Medical devices, like food products, must be traceable back to their point of origin, in case of a product recall, for instance. But how does a healthcare professional scan an implanted device’s information if its documentation is not readily available?

On Wednesday, the Watershed Idea Foundry announced a solution: structural encoding. This new technology is a means for medical devices to be identified with permanent direct part marking, permanently encoding the device with product information including serial numbers, part numbers, date codes, and barcodes to allow tracking through the device’s life cycle.

The Food and Drug Administration (FDA) is implementing requirements for all medical devices intended for repeated use to bear a unique device identifier (UDI) as a permanent marking on the device. The regulations are intended to improve patient safety, modernize post-market oversight of medical devices, and facilitate medical device innovation.

Brian Kieser is managing partner of Fountainhead Investment.
Brian Kieser is managing partner of Fountainhead Investment. Credit: Courtesy photo

Watershed’s structural encoding incorporates a method to embed data within any device in a way that can be read via medical imaging, such as an X-ray, allowing the device to be identified after implantation without requiring access to documentation or paperwork.

“Our team has identified a problem that plagues the [medical device] industry,” managing partner of Fountainhead Investment Brian Kieser said. “In an effort to increase patient safety, we think that this application of a technology platform to this problem is both unique and innovative.”

“The FDA’s UDI regulation is meant to make devices safer for patients by providing key information about the device that is easily accessible,” Watershed CEO Nick Cordaro said. “We took that goal to heart and created a solution that would always be with the patient, accessible when and only if it is needed, simply with an X-ray.”

Nick Codaro is CEO of Watershed Idea Foundry.
Nick Cordaro is CEO of Watershed Idea Foundry. Credit: Courtesy photo

A group of healthcare entrepreneurs created Fountainhead Investment Partners as a San Antonio-based angel investment fund in 2014. By 2015, it had become a venture capital firm.

Fountainhead launched the Watershed Idea Foundry in September 2016, providing the initial funding for this hybrid incubator-accelerator to focus on biomedical innovation. In exchange for equity, Watershed plans to bring together global industry experts to guide the development of healthcare entrepreneurs with services such as proof-of-concept testing and prototype manufacturing.

Kieser had developed a relationship with Cordaro, who founded the Encinitas, Calif.-based Additive Innovations, a company specializing in biomedical product development. Watershed acquired Cordaro’s company in March, and Cordaro became CEO of the merged entity retaining the Watershed Foundry name.

“Nick and I have been working on this for some time and, in part, this work is what drove the acquisition [of Additive Innovations],” Kieser said.

With offices in San Antonio and Encinitas, the company has 15 employees working in four states. Future plans include scaling up Watershed into a nationwide company to service healthcare entrepreneurs across the U.S.

“We’re planning to build out a 30,000 sq. ft. facility to house the R&D and production capabilities,” Kieser said. “Nick is looking at advanced manufacturing and at creating an innovation center that will house not only production and R&D, but serve as a demo center for some of the technologies Nick is working on with other companies.”

The benefits of the newly introduced structural encoding process are considerable given the complexity of developing a medical device for market. Using it does not add extra steps or paperwork, nor does it add additional inventory control issues for hospitals. For manufacturers, structural encoding may not even require a new FDA pre-market submission made to show that the device is at least as safe and effective as a legally marketed device. Structural encoding is also a cost-efficient process that is quicker to market than other systems for medical device manufacturers, Watershed officials said.

“Think of the possibilities when there is the ability to understand everything about a medical device through an image, and structural encoding is the first of the many innovations that Watershed is bringing to the market,” Cordaro said.

“This is the first application of this technology platform,” Kieser said. “In the future we plan on announcing additional applications for this platform. Long-term, we see that there are other applications possible outside the medical field.”

Watershed has been approached by the cities of Phoenix, San Diego, and El Paso, which hope to lure the company as it considers the consolidation of Watershed and Additive Innovations.

“We’re in flux on the location of where we will place the center of innovation,” Cordaro said. “At the moment we’re located across four different states, but we will think carefully about the final determination of our headquarters’ location.”

“We hope to bring more to San Antonio’s bioscience ecosystem,” Kieser said. “Our long-term plans are to service incubator and accelerator clients across the entire U.S.”

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Iris Gonzalez

Iris Gonzalez writes about technology, life science and veteran affairs.