Hartford Business Journal

14 HARTFORDBUSINESS.COM | APRIL 1, 2024 Startups, Technology & Innovation Northeast Scientific employee Keyanah Owens inspects catheters. HBJ PHOTOS | STEVE LASCHEVER Circular Economy After 'long road' to FDA clearance, Waterbury's Northeast Scientific finds growing niche in medical device reuse market Telefunken got its start by reverse-engineering replacement parts for high-end microphones. It eventually built its own line of microphones that sold for as much as $15,000 each in Telefunken's early years. Customers have included artists like Anita Baker and Bruce Springsteen. Allmendinger doesn't have an engi- neering degree, but was always good with his hands and technically adept. As a youngster, he frequently tinkered with go-karts and motor- bikes. At age 14, he repaired a derelict 1961 Honda motorcycle in the family barn that was otherwise headed for the scrap heap. Allmendinger left Telefunken after four years to launch a business dedicated to refurbishing catheters. He got the idea from a Wall Street Journal article about reprocessed medical devices. He thought it was a "cool idea" — recycling and creating a circular economy. Allmendinger had been around medicine his entire life. His father — Dr. Philip Allmendinger — spent a career specializing in thoracic, cardiovascular and vascular surgery. The elder Allmendinger also invested $600,000 in Northeast Scientific to help launch the business. The 'right' location As Allmendinger had done with microphones, he reverse-engineered his way into the catheter reuse business, meticulously researching medical manufacturing and steriliza- tion processes. Allmendinger said he searched for suitable space to launch the busi- ness in Hartford, Farmington and Middletown, but eventually settled on a 5,000-square-foot building along Thomaston Avenue in Waterbury, which was cheaper and "felt right." The location has worked out. The city has supplied a steady work- force — Waterbury residents make up more than 80% of the company's employees. Employee referrals are the strongest source of new applicants, he said. Today, new basic production staff start at $17 to $18 per hour and can earn as much as $40, with training provided in-house. There are also higher-paid professional salaried engineers. By Michael Puffer mpuffer@hartfordbusiness.com B ack when Waterbury-based medical device manufacturer Northeast Scientific had three staff members and no product to sell, there were years when CEO Craig Allmendinger didn't take a paycheck. Founded in 2004, the company didn't get its first U.S. Food and Drug Administration approval — for a process to clean and repackage venous catheters for reuse — until 2011. It has since received six more FDA approvals for other devices. Today, Northeast Scientific employs 78 staff. It has grown from a single, 5,000-square-foot building on Thom- aston Avenue in Waterbury, to three neighboring buildings, totaling nearly 45,000 square feet, in the same industrial complex. Revenue is up to $20 million a year and growing, Allmendinger said. "It was a long road and a long struggle," Allmendinger said. "For a long time, there was no money, no income. A couple of years I went without a paycheck. The FDA review is not easy, and for good reason." Northeast Scientific was founded on the premise that polymer cathe- ters snaked through the human body for diagnosis and treatment can be used more than once. It's a concept that has gained wider acceptance in the medical community. The company has tapped into a multibillion-dollar reprocessed medical devices market that is expected to grow significantly in the years ahead as the population ages and medical care providers face pressure to reduce costs. "We are saving physicians about 50% on the costs of the devices for all the procedures they do, and saving a lot of waste from going into the waste stream," Allmendinger said. Counterintuitive path Allmendinger grew up in Farm- ington and attended the King- swood Oxford private school in West Hartford. He graduated from Colorado State University in 1993, with a bachelor's degree in natural resource management. After college, he worked in sales for Bell Atlantic mobile (now Verizon Communications), then GE Capital. In 2000, he co-founded Telefunken North America in South Windsor with a friend from high school. AT A GLANCE Northeast Scientific Industry: Medical devices Top Executive: Craig Allmendinger, CEO & Founder HQ: 2142 Thomaston Ave., Waterbury Employees: 78 Revenues: $20M Website: smarthealth-care.com Contact: 203-756-2111 Northeast Scientific CEO Craig Allmendinger in front of the "clean room" at his company's production facility in Waterbury.

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