EchoCath’s deal with Medtronic helps turn technology into products

Vendor looks for electrophysiology partners

Ultrasound peripherals developer EchoCath is poised to take advantageof increased market interest in ultrasound-guided procedures.

In December, the Princeton, NJ-based firm entered into a strategicalliance with Medtronic, a manufacturer of heart pacemakers andpacemaker leads, to develop an ultrasound-guided pacemaker implantationsystem.

Under the exclusive licensing agreement, Medtronic will use EchoCath'sColorMark and EchoMark technologies to enable precise positioningof pacemaker leads within the heart using conventional ultrasoundimaging systems, said Frank DeBernardis, president and CEO ofEchoCath.

The resulting system will be designed to augment, and in somecases replace, fluoroscopy for guiding the placement of leads.In addition to reducing costs, the system could enable these proceduresto be performed in non-hospital environments, DeBernardis said.

The system could also be attractive for international marketsgrappling with cost constraints, he said.

"There are many emerging markets like the Far East, wherethey don't have the capital investment to buy fluoroscopic units,and that's a barrier for the implantation of a pacing lead,"DeBernardis said.

ColorMark is a device for improving needle visualization duringultrasound-guided biopsy, and it has received Food and Drug Administration510(k) clearance (SCAN 11/3/93). In addition to the Medtronicagreement, EchoCath will sell ColorMark as a separate product,and the company is in the final stages of choosing a distributor,DeBernardis said.

The other device included in the Medtronic deal—EchoMark --consists of a piezoelectric sensor mounted on a catheter. It isdesigned to improve the plotting of the catheter's location.

EchoCath will receive a series of milestone payments in the developmentprocess from Minneapolis-based Medtronic and will also garnerroyalties from sales of components that incorporate EchoCath technologies.

Other EchoCath work-in-progress technologies that were not includedin the Medtronic deal are EchoEye and EchoFlow. EchoEye, a forward-lookingcatheter-mounted intraluminal ultrasound transducer, could provideintracardiac 3-D volumetric imaging for electrophysiology studies,DeBernardis said.

Another development-stage product, EchoFlow, is a small sensorthat measures true blood flow and volume and can either be attachedto a catheter or function as an epivascular device.

Similar to EchoCath's approach in securing an alliance with Medtronic,the vendor is seeking to partner with another company to enterthe electrophysiology market. An alliance would make sense ifsuch a vendor already has an established marketing and technologicalpresence, DeBernardis said.

"For example, even though we could put a pacemaker lead inwith our technology, it would make little sense for us to considergetting into the pacemaker business," he said.

In markets where another company may not have that kind of dominantpresence, EchoCath would consider bringing products to marketon its own, he said.

Other potential applications being evaluated for EchoCath's technologyinclude ultrasound-guided breast imaging or biopsies, as wellas ob/gyn applications, DeBernardis said.

For its 1996 fiscal year (end-August), development-stage EchoCathreported revenue of $108,000, compared with $31,000 in 1995. Thecompany reported a net loss of $2.9 million in 1996, comparedwith a net loss of $1.5 million the year before. Increased expendituresduring 1996 were caused by expanded investments in R&D, commercializationactivities, staffing, and other administrative programs, accordingto the company.