Nearly two decades since Aspen Medical Products was formed, the spinal-brace product maker in Irvine is ramping up sales efforts in international markets, primarily Europe and Asia. It plans to beef up operations in Germany—it opened an office there about a year ago—and is in the process of setting up one in Shanghai.
“We’ve always sold internationally for the last 20-something years, but our main focus has been the domestic market,” said founder and Chief Executive Dan Williamson. He noted that the company has increased its global position, including Europe, Canada, South America and China, for the last five years. “Those markets have been majorly untapped, [making up] 5% of our business. We want to grow that to 20%,” he said.
Aspen Medical designs, manufactures and markets its brace products. It started selling its devices in the early ’90s but took on its current name when International Healthcare Devices, comprised of the product development and marketing arm of Aspen Cervical Collars and CTOs, merged with Fiji Manufacturing in 2000.
The company’s product pipeline started with brace products for the upper spine and later expanded to include lower and cervical spine products. Its technology is designed to eliminate complications of skin breakdown—which include spine paralysis, decreased sensation, and ulcers—that can result from prolonged, excessive pressure that reduces blood flow to the skin.
Williamson said the company started at a time when back braces used in hospitals had to be customized. “It may take weeks for that brace to be made and to fit it to a patient … we want to make a brace that can be fitted to a patient in a short period of time, [a product that] is easy to put on and easy to take off, with easy adjustability,” he said.
The company owns a nearly 40,000-square-foot manufacturing facility in Tijuana, Mexico, with about 55 employees. Its Irvine headquarters, its “technology center” is responsible for research and development and small-scale manufacturing. The OC campus comprises 52,000 square feet with about 100 employees. With its distribution offices in various parts of the world, the company has about 250 employees worldwide.
“We have about 15 to 20 people doing production for us in Irvine, small things like products for children. If the volume is large enough, we’ll move it to our facility in Mexico,” Williamson said. The company also has contract manufacturers in China.
“In the beginning, I used to do all my manufacturing in the U.S., but as you grow you have to decide where to focus your time and energy. Even then, you have to find the right [Food and Drug Administration]-approved contract person,” he said. Williamson says his company would bring overseas manufacturing back to Irvine if U.S. tax law changes.
The company offers more than 50 spine brace products ranging from $25 to $1,300 in unit price. Williamson highlighted the Peak Scoliosis Bracing System and Vista Collar. The former is used to alleviate chronic back pain for patients suffering from scoliosis, a spine deformity that develops in childhood, often during the growth spurt just before puberty. Adult scoliosis can be extremely painful and disabling. The latter is a neck brace that incorporates six sizes into one collar.
“We work with nurses and doctors to come up with the best design for the Aspen Vista Collar, we probably have more than 70% of the [U.S.] market,” said Williamson, adding that the company continues to see year-over-year growth in sales and revenue. “We are peer-reviewed. Our products may be a little more expensive than the cheapest model that’s out there, but that’s because our products have shown they do what [their product descriptions] say they do.”
While Williamson sees Europe and Asia as big opportunities, he acknowledges challenges in both markets.
“We just hired a sales executive in Shanghai, and will be hiring more people, but it’s a different market. There, our products are primarily self-pay,” according to Williamson. He said in China, if a patient were diagnosed as being in need of a spine brace, that patient would have to buy a spine brace from “a local drugstore” and return to the hospital for surgery and have the physician apply the spine brace.
While noting that the market is very different, he said China is a huge market with nearly 1.4 billion people. “In China, we have over 340 million people that can purchase our product. That’s about the [entire U.S. population].”
But China is a huge long-term market. The company will focus on growing its presence in Europe in the near term. “They are more like the U.S. in terms of reimbursement for products like ours,” said Williamson, citing countries like Germany, Austria and Switzerland.
He noted the company makes a whole new line of spine braces for its European consumers. “All our U.S. products are basically inelastic, because they are medical products. But for the [European market] you need products that are fashionable and functional because a lot of orthopedic products in Europe came from clothing designers.”
The company’s European line offers knitted brace products, “a technology that isn’t widely used in U.S. bracing” and is specifically designed for the European market “based on that market’s aesthetics, materials and sensibilities,” according to Williamson.
The company has invested in a knitting machine at its Irvine campus that will make all of its European products.
Williamson was the 2017 Orange County winner in the healthcare and community category of the prestigious Ernst & Young LLP’s Entrepreneur of the Year Award. Williamson now moves onto the Entrepreneur of the Year National program.
