from the Lake Tahoe area.

Using a national distributor, it has sold more than 200 machines since July, exceeding projections.

It is in the Far East and because of distribution relationships, it is in the process of entering the Middle East, Europe and South America. Ultraroid gets daily interest from doctors in foreign countries wanting to learn more about the product or to buy the product.

"We anticipated international interest but interest is higher than we could've hoped," says Gerald Spurgin, 50, president of Ultroid.

About 90% of sales are domestic, but Ultroid expects foreign sales to soar in the coming years.

As its distribution network takes hold, Ultroid projects revenues of $25 million to $30 million in 2008, then expects them to jump to about $100 million in 2009.

The aging of the population increases the value of Ultroid's product as the number of patients grows.

Hemorrhoids can be caused by lifestyle, diet, standing too much, not exercising enough, work habits and too much exercise. Jogging.

Ultroid's main marketing point is that it makes a product that doesn't create a wound. It's non-surgical. That removes the possibility of infection.

It is also relatively quick and recovery is faster than surgery. For example, one patient had a 15-minute treatment at lunch and later rode his bike 46 miles. Physicians have given testimonials. Other patients have gone skiing and golf later that afternoon after a treatment the same day.

By comparison surgery can take up to 90 days to recover. Stapling also has a longer recovery period. And there's possible pain and wound infection.

The wholesale price of the product to distributors is about $4,120. One box of 25 probes, which attach to the machine, runs $1,250. The retail price depends on the distributor. Since most doctors are still doing surgery, the "market is enormous" for Ultroid, Spurgin says. It uses various kinds of marketing, including radio, print, the Internet and through distributors.

Long-term growth

Five years from now, Spurgin sees sales in the billions of dollars as the market recognizes this new standard of care.

Ultroid has no plans to go public. But it is open to buying or merging with other companies.

"That is always on the table," Spurgin says. "There's a huge interest between buyers and sellers. We've been approached. We're having a lot of fun here. We only see us increasing in value.

"We plan to run it 10 to 20 years," he adds. "But we'll always entertain conversations (about mergers)."

The founders used personal funds to start Ultroid, then about 40 investors around the country bought into the company.

Competitors include industry icon Johnson & Johnson, which makes a heated scalpel.

"Johnson & Johnson was in the market a long time," Spurgin says. "Its treatments were the only game in town. It was its market to lose."

Johnson & Johnson has developed harmonic technology, which transfers electric energy into high-frequency ultrasonic waves onto a vibrating blade controlled by surgeons. When applied to a patient's tissue during surgery, these ultrasonic waves are then passed as mechanical energy that is used to cut and coagulate (or seal tissue).

 Harmonic devices are designed to improve patient outcomes by enabling surgeons to perform precise cutting and to control bleeding during surgery, resulting in minimal damage to a patient's tissue. Unlike lasers or electrosurgical devices, Harmonic products cut and coagulate at much lower temperatures, which minimizes potential heat damage, such as burning or charring, of the tissue.

However, Ultroid sees the competition's products as riskier for physicians, so it's excited about its prospects.

Ultroid is not actively looking for investors, because institutional and individual investors are coming to the company. "Part of our job is to enhance shareholder value," Spurgin says.

The Ultroid machine has been in use by more than 50 doctors who have done thousands of procedures without incident. One physician in Australia has used the machine more than 4,000 times without complications.

While it goes through the patent process for the United States and other countries, Ultroid is also trademarking its name all over world.

ABOUT ULTROIDS

The market for Ultroids hemorrhoid treatment is substantial:

• As much as 80% of the population will experience hemorrhoids in their lifetime

•Up to 50% of the population experiences hemorrhoid disease by the age of 50 with the incidence of the disease increasing with age.

•About 45 million Americans above the age of 45 have symptomatic hemorrhoid disease.

•Most Americans suffer in silence, delaying medical treatment an average of nine years.

•The vast majority of Americans are unaware of painless, non-surgical, safe and effective treatments for hemorrhoid disease.

Sources: National Digestive Diseases Information Clearinghouse

and U.S. Agency for Healthcare Research & Quality

REVIEW SUMMARY

Company: Ultroid Technologies

Industry: Medical equipment manufacturing

Key: Market the uniqueness of the product and improve distribution.