Xenex Sees Big Market for Germ Zapping Robots

By LAURA LOREK
Reporter with Silicon Hills News

Xenex_OR_X4Xenex’s germ zapping robots eradicate dangerous bacteria and viruses leading to lower cases of infectious diseases in the nation’s hospitals, according to several studies.

“On a daily basis we are cleaning 5,000 to 7,000 rooms,” said Morris Miller, CEO of Xenex.

Xenex created a mobile robot that looks like R2D2. It rolls into a hospital room. Everyone then vacates and the robot extends its light tower and starts sending out pulsating ultraviolet rays to kill viruses, bacteria, mold, fungus and bacterial spores. It only takes five to ten minutes to clean a room and it kills germs on 99.9 percent of the surfaces including under beds, in the folds of shades or curtains, light switches, doorknobs and floors. Each robot can disinfect 30 to 62 rooms per day.

The robots destroy the microorganisms that cause Hospital Acquired Infections, known as HAIs.

And getting an infection in a hospital is a huge problem.

In fact, the Centers for Disease Control released a study, based on a large sample of U.S. acute care hospitals, that found on any given day about one in 25 hospital patients has at least one healthcare-associated infection. In 2011, 722,000 patients in the U.S. acquired an infection in a hospital and 75,000 patients died as a result of an infection they acquired during their hospitalizations.

Photos courtesy of Xenex

Photos courtesy of Xenex

Today, more than 300 hospitals, Veterans Affairs facilities, skilled nursing facilities, ambulatory surgery centers and long-term acute care facilities in the U.S. use Xenex robots.

The biotech startup gathers data from all of its robots in hospitals and other facilities nationwide and keeps a running tab displayed on a giant screen at its San Antonio headquarters.

That data is key to showing hospitals how effective the robots can be in reducing infections in healthcare facilities that own one, Miller said.

In July, a new report from the Westchester Medical Center in Valhalla, New York, showed the hospital reduced Clostridium difficile, known as C.diff infection rates in its intensive care unit by 70 percent by using the Xenex robot to disinfect rooms.

Another study, done by the Orlando Health South Seminole Hospital in Florida reported a 61 percent decrease in MRSA, VRE and C.diff, in its intensive care unit and a 41 percent decrease in C.diff infections facility-wide resulting from deploying the Xenex robot to disinfect its facility. The hospital reported the reduction in infections saved the facility $730,000 during a 22 month period.

In San Antonio, Morningside Ministries at The Manor, a long-term care facility, also reported a nearly 77 percent decrease in C.diff infections after they began using a Xenex robot to clean rooms.

Overall, hospitals that purchased Xenex robots have reported greater than 50 percent decreases in Methicillin-Resistant Staphylococcus Aureus, known as MRSA, Miller said.

“This is a bigger problem than Polio was at the time and we’re determined to solve it,” Miller said.

Getting the hospitals educated about the abilities of Xenex’s robots effectiveness in disinfecting rooms is one of the main focuses of the company, Miller said. There’s some confusion in the market because Xenex competes against 59 companies that sell a mercury-bulb-based disinfection system that isn’t as effective, he said.

Yet Xenex is so confident its robots will reduce infection at healthcare facilities that use it, the company offers an infection reduction guarantee, Miller said. It provides a full refund if in the first 12 months of use customers do not save enough money to pay for the $105,000 robot.

A hospital that has a germ-zapping robot also sees a competitive advantage in the marketplace, Miller said. Because patients can now use a website called Hospitalcompare.hhs.gov to investigate and compare hospital acquired infection rates, he said.

“Eventually they are going to say to their doctor I don’t want to get my surgery done there because their infection rates are too high,” Miller said.

Some of the hospitals that have purchased the robots have created billboards and commercials with them. They’ve also used social media to host naming contests for the robot.

“It’s a real differentiator,” Miller said.

Texas Health Presbyterian Hospital in Dallas used its Xenex robot to disinfect after a patient died from Ebola and two nurses became infected with Ebola last year. The hospital has two Xenex robots.

The Ebola infection in the U.S. helped to fuel demand for the Xenex robots, according to the company.

Modern Healthcare, the leader in healthcare news, research and data, estimated the market for disinfection robots at $30 million in 2014 soaring to $80 million by 2017.

Xenex recently expanded its sales to Spain, Ireland and the United Kingdom, Miller said.

Globally, people are concerned about antibiotic resistance and the spread of deadly viruses like MERS and Ebola, Miller said.

Xenex is also expanding its sales force in the United States, Miller said. Xenex is also looking at the application of its disinfection system outside the hospital.

“We’ve had different requests for different versions and we’re researching how to do that,” Miller said. “We’ve designed something that can easily be used in a cruise ship, nursery school or gym lockers.”

In January, Xenex, which is privately held, raised $25 million in venture capital for product development, international expansion and to hire more employees. The company currently has around 100 employees. To date, Xenex has raised about $54 million.

Xenex is an example of a much needed, high value, quite disruptive technology, said Paul Castella, co-founder of the Targeted Technology Fund I and II, an investor in Xenex.

“They are executing well in their chosen field and there’s a ton of possibilities for expansion into other areas,” Castella said.

“I shouldn’t be going to sleep until we’re in every single healthcare facility in the U.S.,” Miller said. Every year, patients get infections and 75,000 are dying, he said. About. 70 percent wouldn’t get the infection if Xenex robots disinfected the facilities, he said.

Even with the best janitorial staff, studies show that 32 percent of the surfaces in a room don’t get clean, Miller said. Xenex is the tool to solve the problem, he said.

“We know it works, its proven to work, it pays itself back to the hospital,” Miller said.

Miller, a serial entrepreneur, previously co-founded Rackspace. In 2008, he invested in Xenex. He also became its CEO and moved its headquarters and manufacturing operations from Austin to San Antonio.

“Sometimes you feel very excited about a business,” Miller said.

With Xenex, the startup is focused on saving lives, he said.

“It’s a bundle of proven potential that as the market hears about it and discovers it, it will be kind of like magic,” Miller said.

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