SenoRx: Patent Portfolio
Manufacturing
Written by John Zorabedian   
Wednesday, 30 April 2008
SenoRx: Patent Portfolio - American Executive - RedCoat Publishing
This medical device manufacturer has developed novel approaches to breast cancer diagnosis and care.
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Medical device manufacturer SenoRx, Inc., a maker of novel products in the area of breast cancer diagnosis and care, grew by close to 40% last year on the strength of sales of its breast biopsy products. Lloyd Malchow, president and CEO of SenoRx, said the publicly traded company is expected to experience continued rapid growth this year with an expanded marketshare in US and international breast centers.

SenoRx: Patent Portfolio - American Executive - RedCoat Publishing
Lloyd Malchow, President and CEO
The Aliso Viejo, Calif.-based company, founded in 1998, developed a commercial strategy to focus on the emergence of breast centers, which are consolidating delivery of breast diagnosis and therapeutic care. SenoRx continues to develop products in the area of implantable tissue markers, biopsy devices, and therapeutic radiation devices, and holds more than 50 patents on its products.

“We’ve grown our sales force in terms of size and stature to support our growth, as breast centers have evolved to be the dominant form of delivery of breast care,” Malchow said. “So the strategy has remained unchanged since the founding of the company and is more salient today than ever as new imaging technologies evolve, the screening is more and more being handled by these breast centers.”

Internationally, SenoRx has received approval to sell its products in 15 countries, primarily in Europe and Asia, and is using country-specific commercialization strategies to launch its products gradually in those markets.

On the product development side, SenoRx has invested in numerous patentable technologies, with the expectation that its intellectual property portfolio will continue to grow in value. Two years ago, SenoRx unveiled its EnCor vacuum-assisted biopsy device, which in the first quarter this year had a run-rate of sales annualized at close to $20 million, Malchow said.

“The EnCor system was the third of this new class of devices which made almost the entire process automated and programmable, working in all three imaging modalities, and in a hands-free mode,” Malchow said. “We took it a further step in ultrasound by making it a miniaturized device, and we developed a new way of collecting tissue, in either a closed system or an open system, where the user has a choice.”

EnCor is currently used in nearly 550 institutions, and Malchow expects that marketshare to grow. Additionally, the company is in launch mode for its Contura radiation balloon, which had expanded to 34 clinical sites by the end of 2007. Malchow said the company rolled out the product last year at a number of sites to have it evaluated clinically before a full launch in the first quarter of 2008.

“We traditionally like to gain an approval and have it evaluated in the market clinically for several quarters, to gather an additional set of data and experience we can use in commercialization,” Malchow said. “That’s just what we did with Contura. We went to two sites, then 10, then 35 sites, collected data sets, and then used that to profile the product and create its launch profile.”

Intellectual property
In the litigious environment surrounding medical device manufacturing, SenoRx expends considerable resources to develop patentable technologies and has applications pending for close to 100 new patents on its devices. Currently, the company is engaged in litigation with device manufacturer Hologic over its Contura product.

Malchow said SenoRx believes it appropriately cited the nature and scope of the Hologic patents in developing its own radiation balloon technology. “We expect to be issued additional patents, which we believe are working through the patent system,” Malchow said. “It certainly remains to be seen, and it will be quite some time before we know more about that.”

As part of its strategy for developing new patents, the company seeks multiple approaches and patents for each of its products and does not develop projects without a significant intellectual property portfolio. “The device area is littered with patent disputes,” Malchow said.

To mitigate risk, the company makes an assessment of the probability of conflicting claims. “Investment and development of intellectual property is one of our biggest expenditures,” Malchow said. “We have products with seven or eight patents of different kinds. It is really important over the long term, and part of the value that may or may not show up has to do with strength and breadth of our intellectual property portfolio.”

SenoRx will continue to roll out new products over the coming year—a strength of the company, Malchow said. He expects the company will experience further growth along the lines of the 35% to 40% it has experienced over the last several years. “We think that those product introductions allow us to continue with the growth rate or exceed it in 2008,” he said.

The company continues to invest in its direct sales organization to further its growth strategy. “We’re building the only smallcap medical device company focused specifically in breast with the profile of high growth and strong margins,” Malchow said. “We continue to bring out new products, build on our direct selling organization, and start with new partners outside of the US. We’ll continue the splendid growth we’ve experienced so far.”
 
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