Kai Medical on the radar of health care
BY Greg Wiles
Advertiser Staff Writer
Kai Medical's offices are spartan, perhaps unremarkable, given the work that's being done there.
Located above a Central Pacific Bank branch in Kaimukī, the no-frills workplace could be mistaken for an insurance office with its neat cubicles and brightly lit surroundings.
But the work being done at the startup is anything but ordinary and may make the company an everyday name in the medical device market. Kai Medical's engineers already have come up with one Food and Drug Administration-approved product and are working on more.
"I think they're positioned to do well," said Jim Thompson, a veteran technology executive who sits on the company's advisory board.
"They've got a lot of large medical companies interested in using the technology ."
Kai Medical is gearing up to manufacture its first offering, a noncontact respiratory monitor that makes use of Doppler radar and proprietary software. The company says the lower-power device can measure how many breaths people are drawing even if they are wearing clothes or under blankets.
Adults draw 12 to 20 breaths a minute and changes in rates can signify deteriorating health conditions. But there are sometimes issues in obtaining an accurate measurement, which typically involves having someone count the number of breaths being drawn as a patient's chest rises and falls.
Kai Medical's device takes the potential for human error out of the equation. The Kai RSPOT is being evaluated by several potential customers.
The device won its 510(k) FDA approval last June for hospital or clinical use in spot measurements. The technology also was recognized by Frost & Sullivan for a 2008 North American Technology Innovation of the Year Award for wireless vital signs monitoring.
"It's the first and only medical technology based on Doppler radar that's ever gotten FDA clearance," said Andrea Yuen, Kai Medical's chief executive officer.
"That's pretty notable."
That and other work created a buzz about the company that has helped in attracting three rounds of financing and making the medical community aware of the device. Yuen said the company hopes to begin manufacturing the Kai RSPOT this summer.
She declined to disclose how much funding Kai Medical, whose chairman is serial entrepreneur Dustin Shindo, has obtained.
The letters from the FDA and Frost & Sullivan are framed and displayed in a small lobby area of Kai Medical's office.
Both represent remarkable progress for the company founded in 2006 to build upon Doppler radar work done at the University of Hawai'i. That included using the technology in defense and security applications to detect heartbeats and respiration through walls.
But that pursuit, along with looking at automotive applications, was dropped as the company refined its mission and began focusing on medical devices using its own Doppler research.
UH, which had been licensing its technology to the company, remains a minority owner in it.
The medical market for respiratory devices is potentially hundreds of millions of dollars worldwide. The company this month signaled its new focus by changing its name from its former Kai Sensors moniker to Kai Medical.
"The opportunity was so compelling that we focused all of our efforts in that direction," Yuen said.
The firm's trajectory would suggest it may eventually able to take a place beside Hawai'i technology companies that hit it big, such as Cheap Tickets, Digital Island and Verifone, where Thompson served as a vice president.
But getting to that level won't be easy, especially given the economy and that gaining acceptance in the medical device market is sometimes slow. Another Honolulu company that has made use of the state's Act 221 tax credits, Hoana Medical Inc., has yet to hit it big despite having a promising medical device that also measures vital signs.
"Anything that improves health care and lowers costs is hard to beat," said Bill Spencer, who has led the Hawaii Venture Capital Association since 1999.
But "the challenge for things like this is who is going to pay for it."
He said it might not be covered by health insurance but that individual clinics and hospitals might buy the devices based on their ability to improve efficiency and care.
That isn't stopping the dozen workers at Kai Medical's offices from pressing ahead with other work, creating software for more respiratory products as well as those involving the heart.
"We're now going for products, which is a stage few startups even get to," Yuen said, rattling off potential types of customers for the RSPOT.
Besides the obvious hospital and medical office applications, the device may migrate to kiosks where people can get their vital signs measured. There is also potential in care homes and in home monitoring.
Thompson said it looks like Kai Medical will be first to market with a noncontact respiratory measuring device and that he hasn't seen anyone who has a product coming close to what the Kaimukī firm is offering.
"I think they've done amazing things since they started," Thompson said.
"They started with almost just a concept and have taken it all the way to a product in a very short time."