Completing a deal with NFS Leasing was easy and uncomplicated for Richardson and his team. He said, “They clearly laid out the deal and terms. They were direct and honest with what they were and were not able to do. No nonsense, no trickery. That allowed us to build a relationship based on trust and the process was simple and fluid because of it.”
SUMMARY
Sanuwave is a medical device company that manufactures novel devices that utilize a specialized method for the treatment of diabetic foot ulcers. The treatment the devices provide helps save the lives and limbs of patients with diabetic foot ulcers. Sanuwave had just spent six years and substantial funds to secure FDA approval for its devices. As a result, it had cash flow constraints and needed a financial partner to support its $20M manufacturing costs to enter the market.
- The new devices would help prevent 2,000 amputations, but delayed revenue recognition made it impossible to obtain conventional funding.
- Obtaining funding with NFS allowed Sanuwave to enter the market immediately and begin positively impacting patients’ lives earlier than expected.
This is a success story in a business that achieves its goals, positively impacts lives and makes a difference with its medical devices.
THE CLIENT
Sanuwave’s flagship device, dermaPACE®, uses Extracorporeal Shock Wave Technology (ESWT) and is the only device of its kind to be FDA approved for treatment of diabetic foot ulcers in the U.S.
Sanuwave has been in business for fourteen years, much of which has been spent conducting clinical trials and obtaining FDA approvals. The FDA approval process takes time and is very expensive. But the company is committed to finding solutions to help save the limbs and lives of people living with diabetes. The last obstacle that Sanuwave had on its way to FDA approval, was a 336 patient, six-year trial that cost upwards of $60 million.
THE CHALLENGE
Sanuwave was faced with a critical market challenge: it needed to manufacture 2,000 devices at a total cost of $20 million. Given that it just spent six years and $60 million on a clinical trial to obtain FDA approval, its balance sheet was unable to support the full $20 million for manufacturing. Financing was needed for part of it.
Furthermore, once manufactured, Sanuwave’s sales would not be realized until three months after production. Sanuwave wanted to reduce barriers to revenue generation and needed a financial solution to adapt to its unique circumstances.
THE SOLUTION
Kevin Richardson, the CEO of Sanuwave considered how the company would pay for the manufacturing of its devices. He then remembers meeting a parent during a recent school fundraiser that worked at an equipment leasing company. Richardson decided to discuss the idea of equipment leasing with his team.
Richardson’s contact is the chief executive officer of NFS Leasing, Cliff Rucker. The moment, Richardson started interacting with the NFS Leasing team, he knew he had made the right decision. The NFS Leasing team spent a great deal of time understanding the situation and the opportunity. They talked to doctors and industry suppliers. Furthermore, it took time to visit Sanuwave and examine the device in person and witness its capabilities. This demonstrated the determination of NFS Leasing to see Sanuwave succeed in its business development strategy.
EXECUTION
Securing an agreement with NFS Leasing was easy and simple for Richardson and his team. He said, “They clearly laid out the deal and terms. They were direct and honest with what they were and were not able to do. No nonsense, no trickery. That allowed us to build a relationship based on trust and the process was simple and fluid because of it.”
Keeping communication lines open during project implementation has enabled Sanuwave to act quickly and enter the market. “What would have taken ten to fifteen years will now take four years thanks to NFS Leasing. This is allowing us the opportunity to save limbs and lives now.” said Richardson.
RESULTS
The primary cause of concern related to diabetic foot ulcers is amputation. As a result of the NFS Leasing agreement, Sanuwave is expected to deploy more than 100 new devices this year alone. Those first devices will treat 20 patients per month per device, 240 patients per year per device, and a total of 24,000 patients this year. Nearly 2,000 amputations will be prevented using Sanuwave’s dermaPACE® device.
The Sanuwave partnership with NFS Leasing makes it possible to achieve this feat in four years rather than in 10 to 15 years. The number of lives that will be saved and families touched for the better is remarkable and not measured in numbers.
