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A clear picture

John Seelmeyer

For more than a dozen years, Roger Royce and his radiologist brother-in-law Dr. Kevin Kelly worked patiently and methodically to develop an improved technology to identify breast cancers.

Now Royce and Karsten Damgaard-Iversen, the chief executive officer of Reno-based SonoCine Inc. are moving as fast as they can to get the technology into the market.

It’s a job that requires Iversen and Royce, SonoCine’s president and chief operating officer, to move aggressively on a wide front:

* They’re ramping up manufacturing operations at a South Meadows plant.

* They’re educating radiologists and other physicians worldwide about the potential of the SonoCine technology, looking for ways to break down resistance to change among professionals.

* They’re talking with regulators and lawmakers across the nation in an effort to require health insurance companies to pay for SonoCine’s screenings.

* They’re using social media and old-fashioned large-group meetings to get the word out to women who might benefit from the technology.

* They’re making sure that privately held SonoCine has sufficient capital to support fast growth into a market that the company estimates may total $2.2 billion in equipment sales, plus another $1.1 billion a year in sale of disposables.

But for all the change and activity, the company’s focus hasn’t changed much since its early days in Southern California in the mid-1990s.

“We’re driven by a radiologist whose patients were dying,” says Royce.

Kelly, a diagnostic radiologist for well over three decades, had grown increasingly frustrated with the shortcomings of traditional mammography among the estimated 40 percent of women who have dense breast tissue.

As they examine mammograms from those women, radiologists struggle to see cancers because the tissue itself creates an image that is similar to the image created by a cancer.

The ultrasound technology developed by Kelly has proven successful in clinical trials. When radiologists conducted a supplemental SinoCine exam on about 6,400 mammography patients with dense breasts, they found nearly two dozen breast cancers that had been missed by mammography, and many of the cancers were small enough to be treated with relative ease.

The company’s technology is protected by six issued U.S. patents and 14 international patents. Another eight patents are pending.

Now it’s up to Iversen and Royce, a couple of experienced international businessmen, to build a successful company around the elegant technology.

Iversen, named chief executive officer in April after serving as a consultant to the company since mid-2010, previously held top-level management positions with Toshiba Medical System, Fisher Imaging Corp. and Storz Medical AG.

Royce, meanwhile, has devoted his career to building manufacturing and marketing companies, a career that includes extensive trading experience in Asia.

They’ve put together at team of 14 employees, along with 10 consultants who work closely with SonoCine, to oversee the company’s move into commercial operations.

Some of those employees spend their days in SonoCine’s 7,750-square-foot facility at 8850 Terrabyte Court, assembling the 400 parts many of them from northern Nevada suppliers that become SonoCine’s breast ultrasound scanners.

Other employees and consultants work to spread the word to the public about the challenges of traditional mammography for women with dense breasts. Much of that work, for now, is focused on audiences in Reno.

“If you can’t be a success in your hometown, you’re not ready for global markets,” says Royce.

The public-education campaigns also are designed to develop demand for SonoCine’s technology from women who ask their doctors about ultrasound tests.

At the same time, SonoCine is educating physicians, who often are wary of adopting new technologies.

The company’s technology is in place in 20 locations across the United States including Renown Breast Health Center in Reno.

As they talk to the businesspeople who manage mammography centers, members of the Sonocine team emphasize that the additional scans can be conducted by a technician within 10 to 15 minutes.

And to get its technology in the door, the company has been offering it on a revenue-split model that doesn’t require any capital investment by physicians.

Equally important to the company is its effort to convince state governments to follow the lead of Connecticut and mandate insurance coverage for the procedure.

Otherwise, patients are paying cash for the service, and Iversen and Royce have been working to find a price point something in the range of $200 for $300 that patients view as affordable while providing a return to physicians and SonoCine.

And while they’re keeping all these plates spinning atop poles, Iversen and Royce also are talking with investors individuals as well as big-name venture funds to ensure the company’s has the financial muscle to grow for the next three to five years.

Once SinoCine is firmly rooted, Iversen and Royce say the exit strategy they present to investors involves either a public stock offering or a sale of the company to one of the major players in the medical equipment industry.