It’s the best money can buy in two important areas of medical technology. There are similar systems that only the first world can afford, but this one is world-class, cost-effective and for me, this is true advancement in medicine,” says, Dr Yuman Fong, chair of surgery at City of Hope, a cancer research hospital in Duarte, California. Dr Fong is one of the world’s leading surgeons specialising in the cancers of the liver, gallbladder and pancreas and has pioneered minimally invasive robotic therapies for cancer. He has spent over two decades in the renowned Memorial Sloan-Kettering in New York. What he is talking about is an image guided robotic system called Maxio, developed by Chennai-based medical technology firm Perfint Healthcare.
Traditionally, cancer treatments involve surgery, chemotherapy and radiation. While they remain the popular choice still, doctors are now veering towards interventional oncology and tumour ablation for patients who are not suitable for surgery or have inoperable tumours. Tumour ablation is a minimally invasive procedure where needles, through an image guided navigational system, are used to deliver energy, be it microwave, laser or electrical, to destroy the tumour and robotic systems like Maxio are leading the way for alternate therapies to cure cancer.
Perfint’s founders S Nandakumar, K Guruswamy, K Puhazhendi and Gopalakrishna Kulkarni earned their stripes in GE Healthcare. After spending a decade in GE, they branched out to IT services, consulting and investment banking in the early years of 2000 but soon discovered their heart was still in healthcare. So the friends came together in October 2005 to form Perfint, a cutting edge medical technology company that is quietly making a name for itself around the world. While the first three took an executive role in the company, Kulkarni took the non-executive route and chose to be on the board. Perfint began as R&D engineering company that offered product development services to medical device manufacturers. “We realised India was very strong in services, so we were looking at whether we could marry our understanding of medical devices with the strength of services from India,” says Nandakumar, CEO, Perfint Healthcare. They even helped smaller companies with the regulatory filings and process.
While there was enough business to keep them busy, they realised in 2006 the business was not scalable because in India the demand was for cheaper alternatives, not high quality products. “Not many of our potential clients wanted world class products solving a clinical problem or meeting an unmet need. They just wanted to know if we can build products cheaper than they were buying and selling,” says Puhazhendi, director-engineering, Perfint Healthcare. That’s when Perfint changed track to give products a serious look. Given their background in imaging technology, CT scanners was an obvious place to start. They decided to look at what the top 3-4 players were offering and map them to customer requirements, recognise the gaps and develop a paper solution first. After speaking to a number of radiologists in India, they came up with a product prototype that would assist in making biopsies more accurate using a robotic navigational system. In early 2007, physicians tested the product and found it very effective. Going with the encouraging response, Perfint decided to develop the product for clinical use. Promoters coughed up a capital of Rs.2 crore, and then raised some more money from angel investors to develop the product. Later that year, they raised Series A funding of $ 3.5 million from IDG Ventures and Accel Partners (Erasmic Partners then). Perfint developed its first product, the Piga CT, a robotic system that would help in the accurate biopsy of lung and liver. That product was launched in 2009. The procedure took a long time to complete for a biopsy, an outpatient treatment, since it was system navigated. The doctors felt that cost trade-off was also not favorable and told them the product would be more effective if they can be used to treat tumours and manage pain, rather than just as a diagnostic tool. The feedback set the ball rolling for its next product launches Robio and Maxio.
Robio came in 2011 with a host of features that would help doctors perform complex biopsies with a high degree of accuracy while ensuring minimal organ damage and higher level of patient comfort. In October 2013, it launched its more comprehensive offering Maxio, a complete care system that diagnosed, planned the procedure, and delivered the drug that would destroy the tumour. Even more, the doctor could instantly verify how successful the procedure was and see if they were able to get rid of the entire tumour. Perfint was the first company to come up with the planned protocol. There are companies that provide the energy devices and then you have the heavyweights such GE, Siemens and Philips that are in the imaging and diagnostic space and companies that specialise in post-procedure verification but there wasn’t a company that offered a comprehensive care system like Perfint. “We are the first company to come up with a seamless workflow and protocol which ties product treatment, planning and verification using the robotic system into one simple procedure,” says Nandakumar. Not only has Maxio simplified the complex procedure, it also supports multi-tumour treatment. “Maxio speeds up the process and you get more efficient and precise at what you are doing. There are other technologies that promise navigational help but Maxio is unique and by far the best solution. It’s the only one that works in a clinical routine,” says Dr Philip Wiggermann, Head –Interventional Radiology at the University of Regensburg, Germany. The University of Regensburg has the most number of ablations (procedure to destroy tumour) in Germany and Dr Wiggermann and his team have been using Maxio for more than a couple of years. The ablation process works best for treating tumours in the lungs, kidney and liver and in the case of pancreatic cancer, where the survival rate is only 5%, ablation helps in increasing the life span by about three years.
Not surprisingly, Perfint has been awarded four patents in the US, and has six more patents in the works. The company has a team of experts across the US and Europe who work with them on continuous product improvement. It got a shot in the arm when Maxio got the USFDA approval in 2014. Approvals in Japan and China followed in 2015. “Getting these regulatory approvals is a huge validation of our work. Our protocols are always set to global standards,” says Nandakumar.
Perfint has done about 21 installations of Maxio worldwide in countries like US, Germany, Spain, Australia, Russia, Vietnam and Malaysia and more than 2,000 procedures have been done already. Including the Piga CT and Robio, Perfint has managed about 86 installations around the world. But the progress has been slower than the company anticipated. In India, ablation forms about 10% of the treatment and as awareness increases, adoption will also increase, founders of Perfint feel. Private hospitals like Tata Memorial, Medanta, Global Healthcare, Jaslok and Narayana Health have installed Maxio, and Perfint is now targeting public hospitals. “In India, cancer is treated by public hospitals since the cost of treatment is high. There is an infrastructure and capacity constraint, so ideally you don’t want the patients to occupy the beds for long. Ablation works perfect in these circumstances since it only takes a couple of hours and it is an OPD procedure so we are pushing for its usage in public health institutions,” says Nandakumar. The company already has a tender to supply six machines which costs Rs.1.5 crore per machine, to the Tamil Nadu State Government. Other state governments have shown interest as well.
While Maxio has caught the attention of the medical world, the company has a fair bit of evangelising to do. “It has taken us a lot of time to create the market. So what should ideally have been our advantage is also our handicap. In the next 3-4 years, we will see better adoption of interventional oncology and ablation as a procedure,” says Guruswamy, director, sales & product adoption, Perfint Healthcare.
Another reason for the slower adoption was the fact that the Maxio was dependant on the availability of CT scanners in the hospital. In the time taken to finish one procedure, the hospital has the option of imaging 15 patients which proved to be better from a revenue perspective. So, hospitals were reluctant to let go of their CT scanners for ablations. But with increasing awareness of the effectiveness of ablations, hospitals are now getting standalone CT scanners for the procedure.
But Perfint is coming up with its own solution. It is working on its next product called the Sonio which integrates the imaging part into its platform. “There were two things missing in the Maxio – imaging and energy delivery. The electrodes had to be procured separately and we had to depend on the CT scanner for imaging. Now with the Sonio, we will offer the entire therapy suite ourselves right from imaging to energy delivery and verification,” says Puhazhendi.
Sonio is likely to be launched sometime in FY18 and the company expects the product to be one of its key growth drivers. The strategy is to use the developed markets as centres of excellence and use them to showcase the technology to developing markets particularly South East Asia, China, Mongolia and Africa. “China has 40% of the world’s liver cancer and 50% of the world’s lung cancer patients and is driving the growth in ablation procedures. In fact, there is a high incidence of liver and lung cancer in South and South East Asia and that will remain our focus,” says Guruswamy. The company expects to clock revenue of $8 million this fiscal and with the launch of Sonio, expects to grow revenue by 50% in the next couple of years.
However, growth has not always been linear for the company and their projections haven’t always been on the money. “We are about 3-4 years behind plan. We have had to temper our growth expectations since some of our projections have been ahead of market growth but we are not discouraged. It also tells us how little we knew when we started but had we known everything we probably wouldn’t have chosen interventional radiology. We are still learning,” says Nandakumar. A quick expansion into several markets like Russia, Chile, Colombia, Turkey and Middle East about two years ago saw the company lose some of its focus. In fact they ran into problems in the Middle East, where they had to write-off some sales. With the company exiting the non-key markets and tighter internal controls in the past two years, the company hopes to be back on track in FY17.
Funding has also been a challenge for this medtech company. It has raised more than $30 million in multiple rounds till date with Norwest Partners coming in as investor in 2010. “We were impressed with the pedigree of the team with all of them coming from GE. Second, there was a definite need for such a product because if you want to treat cancer, there is no indigenous equipment available for newer treatments methods like ablation. As an investor you have to be patient since any medtech product takes about 10 years to achieve its true potential,” says Mohan Kumar, executive director, Norwest Venture Partners India. “Perfint is at a tipping point. I see them scaling up significantly over the next two years,” he adds.
Over the next couple of months, Perfint is hopeful of raising another $10 million. The tech team is also working on extending their robotic navigation system to spinal surgeries and orthopaedics to expand the market they can cater to. “Medicine has been traditionally conservative and rightly so. So you need evidence and proof and that is what we are working on through our publications,” says Wiggermann.
In Asia, the incidence of cancer is likely to increase by 70% in the next 10 years. With lower costs and a better turnaround for hospitals through ablation, products like Maxio and Sonio could just be what the doctor ordered.