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Beware the Contract You Never Signed
Beyond the Ballot Box
Buy, Sell or Hold
Food for Thought
From Concept to Production
On the Job
Seeing is Believing
The College of Hard Knocks
The Right Financing
If at first you don’t succeed, try again. Utah company Catheter Connections proved this old adage to be true as it went from having an unfunded project to an innovative, one-of-kind wonder.
Perfecting the Mousetrap
Located in the University of Utah’s Research Park, Catheter Connections develops vascular access products that can protect patients from life-threatening infections during infusion therapy. In fact, every year in the United States nearly 500,000 people develop catheter-related blood stream infections. Frighteningly, up to 25 percent of these people die despite these infections being treatable. Fighting these infections can cost anywhere from $300 million to $11 billion annually.
That’s where Catheter Connections has come to the rescue.
Catheter Connections’ product, DualCap, is helping to decrease the harrowing statistics of infusion therapy infections. DualCap is a revolutionary infection-control technology that protects and disinfects both the needleless injection site and the end of the IV tubing. For the first time, clinicians have a fast and simple method to keep IV luers disinfected at placement and every time the line is accessed.
Designed by infusion nurses, DualCap reduces the human variability associated with IV care and provides healthcare facilities with an easy-to-use, cost-effective technology that can help in the fight against catheter-related blood stream infections. A patent is still pending for the device.
“We’re the only ones in the world to figure out how to clean and disinfect tubing without getting a drop of alcohol in the tubing,” says Catheter Connections CEO Vicki Farrar. “Hospitals had kept the end unprotected.”
DualCap was the winner of the 2010 Utah Innovation Awards in the Medical Devices category. But taking the concept to production and distribution wasn’t easy.
“It took several years,” Farrar says. “We had to convince the FDA.”
The biggest hurdle Farrar and her team had to overcome was getting funding for the product. Doing this proved to be no easy task, and Catheter Connections representatives had to seek sources other than venture capitalists to raise money to develop, produce and eventually market the product.
“We were unsuccessful at first in raising money,” Farrar says. “The product sells for under a dollar, and this is not the typical business model people invest in. We couldn’t get big groups to invest in our model. But smaller groups understood our market. Investors that had expertise in devices understood. We got traction in Utah.”
Farrar, who has 30 years’ experience as an attorney representing medical and pharmaceutical companies, says angel groups—groups of accredited individual investors who provide capital for business startups—took over the initial funding.
Along with patience, perseverance and determination, the Catheter Connections team learned many lessons during the arduous process of conceiving the product, developing, testing and securing funding. First and foremost, Farrar says working with the right people is critical.
“I learned how carefully you have to leverage whatever limited resources you have,” she says. “We had almost no overhead. We hired the best team imaginable. You’re going to succeed because of your team.”
Farrar adds that her team is “fabulous,” despite having only six on staff during the process of developing DualCap. She also says having a team with experience and expertise allowed her to spend time and energy focusing on finding angel groups and individuals to help provide venture capital to fund the project.
“Your business package needs to be as good as it gets,” Farrar says. “If everything is looking good, you can plan and execute it.”
Maintaining the Passion
Farrar is pleased with the success her team has had in effectively obtaining funding for the product. And she has some words of wisdom for other companies who may find themselves in similar situations.
Initially, Catheter Connections didn’t have a CFO to manage the financial aspects of the project. Farrar says the company now has a CFO and that other companies should be sure to have one in place from start to finish of a major project.
“Our CFO has really helped us,” she says “He tests, revises and is constantly making financial projections. We used a rental CFO for a time who wasn’t being engaged in the business. You need a CFO that is part of management.”