May 16, 2011 presentation hosted by University of Chicago Booth School of Business Entrepreneurial Roundtable at Northern Illinois University Naperville Campus. Video by Stone Cliff Productions, Inc
In 1998, John Swanson (Chicago Booth ’98) co-founded Source Tech Medical (STM) to manufacture and market low-cost radioactive implants to treat prostate cancer. Five years later, STM was sold to a leading medical supply company for $39 million. Join us to hear John talk about how he and his team raised $12 million through five rounds of funding and overcame numerous challenges in manufacturing, sales and marketing to take STM from pure start-up to an established business.
In 1997, prostate cancer was the leading form of cancer and the second leading cause of cancer deaths in men. To the co-founders of STM, this seemed to be a great business opportunity. They devised a business plan to develop a method for manufacturing low-cost radioactive implants to treat localized prostate cancer. At that time, radioactive implants had become an accepted form of treatment by physicians and was often requested by patients as an alternative treatment to radical prostatectomy and external beam radiation for localized prostate cancer. The business plan envisioned a total investment of $10 million.
STM faced a number of challenges in getting the initial funding, during a time when most VC money was going to .com companies. STM also found that the automated manufacturing equipment necessary for STM to be the low-cost producer in the market could not be developed without additional investment. CR Bard’s interest in marketing the device globally led to the sale of STM to CR Bard in 2003 for $35 million. The business remains a going concern with its plant in Carol Stream, Illinois.