City firm responds to U.S. outbreak

Posted on December 4, 2012

A tragic outbreak of fungal meningitis in the U.S. has helped create a perfect storm of favourable market conditions for a Winnipeg manufacturer of robotic pharmacy equipment.

So far, the outbreak has been responsible for 36 deaths and more than 500 cases of fungal meningitis and stroke across 19 states. It has been linked to contaminated IV bags produced by a Massachusetts firm that puts together IV bags for hospitals around the U.S.

KEN GIGLIOTTI / WINNIPEG FREE PRESS An IHS robotic arm inside a RIVA automated pharmacy unit.
KEN GIGLIOTTI / WINNIPEG FREE PRESS An IHS robotic arm inside a RIVA automated pharmacy unit.

The meningitis outbreak has caused many hospital administrators to seek ways to bring the preparation and automation of IV syringes and bags in-house.

Enter Intelligent Hospital Systems Inc. (IHS), a Winnipeg company formed about six years ago with technology developed at the St. Boniface General Hospital Research Centre.

IHS makes the Robotic IV Automation (RIVA) units. At a cost of about $1.25 million, the RIVA prepares IV syringes and bags at incredible speeds and accuracy, error-free in a sterile environment.

Since its first sale at the end of 2008, the company has sold and installed another 26 units, mostly in the U.S. But last year’s U.S. election, with its emphasis on health-care reform, cast a layer of uncertainty over the market, persuading senior hospital officials to put off capital expenditure decisions that were not crucial.

That meant a slow sales year for the relatively young company that was formed with lead investment from the Western Life Sciences Venture Fund.

Niels Erik Hansen, the chief executive officer of IHS, said there’s no question more hospitals are now looking to learn about pharmacy automation and the RIVA equipment.

“These kind of situations (like the meningitis outbreak), no matter how unfortunate they are, do change people’s behaviour,” Hansen said. “It makes it more urgent for them to look closer and do more investigation.”

As concerned as Hansen is with the outcome of the patients who contracted the meningitis — which has been linked to contaminated bags of steroid medication produced at New England Compounding Center in Framingham, Mass. He said his company is tooled to handle a significant increase in interest from the U.S. hospital community.

In fact, Hansen said the company is budgeting for a significant spike in sales in 2013 that could total its install base to date.

His company has shipped a functioning RIVA to this week’s American Society of Health-Systems Pharmacists (ASHP) mid-year clinical meeting in Las Vegas and it has already lined up presentations to at least 20 different potential clients, including the largest hospital company in the U.S., Kaiser Foundation Hospitals.

Bill Shields, IHS’s global vice-president of marketing and sales, said it was a wise decision to take a unit to this year’s ASHP show.

“We have seen an awful lot of interest generated around the RIVA system we’re bringing to the show this week,” Shields said.

And IHS does not have to rely on a tragic outbreak of disease to leverage interest in its technology.

Earlier this fall, the Winnipeg company received a glowing endorsement from KLAS, an independently owned and operated market research firm headquartered in Orem, Utah, that specializes in rating health-care technology vendors by impartially measuring vendor performance.

IHS by the numbers

ALL about Intelligent Hospital Systems:

Founded — 2006

Employees — 135 including more than 100 in Winnipeg

Units sold to date — 27

Geographic distribution of units — two in Canada (Princess Margaret Hospital in Toronto and Royal Victoria in Barrie, Ont.), three in Australia, most of the balance throughout the U.S.

Ownership — private ownership group led by Winnipeg-based Western Life Sciences Venture Fund

Potential sales in 2013 — close to 30

Republished from the Winnipeg Free Press print edition December 4, 2012 B3

Media Coverage 2012 | NEWS