A medical device startup has drawn an investment from Irvine’s Masimo Inc. and acquired a Hospira Inc. product that’s now the basis of the new company.
SedLine Inc., whose chief executive hails from Masimo, said last week it’s buying a brain function monitoring device from Lake Forest, Ill.-based Hospira for an undisclosed price.
The company took its name from the product, also known as SedLine.
The device measures the effects of anesthesia and sedation on patients by analyzing, quantifying and displaying both sides of the brain’s electrical activity.
The startup grew out of an interest Masimo had in devices that monitor brain function, said David Goodman, chief executive of SedLine.
Masimo makes devices that continuously measure oxygen and other substances in patients in operating and emergency rooms, intensive care units and other medical areas.
It has yearly sales of $350 million.
SedLine is starting up with a $3.5 million investment from Masimo.
Goodman was Masimo’s executive vice president of business development until earlier this month. He also is a Harvard University-trained doctor and bioengineer.
Masimo might be interested in buying SedLine, Goodman said, but there is no option for it to do so in the funding deal.
In a release, Masimo said that it could up its investment in SedLine if the startup reaches financial and development targets.
The company plans to develop next-generation monitors that Goodman said could further improve the care of patients who are under anesthesia or sedation.
He said he expects the company can grow through a combination of direct sales, as well as marketing at trade shows and networking.
Goodman is a veteran of the patient monitoring industry who also worked for the predecessor of Covidien Ltd., Masimo’s longtime bitter rival with an official base in Ireland and a day-to-day headquarters in Massachusetts.
“I was employee No. 6 at Nellcor,” Goodman said, referring to a unit of Covidien.
For years, Masimo fought Covidien and Nellcor to get its devices into hospitals. Masimo won a settlement of more than $300 million from Covidien in 2006.
Goodman said he is a co-inventor of early forms of pulse oximeters, which attach to a patient’s finger or toe and measure levels of oxygen in the blood.
In November, Covidien paid $210 million for brain function monitor maker Aspect Medical Systems Inc. of Massachusetts. Goodman called Aspect Medical the market leader in brain monitoring devices.
“I’m a believer that markets work better when you have good competition,” Goodman said.
There’s room to grow, according to Goodman. Brain monitors now are used in about half of operating rooms, he said.
SedLine has 10 workers, including Hospira’s original team, and is based on Alton Parkway in Irvine, near Masimo.
