Rob Saron, president of Bovie Medical Corporation (NYSE MKT: BVX), talks with the Opportunist’s Managing Editor Leslie Stone about his company’s innovative, minimally invasive surgical tool and what it could mean for doctors and their patients.
The ever-increasing cost of healthcare has created a demand for minimally invasive procedures and outpatient care whenever possible. Bovie Medical is a Clearwater, Fla.-based manufacturer and marketer of electrosurgical products designed specifically for surgeons from the operating room to the smaller surgical centers. The company has introduced a revolutionary new product, J-Plasma. The market for electrosurgical generators and single-use specialty medical products such as those manufactured by Bovie Medical is in the multi-billions.
Opportunist: Rob, could you tell us a little about your background?
Rob Saron: Sure. I was born in St. Petersburg, Fla., and Tampa is the farthest north I’ve ever lived although I travel extensively and have friends all over the world. My father was a pharmacist and my mother was a nurse. My father had founded a company that was sort of a forerunner to generic pharmaceuticals and I decided to work for him while still in college. Although I loved my father, I soon decided that pharmaceutical sales wasn’t what I wanted to do. When another firm acquired his company, we started a home oxygen business that covered the state of Florida. At the time, GE Credit would lease a machine for $31 and Blue Cross and Blue Shield would pay $221 a month. Simple math told us that if we had enough machines out there we’d do well. We got 1,000 machines out the first year and somebody came to buy us out.
Opportunist: So how did you end up at Bovie Medical?
Rob Saron: A medical product distributor ‘wannabe’ called me over to find out why one of their companies was losing money. That little company was making disposable pen lights and wanted to make handheld cauteries [a device to control blood loss]. This technology was new 35 years ago, and a company called Concept Inc. was dominating the cautery market with 95 percent market share for those types of handheld devices. As luck would have it, Bristol Myers Squibb acquired Concept and split it up. Part went to Linvatec and part went to Xomed, but their catalog numbering system got messed up in the process. A couple of extra digits were added to the beginning and the end of their catalog numbers and suddenly no one could find their products. Within 90 days their distributors were cut off. All of a sudden, I had a group of people calling and saying ‘Here’s a list of what we bought from Concept … can you get that?’ Of course we said yes, and that’s how our business doubled. Life was really hard and then it got easy. We were successful because we lasted long enough for good fortune to find us. And that was the start of my medical device manufacturing life.
Opportunist: That’s an amazing story. Please tell us about your current product line.
Most companies in the United States tailor their generators to the OR, but we make them for dermatology, OB/GYN, plastic and general surgery, surgi-centers and the OR and each one has more features and more bells and whistles. The electrosurgical equipment we manufacture comes in a 40 watt model for dermatology up to a 300 watt model for use in the OR and many in between. We make a really good product, and that’s both good and bad because you don’t have to keep on replacing it. The U.S. market and even that of most of the world today requires a single use sterile disposable accessory. Depending on what a doctor is trying to do in electrosurgery, the electrode blows apart the cell in a cutting mode or dehydrates the cell in a coagulation mode.
The electrical current going through the body goes back to the pad and back to the machine and a safety mechanism measures how the tissues is responding. If it isn’t working well it will shut the machine down. Given that there are more lawyers than people in our society, safety is our primary concern. Our philosophy is to remember that the product we are making could be used on us or one of our loved ones, so we make sure we build it that way. But our J-Plasma technology is the future of our company and I believe it has the potential to multiply our size.
Opportunist: What makes J-Plasma different?
Rob Saron: Well, the downfall of regular electrosurgery is its effect on eschar buildup or burnt blood. With J-Plasma there isn’t any of that and the cut is far cleaner and much more precise than a surgeon could do with a scalpel. We take surgery to a new level of control that surgeons have never seen before.
Opportunist: What is the potential market for J-Plasma?
Rob Saron: Gynecology, urology, dermatology, plastic surgery, neurology, gastroenterology and even veterinary medicine. We have a paper being presented by Dr. K. Warren Volker and Dr. Melissa Gutierrez, two prominent gynecologic surgeons, at the AAGL [American Association of Gynecologic Laparoscopists] in Washington, D.C., in November. I believe they will put J-Plasma on notice to the world when they explain how it can benefit surgeons and their patients. For example, there are some 600,000 cases of endometriosis in the U.S. annually. When a surgeon sees how good J-Plasma does with that, then I believe it will get pulled over into the area of plastic surgery. The Russians said it could do all these things that seemed farfetched, but we are already seeing the technology pulled into some pretty amazing areas. It’s premature to talk too much about it, but J-Plasma could have the potential to treat skin problems such as acne. It’s not just for cutting. It seems to have a sterilizing effect as well as skin tightening, which makes it a potential technique for plastic surgery. Also, because J-Plasma is so precise it makes a doctor look like an even better surgeon. If they’re already a world class surgeon they are now an even better surgeon. It improves the skill level and what the surgeon will be able to do because of the way this product operates.
Opportunist: What are the cost advantages of your products?
Rob Saron: If you’ve got a better mousetrap, so to speak, that is better for the patient and that lets you do a procedure faster and potentially safer and get patients out of the OR quicker, to me, as president, director and chief sales and marketing officer, that is a very good thing. Every minute in the OR is costly.
Opportunist: Where are your products made?
Rob Saron: Ninety percent of what we make is made in Florida but our products are sold all over the world. A company in Sofia, Bulgaria does some of our electrical engineering work and manufactures the circuit boards that go into our generators and the parts for the transformers. We have a contract with them and while they technically aren’t our employees they only work for us.
Opportunist: What is the history behind your company’s name?
Rob Saron: We bought the name from a company called Maxim Medical. Bovie Medical is named after Dr. William Bovie, a Harvard Ph.D. who first introduced electrosurgery in 1926. One of his colleagues, Dr. Harvey Cushing, had been unsuccessful in removing a tumor from a patient’s head. So, Dr. Bovie showed him his electrosurgery technique and the two doctors were able to successfully remove the mass with very little bleeding. Almost 87 years later, the name ‘Bovie’ has become synonymous with his invention and surgeons still refer to their equipment as a ‘Bovie’ and ‘bovie cautery’ is the catchphrase for elecrosurgery. If you ask just about any surgeon in the world what a Bovie is they will know and probably think what they are using is made by Bovie although not every ESU [electrosurgical unit] has the Bovie trademark. But we hope to correct that eventually.
Opportunist: What is the key to Bovie Medical’s success?
Rob Saron: We are small but we have the presence of a much larger company. In the 1980s, we actually registered the trademark ‘Dedicated to Distribution®,’ which is really true of what we aspire to accomplish. We work very closely with our distributors and we treat others the way we want to be treated and, most importantly, we show up. The truth of the matter is a lot of the industry doesn’t even show up, so by doing that you already look better than many. We work a little harder. We go out of our way to be helpful and to be remembered. It’s a tough a business, and it has become more complicated today, especially with all the issues between insurances and how they’re trying to control the doctors. When you factor in all the committees at the hospitals and Obamacare, life isn’t as simple as it once was. I mentioned that distributors came to me and wanted a list of products. It was pretty easy to get products out back then. Today it’s much more complicated and with that goes a little more scrutiny. The only good news about that is while we don’t think it’s easy we sort of understand it and so our knowledge tends to keep others out.
Our strength of market today is in the physician office market. Because we sell our products through distribution to thousands of salespeople we are frequently the company that comes forward and gets the opportunity. We have about 45 to 50 manufacturers’ representatives demonstrating our products if somebody wants to see them.
Opportunist: Are any strategic alliances or joint ventures in the company’s future?
Rob Saron: We have periodically been approached by different people interested in what we are up to. At this point—other than some OEM [original equipment manufacturer] products that we design and manufacture and put their name on—we aren’t pursuing any joint ventures. J-Plasma was originally a joint venture. We have been working on it for a period of time, but we got it from a group of Russians who originally owned half of the product until we bought all of it. Now it’s 100 percent a Bovie product. We have several more patents and patents pending and we are excited about those.
Opportunist: As the country’s population ages, biotech stocks are expected to rise. What should investors look for in assessing a biotech company such as Bovie Medical?
Rob Saron: If you’re right about a biotech stock you stand to make a lot of money but, of course, if you’re wrong it would be like anything else. Investors should pay attention to what the papers and the surgeons are saying. Don’t just listen to one—you need to hear from a bunch of experts. The most encouraging thing about our products is that everybody who has tried them has said ‘Wow.’ We have a proven track record. We are a solid company and our technology is very exciting.
Opportunist: Which facet of your work do you enjoy the most?
Rob Saron: I hold a dual title in the company: president and chief sales and marketing officer. In my heart I am a sales and marketing person, so I genuinely enjoy that. Being president, technically, is not as much fun. [Laughs] I enjoy the people and the friendships and talking to the customers and users and finding out what they want. Putting the right people together to lead a sales force and helping them if they need help—and staying out of their way if they don’t.
Opportunist: Which of Bovie Medical’s accomplishments makes you the most proud?
Rob Saron: Our people donate to different causes and people that do good works all over the planet. “60 Minutes” recently did a profile on Mercy Ships, which is a fleet of ships crewed with doctors that sails around the globe and does surgery in places where people do not typically do surgery. Their surgeons sail in and perform surgeries to remove cleft palates and fix other deformities and disfigurements that we wouldn’t understand here in America. They do it for free to get those people back to looking like a normal person as opposed to an outcast. That’s part of the give back of the business we are in. We manufacture the product, so it’s easy for us. That’s one of the nicest things about what we do.
Rob Saron: It was a little embarrassing at first, but then I got used to it. [Laughs] Medical distribution has been very good to us. That’s how we have built our business up to this point.
Opportunist: Where do you see the company in five years?
Rob Saron: I believe we will be a lot larger than we currently are. In fact, I will be surprised if we aren’t a multiple of the size that we are today. Taking into consideration the manufacturing pressures in the United States—with the cost of insurance and whatnot—I cannot say that the amount of manufacturing we do here in the states will necessarily be a multiple of what we do. We may end up doing more in Bulgaria and other places, but I think from a revenue generating point of view we will be bigger. How many times bigger … time will tell.
Visit Bovie Medical Online - www.boviemedical.com
Leslie Stone is an award-winning writer/editor with more than two decades of experience covering business, finance and lifestyle issues for newspapers, magazines and online publications. Originally from Virginia, she currently resides in Florida. Follow her on Twitter at @les7989.