Skin Game: Fort Worth company makes mark in wound care fieldFebruary 3, 2014
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Michael Steadman of SteadMed in Fort Worth. Courtesy photo.
Demand for advanced wound care products and services is expanding quickly, and a fast-growing small Fort Worth company wants a bigger piece of it.
SteadMed Medical, founded in 2011 by the longtime wound care company executive Michael Steadman, saw its sales rise 70 percent last year on two new products it’s distributing, Steadman said. And the 33-employee company expects its sales to increase this year by a like number, boosted by a third new product, he said.
Newest to the company’s lineup is Xpansion, a wound treatment process whose distribution rights SteadMed recently acquired in a joint venture with the chief of plastic surgery at Harvard Medical School. Medicare’s changes in January that pared reimbursement for traditional skin substitutes will help the cheaper, more effective Xpansion, Steadman predicted.
“We’ve got a couple more that are knocking on our door” with prospective products, Steadman, 51, said. “But we’ve got more to say grace over with these products.”
Steadman, who was president of DFB Pharmaceuticals in Fort Worth and helped start that company’s Healthpoint, is well into a market whose growth is being propelled by an aging population and advancements in treatment of chronic wounds such as diabetic ulcers, burns and other trauma.
“You take care of all those together, you have an exploding marketplace,” Steadman said during an interview in the company’s modest offices in a building on South Hulen Street that used to house Healthpoint.
He declined to disclose the company’s sales. But he estimated the market at $5 billion, growing 18-20 percent annually for advanced wound care and 8 percent for traditional wound care.
The researchers Medtech Insight and BioMed GPS estimate the global market in advanced wound care at $6 billion, growing to $8 billion over the next five years.
Steadman, who started the company with his own capital and then raised $5.3 million from investors in a round that closed in June 2011, says the company should achieve profitability this year. John Adams, CEO of the Fort Worth-based Adams Laboratories and creator of the Mucinex cough suppressant and decongestant, is one of the investors, Steadman said.
While SteadMed Medical is doing some of its own research and development, its niche is decidedly in distribution and licensing, Steadman said. Of its 33 employees, 26 are salespeople.
The company has been building on its Elta line of skincare products.
Steadman attributed the company’s sales growth last year to Drawtex, a dressing created in South Africa that pulls fluid, bacteria and debris out of a wound and into the dressing, and Vashe, a nonstinging cleanser that kills infectious pathogens.
“I gargle with this stuff,” Steadman said.
SteadMed is the North American distributor for Drawtex. It began U.S. sales in 2011, Canadian sales in January and Mexican in February.
Drawtex competes against a plethora of other treatments, Steadman said. They range from foam to “negative pressure,” in which a vacuum pump is used with a sealed dressing to suck out fluid, infection and other extraneous material.
SteadMed has the exclusive rights to sell Vashe in the wound care market in the United States, Canada and Mexico.
Drawtex and Vashe treat chronic wounds. SteadMed’s latest product, Xpansion, helps treat and heal acute wounds.
SteadMed is in a joint venture with Elof Eriksson, the Harvard surgeon who created the Xpansion tool kit and process that he used to mince a small section of skin graft and lay it into the wound bed. The wound is dressed, and skin is supposed to regenerate and incorporate with the surrounding skin.
Through this technique, the material taken from a small graft can be used to cover a wound significantly larger, Steadman said. The surgeon does the treatment in an outpatient center, using a local anesthetic, in about 45 minutes, he said.
The technique competes with surgeons’ use of skin substitutes, but those don’t incorporate well into a wound and they typically require several applications over a number of weeks, Steadman said.
As of Jan. 1 Medicare capped its reimbursement for skin substitutes. That’s opened the door for other treatments, Steadman said.
Jason Napolitano, an analyst for Zacks Investment Research, said the same in October in starting coverage of a publicly traded company called Uluru, whose wound product Altrazeal “has the potential to dramatically change the way physicians treat chronic wounds.”
“We believe a significant change in how chronic wounds are treated in the U.S. is coming in 2014” because of the Medicare decision, Napolitano said in an investment note accompanying the start of coverage.
Eriksson had been talking to other potential partners, but he’s had a longstanding relationship with SteadMed’s principals, Steadman said.
“He was talking to multiple folks,” Steadman said. “We just have a long history together.”
SteadMed remains privately held, but it’s possible the company may need access to the public capital markets to help with the growth of Xpansion, Steadman said.
“We’ve taken a pay-as-you-go pace,” he said, adding that the $5.3 million in 2011 capital he raised will “take us to profitability.”