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Surgeons Can Count on Firm’s Medical Device

RF SURGICAL SYSTEMS INC.

CEO: Kevin Cosens.

Revenue: Undisclosed.

No. of local employees: 10, with 55 employees in all.

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Investors: Split Rock Partners, Menlo Ventures, Stanford University, the founders.

Headquarters: Bellevue, Wash., with research and development in San Diego.

Year founded: 2004.

What makes the company innovative: Offers a fast, new way to detect a foreign object left in the body during surgery.

Key factors for success: Patent portfolio, technical expertise, ability to increase market share, access to the surgical channel.

Bill Blair recalled sitting at a table at a Greenwich Village eatery as his surgeon friend laid out a work-related challenge.

“Why can’t you fix this,” he recalled Dr. Jeffrey Port asking, over dessert.

Blair is an engineer. His friend’s problem was common in the surgical profession. It’s the need to find a missing surgical object at the end of a procedure, without dragging the surgery out any longer than necessary.

The two began ruminating on the problem. After two years of work, Blair felt they were on to something.

After several more years, they have built a company on what they feel is an elegant solution.

Blair and Port are co-founders of RF Surgical Systems Inc., which has operations in San Diego and the Seattle area. Their solution is a marker added to the lowly surgical sponge.

A surgical sponge looks more like a cotton dishtowel or washcloth, though perhaps not as dense. The surgical team uses such sponges to soak up blood. Sometimes they are hard to see.

Nurses keep track of the number of sponges used. If all sponges are accounted for, it’s OK to sew up the patient.

Sometimes, however, the count is off and the surgical team has to search for the missing sponge.

In rare cases a nurse may say the count is correct, but there will still be a sponge left inside the patient, RF Surgical executives said. If the sponge stays in the body, it can make the patient very sick.

Call and Response Technology

There is one retained object in every 6,000 to 8,000 surgeries, said RF Surgical CEO Kevin Cosens.

What RF Surgical has done is create a sponge with a radio frequency tag sewn into a corner. The tag is a little round cylinder slightly bigger than a grain of rice.

They also created some electronics to detect that tag.

At the most basic level, the technology works through call and response. A surgeon holds an electric wand over the patient. The wand puts out the call, the tag in the sponge responds, and an electronic display tells the surgeon there is still a sponge in the patient.

If there’s nothing left in the patient, the electronics show an all-clear on the display.

The company got the U.S. Food and Drug Administration’s approval to market the technology in 2006.

RF Surgical holds 15 patents on its technology and it looks as if it will soon have two others, Blair said.

The founders, as well as Stanford University and Menlo Ventures put up initial capital for the company. RF Surgical got a capital infusion in September 2011 when Split Rock Ventures joined the original investors to put $12 million more into the firm.

RF Surgical does not disclose its revenue.

Bringing the product into the surgical supply chain was a challenge, Blair said. So was product development.

First, the radio frequency tag had to hold up during the process that sterilizes the sponges.

The technology also has to work in terrible conditions. An operating room is electrically “noisy,” Blair said: It has all sorts of equipment that can play havoc with the call and response.

So RF Surgical’s R&D lab in Scripps Ranch is full of typical operating room equipment, such as the “Bovie” electrosurgery tool. Engineers use such tools to test how they interact with the radio frequency tag system.

As an alternative to the detection wand, RF Surgical has developed a mat that a patient lies on. The mat contains antennas to detect the radio frequency tag following surgery.

There is competing technology. Some surgical sponges contain a specialized thread that will show up in an X-ray. But Blair said that system isn’t foolproof, and in some cases, the thread doesn’t show up. Besides, the process of getting an X-ray takes time, which works against the goal of getting the patient off anesthesia as soon as possible.

Some 245 hospitals use the RF Surgical system — but there are many more that don’t. The United States has roughly 4,000 hospitals, Cosens notes. So RF Surgical sees its market as large.

Its 55 employees include a sales team of 26.

$10 Per Patient

The cost of using the system is $10 per patient, down from $50 per patient, said Cosens. The price is miniscule compared to the average $300,000 payout a hospital makes to settle a case over a retained surgical object, the CEO said.

Blair said that hospitals that had eight to 10 retained objects per year are down to zero after using the system.

As RF Surgical works to sell more hospitals on its wares, it is also forging ahead in research and development. Its R&D center has 10 employees.

For one thing, Cosens said, the company is mulling how to put its radio frequency tags into surgical instruments.

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