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Jan. 8, 2018
This piece is presented by South Dakota Biotech.
An incision in the navel of a bit more than an inch is all it takes for a tiny robot to be inserted into the abdomen.
Equipped with a light and camera, each robotic arm can lift 2 pounds. The equipment already has been used virtually by a surgeon in Hawaii and at the Johnson Space Center in Houston to perform abdominal surgery experiments in Omaha.
This is the invention of Virtual Incision Corp., a spin-out of research at the University of Nebraska that appears positioned to transform surgery worldwide – and maybe even beyond, into outer space.
At the forefront of this potentially game-changing development is Sioux Falls-based private equity firm Bluestem Capital Co., which invested in Virtual Incision a few years after its founding in 2006.
The company now has seven funds invested in Virtual Incision and accounted for more than $7 million of a recently completed $18 million Series B funding round.
“Literally, there is nothing like this robot in the world,” Bluestem CEO Steve Kirby said. “And the most recent funding means this company will be adequately funded through FDA approval.”
That process might be done as soon as this year, he said. The FDA has approved a similar surgical robot, which has been used for years, including in Sioux Falls. That system is much larger, though. It takes up an entire surgical suite and can weigh 2,000 pounds. The cost approaches $2 million, Kirby said.
The Virtual Incision robot “is functionally similar to what’s already been approved … just in a different form and size, which helps expedite the regulatory process. Initial meetings with the FDA have been very productive.”
The product also has caught the attention of the Army “because over 80 percent of soldiers who pass away do so because they bleed out. They can’t get them to surgery to stop the bleeding fast enough,” Kirby said. “Now, we have this, that’s small enough we can put it in a helicopter and essentially take the surgical suite to the soldier.”
With a cost expected to be a fraction of what’s on the market, it also will be affordable for rural hospitals, he added.
There’s even talk of sending one to the International Space Station.
The robot has successfully performed abdominal surgery in a human as part of testing a couple of years ago, Kirby said.
The small incision size reduces recovery time and risk for infection for procedures currently performed with large, open incisions, including colon resection, he added.
Virtual Incision first contacted Bluestem looking for funding. The latest round included a new investor, Sinopharm Capital, which is a private equity fund initiated by the largest health care company in China, and Sioux Falls-based PrairieGold Venture Partners.
“Closing this round of financing launches the development of our miniaturized surgical robot toward our next key milestones, including submission to the FDA for market clearance,” said John Murphy, the company’s California-based president and CEO.
“We sincerely appreciate the support from all our investors, who clearly understand the tremendous potential of our surgical robotics program and provide vital input to our team and company.”
The company’s relatively small core team has used two dozen suppliers to bring its product this far, Kirby said, disproving early predictions from some about how much it would cost to develop.
“We’re very proud that we didn’t spend much money at all, and we showed the Midwest approach of being very lean could get us where we need to go,” he said.
“Virtual Incision is taking a unique approach to surgical robotics and minimally invasive surgery. It’s very, very disruptive.”
The Nebraska-based engineering and clinical teams will keep refining the product, and pre-clinical studies will continue “so we are absolutely sure our product is as good as we can get it,” Kirby said. “And right now, it’s very good. It can do human surgeries today.”
As the device moves into the commercialization stage, there could be opportunity for additional work in South Dakota, he added.
“We have raised that issue with management, and there’s been no pushback,” he said. “Bluestem is absolutely excited about the idea of producing some of it in South Dakota, but that’s just a business decision the board will have to make.”
The ties to Virtual Incision already show South Dakota’s growing influence in biotechnology, said Joni Johnson, executive director of South Dakota Biotech.
“Biotech companies are discovering that private equity most certainly exists in South Dakota. And not only does it exist, but our funding partners bring outstanding depth of knowledge and resources to their relationships,” she said.
“At the same time, we’re showing increasing strength as a center for medical device manufacturing. We absolutely think Virtual Incision would be a fit with that growing sector as well.”
Virtual Incision, a company significantly funded by Sioux Falls private equity, could change the way surgery is performed with this incredible robot.