Does the name Modulim ring a bell?
Even if the contraction of its old name, Modulated Imaging Inc., isn’t well-known, the 14-year old optical imaging company is gaining more notice as its technology is used to prevent diabetic foot ulcers.
It’s entering a self-described “growth phase” with a new product designed to improve doctors’ assessments of tissue health for people suffering from blood circulation issues — and one of the biggest players in the diabetes industry is on board to help out.
The Irvine-based company this month began shipping its Clarifi Imaging System, which received Food and Drug Administration approval last year. It’s the company’s second U.S.-approved product since inception.
The company’s product is largely focused on diagnosing and preventing the effects of diabetic foot ulcers.
The noninvasive device can also be used to manage and treat peripheral vascular diseases, burns and chronic wounds.
“Clarifi can lead to significant preventive care [and] over $6 billion per year in [healthcare] savings,” founder and Chief Executive David Cuccia said in an interview.
In January, the company nabbed a $7 million Series B funding, led by new investor Pangaea Ventures Ltd., a Canadian investor in scientific-focused advanced materials companies.
Additional participation came from returning investors including Fresenius Medical Care Ventures GmbH, Grey Sky Venture Partners, Mitsubishi UFJ Capital Co. Ltd. and Fouse KK.
The company said its biggest strategic investor is Fresenius, a German company that is the world’s largest provider of products and services for people with chronic kidney failure. It has more than 2,400 dialysis centers in the U.S.
Its backing of the company “is based on the disruptive nature of their early data and the impact we believe this technology could have in our mission to decrease life-altering complications in our patients with diabetes, vascular, and kidney diseases,” Al Wiegman, head of Fresenius Medical Care Ventures, said in January.
The latest funding will go to commercialize Clarifi.
The 15-employee firm is hiring in a variety of areas including sales, marketing and engineering. It recently moved into new headquarters across the street from the District at Legacy shopping center.
The new spot, at 2400 Barranca Pkwy. in Irvine, is more than 10,000 square feet. It’s almost double the size of its previous office on Gillette Avenue in Irvine.
30 Million
Modulim is the result of research Cuccia conducted while earning an undergraduate degree and Ph.D. at University of California-Irvine.
His research was originally housed in the Photonic Incubator at the Beckman Laser Institute on UCI’s campus. He now has nine patents with two pending, has co-authored more than 40 publications and has more than 2,000 citations in biomedical optics.
Cuccia started the company in 2005 and moved to the Gillette Ave. office in 2015.
Modulim’s external funding began with a $500,000 seed round in 2016 led by Cove Fund—at UCI’s Applied Innovation accelerator—with participation from Photonics Management Corp., a wholly-owned unit of Japanese light-based device maker Hamamatsu Photonics KK.
Prior, it was self-funded through the sale of a research instrument, Reflect RX, and about $8 million in federal grants.
Cuccia said he initially developed Reflect RX to help it further its own research and sold some devices to customers for clinical research, aesthetic imaging and agricultural applications.
It then began to focus on diabetes, which affects some 30 million Americans, or nearly 10% of the U.S. population, according to the most recent data from the U.S. Centers for Disease Control and Prevention.
Medical costs of diabetes have risen to $327 billion in 2017 from $245 billion in 2012, the American Diabetes Association estimated.
Problems with circulation can lead to complications like diabetic foot ulcers, an open sore or wound that occurs in approximately 15% of patients, according to the American Journal of Managed Care. There are about 200,000 diabetes-related amputations annually and the average cost for each is more than $70,000, it said.
Chief Operating Officer Richard Oberreiter said the cost in treating diabetic foot ulcer in the U.S. is about $17 billion, and “even if we reduce that by 10%, by 5%, that’s significant savings.”
Fewer Amputations?
Ox-Imager CS, the company’s first medical device, received FDA approval in 2017; it was used to identify patients with potential circulation problems. After studies at Keck School of Medicine at USC, the University of Arizona and Kaiser Permanente, the company developed the second-generation device, Clarifi.
Cuccia said Clarifi is smaller, faster, ergonomic and less-expensive, with an easier-to-use interface, letting doctors identify at-risk patients earlier, quantify risk levels and target care.
Modulim plans first to sell to podiatrists; the device can be integrated into practices and is backed by reimbursement.
While a comprehensive foot examination by a podiatrist is one of the easiest ways to prevent most foot complications, Cuccia said that current methods and tools are highly subjective and inadequate for detecting diabetic foot ulcers in patients with diabetes.
The new product, “will allow us to prevent ulcers before they occur, heal them more efficiently when they do occur, and ultimately limit amputations,” Jeffrey Lehrman, podiatrist and medical director at the wound healing center at Crozer-Keystone Health System in Pennsylvania, said in a company press release.
Experienced Management
The potential has convinced key executives to join Modulim.
COO Oberreiter, a former naval officer who worked on guided missile cruisers and a veteran of two prior medical device startups, joined the company in 2014. Oberreiter spent nine months learning the technology and doing in-depth market analysis to find where the company could have the most impact and revenue.
“Once you have established that vision, then you can go to outside investors,” he said.
Chief Financial Officer Mike Dutton spent 42 years at PwC, where he counseled clients in industries including healthcare, technology, manufacturing and retail.
Charles Gropper, vice president of engineering and manufacturing, during a 37-year career earned seven patents and delivered more than 20 medical devices and dozens of product enhancements. Gary Marston, vice president of sales, has more than 29 years of experience selling medical devices, including as global director of strategic and product marketing at Masimo Corp. (Nasdaq: MASI), the Irvine maker of patient monitors.
Besides Cuccia, the other four directors on the board have years of experience in venture capital and medical devices. Newest member Janelle Goulard, who led the latest round as director of health investment for Pangaea, spent much of her career at GE Healthcare where among other achievements she launched a joint venture with Microsoft Corp.
“We expect Modulated Imaging’s novel approach to fundamentally change how clinicians diagnose, treat, and deliver care to patients across the healthcare continuum—especially patients with diabetes,” Goulard said in the January statement.
