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March 06, 2018 01:00 AM

Canon's new medical unit shows off its first product

Catherine Kavanaugh
Senior Reporter
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    Catherine Kavanaugh
    Canon Virginia Inc. showed off a preproduction model of a carotid stenotic scan for customer CVR Medical Corp.

    Anaheim, Calif. — A year after entering the busy medical contract manufacturing space, Canon Virginia Inc. (CVI) showed off the preproduction model of a carotid stenotic scan that will help a customer, CVR Medical Corp., launch its first product.

    Plastics are being selected for the prototype of the screening device billed as next-generation technology to prevent strokes. Clinical trials are underway on the potentially groundbreaking tool that uses sound wave analysis — no dyes or radiation — to detect carotid arterial stenosis.

    Components of the CVR device will be manufactured using injection molding and thermoforming, Ron Kurz, senior director and operations manager for CVI's medical business unit, said at Medical Design & Manufacturing West, held Feb. 6-8 in Anaheim.

    Based in Newport News, Va., CVI is a wholly owned subsidiary of Canon U.S.A. Inc. It added molding capabilities to its medical quality management system in the last year. Presses include two 75-ton Sumitomos, one 50-ton Sumitomo and one 33-ton Milacron Roboshot. The division also has a mobile clean room and mobile injection unit for two-shot molding.

    Widely known for making cameras and printers, Canon is focusing attention on its budding contract manufacturing services for the growing medical industry.

    "We're engaging with customers, and we have several other projects in the works," Kurz said.

    Medical device outsourcing was valued at $44.3 billion in 2016, and it is expected to increase at an annual rate of 9.5 percent and reach $83.9 billion by 2023, according to a global forecast by Allied Market Research.

    The electronics segment held more than a two-fifths share of the total medical device outsourcing market in 2016, according to the Portland, Ore.-based firm's report.

    CVI's partner CVR Medical, which is a joint venture with Denver, N.C.-based CVR Global Inc., is trying to commercialize proprietary subsonic, infrasonic and low-frequency sound wave analysis technology for a diagnostic device that measures carotid arterial stenosis, which is a leading stroke indicator.

    "Canon was founded by a doctor, so our whole history from day one has been related to medicine and X-ray, but we weren't really, really strong," Kurz said.

    Preparing to compete

    To address weaknesses, Canon Inc. acquired Toshiba Medical Solutions Corp. for $6 billion in 2016 before launching contract manufacturing services for the medical market in 2017.

    "We now have a complete medical solution," Kurz said, pointing to Toshiba Medical's broad product portfolio of diagnostic systems for magnetic resonance imaging, X-ray, ultrasound and nuclear medicine.

    CVR's carotid stenotic scan detects abnormal narrowing of the neck arteries that carry blood to the head with technology that analyzes sound wave patterns in a patented algorithm. The device assesses arterial health and provides results in a percentage range of narrowing up to 100 percent blockage.

    "They'll be basically looking for any obstruction of flow, and from this, they can make a quicker decision on patient care and get the person to the appropriate avenue, which might be an MRI," Kurz said.

    Other contract manufacturers also are looking to beef up their technological offerings to pick up business in the medical market. Seisa Medical Inc. announced Feb. 2 that it will bolster its presence in the space through acquisition with some $42.5 million of secured credit and its own resources if needed.

    Outsourcing on upswing

    CVR Medical officials have said they are looking to CVI's engineering expertise, along with its 30,000 square feet of medical manufacturing space and industry relations, to help it maximize production value as the diagnostic device is scaled to meet its high-demand potential.

    "CVI's commitments to quality and manufacturing excellence are key reasons why we've trusted them with our initial product launch," Tony Robinson, CVR's chief operating officer, said in a Feb. 6 news release.

    Joan Magrath, vice president of sales and engineering for Mack Medical, a division of Mack Molding Co., says requests for contract manufacturing services are up 10 percent for the Arlington, Vt.-based company, which also serves industrial, transportation, energy and consumer markets.

    "We're looking at growth of 20 percent across the board this year, and I have to say the contract manufacturing is crazy," Magrath said. "We're being very selective in the kind of work we're taking on now. We want to make sure it's the right fit."

    She attributes some of the uptick to an influx of young, inexperienced designers and a recognition by OEMs that it helps to involve experts in plastics processing at the design stage.

    "They're saying, 'Hey, I want you guys to own it. You help me design it. You help make it,'" Magrath said. "And that's where you have to amp up your skill set quite a bit to support what the customer is looking for. We're like the orchestra leader trying to pull all these pieces together and make it sound beautiful."

    Contract manufacturing is also on the rise because of constant price pressure in the medical field the desire to keep intellectual property in the United States the benefits of engineers being close to manufacturers and opportunities for joint-development projects.

    John Whitney, Mack Medical's director of business development, said customers are also looking to simplify their supply chain.

    "Since we can do the fabrication and assembly for them, it's really one phone call to manage that entire supply chain of components," Whitney said. "They're trying to minimize their overhead and approved vendor list, and if they can pass a lot of that responsibility to the manufacturer, it gives them what we like to say is one neck to ring, one person to call."

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