Ohio Venture - OVA Review Newsletter
News from the Ohio Venture Association meeting on October 8, 2010

Keynote Address:

Dr. Raymond Onders
Director, Minimally Invasive Surgery, University Hospitals Medical Center
Founder, Synapse Biomedical

Things looked so rosy two years ago for Synapse Biomedical, a spin-off from University Hospitals that uses neurostimulation technology to help wean spinal cord injury patients off mechanical respirators. After garnering worldwide attention for helping take actor Christopher Reeve of Superman fame off a respirator, the company, founded in 2002, received significant investments from UH, Jumpstart and elsewhere. That culminated in a $5 million round of funding in 2007, and the future seemed limitless, founder Ray Onders told attendees at the October OVA luncheon.

"We actually had term sheets on the table (from large VC funds) in September of 2008, but you know what happened then," he recalled. The offers were quickly withdrawn, the funding all dried up, and the functional equivalent of nuclear winter set in for early stage ventures, with the onset of the worst global financial downturn in 75 years. "In January 2009, everyone thought we'd be dead, and we'd all be looking for other work, and I'd be back to doing hernias," he said, noting that he still performs those procedures to this day in his day job, as head of minimally invasive surgery for UH.

Instead, an angel investor in Florida stepped in to cover employee salaries, giving the company some time to recover. A series of money-saving steps (Onders himself analyzed the data from a crucial ALS study), helped Synapse eke out about $3 million in revenues in 2009, which proved to be a lifeline to better times. In October of this year, the FDA approved the company's device for use with patients suffering from ALS, also known as Lou Gehrig's Disease.

Dr. Onders noted that the company's original saving grace was that its leadership resolved early on to not merely manage the burn rate, but to establish a real revenue stream from the sale of devices. "Medical device startups normally burn money, but we decided very early on to get some income from our devices," he said, even when that only meant getting FDA approval to charge for the devices used in its own medical trials. In the end, that continuing revenue stream, however modest, proved to be the difference between ultimate failure and success.

Today, the company's prospects are as bright as ever. "We're this little company in Oberlin with worldwide sales," he said, proudly. Its devices have now been implanted in about 370 patients around the world, and it has established clinical partnerships in more than a dozen countries. With imminent anticipated FDA approvals, the company expects to record sales of between $5-10 million next year.

More information:

Webcast from the Meeting:

Click on the image below to view the entire presentation as video.

Video Webcast from Recent Meeting
Webcast produced by Tom Kondilas.

Upcoming Meetings:

December 10, 2010
Frank Douglas
The BioInnovations Institute Akron
Time: 11:30am

February 11, 2011
Venture Capital Summit VI

January 14, 2011
Ram Ramakrishnan
Eaton Corporation
Time: 11:30am
March 11, 2011
Mike Burke
Time: 11:30am

See complete details and registration for these events.

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