SBIR and STTR Success Story for Xilas Medical, Inc.

SBIR and STTR Success Story for Xilas Medical, Inc. (Information Posted/Updated on 07/09/2004)

Xilas Medical, Inc. 12665 Silicon Drive San Antonio, TX 78249 Contact: Ruben G. Zamorano Phone: 210-692-1114 Ext. 119 Fax: 210-692-1144 E-mail: zamorano@xilas.com Web Site: http://www.xilas.com
Project Title: Medical devices that prevent the occurrence of foot ulcers and amputations in people with diabetes
Related Award(s): R43/R44 DK54559 ; R43/R44 DK055909; R43 DK061815
Technology Developed: People with diabetes are highly susceptible to ulceration and amputation of their lower extremities due to the development over time of peripheral neuropathy. The lack of feeling in the feet, our body’s early warning system, combined with any type of mechanical stress can lead to inflammation which places the patient at a high risk for amputation. Xilas has developed a family of products that assist the diabetic patient and their doctors in the prevention of these devastating and costly events.
Key Words: diabetes, diabetic foot ulcer, amputations, friction, dermal thermometer, early warning tool, GlideSoft, TempTouch.
Uses of Technology/Products/Service: Xilas developed two products that prevent ulcers and amputations – the GlideSoft (TM) insole which can eliminate mechanical stress on the diabetic foot and the TempTouch (TM) home use foot thermometer, which can provide the patient with an early warning of developing ulcers. Both devices are tools that assist the patient in compensating for the lack of feeling in their feet, a complication common in people with diabetes. The GlideSoft(TM) insole is an innovative device that provides the patient with the benefit of reducing shear or rubbing (friction) on the bottom of the foot. It has been designed to be worn in off-the-shelf extra depth shoes normally recommended for high-risk diabetics and has been proven in clinical trials to be effective in preventing foot ulcers. The TempTouch(TM) dermal thermometer provides the diabetic patient with an objective means whereby they can take the temperature of key sites on the feet to call attention to the presence of inflammation that they would otherwise not be aware of. The device is used in the home environment by the patient on a daily basis as an early warning tool and is designed to accommodate people with advanced levels of obesity or osteoarthritis. Experts estimated that each year in the U.S. people with diabetes experience in excess of 1.2 million foot ulcers and 100,000 amputations that cost the healthcare system over $20 billion per year to manage. Based on its clinical trials funded by the National Institutes of Health, Xilas has shown that the GlideSoft(TM) insole and the TempTouch(TM) dermal thermometer can effectively prevent over 80% of these ulcers and amputations.
Benefit to Company: Xilas Medical has diligently applied for, and been privileged to receive, $2.7 million from the National Institutes of Health (NIH) via the Small Business Innovation Research (SBIR) program. As a consequence, Xilas has utilized these funds to evaluate, refine and validate four separate products, each in it own right important to improving outcomes and lowering healthcare costs in the area of diabetic foot complications. As a result of its clinical trials, Xilas has moved to bring two products into the commercial market in 2004, the GlideSoft insole and the TempTouch dermal thermometer. Revenues from product sales are estimated to be $1.2 million in 2004, $6.6 million in 2005, and $19.0 million in 2006 with most sales planned to occur in the U.S. Of significant importance, is the fact that Xilas has signed a Vendor/Partner Alliance with XLHealth of Baltimore, Maryland to provide over $1.2 million of GlideSoft and the TempTouch devices in support of the Center for Medicare and Medicaid Services (CMS) Disease Management Demonstration project designed to dramatically improve health care outcomes for seriously ill Medicare participants residing in the state of Texas. It is Xilas’ belief that the outcomes demonstrated through the SBIR grants will be replicated in the CMS demonstration project resulting in a significant reduction in the occurrence of ulcers and amputations in these high-risk patients with diabetes. Furthermore, XL Health has already indicated their intention to become our first customer of the TempTouch RM™ temperature device once further development has been completed. Without the opportunity provided by the SBIR program, it is not likely that Xilas would be in the position it is in today to bring these clinically proven devices into the market at a time when prevention of complications associated with diabetes is at such a high level of importance due to the epidemic-like condition that currently exists. Xilas believes that this work will benefit both the U.S. citizens with diabetes and the existing burden on the health care system, as well as allow the Company to build a profitable business. After pursuing our products’ adoption in the U.S., Xilas will pursue European market introduction of these devices.
Other Comments Related to Company's Success Story: Xilas has funded operations over the past six years with personal money from founders and insiders and has completed clinical trials with its products through the SBIR program where it has been granted seven awards from NIH totaling $2.7 million. Recently, on June 23, 2004, the Company completed its first ever, private equity financing round raising $500,000. An amount of $1.0 million will be added within 2-3 months. The success of the Company to-date in obtaining and executing on the seven grants, the positioning of its products in the fast growing area of Disease Management, and securing its first $1 million product order has proven to be an attractive scenario for investment. The Company is pleased that its recent and future investors have recognized the importance of the products in preventing diabetes related foot amputations and the opportunity to grow a significant business.