Kiger's Notebook

Rochester founder says Tenex is growing quickly

When pro basketball player Pau Gasol of the L.A. Lakers needed damaged tendons in his knee removed this week, his doctor opted for a noninvasive treatment developed by Mayo Clinic instead of the traditional surgery option.

Gasol now is one of about 5,000 patients that have been treated with Tenex Health Inc.'s TX1 instrument, since the firm took its specialty needle system to market at the start of 2012.

Dr. Jagi Gill, of Rochester, founded Tenex in 2009, and it received approval from the Food and Drug Administration in 2011. Since then it has quickly been gaining traction and is now listing "multi-millions" in sales.

"We moved past the 'Will it work?' and 'Can we make it?' stages. Now we are building a sales team and working a marketing message," Gill said.

Tenex now is selling the system to doctors. The firm has 12 sales representatives, and he hopes to grow that number to 40 by the third quarter of 2013.

Gill began his career in Mayo Clinic's Department of Neurology. He has since worked at Boston Scientific as well as a number of biotechnology start-ups.

Tenex's one-time use, disposable handpiece was developed and commercialized in collaboration with Mayo Clinic. Tenex licenses technology from Mayo Clinic and in turn, Mayo owns equity in Tenex.

"The folks at Mayo have been very helpful," he said.

The TX1 system uses ultrasound technology to treat damaged tendons or soft tissue in elbows, knees, ankles, feet and shoulders. Unlike surgery, patients can walk out after what is often a procedure no longer than 20 minutes.

"It is well-tolerated and safe as an injection," says Gill.

That and the quick recovery are making Tenex very popular with athletes, people with work-related injuries and patients who simply "want to have an active lifestyle."

Gasol is not the only celebrity who has discovered Tenex. TV and radio personality Ryan Seacrest has also has his elbow treated with the TX1 system.

At one point, Tenex looked at Rochester, nearby Elk Run and even Willmar, Minn., as possible locations for a manufacturing facility. In the end, the decision was made to acquire the California company that handled the early manufacturing on a contract basis.

So why not do the manufacturing in Rochester?

"The challenge that any company would have in going here is that there isn't a lot of experience in terms of engineering, manufacturing, production, quality systems," says Gill.

He explained that medical device hotspots, not only have a medical system or university for generating ideas, but also "They have an imbedded group of people that know how to turn on an infrastructure."

Private Wealth mag: "Mayo Clinic Targets Ultra-Wealthy"

Here's some from an interesting article headlined "Mayo Clinic Targets Ultra-Wealthy" posted a couple of weeks ago by Private Wealth magazine. The piece was written by Raymond Fazzi.

The Mayo Clinic, one of the nation’s most prominent hospitals, is starting to flex its muscle in the field of medical concierge services for the wealthy.

The Rochester, Minn.-based hospital this year started to ramp up efforts to market its Preferred Response service—a membership program that provides medical transportation and emergency services all over the world—to business travelers, travel clubs for the wealthy and other segments of the ultra-affluent market. The expansion of Preferred Response comes three years after the hospital launched its Medallion program, a concierge medical service that devotes a team of doctors to its subscribers’ primary medical care needs.

The push comes at a time when some of the nation’s top hospitals are looking to the well-heeled to increase revenues and make greater use of their more expensive, high-tech medical capabilities. Johns Hopkins Hospital in Baltimore, for example, has offered a similar concierge transportation service for years.

“Prominent hospitals are looking at any ways they can to leverage expertise to generate revenue streams,” said Dr. Clayton T. Cowl, Preferred Response medical director. “Access [to medical care] is going to be the key.”

The drive to market Mayo Clinic Preferred Response to the wealthy is based heavily on the public’s desire for medical access. The program has been part of the Mayo Clinic for more than a decade, originally as a service for dealing with in-flight medical emergencies. The program has since grown more expansive, with the ability to coordinate care and transportation when members are facing a medical emergency far from home.
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“The idea is, we want to create a relationship—not just a doctor visit or two a year—no matter where you are in the world,” Cowl said.

Cutting The Line
As President Barack Obama’s health reforms start to kick in, bringing millions more people into the health system, increased waiting times for appointments and treatments are expected to become larger issues with patients.
The selling point for Preferred Response and other medical concierge services is that they allow those who can pay a premium to basically cut in line, according to industry experts.

“Ultimately, we’re in an era right now where lots more people are going to have insurance and the key I think is going to be access and connectivity,” Cowl said. “In a time of need, you don’t want to be fumbling around asking which of these 14 numbers I need to dial.”

The base membership fee for Preferred Response is $650 per year for individuals and $800 for families. The fee does not include hospital and doctors’ fees, according to a hospital spokesman.

With two around-the-clock medical teams, Preferred Response deals with emergencies throughout the world, ranging from instances where a subscriber fell down a flight of stairs in Turkey to another where a member suffered from a heart attack while vacationing in Cancun, Mexico. In one recent episode, a member suffered a punctured lung while on a bicycle tour in China. Preferred Response arranged for his treatment and transportation a few days later to the Mayo Clinic in Rochester, Cowl said. 

 

I remember when Mayo Clinic launched its relationship with NetJets back in 2003.

Mayo Clinic will now provide in-flight medical advice and assistance to people flying NetJets airlines.

The agreement, announced this week, gives NetJets employees and passengers access to Mayo Clinic support all day, every day. People on a NetJets flight can call a dedicated phone number to speak to a critical-care flight nurse or physician.

Additionally, all NetJets flight crews have received instruction in the use of special, Mayo Clinic-designed emergency medical supplies.

NetJets, based in New Jersey, is the largest provider of fractional aircraft ownership offerings in the world. NetJets currently manages 512 aircraft. This year, NetJets fractional aircraft owners will fly more than 250,000 flights to more than 140 different countries.

With weather warming, hot dog man to return to downtown

It feels as if the weather finally has taken a turn for the better and maybe, just maybe, the dogs of winter are leashed again for at least a few months.

That means it's time to start relishing the spring days in the Med City again.

And what better way to do that than with downtown Rochester's gem, Murph's Diamond Dogs. On Monday, Rick Murphy plans to roll out his cart and start serving hot dogs for the hungry packs hunting for a quick and tasty lunch.

Look for the genial Murphy with his ball cap and stainless steel cart at his usual spot in the Peace Plaza by O & B Shoes.

The Pine Island man and his cart have added flavor to downtown for eight years.

That means he has been around downtown longer than the University of Minnesota-Rochester, Sontes, Chester's, the Minnesota BioBusiness Center, 300 First, Social Ice, 318 Commons, Big Brad's, Hot Shots! and lots of other changes.

He was already selling dogs when people started saying "Rah-Rah" about Rochester.He was downtown long before it became "The Place To Be." He was here when DMC was just part of the name of an '80s rap group.

Quite simply, downtown is Murph's turf.

With sun shining and people buzzing around the plaza, it'll be good to have him back where he belongs.

Rochester's DMC tight rope walk - Looking for people for article

Last week I interviewed a few local leaders about the DMC tight rope walk, particularly after last week's political chatter about Rochester being boring.

It seems the path is between "Rochester needs money to be better" and "Rochester is a great city."

I'm looking for to interview folks who normally don't get quoted in the newspaper for feedback on if Rochester actually is dull? Dull or not, everyone seems to have ideas about what this city needs to improve the quality of life here plus add some zest to the community's personality.

Beside looking for the opinions of average people, I'd also like to chat with some young doctors as well as some patients visiting here for medical treatment.

If you are interested, please contact me at jkiger@postbulletin.com or 285-7798.

New building proposed for deposed Burger King site

After eight years as an empty building gathering dust, a proposed development might mean that it's time to say farewell to Rochester's deposed King.

This royal saga begins with an ending, so here's a slightly condensed version of the history to provide background for the new chapter.

In 2005, the Burger King at 4107 U.S. 52 N. closed its doors after a dispute between franchisee Road Corp., which was owned by Girish Dharod, and the royal fast food corporation ended with all five of Rochester's BKs being shut down.

Burger King shifted the Rochester area franchises to the Twin Cities-based Dolphin Corp., which quickly re-opened three of the five restaurants.

The two others — the North 52 location and the one at 615 S. Broadway — were owned by the Dallas, Texas-based Z’s American Properties. Z's American Properties is owned by Sunil Dharod, Girish's brother.

Eventually, a real estate auction of the two ex-BKs was held in 2006. Dolphin was the top bidder, but Sunil Dharod later rejected the bids.

A frustrated Greg Dolphin said he was ready to “go back to the drawing board" and pursue other Rochester sites to open more Burger Kings. True to his word, Dolphin is planning to build a new restaurant on a long empty chunk of land at the corner of 12th Street Southeast and Marion Road Southeast. When completed, it will be the new home for the BK that's now based in the nearby Cub Food Plaza.

In the ensuing years, the South Broadway building became the Tex-Mex eatery Rico Mex. That closed in 2008. It was bought up by the University of Minnesota Rochester and demolished to clear the way for a future campus.

Meanwhile, Sunil Dharod's other building sat quietly, tucked away in its nook on the U.S. 52 frontage road

That could all change now that Z's American Properties has filed plans with the city to build a 7,400-square-foot complex. The plans show it split into two units — a 2,400-square-foot restaurant and a 5,000-square-foot retail site. Rochester's McGhie & Betts is handling the design duties.

The building plans were filed with the city this week, so it might be a while before anything happens at the faded fast food site. If the plan does move forward, it'll be interesting to see what restaurant might open there.

Like his brother, Sunil Dharod was a franchisee with Burger King. At one point, he had 18 BKs as well as many Applebee's restaurants. His BKs were auctioned off in 2011. The Dallas Morning News described the split as being "Beset by lawsuits, slumping sales and hard feelings."

Sunil Dharod still has his flourishing portfolio of 43 Applebee's, all of which are in Texas. However, an Applebee's doesn't seem a likely candidate for the new spot, since one is already cooking across the highway. Since the plans include a drive-through window, it looks like some sort of fast food entity is in mind.

Oronoco couple signs for $145 million loan to buy Kahler hotels

Here's some from my piece today that pulls back the cloak of secrecy from the mysterious new ownership of the Kahler portfolio of hotels:
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Loan documents filed with the U.S. Securities and Exchange Commission indicate that Javon Bea, a Wisconsin hospital executive who lives in Oronoco, is the driving force behind the $230 million purchase of four Rochester hotels, anchored by the Kahler Grand Hotel.

Bea, along with his wife Vita Bea, signed as "sponsors" to borrow $145 million from Deutsche Mortgage & Asset Receiving Corp., part of the German banking giant Deutsche Bank, to finance the deal to buy the hotels from Sunstone Hotel Investors, according to the documents, which are public information and available online. The deal, which was announced in February, also included the Textile Care Services laundry business.

The hotels are the Kahler Grand, the Kahler Inn & Suites, the Marriott Rochester at Mayo Clinic and the Residence Inn.

Bea also is listed as sole owner of RochesterBevFlow, which holds the liquor license for the Kahler hotels. The transfer of the liquor license is on the agenda for the Rochester City Council meeting tonight.

Bea, a former vice president of operations for Saint Marys Hospital, has been chief executive officer of Mercy Health System in Janesville, Wis., since 1989. He has not responded to repeated interview requests in recent months.

Bea previously has been identified as an investor in the Kahler purchase as well as a consultant to the ownership group by Merl Groteboer, the Rochester Realtor who represented both sides of the deal.

The financing for the Kahler purchase was outlined in Deutsche Bank's SEC filings:

• Three Deutsche Bank loan components  — $110 million, $10 million and $25 million, totaling $145 million — provided the bulk of the financing, at an interest rate of 7.4 percent.

• "The Borrower" provided $45.8 million in equity. Javon R. Bea and Vita E. Bea are identified as the sponsors of the borrowers and the guarantors.

• Sunstone, a real estate investment firm based in Aliso Viejo, Calif., and owned the Kahler properties for 16 years, retains a $25 million equity investment in the hotels.

SEC documents filed by Sunstone also show that the California company retained $14 million in "liability related to the Portfolio's pension plan." Sunstone also provided "a $3.7 million working cash advance to the Buyer that will repaid from the Portfolio's available cash flow."

According to insiders, one of Bea's plans for the hotels is to offer transitional medical care for people recovering from treatment at Mayo on one or two floors of the 660-room Kahler Grand. The hotel is across Second Avenue Southwest from Mayo's Gonda Building and south of Rochester Methodist Hospital.

Industry experts say such a blending of hotel and hospital has been discussed in other markets, but no one has tried it in Minnesota.

Mayo Clinic extends deal with drug research lab

Here's some from a release I spotted this morning about Mayo Clinic signing an updated agreement with Sanford-Burnham, a research lab with locations in California and Florida.

By the way, the Sanford in Sanford-Burnham is T. Denny Sanford, who is also a big financial backer of Mayo Clinic.

Sanford-Burnham and Mayo Clinic signed a new collaborative agreement to build a pipeline of therapeutic drugs aimed at a variety of diseases with serious unmet medical needs.

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The agreement combines Mayo Clinic’s clinically relevant targets with Sanford-Burnham’s discovery platform in a translational initiative aimed at advancing a portfolio of projects through the initial stages of drug discovery. The new agreement builds on a yearlong pilot phase and expands the number and scope of drug discovery projects derived from Mayo Clinic researchers that are being conducted at Sanford-Burnham.

 

“We’re looking forward to further engaging with our Mayo Clinic collaborators as we develop innovative screens to identify chemical compounds that modulate the activity of clinically relevant targets,” said Michael Jackson, vice president of drug discovery and development at Sanford-Burnham. “If successful, these compounds will form the basis of completely novel—‘first in class’—therapies for devastating diseases such as cancer, Alzheimer’s, and others.”

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“The Mayo Clinic–Sanford-Burnham collaboration provides an avenue for Mayo scientists to rapidly translate basic science discoveries into screening platforms that will enable new drug discovery, and a new paradigm in drug development,” said Andrew Badley, associate dean of research resources at Mayo Clinic.

Crenlo + Space and Naval Warfare Systems contract

Rochester's manufacturer, Crenlo, has been awarded a federal contract by The Space and Naval Warfare Systems Command, which is part of the U.S. Navy.

I don't know a lot about it. It looks to be for customized cabinets under Crenlo's Emcor brand. The cabinets are slated to be used in a moderization project at the Naval Air Station Joint Reserve Base in New Orleans. 

SPAWAR (which always makes me think of Spa War, like Liliac Wellness and Healing Touch fighting on some battlefield somewhere. Heh) has a long relationship with Mayo Clinic.

For many years, the Special Purpose Processor Development Group in the Mayo Support Center has had a contract with SPAWAR to develop/test electronics, some which are used with missiles.

Hhhmmm... Just noticed that contract was renewed last year for $28.4 million and it runs through 2017. Think I need to follow that up one of these days.

Anyway, back to Crenlo, I spotted a posting about its contract on the Federal Business Opportunities website from Feb. 27. Here's some of that:

The SPAWAR Systems Center Atlantic, New Orleans Office intends to award a firm fixed price purchase order for the items on the attached document. Manufacturer-Crenlo.

No other product will be accepted. Brand name only - an equal product will not be accepted. This is a Small Business Set-Aside only. No electronic or hard copy Request for Quote (RFQ) will be prepared or made available for distribution.

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Award will be made on an all or nothing basis. The Government will accept quotes from all responsible sources with the capability to provide the BRAND NAME product cited and will award a contract resulting from this RFQ to the responsible vendor whose offer conforms to the solicitation and is considered to be the Lowest Priced Technically Acceptable offer.

The part numbers must be the manufacturer's part numbers. The Crenlo cabinetry must conform to the critical design requirements of SSCLANT Drawing 29355-525209-01 (attached) and interface with the Standard Terminal Automation Replacement System (STARS), Visual Information Display System (VIDS), Enhanced Terminal Voice Switch and Visual Communications System (VISCOM) equipment procured for the National Airspace Modernization at NAS JRB New Orleans.

Crenlo EMCOR has devloped custom mechanical interfaces for this equipment.

Mayo Clinic adds DC/NYC PR firm to rachet up 'thought leadership'

Interesting. It looks like Mayo Clinic is contracting a high-powered PR firm, Widmeyer Communications, to promote public appearances on a national stage for CEO Dr. John Noseworthy and other Mayo Clinic leaders.

Actually, Mayo doesn't call it promote. They say 'thought leadership.' I'm not certain exactly what that entails. I don't believe surgery is involved, but I could be wrong. Heh.

I should point out that I'm very impressed by Mayo Clinic's in-house communications team in Rochester. Very sharp, efficient and professional people as well as patient with annoying journalists. I'm not sure what Widemeyer can do that they can't. I guess we'll find out.

Here's some from a PRWeek article by Virgil Dickson that quotes Mayo Clinic's Chris Gade. I remember way back when Chris was merely a spokesman.

“We're an organization with a 150-year history in medicine, medical research, and education. As healthcare continues to change, we want to continue to be a resource for healthcare in the nation and around the world,” said Chris Gade, chair of the division of external relations at Mayo Clinic. “One way to do that is identifying the appropriate forums and places for thought leadership.

Mayo hired Widmeyer based on work it did for other clients. The contract is for one year. Gade declined to disclose the firm's budget.

A window on Mayo Clinic's business accelerator plans

It is getting close to the big reveal of the Mayo Clinic Business Accelerator in the City of Rochester's Minnesota BioBusiness Center.

The plan, as I understand it, is to announce the new tenants - possibly eight - in the 2,500-square-foot center at RAEDI's annual meeting on Thursday. Remember this new twist on a business incubator is designed to house early biotech start-ups as well as venture capitalists. The tenant names have been kept hidden from anyone outside of Mayo Clinic and the usual insider crowd of public figures.

And yet this morning, a couple of venture capitalist firms' names are as clear as glass as being part of this private/public project.

Sanderling Ventures and Versant Ventures are up on the window, along with Mayo Clinic Ventures, the City of Rochester and RAEDI.

The California-based firm has a lot of experience working with Mayo Clinic and Mayo-related companies, like Torax and Naviscan.

I don't know as much as about Versant Ventures, but it is also based in California. However, it also has an office in Minneapolis.

Here's some background on the accelerator:

Mayo Clinic is giving $100,000 to turn the unused space, which is owned by the city, into offices. RAEDI will handle the management and leasing of the space.

HGA, which was the architect firm for the building, handled designs for this space. Lots of glass walls, I hear. Rents are expected to range from $13 to $15 per square foot.