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Pending FDA approval, trials to begin on ALung's artificial lung

ALung Technologies Inc.

What: Medical device company that makes an artificial lung called the Hemolung, which works by removing carbon dioxide from the blood stream and adding oxygen, similar to a kidney dialysis machine.

Where: South Side

Employees: 40

Founded: 1997

Sales: Less than $1 million this year

Top executives: Pete DeComo, CEO; Nicholas Kuhn, chief business officer; Joseph Argyros, senior vice president of operations; Matthew Burlando, vice president of finance and administration; Frank Falcione, senior vice president of regulatory affairs and quality assurance; and Scott Morley, vice president of marketing

Tuesday, June 18, 2013, 12:01 a.m.
 

ALung Technologies Inc. spent four years working on technology to aid a patient's breathing before deciding to change gears in 2005 and focus development on an artificial lung device.

The switch might have been a momentum-killer, the kind that sends startup tech companies to an early grave.

Yet investors kept ALung afloat for a dozen years with $40 million because they believed in the company, officials said.

“The idea of this treatment has always captured the imagination,” Nicholas Kuhn, ALung's chief business officer, said at the company's South Side offices. “There was always investor support.”

ALung's development has been an exercise in patience, which is not uncommon in medical device development. It was founded in 1997 to hold licenses for technology developed by University of Pittsburgh researchers but didn't have employees or begin operations until 2001, Kuhn said.

Starting in 2001, ALung pursued an intravenous catheter that would filter carbon dioxide and add oxygen directly to a patient's bloodstream. They found they couldn't make the device small enough to easily insert into a vena cava, a vein that carries oxygen-depleted blood to the heart.

“We realized we needed to take a different approach,” Kuhn said. “It wasn't an easy decision.”

The device they settled on — the Hemolung RAS — sits outside the body and performs the same task in a process analogous to a kidney dialysis machine. ALung started selling it in Europe this year and hopes to gain approval for U.S. sales by 2017.

The target date for U.S. sales could drag out, CEO Pete DeComo said.

“If there's anything that's true today, it's the cliche that everything is taking longer and costing more,” said DeComo, who joined ALung in 2008 after selling a company he founded, Renal Solutions, for $190 million.

ALung officials expected to meet with the Food and Drug Administration this month. It needs the agency's OK to begin a three-year clinical study of the Hemolung and could start trials next year if the FDA approves its study design, DeComo said.

Gaining FDA approval will require more money from investors. DeComo last year told the Tribune-Review that ALung likely would need $25 million for clinical trials.

This month, he declined to comment, citing Securities and Exchange Commission rules that prevent companies from discussing fundraising efforts while talking with investors.

In the meantime, ALung is working to expand sales across Europe.

“Patients in Europe benefit from new medical technology four to five years faster” than in the United States, DeComo said.

Sales this year “will be modest, most likely under $1 million,” he said. An expanded commercial launch will begin in 2014, enabling revenue to “accelerate and grow rapidly.”

If ALung's early success builds, the potential market for the Hemolung is huge. DeComo said 2.5 million Americans each year experience acute cardiorespiratory exacerbations, or trouble breathing, because of chronic obstructive pulmonary disease and other lung diseases.

The Hemolung is designed for patients who have trouble breathing or to supplement a mechanical ventilator.

Many patients with reduced lung function are placed on ventilators because no other option exists. Ventilators can cause lung infections, and often a patient's lungs become dependent on the machine. ALung's device could help patients who still have some lung function.

About 1 million people worldwide use ventilators, DeComo said. The potential market size could be $6.3 billion a year, including $2.7 billion in the United States.

The 40-employee company leases space in a renovated factory that includes room for assembly of the Hemolung. That's unique among most startup medical device companies, which find it more cost-effective to outsource manufacturing, DeComo said.

ALung maintains control so that it can ensure quality, he said. The company produces about 10 Hemolungs a month.

Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or anixon@tribweb.com.

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