Friday, August 28, 2009
SemiNex reaches profitability in medical and military markets
by Rodney H. Brown
Mass High Tech Journal
When it was founded in 2003, SemiNex Corp. had one clear market in mind — home treatments for wrinkles. Now, while SemiNex waits for the unnamed major home care products company it has partnered with to get its laser wrinkle remover to market, it has become profitable by serving two widely divergent markets.
“With key customers in medical applications and a few military applications, we have turned the corner to profitability,” said David Bean, president and co-founder of Peabody-based SemiNex.
The company was launched by Bean and engineering chief Dan Pulver. They linked up in 2000 when Corning Inc., which employed Bean, acquired Woburn-based Lasertron Inc., at which Pulver worked, to integrate it into Corning’s fiber-optic telecom business line. By 2003, following the period known as the “telcom nuclear winter,” Corning closed down the Corning Lasertron operations.
Bean and Pulver took their expertise in high-power, long-wavelength semiconductor lasers and launched SemiNex, aiming at a market about as far from telecom as they could get — wrinkle removal. Part of the reason for targeting the home wrinkle treatment market was the nature of the lasers themselves.
Operating in the 1,300 to 1,700 nanometer spectrum, SemiNex’s lasers are absorbed by the water in the cells of the dermal layer of skin, while having little effect on the epidermis, or outside layer. That allows them to be used to smooth out the deep wrinkles that start in the dermal layer.
As it turns out, that spectral length also can be used for some applications that drew the attention of the military, Bean said.
“Our wavelength is 50 times more eye-safe, and it also penetrates through fog and the atmosphere,” he said.
While at a trade show, Bean said he was approached by some people who said that the military might be interested in the technology. It turned out that the shorter wavelength laser being used by the U.S. military in its laser radars and rangefinding applications couldn’t penetrate a dense atmosphere as well as SemiNex’s and had one other major drawback — the beam, while invisible to the human eye, could be captured by a standard cell phone camera. That made the lasers a significant risk for the soldiers using them.
It is the growth in the military sector, and in medical applications such as laser-based acne treatment systems, that has driven SemiNex into profitability, Bean said. The company has taken a conservative approach to growth, and with a new $200,000 financing round it reported in late June, SemiNex has now taken just over $1 million in equity financing from angel investors, with no plans for seeking VC money, Bean said.
At least one of the new markets that SemiNex is in is significant, according to a study by Frost & Sullivan, the global medical laser systems market reached $2.5 billion last year. However, the aesthetic laser market in particular is down, said Anthony Vendetti, director of research at Maxim Group LLC of New York.
“The aesthetic market used to be a billion-dollar market, but it has declined because of the decline in discretionary spending, and has declined to about a $700 million,” Vendetti said. However, the market for home skin rejuvenation laser products has great potential, he said.
“Wrinkle reduction, we think, has a lot of potential in the home,” Vendetti said.
Conservative growth aside, Bean sees a 20 percent increase in business in the coming year from both the military and medical applications, but he is still strongly focused on the home care market.
“Our aim is to be the ‘Intel inside’ for the lasers-in-the-home market,” Bean said.
