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Embrace Orthopedic In South Florida Business Journal

Local Trio Embraces Unlucky Breaks To Kick-Start Company South Florida Business Journal - by Ed Duggan Two physicians specializing in foot and ankle surgery, along with a contract manufacturer, have formed Embrace Medical LLC, a company that will design, build and market specialty medical devices for the foot and ankle. The existing foot and ankle device market is estimated at $29 billion by Vienna, Va.-based Knowledge Enterprise, a private research and consulting firm. But, Dr. Kyle J. Kinmon, one of the three Embrace founders, said the fixation devices and implants are currently in use are antiquated, and most were developed in the 1950s and '60s. "We plan to bring modern technology, innovative designs and space-age composite materials to the field," he said, citing benefits as additional patient comfort, improved physician efficiency and lower hospital costs. To help fund the company, Embrace officials made a presentation to members and guests of the Gold Coast Venture Capital Association on March 26. Embrace is raising up to $2.5 million of initial capital from qualified investors, they said. "We are talking to three investment groups - two of which are physician groups - and the other which is an angel group," Kinmon said, noting that Embrace would prefer to get all the funds from one group or individual, but that $50,000 would be the minimum if necessary to resort to multiple sources. Funds will be earmarked to initiate fast-track Food and Drug Administration approvals, as well as initial manufacturing and marketing costs for the company, which is to be based in Mediscope Manufacturing's facilities in Pompano Beach. Foot and ankle reconstruction device sales are estimated by Knowledge Enterprise at $9.6 billion a year, while fracture and repair device sales are estimated at $3.3 billion. About 20 current suppliers each have only a small piece of the whole in what Kinmon describes as a "fragmented marketplace." "We plan to be the one-stop shop for foot and ankle surgical appliances, implants and devices," he said. Embrace began with the meeting of Kinmon and Dr. Luis Marin, who were introduced to orthopedic device manufacturer Daniel Helme. Marin, a podiatric surgeon with a national reputation, had been Kinmon's residency director at Palmetto General Hospital in Miami. The two physicians had ideas for a line of new post-surgical products - and Helme did, as well. The sweet answer For Helme, it was the sweet answer to a bitter business reversal that he said he had been powerless to prevent. "About a year ago, I got a letter out of the blue from a large customer for whom I did contract orthopedic device manufacturing," he said. "It directed that half of the production of a certain device 'would be moved to a low-cost region' - and I lost $2 million in revenue overnight." A low-cost region could be China, India, Malaysia, Korea or any other emerging nation with cheaper labor. And there was no phased order slowdown for Helme's Mediscope Manufacturing - it happened immediately. Helme had to lay off half of his Pompano Beach staff of 37, which had been working two shifts a day to meet production deadlines. "That killed me," he said. "I had won all kinds of awards and trophies for being supplier of the year for that customer, as well as for other [original equipment manufacturers] based upon our cost-effective and high-quality work." The desktop of taunting awards spurred him into action. Helme started interviewing a number of physician-surgeons in different specialties, looking for the right opportunities and synergies to form an independent medical device company. That search led him to Kinmon and Marin and the formation of Embrace Medical in February. "We already have developed prototypes of nine different devices and implants," Helme said. eduggan@bizjournals.com | (954) 949-7512 Read more: Local trio embraces unlucky breaks to kick-start company - South Florida Business Journal