Contact: Eric Stone, CEO Business: Single-use, disposable vascular access device collects blood from hospital in-patients - Founded: January 2012 - Founders: Eric Stone; Pitou Devgon, MD, PresidentEmployees: 10Financing To Date: $5 mi

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Start-Ups Across Health Care
Biotechnology
4040 Locust Street
Philadelphia, PA 19104
Phone: (844) 835-2668
Web Site: www.velanovascular.com
Contact: Eric Stone, CEO
Business: Single-use, disposable vascular
access device collects blood from hospital
in-patients
Founded: January 2012
Founders: Eric Stone; Pitou Devgon, MD,
President
Employees: 10
Financing To Date: $5 million
Investors: First Round Capital; Griffin
Hospital, Derby, CT; Kapor Capital; Safeguard
Scientifics Inc.; The Children’s Hospital of
Philadelphia; White Owl Capital Partners
Board Of Directors: Eric Stone; Pitou
Devgon; Paul Molloy (ClearFlow); Jack Lord,
MD (formerly University of Miami)
Scientific Advisory Board: Karen
Daley, PhD (past president, American Nurses
Association); M. Bridget Duffy, MD (Vocera
Communications); John Gormally (formerly
Becton Dickinson); Jean Proehl (Emergency
Nurses Association); David Reibstein
(Wharton School, University of Pennsylvania)
Velano Vascular Inc.
Vascular access via peripheral
IV catheters
In 1991, Eric Stone, then 14 years old,
had the misfortune of spending 12 days in
Rainbow Babies and Children’s Hospital in
Cleveland, two days after a colonoscopy
detected the inflammatory bowel disease
Crohn’s. During his hospitalization, Stone
was subjected to dozens of painful needle
blood draws.
Fast forward 20 years. Stone had re-
cently departed Abbott Vascular and was
looking for a novel technology to bring to
market. At the same time, Pitou Devgon, a
health care venture capitalist and a practic-
ing hospitalist, had devised an innovative,
more humane approach to drawing blood
by using existing IV catheters. “Using a
needle to collect blood seemed like a very
archaic process,” says Devgon, who was
originally exposed to the problem of exces-
sive needle sticks during his medical resi-
dency training. His observation hit home
one day when an elderly patient suffering
numerous needle sticks and a severely
bruised arm innocently asked, “Why can’t
you just draw blood out of this?”, pointing
to the peripheral IV catheter already in her
arm, recalls Devgon.
Devgon realized, however, that making
needles less painful or altering IV catheter
designs were likely not the answer. His
innovation came to fruition by creating a
new device that combined the most ap-
pealing attributes of these two devices: the
blood-drawing capabilities of a stiffer tube
advanced through the more flexible con-
duit of an IV catheter.
Stone and Devgon were introduced by a
mutual friend in 2011 and formally joined
forces in January 2012 to start Creative
Vascular LLC, renamed Velano Vascular
Inc. in October 2013. The company is
commercializing a single-use, disposable
vascular-access device that resembles a
syringe and interacts with an existing pe-
ripheral intravenous catheter that has al-
ready been inserted in the patient’s hand
or arm. “This enhances the experience for
both patients and practitioners during one
of the most common medical procedures
in the world,” says company CEO Stone.
Velano Vascular envisions a long-term
market opportunity because of all the hos-
pitalized patients in the world who have
a peripheral IV catheter in their hand or
arm. These patients represent about 90%
to 95% of the roughly 40 million annual
hospitalizations in the US alone, translat-
ing to between 300 million and 400 mil-
lion traditional needle sticks that could be
avoided. The company declines, though,
to estimate a market value for its product.
Stone most recently served as VP of
sales and marketing for MolecularHealth
Inc. (personalized-medicine genome se-
quencing for cancer patients) from 2011
to 2013. Prior to that, he was a commer-
cial marketing manager at Abbott Vascular
(including launching the first bioabsorable
stent) from 2007 to 2011. Stone also was
a senior business development manager
with Model N Inc. (revenue management
software for the medical device/pharma-
ceutical industry), where he helped found
and build the Life Sciences division from
2000 to 2002.
Devgon, president of Velano Vascular,
also practices internal medicine part-time
at the Philadelphia VA Medical Center. In
addition, he was a senior associate at the
health care technology venture capital
fund Safeguard Scientifics Inc., based in
Philadelphia, from 2010 to 2013.
Velano Vascular has multiple issued
and several pending patents. The firm de-
clines to disclose if it is sharing royalties
and/or revenues with another entity.
The company’s vascular access device,
which can be used by either a nurse or
physician, comes in a sterile pouch and re-
sembles, at least externally, a syringe. The
device is transiently attached to a periph-
eral IV catheter line and is activated by ad-
vancing the plunger, which subsequently
advances a small polymer cannula through
the IV catheter and into the vessel. Next,
blood is drawn from the vessel, using the
same standard vacuum tubes for suction-
ing blood out of the vein that are employed
when using a needle. “The clinician can
fill as many tubes as needed, by simply
switching out tubes,” Devgon notes.
After the requisite number of tubes are
filled for a patient’s lab work, the device
is retracted by pulling the plunger back
to its resting position, which causes the
cannula to be removed from the IV. The
device is then detached from the IV line
and discarded.
IV lines are typically employed to infuse
medication or fluid, but are not particularly
effective for aspirating blood. “Our device
overcomes the technical barriers of why
IVs are not suitable for aspirating blood,”

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2015 Informa Business Information, Inc., an Informa company | START-UP | April 2015 | 2
Devgon explains. “The device threads
through the IV catheter and into the ves-
sel. However, the workflow is similar to that
of a needle and the clinician
feedback we have received is
that our device is very intui-
tive to use.”
Major disposable nee-
dle manufacturers such as
Becton, Dickinson & Co.,
Smiths Medical/Smiths
Group PLC, and Greiner
Bio-One International AG
“may eventually see us as a
competitive threat,” Stone
asserts. In addition, be-
cause the company’s unique
approach to drawing blood
“reflects a distinctly spe-
cialized practice, we do not
envision facing any head-
to-head technology com-
petitors in the traditional
sense of the word. There are
companies evaluating novel
approaches to blood draws,
including smaller needles,
sharper needles, lower
blood volume, or analgesic creams or in-
jections to ‘mask’ the pain of the needle,
but these all come with trade-offs – trade-
offs that patients, practitioners, and hos-
pitals do not need to make when using
our simple solution.”
The barrier to adoption is more philo-
sophical than clinical, according to Stone.
Instead of using a sharp object to punc-
ture the skin to withdraw blood, “our
device requires a mind shift to use ex-
isting access without caus-
ing an additional puncture
or stick,” he says. Besides
providing a more pleasant
hospital experience for the
patient, Velano Vascular’s
goal is to allow the practi-
tioner to be more efficient
in blood collection and to
work in a safer environ-
ment with fewer needles.
“The lack of a needle re-
duces the risk of acciden-
tal blood-borne pathogen
transmission – a real risk
when treating patients with
HIV or hepatitis C,” Stone
points out, despite recent
innovations in retractable
needles to minimize risk
of exposure. The company
believes its device will not
only deliver cost-savings to
hospitals, “but will benefit
them by enhancing the pa-
tient experience – more important than
ever under the Affordable Care Act, given
that hospitals are partly reimbursed based
on patient satisfaction ratings,” Stone
conveys.
The first clinical study of the vascu-
lar access device should commence this
spring. The novel vascular-access device
received 510(k) clearance in January; CE
mark is expected in April.
The device is expected to start selling
in the US in the second half of the year,
at a yet-to-be-determined price, and is in-
directly reimbursed as part of the existing
DRG lump-sum payment system. Initially,
the company will use a direct sales force,
followed eventually by a hybrid direct/
distributor network.
To date, Velano Vascular has raised $5
million: a seed round of $150,000 that
closed in January 2012, funded by 10
angel investors and the two co-founders;
and an A round of nearly $4.9 million
that concluded in January, infused by
four institutional investors, two hospi-
tals, and roughly two dozen individuals.
No additional fundraising is planned at
this time.
The most likely exit strategy for
Velano Vascular is either partnering with
an existing company in the needle or
peripheral IV space to help scale manu-
facturing and distribution, or the firm
may remain as a stand-alone through an
IPO or as a privately held company. “Our
technology is an intuitive replacement to
needles and complementary to peripheral
IVs,” Stone says. SU
[A#2015900056]
– Bob Kronemyer
“The lack of a
needle reduces
the risk of
accidental
blood-borne
pathogen
transmission
– a real risk
when treating
patients with
HIV or
hepatitis C.”
- Eric Stone
©2015 Informa Business Information Inc., an Informa company. No reproduction without the written consent of the copyright owner.
Eric M. Stone, Co-Founder and CEO
3138 Geary Boulevard, San Francisco, CA, 94118, | (617) 642-6460 | eric.stone@velanovascular.com