CircumFix Solutions Inc., a Collierville-based medical device startup, received FDA clearance for its first product, clearing the way for use in surgery and a clinical study that will test its advantages over a more-than-60-year-old standard.
CircumFix’s goal is to usurp wire as the standard for closing and healing the sternum after open heart surgery, a procedure that is performed more than 700,000 times per year. CircumFix’s device is a polymer harness that wraps around the bone similar to the way wire is used.
While often more expensive than wire solutions that are used in 90% of fixations today, CircumFix CEO Louis Houff said that, in the clinical study, they are hoping to see these costs recouped through reduced surgeon time, fewer complications, patients returning to normal life quicker, and less pain.
Now the device has been approved by the FDA, CircumFix chief commercial officer Ken Richardson expects the product to be used in surgery as soon as tomorrow.
“Across 20 hospitals, we have [about] 40 surgeons that are keenly interested in being first evaluators of our product,” Houff said.
The surgeries, given the patient's consent and eligibility, will be part of a clinical study that will allow Richardson and Houff to monitor the product’s performance, receive surgeon feedback, and collect outcome data.
“'Does it deliver on the promise that it seems to present?'” Houff said. “We have bench testing data that would suggest that it will, but you have to have clinical data to really demonstrate that.”
Some of the outcome data the study will collect is recovery time, post-operative pain, and time to return to work.
“We really want to approach this scientifically,” Houff said.
CircumFix contracted FOCUS Medical Development and Design, a medical testing company based in Oakland, Tennessee, to perform the required testing for FDA clearance to ensure the product's safety before use in surgery. This included stress testing the device and using physical models to emulate bone healing.
Path to commercial presence
In addition to the clearance allowing for use in surgery, the FDA approval also gives CircumFix “that hunting license we need to go after the market,” Houff said. Without FDA clearance, medical device companies are not allowed to market their products.
Now that the product is approved, the two-employee CircumFix plans to start hiring to establish its commercial presence.
To “go after the market,” CircumFix plans to hire five technical salespeople off the bat and potentially as many as 20 technical sales people by the end of 2024. These salespeople would have to wear multiple hats, with expertises on the product plus law and sales to get the product into hospitals.
“Where you have big cities, you have big heart centers,” said Houff. “Big heart centers” in the U.S. are where CircumFix salespeople would be located.
In smaller markets, CircumFix plans to use out-of-house help by contracting third-party sales agents and distributors to carry the product.
In addition to sales, CircumFix plans to increase its local employment by about five for back office help, such as picking up the phones, which Houff and Richardson have been doing themselves.
Based on MBJ research, in March 2023, CircumFix was tied as the smallest of 18 medical device company in the Memphis-area, based on local employment. Given no change in other companies' employment, this hiring ramp would boost them to 15th largest medical device companies based on local employment.
The growth wouldn't stop there, Richardson said. They plan to double the size of the business every year over the next five years.
Houff believes that CircumFix will be acquired by a larger company at some point but is unsure of a time frame or value that they’d seek.
Commercial partner invests
One of the purported upsides to CircumFix’s product over the wire-based industry standard is that it uses a bioinert and hydrophobic polymer, which would mean that it less likely to cause infections that require additional costly intervention and can even be deadly.
Evonik, a German-based specialty chemicals company, manufactures and supplies the polymer for CircumFix. However, their relationship is not just commercial.
While shopping for a polymer manufacturer, Houff and Richardson asked their contacts at Evonik for an introduction to the firm's venture capital branch. This introduction led to a catalytic investment for the Collierville company.
“The validation that [Evonik’s] research did in terms of the value of our company and validation of our opportunity gave us tremendous credibility that allowed us to raise money on the back of it,” Houff said. “Once we had their secure investment, we were able to then go back and get small private investments.”
Of Evonik Venture Capital’s 45 investments, CircumFix is the only company for which Evonik is both a supplier and investor, according to Richardson.
CircumFix’s investors also include Launch Tennessee, a state-funded nonprofit aimed at supporting startups across the state.
CircumFix has raised $6 million, with a goal to raise $4 million more, Houff estimated.
“We want to get to a point where we have enough to go forward with a very aggressive commercial campaign: hiring sales people, building up our operations, building inventory, and engaging the commercial marketplace with our target customers,” Houff said.
After a last round of funding for that “very aggressive commercial campaign” and with FDA clearance, CircumFix would start to have enough revenue flow and not require additional investments, Houff predicted.
“Our goal is not to become just another way to fix the bone. We want to become the way to fix the bone. We want to eventually get across health care system conversion [and] adoption of our technology,” Houff said. “This is a chance for us to hopefully finish our careers doing something that leaves our mark on the industry.”
