Vertos Medical Inc., a venture-backed maker of devices that treat degenerative spinal diseases, recently moved its headquarters to Aliso Viejo from San Jose as it readies its first product.
“My intent upon joining the company was to grow it commercially,” said Chief Executive James Corbett, an Orange County resident who joined Vertos in November. “I thought that Orange County would be more stable and (a better) area to build the company out.”
Vertos developed a procedure called “mild,” which stands for minimally invasive lumbar decompression, and sells a set of devices that is used in the procedure.
“Mild” treats lumbar spinal stenosis, or narrowing of the spinal canal, without major surgery.
Vertos is training doctors to use its devices and plans to roll them out nationally in early 2010.
Vertos’ 10,000-square-foot headquarters, on Aliso Creek Road near the San Joaquin Hills (73) Toll Road, includes space for administrative, financial, some clinical research, sales and marketing, customer service and distribution functions, as well as a training center.
The headquaters once housed SenoRx Inc., a maker of breast cancer diagnosis and treatment devices that’s now headquartered in Irvine.
“It’s designed to create an easy access environment where we can have a concentration of our team,” Corbett said.
Vertos did look at “quite a number of buildings” in OC, Corbett said,including ones in the Irvine Spectrum, Laguna Niguel and San Clemente,before picking its facility.
Not all of Vertos is coming to OC. The company’s research and development function, along with manufacturing, will remain in San Jose, according to Corbett.
Vertos’ operations in OC will eventually have 30 to 40 employees, he said, although he was reluctant to give specific numbers because the company’s still in an early growing stage.
Among the jobs to be filled: chief financial officer.
Vertos expects sales in the seven-figure range this year, Corbett said. Overall, he estimates that the yearly market for lumbar spine disease treatment to be in the “couple billion” dollar range.
Vertos was founded in 2005. It’s raised $17 million in venture capital to date.
An initial public offering is not in Vertos’ immediate plans, Corbett said. Instead, the device maker hopes to raise what it calls its last round of financing prior to reaching profitability before the end of 2009.
“We’ve got sufficient cash to operate now,” Corbett said.
Vertos’ backers include Foundation Medical Partners of Rowayton, Conn.; CHL Medical Partners of Stamford, Conn.; Superior, Colo.-based Aweida Venture Partners; and DFJ Mercury of Houston.
CHL invested in Vertos because it addresses “a pretty large unmet medical need,” said Myles Greenberg, a CHL partner who serves on Vertos’ board.
In particular, Vertos’ device set is a good alternative for patients who, because of their ages or other ailments, aren’t good candidates for spinal surgery, Greenberg said.
Corbett said that 650,000 to 700,000 patients a year could be candidates for Vertos’ device set, compared with the 220,000 patients who receive spinal surgeries each year.
The company has FDA clearance for the device set. Corbett said Vertos’ first priority is launching its device set in the U.S., although it has European regulatory approval also.
Before coming to Vertos, Corbett was chief executive of Ev3 Inc., a Minnesota-based maker of devices to treat arterial disease with about 330 workers in Irvine. He left Ev3 about a year ago after the company’s financial results missed expectations.
Corbett was replaced at Ev3 by OC device veteran Robert Palmisano, who took Irvine eye laser maker IntraLase Corp. public and later sold it to what’s now Abbott Medical Optics Inc. of Santa Ana.
Corbett has nearly 30 years of medical device industry experience. His career also includes serving as chairman of Micro Therapeutics Inc., now part of Ev3.
