The little guy won a large victory, and now the big money will soon follow.
Dr. Jerome Canady appreciates the David-versus-Goliath analogy being applied to his company, Canady Technology, especially in light of a recent arbitration ruling that gave him the right to sell his inventions—argon plasma powered “dual mode” endoscopic tools. He took on one of the industry leaders, ConMed, and prevailed.
“It was a bitter, 18-month fight. Who would think a group of folks from McKeesport could fight these guys?” Canady said. “As this went along, people from McKeesport invested in us. Those people kept us alive as were fighting.”
One might call Canady, a Philadelphia native who trained as a transplant surgeon in western Pennsylvania, a “reborn” McKeesport native, so to speak. His affection for the struggling old mill town is obvious whenever he speaks of the people there who have believed in him and encouraged him. Their financial contributions are one of many parts of the equation that led to the company’s recent success, Canady noted.
The Canady Technology founder first copyrighted his device in 1991. During his residency at UPMC McKeesport Hospital in 1991, Canady developed the flexible “Canady catheter.” The tool is used in electrosurgery and directs a beam of energy, created with electrical current and argon gas to cauterize blood vessels or ulcers or to remove polyps or tumors.
Canady sold the right to refine and market the device to ConMed for $500,000 and $500,000 in ConMed stock. But ConMed did nothing with the technology, dropping it “into a corporate limbo,” instead of refining and selling the invention, according to the panel of arbitrators that ruled on the matter. Canady had terminated his contract with ConMed, which led to the legal dispute.
McKeesport-based Canady Technology employs 10 people locally and five at an office in Hampton, Va. The company occupies 3,200 square feet of office space in the McKeesport RIDC Park, in the so-called Brick Shed, where bricks for steel mill furnaces were stored. The company plans to build a manufacturing facility in McKeesport in the future, and the planned facility is expected to employ about 300 workers.
The Canady tools at issue in the recently settled arbitration are argon plasma coagulators that are used mainly to stop bleeding, or to remove tumors or polyps. Canady Technology is the first and only minority-owned biomedical device company in the nation, and its founder says it is poised for fast growth in the $100 million U.S. plasma market. Since it was founded, the company has grown from providing one product to providing 25 products. The recent arbitration ruling by the American Arbitration Association will allow Canady Technology to expand with 10 new products, Canady said.
The ruling also will encourage prominent investors to fund the company. Two such investors—brothers Anthony and J.D. Pritzker, Hyatt Hotel heirs—already are on board with the startup, Canady said. “They are partners in the company and will change the whole future of the company,” he said.