Harold Linville retired from Innovative Medical Device Solutions in 2011 after 34 years of service. But Linville is now quietly helping ramp up another local medical device provider, NovoSource Inc.
“I said, ‘Look we’ll have to raise a lot of money,’” Linville recalled telling his NovoSource co-founders early in the venture. The co-founders said, “Harold, you’ve got to lead it (the new company).”
Linville replied, “Well, if I have to lead it, it has to be in Dayton, because I’m in Dayton.”
The idea behind NovoSource is offering lower-cost options for quality orthopedic devices, particularly knee implants and hip products. The business will outsource manufacturing of these devices to Innovative’s Vandalia operation and a Michigan manufacturer, Orchid Orthopedics.
In a November filing with the U.S. Securities and Exchange Commission, NovoSource disclosed that it had raised nearly $4 million, much of it from Ohio and Dayton-area investors. A new round of financing has been opened as well.
Besides Linville, the principals include Jon May — a former Inland manager in Dayton — and T. Bradley Harris, former Upex Holdings chief executive.
The Dayton Development Coalition is supporting the business with a $1.1 million Entrepreneurial Signature Fund loan.
Linville expects Federal Drug Administration approval for its knee implant soon. A hip product produced by Orchid will be next. Distribution contracts are in place.
“NovoSource has a very exciting business model that strips out significant costs in health care and is already engaged with distributors to produce immediate sales,” said Scott Koorndyk, the coalition’s executive vice president of economic development and operations.
The knee product has an FDA “510K” classification, meaning it’s similar to products already on the market. The innovation comes at the lower cost NovoSource principals believe they can offer.
“There’s nothing new in orthopedic implants over the last 20 or 30 years,” Linville said in a recent interview at the company’s Entrepreneur Center offices.
One possible challenge to NovoSource’s business model is “slow uptake and skepticism from surgeons who are seeing good results from the products they have already,” said industry website orthostreams.com in a story on the company.
But the savings NovoSource envisions are substantial, according to the NovoSource website. A typical orthopedic practice could save $500,000 to $1 million a year.
“The end game, really, is we’re going to be the best value,” Linville said.