Sometimes an entrepreneur comes up with an innovation. Sometimes the innovation finds the entrepreneur.
The latter certainly seems to be the case for Michael Lowe, president and CEO of Houston-based OrthoAccel. His story beings with an orthodontic technology sitting in a tech transfer office in Chicago that would eventually win an award at the Rice University Business Plan Competition. Lowe, a Rice MBA candidate at the time—but nowhere near the competition when it happened—ended up a few years later working as a consultant for a local VC, who happened to have been a judge that day. Hey, he wondered to Lowe, whatever happened to that orthodontic device?
That nudge led Lowe to his first startup opportunity, one that, in many ways, had been in front of him while he was at Rice. “I’m a dental guy through and through,” says Lowe, a dental school graduate and former global product manager of Sonicare toothbrush.
He looked into the technology and found out that the University of Illinois at Chicago students who had brought the device to Rice had retained an option on it, though they hadn’t commercialized it. He paid them about $30,000 for the option and then negotiated with the University of Illinois for an IP licensing agreement, the details of which he declined to disclose.
Lowe raised about $500,000 from investors to found OrthoAccel and market its first product: AcceleDent, a device that could cut the time a person has to wear braces by half.
Initially, the company sold the mouthpiece overseas through orthodontists starting in 2009. OrthoAccel then got FDA approval to market AcceleDent as a class two medical device and began selling it domestically in 2012. The company, which manufactures the product at a facility in Austin, currently sells to 9,000 doctors in 12,000 offices in the U.S. The company declined to disclose revenues.
The technology works this way. For 20 minutes a day, an orthodontics patient wears the mouthpiece that is attached to an activator, which pulsates gently. “When you’re moving teeth with braces, you put pressure to the where they sit in the bone,” Lowe says. “The bone tissue is filing in that vacated space and remodeling the sockets.” The tiny movements generated by the mouthpiece accelerate that bone remodeling, Lowe says.
While the market for orthodontics is growing in other countries, the U.S. remains the company’s most important market. “Getting braces is a highly planned purchase and middle-class right-of-passage in North America,” Lowe says. “There is enough work here to keep us busy.”
OrthoAccel employs 55 and last week raised $9 million total through an equity funding as well as tapping a bank loan to fund the expansion of its sales and marketing staff and the scale-up of manufacturing. Healthpoint Capital in New York and S3 Ventures in Austin were the investors in the round.
Lowe says he plans to make as many as 10 hires this year and that OrthoAccel is looking to introduce new products as the company grows. To help with these plans, the company recently appointed as COO Jeff Layton, who had been an executive at a Texas power management company. Doug Bukaty is the company’s new vice president of sales; he had held that position at a medical equipment distributor in Ohio.
The original innovator behind AcceleDent is Jeremy Mao, an orthodontist who developed the technology and did the first animal studies on it about a decade ago, while at the University of Illinois. Since the early 1980s, orthopedic doctors had used vibrations to accelerate bone healing in so-called longbones, such as those in the arms and legs, and Mao wanted to see if a similar technique would work on bones above the neck. “That was his a-ha moment,” Lowe says.
But the technology sat in the Chicago university’s tech portfolio until that group of MBA students fished it out as part of a class homework assignment, and eventually brought it to Rice to compete.
For Lowe, serendipity gave him an opportunity to combine his interests in the dental industry, business development, and venture capital through OrthoAccel. He emphasizes that others also deserve credit for company’s success. “I happened to be a student at Rice business school but I knew nothing about it,” he says. “I don’t want to take important credit away from those students.”
