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MedCityNews.com writes about the economics of health care from major "medical cities" such as Cleveland and Minneapolis-St. Paul.
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  • Envoy Medical raises $16.4 million for Esteem hearing device... thanks to Rush Limbaugh 6 comments
    Oct 8, 2010 9:11 AM

    Envoy Medical Corp. should send Rush Limbaugh a fruit basket.

    Thanks in large part to Limbaugh’s plug on his popular radio show, Envoy in White Bear Lake, Minnesota, recently raised another $16.4 million, including $10 million from hearing aid powerhouse Starkey Laboratories Inc., for its implantable hearing device, Esteem.

    The latest financing round, which closed at the end of September, brings Envoy’s total take to $140 million.

    In addition, Limbaugh’s millions of listeners have flooded Envoy’s website and phone lines, prompting the startup to hire more sales staff.

    “It’s been off the charts,” CEO Patrick Spearman told MedCity News. Limbaugh “is worth every penny” of the $250,000 a month advertising deal his company has with the conservative talk show host.

    Not that Envoy necessarily needed more buzz. Since the Food and Drug Administration approved its Esteem system in March — the first fully implantable device to treat hearing loss in the United States — the company has been busy.

    About 90-to-100 surgeons are training to implant the device, including doctors from Mayo Clinic, Harvard University and Yale University, Spearman said. Ten surgeons ready are to perform the procedure over the next month.

    Spearman estimates 80 patients have signed up for the $30,000 out-of-pocket procedure with another 400 expressing “serious interest.”

    The Esteem device is located entirely in the ear. The system consists of a sensor, sound processor and driver. The sensor picks up vibrations from the ear drum and converts them into electric signals. The sound processor — a specially designed computer chip — cleans up the signals and boosts their power. Finally, the driver converts the signals back into mechanical vibrations and transmits them to the cochlea.

    If Envoy can sell 110 procedures a month, the company would generate positive cash flow by March 2011, Spearman said.

    Apparently, one of Envoy’s best moves was reaching an advertising deal with Limbaugh. For the last eight weeks, Limbaugh has pushed the product on his show and website.

    As a result, traffic to Esteem’s website has jumped to 2,800 hits a day from 500 to 1,000 hits. The company has hired extra sales staff just to handle the volume.

    Getting Limbaugh to promote a product is no easy task. He accepts only one in 11 advertisers that make a pitch. Spearman said he met Limbaugh for two hours and walked away impressed.

    “He is a very gentle person,” Spearman said. “Very kind. He is an incredible listener. He has an incredible memory.”

    Exposure from Limbaugh’s show helped Envoy land the $10 million investment from Starkey, one of the world’s largest manufacturers of hearing aids, based in Eden Prairie, Minnesota.

    The alliance should benefit both companies — Envoy could refer customers to Starkey, and vice-versa, Spearman said.

    Envoy’s other investors include Minnesota Timberwolves owner, billionaire Glen Taylor; Roger Lucas of biotech firm Techne Corp.; and former Medtronic Inc. vice chairman, Glen Nelson. Former Boston Celtics great, Kevin McHale — Spearman’s brother-in-law — also chipped in $400,000.

     



    Disclosure: No positions.
    Themes: Envoy Medical, Esteem, implantable hearing device, hearing loss, White Bear Township Minnesota
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  •  
    I can't afford you now so will have to be content to research co's hard on your heels to see when the competition kicks in.
    I'd love to be invested---Let me know when your IPO comes out.
    cmsather2@msn.com
    14 Oct 2010, 03:53 PM Reply Like
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    I want to know when will Obama care kick in on this " for the rich and famous only" product? Rush could afford it even if the $250k a month the company pays him was his only income. As with most really great medical care while cogressmen/women, senators, the president and their families and the rest of the rich and famous, the average American will never even come close to affording this medical break through. Oh and if having a cell phone to one's ear for prolonged periods is supposed to cause cancer, won't having an electronic device implanted in one's ear be an even higher cancer risk?
    5 Aug 2011, 12:02 PM Reply Like
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    I want to know when will Obama care kick in on this "for the rich and famous only" product? Rush could afford it even if the $250k a month Envoy Medical pays him to advertise was his only income. As with most really great medical care while cogressmen, senators, the president, Rush and the rest of the rich and famous can easily afford the $30K out of pocket expense, the average American will never even come close to being able to afford this medical care either!! Oh and if cell phones are supposed to cause cancer, how much higher is the cancer risk from having a different electrical device implanted in one's ear? With the FDA's record of approving products that regularly kill people not so sure I'd want one anyway.
    5 Aug 2011, 02:49 PM Reply Like
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    I'm not rich ETGAGAL like Rush. It's not only for the rich and famous as I'm in the process of having one implanted myself. You can't put a price tag on being deaf, its isolating and a quote from Helen Keller states its worse to be deaf than blind. I suffered with SID 5 years ago, never had an ear ache, infection, fever or anything, been tested for MS. Brain tumor, Stroke, spinal tap for Meningitis, have NONE of them. I was in my early 40's when I woke up one morning completely deaf. I'm on my 4th set of hearing aids, each set $5k, add batteries, cleaning solutions, I have already spend close to the price of the Esteem. I'm borrowing against my retirement, interest free. It's not just for the rich, yes I've had to cut back on my spending by saving for them, like I mentioned, the difference is coming from my retirement.
    18 Sep 2011, 11:24 PM Reply Like
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    Why is it if I decide to have a cochlear implant, cost $80k each, my health insurance will pay for it, yet the Esteem costs $30k and the insurance company won't. I suffered SID 5 years ago while in my early forties, have decided to have the Esteem implant and just this week sent in my deposit. I hope it works, my hearing doctor doesn't think it will as he said my hearing loss is too bad. I sent my latest audio-grams in to Esteem, I hope they will be upfront and honest with me if it looks as though I'm not eligible they will tell me and not take my $30k.
    18 Sep 2011, 11:24 PM Reply Like
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    @poulsene I was one of the 2nd wave of FDA trial implants in 2006, replaced because of battery issues in 2009. 40% hearing loss each ear. Went from 80% voice recognition to 88% with the Envoy. Not the total solution, but infinitely better than the alternatives. Dr. Kraus in Greensboro was the lead doctor in the trials and he and his staff were very upfront throughout.
    29 Sep 2011, 10:06 AM Reply Like
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