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REVIEW SUMMARY
Business. Sarasota Medical Products, Sarasota
Industry. Health care, manufacturing
Key. Company founder seeks to build a $200 million medical device manufacturing firm within five years.
Walter Leise III readily admits he was a below-average high school student.
But he quickly learned the value of pursing excellence when he enrolled in the U.S. Army. In fact, by the time Leise was 19 in 1989, he was an attack helicopter crew chief in Operation Just Cause in Panama. He even received two Army Commendation Medals in the effort to oust Manuel Noriega from power, including one for actions under the threat of hostile fire.
Leise has since notched several more high-achiever accomplishments. The list includes a Ph.D. in molecular biology and biochemistry from the University of Chicago; an M.B.A. earned while taking night classes; and a job in charge of a diagnostic division at Abbott Labs, a medical and pharmaceutical giant.
Leise's next mission, however, could be his toughest challenge.
The task: to build a $200 million company within five years that manufactures medical devices for wound care and infections. The Sarasota-based company's first phase is to develop products for ostomy procedures, which create an opening in a patient's abdominal wall for eliminating bodily waste.
“We hear all the time that growth like that has never been done,” says Leise, now 41 and the president and CEO of the company, Sarasota Medical Products. “That makes it all the more attractive to me.”
Leise founded the company early last year. Four medical-device industry veterans, a group that includes Leise's father, have signed on to aid Leise in his quest. The foursome holds more than a dozen patents from past work in the industry, and the group seeks to use its experience to create products that innovatively solve problems of age-old medical problems, such as making bandage adhesives that are easier to remove from patients' skin.
The challenge now for the company is to twofold: One, to invent the right mix of products that meet the demands of the niche market, and two, to find the right companies to sell the products after it manufactures them.
Leise is off to a decent start, at least in getting capital to reach those goals. The company has already raised $1.6 million, with about $1 million from friends and family, Leise says. He seeks at least another $4 million in startup equity in the next few months.
Sarasota Medical Products also hopes to expand rapidly in the employment department, possibly hiring up to 60 people over the next five years. The company currently has six employees. Leise says it could be at 12 by the end of the year and 24 by the end of 2012.
That kind of potential employee growth, not surprisingly, attracted Gulf Coast economic development officials who realize the company fits two needs: job growth and so-called clean manufacturing.
The company flirted with Pinellas County but ultimately chose Sarasota, where most of its executives live. Sarasota County commissioners dangled $360,000 in incentives for Sarasota Medical Products if it comes through on the 60 employees by 2015. The average salary is expected to be $50,000 a year.
'A starting point'
Leise realizes Sarasota Medical Products must first prove itself in the marketplace before it goes on a hiring spree.
It took a big step in that area last year when it signed an agreement with Largo-based health care supplier Genairex to manufacture more than 100 ostomy products.
The Genairex deal is good for $2.5 million per year in purchase orders for 10 years. Sarasota Medical Products will manufacture the ostomy products for Geanairex and that company will take care of sales, says Gene Sweeney, a Bradenton-based independent sales consultant who works with Leise and Sarasota Medical Products. “This way [Genairex] doesn't have manufacturing costs, and we don't have sales costs,” says Sweeney, with Sales Intelligence Management. “This alliance will also provide a starting point for entry into European markets.”
Plus, a Sarasota Medical Products prospectus for investors says the Genairex deal for the ostomy products is “in an untouched market niche” that could be worth $65 million over the next five years.
The company simultaneously plans to pursue other business lines, with a concentration in partnerships.
For example, the firm signed a letter of intent late last year to work on a joint-research project with Durham, N.C.-based Oxygen Biotherapeutics. The companies will study ways to improve the treatment of chronic ischemic wounds, which stem from a decrease in a patient's blood supply.
Sarasota Medical Products is essentially divided into four units under the wound-care umbrella: ostomy, where the company aims to develop softer and more comfortable products for patients; adhesives, which assist wound management by holding pads and dressings in place; infection-control technology, where it's developing products that use compounds such as ionic silver; and silicone, in which the company is working on a line of gel adhesives that are easier to remove from a patient's skin.
Leise projects those units will take the company into new directions in the next few years as they develop new products to manufacture in each of the four areas.
One patent-pending product the company is working on, for instance, uses portable oxygen chambers to aid wound healing. Another patent-pending device is a system that can deliver controlled doses of wound-care gels. The company is also developing a catheter holder that will aid medical professionals in infection control.
Sarasota Medical Products already holds 12 provisional patents for its wound-care products. Leise believes the patents will provide an edge in the competitive ostomy products industry, which is a mix of startups and behemoths. “There are a lot of different technologies out there,” says Leise, “but what they haven't been doing is innovation.”
Stay disciplined
Leaning on the military philosophy of surrounding yourself with good men, Leise believes he has the innovation side of Sarasota Medical Products covered. Indeed, the company's executive team is an accomplished group of medical-device industry executives and entrepreneurs.
The chief science officer is Richard Bradley, who led a product development team at ConvaTec, a division of Bristol-Meyers Squibb. Bradley's team created DuoDerm, a widely used dressing product that protects wounds from contamination. And the head of product and process development for Sarasota Medical Products is Walter Leise Sr., Leise's father, who worked alongside Bradley in several previous ventures.
Denis Keyes, a longtime colleague of Bradley and the elder Leise, is a third member of the executive team. The trio considers Sarasota Medical Products its last great entrepreneurial hurrah. Quips Keyes: “We argue, and we drink and we come up with solution.”
Meanwhile, as the elder Leise built his medical-device products career in the 1980s, the younger Leise floundered in high school. Leise III joined the Army in the late 1980s almost on a whim. He turned 19 a week before American troops were sent to Panama in 1989 to oppose Noriega.
The experience of supervising a crew of Army helicopter technicians changed Leise. One, he learned the significance of paying attention to each and every detail. And he learned how to lead in stressful situations. “I made a lot of good mistakes early,” Leise says. “I learned it's important to be a reflective leader.”
Leise also saw the payoff between hard work and results in the Army, which led to a renewed emphasis on school and education.
That passion brought Leise to the University of Chicago and discoveries in molecular biology and biochemistry. It also led to the job at Abbot, where he led a team of scientists for eight years. But by 2009, Leise had the itch to go out on his own.
“I got really interested in the business process of getting something to market,” Leise says. “Why work for someone else when you can work for yourself?”
Leise brought that passion to Sarasota Medical Products, in addition to a strong shot of confidence.
“We are a snowball at the top of the hill about to roll down,” says Leise. “Our biggest problem will be managing the growth.”
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