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San Diego-based medical software and imaging systems maker Volcano Corp. sees the Bay State as a promising place to do business and will be expanding its research and manufacturing footprint in Massachusetts, as it makes the Bay State its East Coast headquarters.
In December, Volcano bought out 90-strong Axsun Inc. of Billerica for $21.5 million. Privately held Axsun primarily made systems to monitor signal quality for the telecommunications industry. However, its portfolio also included medical lasers and optical engines that relied on optical coherence tomography.
Volcano already made an ultrasound catheter that could be inserted into the heart to assess heart disease, said Joe Burnett, Volcano’s vice president of marketing. Axsun, in turn, had technology that was capable of doing similar diagnostic work, except it was using light. These devices are connected via interface modules with a catheter to create heart images, said Burnett. The company declined to comment if the components would remain separate or be merged into a single integrated system.
That deal followed Volcano’s May 2008 acquisition of Methuen-based Novelis Inc., a privately-held maker of ultrasonic visualization technology.
Since the Axsun buyout, Volcano has been evaluating both firms and seeing how they fit in with the company’s overall evolution, said Burnett. The news is good for Axsun’s employees.
“We’ve decided to make Billerica a focus of our East Coast efforts,” he said. This includes hiring more engineers with medical device experience into the Axsun group.
While he acknowledged both San Diego and San Francisco are also strong contenders in biotech and medical devices, Boston can provide full services to develop the Volcano portfolio, he said.
“The fact of the matter is, our systems are so complex, involving business consoles, software development, hardware, cabling and interfaces with X-ray machines, the type of engineering required is diverse,” said Burnett. “We’ve found few places like Boston to serve that entire package.”
Moreover, while Research Triangle Park in North Carolina is a potential East Coast biotech-and-med device manufacturing contender, it still lacked access to the necessary labs and other resources for rapid clinical studies, said Burnett.
Volcano plans to expand the engineering facility. It will include open lab space, and allow work for a wide array of new technologies, including lasers, micro-machined manufacturing systems and other research tools. The company will also keep Axsun’s two core telecommunications units operating, as well, said Burnett.
Additionally, using the Axsun technology, Volcano hopes to branch out to treat eye ailments and diagnose cancer, potentially without having to do an invasive procedure like a biopsy. There are also potential dental applications for identifying cavities. However, these aren’t necessarily within Volcano’s core competencies, and the company may partner with companies that are already established in these fields, said Burnett.
While Volcano’s expansion isn’t necessarily the harbinger of a West Coast medical device company defection trend, Volcano’s decision to beef up its Massachusetts’ presence is welcome news to Thomas Sommer, president of the Massachusetts Medical Device Industry Council. “Volcano has performed extremely well since their initial public offering in 1996, and has been growing at a phenomenal rate over the past five years,” said Sommer. He also noted that Massachusetts “could use a dose of (California’s) entrepreneurial spirit here, as well as their good fortune in attracting venture capital investment.”
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