Posted 3/25/2013 12:00 am
Updated 1 year ago
ContourMed Inc. of Little Rock surfaced from Chapter 11 bankruptcy earlier this month.
U.S. Bankruptcy Judge James Mixon approved ContourMed’s plan that included restructuring its nearly $400,000 debt with the Arkansas Science & Technology Authority of Little Rock.
In May, ContourMed listed $6.7 million in debt and only $165,000 in assets when it filed for Chapter 11. Its largest creditor, CM Medical LLC of Little Rock, was owed $3.8 million at the time of the bankruptcy, but it has a majority ownership interest in the company, which manufactures customized breast prostheses for women who have had mastectomies.
In the second half of 2012, ContourMed reported sales of $16,433 and a loss of $196,245, according to its bankruptcy records.
ContourMed CEO Barry Corkern told Arkansas Business that he expects to have $500,000 in revenue by the end of this year.
He said the company had radically changed the way the product was marketed. Previously, ContourMed’s sales strategy included targeting the medical community and vendors to encourage them to buy a $20,000 scanner. The vendors then would have performed the scans on the woman who needed the product, which runs between $3,000 and $3,600.
“We’ve changed that business model entirely,” Corkern said. “ContourMed will own all of its scanners and will either deliver a scanner to be used by a vendor or, under certain conditions, will travel and execute the scan ourselves.”
He said the company was targeting women who had had mastectomies and was encouraging them to ask their medical providers for the custom prosthesis.
The company will advertise at women’s events and health fairs put on by hospitals, he said.
Corkern said the company, which has seven employees, recently started providing its product to women who are covered by the U.S. Department of Veterans Affairs in Florida.
“We want to expand our exposure to VAs all across the country,” Corkern said. “We’re on their radar screen, so any VA in the country could use ContourMed to provide a custom breast form.”
In March, he said, the company had conducted scans for women in Florida, New York, New Jersey, Pennsylvania and Arkansas. “We’re really beginning to see the results of our efforts,” Corkern said. “I expect the company will continue to grow its scans exponentially.”
While Medicare doesn’t cover the cost of the prosthesis at this point, insurance companies do, Corkern said.
“I think we can build a very effective company, even without Medicare reimbursement,” he said.
About 2.6 million women in the United States have had breast cancer and about 1.9 million of those are wearing a prosthesis.
In 1997, ContourMed was one of the first companies to graduate from the University of Arkansas for Medical Science’s BioVentures, which was formed by UAMS as the state’s first biomedical business incubator, helping researchers commercialize their lab work.
The breast form is custom made for each woman to ensure a perfect fit, Corkern said in a bankruptcy filing. The scanning and imaging are usually done at a location picked by the woman, and the forms are then manufactured at ContourMed’s Little Rock office.
By 2006, ContourMed had about $1 million in revenue and generated a small profit. But then the company lost its focus, Corkern said in the filing. Revenue tumbled 85 percent between 2006 and 2011, when it hit $141,420. Between 2009 and 2011, the company lost $2.83 million.
Its CEO during that period, Dr. Susan Cassidy of Naples, Fla., left in 2011. And Corkern stepped in as interim CEO in September 2011. Corkern has been a member of ContourMed’s board since 2000.
Corkern said the thought of walking away from the company had crossed his mind in recent months. But then an encounter with a customer changed that.
“A woman talks about how fantastic the product is [and] how much this is needed,” Corkern said. “It changes the lives of women and it just needs to be managed well.”