Reducing prescription error was the goal of Morrisville, North Carolina-based Centice, which developed a device to verify that the drug in a pill bottle is the drug prescribed to the patient.
Centice’s lead product, PassRx, identifies a drug by reading its unique light signature. Pharmacists who use it say it works. But there are too few of those pharmacists to sustain a business. After seven years and more than $22 million in venture capital investment, Centice’s device is used today by fewer than 20 total pharmacies and hospitals.
CEO Scott Albert says the company now aims to leverage PassRx’s technology for applications such as manufacturing and law enforcement. Technology that enables PassRx to verify a prescription can also verify chemicals, pharmaceuticals or products coming off a manufacturing line. It can also identify suspected narcotics found by police. Beta versions of the technology are in place with select companies and Albert says he’s talking with potential customers. But he says even if the underlying technology is the same as PassRx, it’s not as simple as just deploying it into new industries. Companies need time to fit new technology into their processes.
“Whether you’re Cisco or Apple or whatever, you can’t just walk out the door and say here’s our new product,” he said.
Centice was founded in 2004 based on computational optical sensor technology originally developed at Duke University. The technology uses Raman spectroscopy, a technique of reading the unique fingerprint of a sample by analyzing how it scatters light — the Raman effect.
Dr. Mark Borchert, a specialist in pediatric neuro-opthamology and a professor of clinical opthamology at the University of Southern California, says Raman spectroscopy is used in a number of industrial applications such as metallurgy and oil exploration. Borchert uses it as part of a diagnostic tool he’s developing that can examine the eye in a noninvasive manner. Such a tool could also determine if a drug is getting into the body in the proper amounts. Borchert’s work is still in the early stages. Funded by grants so far, USC needs to partner with a medical device company in order to carry out clinical trials. Borchert, who was unfamiliar with Centice, realizes Raman spectroscopy can be used to verify prescriptions — he tests pills to calibrate his instruments. But he decided against developing such a device.
“That’s not something that intrigued me; it’s way too easy,” he said.
It’s easy, but it’s also a quicker way to market. Nonclinical applications don’t have to overcome hurdles such as determining how much light can be comfortably shined on a patient’s eye. Centice does have revenue from its smattering of pharmacy customers. A foothold in other industries will broaden its revenue potential.
But as Centice seeks a broader set of applications for its technology, it pits itself against a broader set of competitors of all sizes. Scientific instruments giant Thermo Fisher Scientific (NYSE:TMO) is actively seeking to expand its Raman spectroscopy footprint in pharmaceutical and chemical applications. Fluorotronics, a San Diego-area startup, uses a different method, carbon fluorine spectroscopy, for a number of life science applications, including drug discovery. CEO Olga Sharts says the carbon fluorine method offers a more specific analysis of a sample compared with Raman spectroscopy. Fluorotronics is talking with companies interested in licensing its technology platform. She adds that there is government interest in the technology for security applications — identifying and tracing the origin of potentially harmful chemicals. In that regard, she’s chasing the same potential customers as Centice.
Albert, managing general partner of investor Aurora Funds, took on the additional role of Centice CEO in 2010. He declined to comment on Centice’s finances, including whether the company needs additional investment. Securities filings show that the company has secured additional funds from investors, though in small amounts compared to earlier venture rounds. A $1.2 million round started last October has another $45,000 remaining to be sold, according to a January securities filing.
Centice isn’t abandoning the pharmacy market. Albert says he just wants to move the company beyond being a single-product business. But in pitching to pharmacists, Centice could describe its pharmacy offering as unique. No one else marketed Raman spectroscopy for prescription verification. To industrial customers, Centice must show how it stacks up against a wider array of competing technologies and products, some of them already established in the market. In that context, the prospects for Centice’s light technology are far from clear.
