12 Jun Surgical products company wins Governor's Business Plan Contest
Milwaukee, Wis. – In its third year as a contestent, Vector Surgical, an Oconomowoc business that is developing new medical instruments to improve breast cancer surgery, is the winner of the 2007 Governor’s Business Plan Contest.
Vector Surgical, the winner in the life sciences category, beat out three other category winners for the award, which was announced during the Wisconsin Entrepreneurs’ Conference. The 2007 contest, produced by the Wisconsin Technology Council in conjunction with the Wisconsin Innovation Network and the Wisconsin Angel Network, attracted nearly 300 business entries statewide.
Janet Phillips, CEO of Vector Surgical, noted that the company has been a finalist each year it has entered the contest. “It’s been a great opportunity for us,” she said. “We’ve continued with it because it’s great for networking and developing relationships that we need, and to strengthen our business plan.”
The other category winners included Dossette, LLC of Pleasant Prairie, a manufacturer of pharmaceutical feeder technology, advanced manufacturing category; Extract Systems, a Madison-based developer of identity theft solution software, information technology category; and Fahlgreen Solutions, a Montello-based biometric security company, business services category.
Vector the victor
Contestants were asked to produce for contest judges a 20-page business plan. Twenty-six companies, including the four category winners, were vying for prizes valued at more than $200,000. Prizes included a year’s free rent in a business or technology park, legal and accounting services, web/IT services, and media-related services.
Phillips said the next major step for Vector Surgical will be to launch its products, most of which were developed by her husband, Michael Phillips, a Milwaukee surgeon who co-founded the company and serves as its scientific advisor.
The company is working to launch three of the products this year, with the ultimate goal of entering a distribution agreement with a global player. One year from now, Phillips hopes to not only have exceeded sales goals, but to have the company’s sales channels firmly establsihed.
Two products, MarginMarker and CorrectClips, are used to “orient” tissue as part of cancer operations. In cancer surgery, tissue is examined for adequate margins of healthy tissue, but current methods are imprecise and can lead to the deadly failure to remove cancer. Vector Surgical believes these two products can prevent as many as 28,000 people from going through a second cancer surgery.
The market advantage of MarginMarker, which is expected to be the company’s top revenue driver, is that it takes about 20 seconds to define an entire specimen surface, as opposed to the usual four minutes for orientation using sutures, and it eliminates puncture risk to staff members.
Correct Clips, which are used in radiology, replace the metal tags or clips that typically are sutured to tissue and can detach or obscure the view of tissue. The plastic Correct Clips attach more securely and x-rays look right through the plastic to provide a more complete view.
A third product is MammoShield, a lead shield placed on the breast during surgery for the purpose of blocking the potential for false positive feeback from the tumor site, which is typically injected with radioactive fluid.
Vector Surgical’s business plan estimates that, at full penetration, the 2,477 American hospitals offering cancer services could achieve $1.5 billion in net savings and additional income with the use of these products.
“With relatively simple changes, dramatic improvements can be made in the quality of cancer care,” Phillips said.
Three additional products are still in development, including a LapMarker used to mark the abdominal wall during surgery.
The company estimates the combined annual market for all of its products is $191 million in the United States and $980 million worldwide. All of the products are relevant to breast cancer surgery, whose practitioners tend to be early adopters of new technology, Phillips said.
Vector Surgical has been financed to date with $145,000 from the founders, a $75,000 Technology Development Loan, and a $150,000 line of credit. Assuming it can raise $875,000 in additional capital, the company forecasts profitability in May of 2009, a year in which its annual revenue is projected to rise from the current $315,000 to $1.6 million. To help reach a cash flow-positive position, it is seeking an additional $520,000 in capital from investors and banks.
Business plan refinement
Phillips said the company has used the Business Plan Contest as a vehicle to continually sharpen its business plan and its strategic thinking. The revamps help the business keep pace with changes that occur each year, whether it’s adding more products, improving its ability to project financials, or developing a better understanding of the markets.
Chief executives for each of the category winners also said that developing or further developing their business plan is paying dividends in terms of detail and clarity.
Suzanne Kufahl, owner and CEO of Fahlgreen Solutions, said the contest enabled her biometrics company to add more depth to its plan in the areas of accommodating rapid growth and establishing a solid executive team.
“I think it’s really polished our business plan a lot,” Kufahl said. “It definitely has made us think of more aspects of the business that we glanced over originally.”
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