One that got away is coming back.
After defecting to Bethlehem, Pennsylvania, about three years ago from Columbus, InfraRed Imaging Systems Inc. is planning a move back to Ohio after securing an $812,000 Third Frontier grant (pdf) in June.
CEO Dale Siegel just doesn’t know where yet. The resident of Central Ohio town Marysville is considering his hometown, the Columbus area or Cleveland suburb Eastlake.
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It’s been a long and winding road for the company founded in 2001 after licensing technology discovered at Dayton’s Wright-Patterson Air Force Base, but one theme has defined InfraRed Imaging since its inception: a difficulty in securing funding.
The problem’s persisted despite InfraRed Imaging having something many venture-backed device companies don’t: approval from the Food and Drug Administration to sell its product, the Vascular Viewer. Further, the Vascular Viewer is operational in five hospitals nationwide, including Minnesota’s Mayo Clinic, according to Siegel.
“It’s very frustrating and extremely difficult to understand,” said Siegel, who theorized the company would have an easier time attracting funding if it focused on a more high-profile medical problem like cancer or AIDS.
Nonetheless, securing the funding from the Ohio economic development program may have started opening some doors for InfraRed Imaging. “It used to be that we’d call [institutional investors] and they wouldn’t return the calls, but now we’re getting some interest,” Siegel said.
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The company’s technology uses near-infrared light to visualize superficial, and deeper veins and arteries.The Vascular Viewer increases clinicians’ accuracy while inserting a needle or catheter into a patient’s vein or artery, a process that’s usually done simply by sight and touch.
It’s especially valuable in pediatric and neonatal intensive care units, since young children have smaller, less-developed veins than adults, Siegel said.
It’s possible VCs have been hesitant to commit to InfraRed Imaging because they view the company’s technology as more of a “nice-to-have” than a game-changing “must-have,” Siegel allows, though he stresses, “there’s no doubt it has clinical value.”
The company’s star-crossed fundraising began in Columbus, when an oral commitment of $1.5 million dried up shortly after the recession brought on by the Sept. 11, 2011, terrorist attacks.
A few years later, an award of $200,000 in equity with the promise of more to come lured the company to Pennsylvania, but that add-on funding never materialized after the state experienced budget problems.
It seems Pennsylvania’s fiscal pain could be Ohio’s economic gain now that the Third Frontier grant enticed the company back to the Buckeye State.
Despite all that, Siegel has managed to raise $2.8 million over the company’s lifetime and would like to raise another $4 million to begin selling the device to hospitals across the nation. He estimates that even a 3- or 4-percent market share would equal about $100 million in annual sales.
But before that happens, the company will have to decide on a new location.
It’ll likely come down to what sort of incentives the various cities offer, but Eastlake may have a leg up since it’s home to equity investor and manufacturing partner Astro Manufacturing & Design. “It’d be an advantage to have our engineering located close to where our manufacturing is, but it’s not an absolute necessity,” Siegel said.
Economic development professionals throughout Ohio: the ball’s in your court.
