A few years ago, a woman was facing the news she would need a double amputation below her knees because the arteries in her legs were diseased and blocked.
A snowstorm delayed the surgery, and the woman went on the Internet to explore options for her condition. She found Spectranetics and a few phone calls later, learned the answer wasn’t necessarily amputation — the lasers at Spectranetics could take care of the blockage and she could keep her legs.
“She danced at our Christmas party,” said Dave Webb, an engineer who works on the lasers at the Colorado Springs-headquartered company. “It’s great to know that you’re doing something that can make such a big difference to people.”
[pullquote]More than 1,000 Spectranetics laser systems are in use around the world.[/pullquote]
Another patient was filming his last round of golf before an amputation when a friend told him about the Spectranetics laser. He was in so much pain he couldn’t finish all 18 holes. A few months later, he filmed what he termed as his “first” 18-hole round of golf since his surgery.
“It’s just good to know you’re giving people options,” says Webb, clearly enthusiastic about both the lasers and the job he’s performing at Spectranetics. “How many people can say their job makes that big a difference?”
Atherosclerotic peripheral artery disease (PAD) is one of the world’s most prevalent and deadly diseases. Many in the medical world are calling it a pandemic, and conservatively, more than 202 million people worldwide have the disease, which leads to heart attacks and strokes. It has a higher fatality rate than HIV.
“Unfortunately, PAD isn’t treated well,” said Julianne Mashke, human resources director at Spectranetics. “Often, it’s not even treated until very late in the life cycle of the disease. If they can be treated sooner, there’s more of a chance to save their limbs.”
Spectranetics has emerged as one of the companies with a solution to fight deaths and amputations that stem from the deadly disease. The company makes medical devices that clear blocked vascular arteries and remove leads — the tiny tangles of wires that come with pacemakers and other implantable devices.
Business is picking up, company officials say.
“Pacemakers last about 10 years, and they’re not only getting implanted earlier — people are living longer with them,” Mashke said. “So lead extraction is becoming a much more common surgery. We also do vascular intervention with the laser, which clears blockages in veins and arteries.”
Combined, the two lines of business brought Spectranetics nearly $77 million in revenue for the first six months of 2013, according to its Securities and Exchange Commission filings.
The company’s profits are evenly split between the two divisions, according to its SEC filings.
How it evolved
Spectranetics was born from the tools of war.
An Air Force Academy professor, Robert Golobic, was working on developing lasers as part of the Strategic Defense Initiative when he met Hewlett-Packard engineer Johan Sverdrup in 1984. Sverdrup was working on ultrasound technology. The two realized they could create an ultraviolet laser to clear occluded arteries, and the first patient was treated five years later.
In 1993, Spectranetics received FDA approval for its laser ablation system and fiber optic catheters to treat coronary artery disease. Four years later, they received clearance to use the laser to remove leads in pacemakers and defibrillators.
“The laser is a cold laser; there’s not any kind of heat,” Mashke said. “Energy moves the molecules around enough to dissolve them against each other. It’s safer than pushing the blockage to the walls of the artery or to a different part of the body.”
Webb’s job is to work with the lasers to make sure they function properly. He says the lasers use a combination of gases and high-voltage electricity that form a bond to break apart the blockages.
“It’s a cool laser, a ‘bad’ laser,” he said. “It’s cool to be able to work on it.”
In 2004, the company got clearance to treat patients suffering from total occlusions in their legs and in 2007 to treat arterial blockages above the knee.
In early 2013, the company expanded its vascular intervention portfolio through acquisition of an Israeli-based firm with products designed to minimize radiation exposure during peripheral vascular procedures.
More than 1,000 Spectranetics laser systems are in use around the world, according to the company’s press packet.
Made in Colorado Springs
Colorado Springs is home to operations for some big-name corporations: Raytheon, Lockheed Martin, Northrup Grumman. But none of them really do any kind of manufacturing in the city. Spectranetics, on the other hand, does every part of its manufacturing on-site in a 65,000-square-foot building just off Voyager Parkway.
“Our employees are really proud of that,” Mashke said. “It’s a big point of pride and satisfaction.”
The company has a clean room to put together parts for the catheter; it has a laser room that creates the lasers with a team to make sure they’re running right. They put together the plastics for the heart catheters and the fiber optics that go inside them — all in Colorado Springs. About 385 people work at Spectranetics’ location in the Springs. About 577 total work at the company; the rest of them are overseas.
“If you make your own fiber optics, then you can be sure of the quality,” Mashke said. “You can make it to your own specifications and you can know exactly what you need.”
The company’s clean-room technicians are responsible for the painstaking task of combining the catheter shell with the fiber optics, as well as making some of Spectranetics’ disposable (one-time-only use) medical devices.
It’s tough work. Technicians must be precise. They have to measure and remeasure, and they have to do it on very small catheters and fiber optic wires. Finding help, though, isn’t a problem in Colorado Springs.
“We actually have a waiting list for people to work here,” Mashke said. “People know it’s a great place to work, and the Springs has such a wealth of talented employees. There’s no place else we’d rather be located.”
The company’s future
Scott Drake has been CEO of Spectranetics for a little more than two years, coming at the end of a rough spot for the company that involved settling a case with U.S. Customs, the Food and Drug Administration and the U.S. Attorney’s office after the company allegedly imported and marketed unapproved devices. Three former company officials were indicted, and all were cleared of the charges except for a single charge of lying to government investigators. Former CEO John Schulte is appealing the conviction. Spectranetics avoided charges as a company by settling out of court for $5 million in penalties.
But Drake says that’s all behind the company now. The company is hiring — has hired more than 100 people in the past two years and plans to hire 50 more in the next year.
“We have a bunch of good ideas and we have the talent to drive those ideas,” he said. “We’re expecting double-digit growth and a modest profit for the year.”
In the past three quarters, the company has seen profit grow to 13 percent, he said.
“In the longer term, we hope to get to 20 percent growth, which is totally within our ability,” he said. “We’re working on clinical trials for a treatment for in-stent restenosis, another type of coronary artery disease. Our competition is contra-indicated, and we are actively seeking FDA approval.”
The company also is working on its third global expansion, selling its lasers and training systems in 40 countries. It’s also working to open markets in India and China.
And the company is maintaining its vitality.
“Our three-year metric at the end of 2011 showed a vitality index of 4 percent,” Drake said, noting the company takes routine measurements of its results, revenue and profit. “In 2012, it was 13 percent. Today, it’s 25 percent.”