Winnipeg firm lands investors

June 27, 2013
Author: Martin Cash

A two year-old Winnipeg medical device company that's developing a hand-held gamma camera that can be used to increase the success in breast cancer surgery has landed a $500,000 investment from a group of local investors.

Cubresa Inc. is developing the world's only hand-held gamma camera, which is smaller than fixed gamma cameras and larger than tiny probe devices that are in use now.

James Schellenberg, founder and CEO of the company, said a reasonable expectation is for the company to have product in the market by the fall of 2014. He said it's not determined yet whether regulatory approval will be sought first in Canada, the U.S or Germany.

Even though the devices do not yet have approval, Cubresa has already started to earn revenue by selling elements of its technology to original equipment manufacturers who can integrate it into their current quality-controlled products.

"So we do have things for sale today that we don't need regulatory approval for," Schellenberg said. "With this new investment from Manitoba Knights we'll be able to do more design work on the camera, develop our customer base and do a little more marketing."

Cubresa is part of the Manitoba Technology Accelerator program (formerly Biomedical Commercialization Canada).

Marshall Ring, executive director of the Manitoba Technology Accelerator (MTA) program co-founded the angel investment group, called Manitoba Knights, in the fall of 2011 with local investor Harry Ethans and a group of investors representing about $10 million of investable capital.

They are not restricted to MTA companies but have a bird's-eye view on how those companies are developing and Cubresa has been on their radar screen for a while now.

Ethans said, "We have been watching Cubresa grow over the past 18 months. When it reached the criteria our group has for investment there was great enthusiasm from our group to get involved."

Ring said the Cubresa deal was a perfect fit for the Manitoba Knights.

"This is in the absolute sweet spot for what the Knights want to do," Ring said. "The Knights wanted the company to get to a certain level before they invested. We established where the investment line is and we have been working with the company to get to that point and our investors have now seen them hit a milestone or two."

The milestones achieved include a defined product with detailed specifications rather than just a platform technology. As well Cubresa has what Ring refers to as an "X,Y,Z" letter.

"That's a letter from a potential customer saying "I will buy X number of units at Y price subject to product specifications Z'," he said.

In terms of the size and manner of use for the hand-held gamma camera, Schellenberg said it's like an ultrasound but it is looking for cancer tumours in lymph nodes.

"Right after the doctor takes out the tumour, the next thing you want to know is if the lymph nodes are malignant," said Schellenberg. "Our small hand-held camera is a good surgical tool for imaging those sentinel lymph nodes."

Largely self-funded to date, Schellenberg, like several of his current staff of six full-time and five part-time people, is a former senior staff member of IMRIS Inc. the intra-operative magnetic resonance imaging equipment manufacturer.

IMRIS, which was also founded in Winnipeg, is in the process of moving its entire operation to Minneapolis. Schellenberg said his company has been fortunate to hire some high-level staffers from that company who did not want to relocate.

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James Schellenberg, founder and CEO of the company, said "With this new investment from Manitoba Knights we'll be able to do more design work on the camera, develop our customer base and do a little more marketing."