There were smiles all around one recent morning as Tim Fox told board members of the Georgia Research Alliance the story of the medical software company he co-founded, Velocity Medical Solutions.
Incubated at Emory University’s Winship Cancer Institute where Fox worked, Velocity had hit it big. And though it was acquired in March by a larger firm, Velocity is expected to stay and grow in Georgia, with two dozen high-tech jobs now and possibly many more in the future.
More jobs for Georgians isn’t the only fruit of Velocity’s success, either. Its product is helping doctors provide better treatment to cancer patients.
Velocity offers a best-case scenario of what can happen when medical researchers take a product conceived in the laboratory to the commercial marketplace. The GRA provided $400,000 in seed money from state funds.
“It’s a great story of how universities, with the support of those like the GRA, can be incubators of innovation,” said Walter Curran, Winship’s executive director.
“Academia alone or industry alone can’t do it,” said Fox, a medical physicist who left Emory after 22 years and is now an executive at Varian Medical Solutions, which bought Velocity.
“There needs to be a partnership.”
Academics and business execs acknowledge that great ideas from the lab often don’t make it in the commercial world. Sometimes the problem is the product. Sometimes it’s the people behind it. Velocity, observers say, was strong in both areas.
Fox and his partners, radiation oncologist Ian Crocker and software engineer Paul Pantalone had an innovative idea that filled a need and benefited from the financial aid provided by the GRA. And they showed persistence and the team-building skills critical at a start up.
Around 2003, Fox saw that medical imaging devices like CTs, MRIs and PETs that were being used to take pictures of cancer patients had improved greatly, but that the data from those scans wasn’t being integrated in a way that allowed cancer care teams to get a comprehensive view of the patient’s condition over time.
“The data was scattered in so many places,” said Fox. “Patients move around, they go to different hospitals for care. Gathering it can be a challenge. We focused on how to bring that data together.”
He approached some large medical device companies with the idea to create software that would assemble and manage the image data, but they weren’t interested. Fox and two partners decided to develop the product themselves. They built a team that also included Fox’s wife, Joelle, formerly an executive with other Atlanta companies.
Initially, the idea was simply to help Emory patients. But soon the partners realized they could aid others.
Executives at California-based Varian, in a statement issued after the acquisition, said the Velocity software offered “a comprehensive view of a patient’s diagnostic imaging and treatment history, regardless of where they were treated or what technology was used. By organizing patient data and making it available in one place, the Velocity software can help clinicians make more informed treatment decisions.”
It’s now used at more than 200 cancer treatment centers around the world, including 20 of the top 50 cancer centers in the U.S. There could be applications beyond cancer care as well.
“This is a company that was very focused on understanding individual needs and coming up with solutions that meet our needs. That’s a very valuable strength that has contributed to their success,” said Harry Quon, a physician and associate professor in cancer care at Johns Hopkins Medicine.
Velocity’s success wasn’t always a sure thing. There was the funding issue. The business was too far along in its development to receive a federal research grant, but not far enough along to attract venture capital or angel investment. So, it turned to the GRA which initially put up $50,000 to get things going
The partners went back to the GRA for a second round of financing, at $100,000, the organization said. The hook was that they would have to come up with $100,000 in matching money from another source.
“We thought it would be easy,” said Fox. “All we’d have to do is talk to the angel investors or the (venture capitalists).”
But nobody would fund them.
“We didn’t have a track record,” he said.
So Fox and his partners dug deep and put up the other $100,000 themselves. It worked out: the partners kept all the equity in the company and also got a little extra motivation to succeed.
In addition, Velocity took out a loan from the GRA for $250,000. Thanks to the Varian acquisition, that’s been paid back.
By 2007 Velocity had Food and Drug Administration clearance to sell its product, and it has grown since. The culmination, to date, came when Varian bought the business this spring for an undisclosed price.
The Velocity team and its idea were vetted before the GRA made its commitment, said Susan Shows, senior vice president of the organization.
The GRA, she said, brings in a team of external advisers including entrepreneurs, investors and start up veterans, and forms a panel that studies projects. Fox and his partners, as do all applicants, made a presentation to the group, and they were sold.
“This was a strong team,” Shows said.
Now, as cancer centers and their patients around the country are seeing the benefits of the product, Atlanta is seeing a payoff in jobs.
“The GRA is using state taxpayer dollars,” Shows said. “So we’re not eager to create jobs that are going to go somewhere else. We have a lost a handful of companies to other states. We’re thrilled because they are staying here.”