Less than four months after completing the inaugural class of Zero to 510, Restore Medical Solutions has received an estimated $2.5 million in financing from local venture capital funds MB Venture Partners and Innova that is allowing the company to move forward in producing its primary product.
Restore’s product, the RMS Modular Sterilization Tray, simplifies the reprocessing of sterile surgical instruments in hospitals and surgical centers. The company was founded in Atlanta, but moved to Memphis earlier this year to take part in Zero to 510, which invested $50,000 in six biotech startup companies and provided mentoring and other services over 90 days. The program also helped the companies prepare to apply for the U.S. Food and Drug Administration’s 510(k) pre-market notification filing. At the end of the program, the companies presented their ideas to potential investors.
Restore Medical needed an estimated $2.5 million to ramp up and launch and had been negotiating with Innova and MB Venture Partners for the financing, which has now come through, Ryan Ramkhelawan, Restore Medical’s CEO, says.
“We’re done with the fundraising for right now, at least,” he says.
The next steps for the company include receiving FDA approval and filling purchase orders it has received. Then the company would look for space to house its manufacturing, assembly and distribution operation. That could begin in the first quarter of 2013, when the company also intends to hire five employees. The sterilization tray is designed to reduce the time it takes for surgical staff to sort and clean tools post-surgery.
“This is actually helping the health care sector save hard dollars,” says Shawn Flynn, Restore’s president. “Moving forward with the challenges hospitals are faced with in cutting costs, we’re well positioned to be a leader.”
While the Zero to 510 companies were in various stages of product development, Gary Stevenson, managing partner of MB Venture Partners, says Restore Medical had a prototype and purchase orders in hand by the end of the program.
“They needed some regulatory steps and inventory build to get there,” Stevenson says. “But nothing validates a business plan like a purchase order.”
Jan Bouten, partner at Innova, says Restore can’t control the FDA approval process, but once it gets clearance, “you can really start rolling it out.”