Industry: Bioscience & Medical
Products: Coatings for medical devices
President and CEO James Morris is leading the company his father founded 25 years ago to dynamic growth with innovative coatings for medical devices.
A shop in a small town south of Denver is an increasingly important link in the supply chain for many of the world's top medical device manufacturers.
Jim Morris, James' late father, started the shop after 20 years working in the medical device industry for Bioquantum Technologies and other companies In 1997, Jim moved the company, then known as Integrated Surgical Sciences Corporation, a few miles south to Sedalia to a building he later purchased.
"He realized a need for surface coatings on medical devices and surgical equipment, in particular electrosurgical devices," says James, noting that it remains Surgical Coatings' exclusive focus today.
Jim suffered traumatic injuries to his arms fighting off a home intruder in the early 1980s. "He severed a bunch of blood vessels and arteries that couldn't be repaired, because there were no procedures for suturing blood vessels or nerve endings back together that were less than a millimeter in diameter," says James. "While he was in the hospital, he came up with some of the very first procedures for that and invented some of the first procedures to laser welding arteries less than a millimeter in diameter. It was through that work and his work at Bioquantum that this company sparked out of."
Jim also contracted hepatitis C from a blood transfusion during his recovery. The affliction led to his unexpected death in 2011. "I got to spend my life working with him, and I've done nothing but medical device coatings for the majority of my life," says James. "When he passed away, I realized I had the knowledge [at age 22] of someone who'd spent 15 or so years in the medical device industry -- because I essentially had at that point."
He'd worked at the company since he was eight years old. "My video games as a kid were Solid Edge and mechanical drafting software," says James. "At 16, I built three $1.5 million laser systems."
After his father passed away, James stepped away to work in consulting and telecom for a few years, returned in 2015 to catalyze a big growth spurt, and bought the company from his mother with mentor and partner Jonathan Thorne in 2018.
In 2019, revenue almost doubled as the profit margin increased on a similar trajectory. "We kept driving the profit through automation and Lean manufacturing," says James.
Coatings continually evolve based on innovation and regulation. "Technology for the application keeps getting better and better," says James. "Everything has evolved, and things get more stringent with FDA and EU regulations on what can and can't be used for patient contact."
Surgical Coatings works with a long list of materials, including polyurethanes, silicones, metallics, and ceramics. Different coatings are used for heat and energy insulation, antimicrobial properties, and other functions.
Abrasion-resistant, insulating PEEK (polyetheretherketone) is one of the latest and greatest coatings for medical devices, especially for robotic surgical systems. "We're one of the first companies that can apply PEEK coatings for a medical device," says James. "In particular, we're using an electrostatic spray application."
In optics-based process known as virtual masking removes from the surface with lasers. "We're able to create coating-free area that are completely crisp, clean edges, without any flakes or anything that could potentially be left behind in the patient," says James. "We've dialed in those optics and wavelengths of laser energy to completely suit us and be able to achieve a quality that we feel no one else can."
Medical device manufacturers are shipping products to Surgical Coatings' 6,500-square-foot shop from both coasts and the United Kingdom, France, Canada, and Taiwan for coatings. Volumes vary from about 200 units to 50,000 units a month, depending on the customer.
"Many of our customers are billion-dollar-plus medical device companies," says James. "We do coatings every single day in very high volume for the top five medical device companies in the world."
That requires customized automation on Surgical Coatings' lines, as well as artificial intelligence for QA. "That level of automation is what drives our efficiency and makes us a successful business," says James. "It's what keeps the quality high. It keeps us competitive for our customers and their costs."
James says he owes a lot of his success to his father's guidance. "I always tell a story about my dad," he says. "He always let me go to work if I had a 3.3 GPA. If I had a 3.3 from middle school on, he would write me notes and get me out of school and let me come to work. I liked working more than I did school."
"It's that work ethic he instilled in me that I believe is a critical factor in the company's success and my success," he continues. "It's something we would love to do for the next generation."
Challenges: "Customer acquisition has always been a challenge," says James. "It's mainly because of the industry we're in." It can take one to three years to advance from spraying the first samples to a volume production run with major medical device manufacturers.
Ever-changing regulations are also challenging, he adds. "We have established a great coating database. That's something we consider proprietary and hold very close to our chest."
Opportunities: "What's going to drive future growth is premium-quality coatings specifically for medical devices," says James. "We are an inch wide and mile deep. We are very focused: We only serve the medical device industry. We will not venture into other industries."
He adds, "The quality of what we're doing, that premium quality, is something that is lacking in most other companies and something we see as an advantage."
Needs: "We have officially outgrown our shoes," says James. He says he's currently looking for a new site and will likely move the operation to Golden, Weld County, or Longmont by the end of 2020. "We're actively looking for a facility that is 12,000 or 13,000 square feet. We could easily double in size."
Another need: "Good labor is hard to find," says James, anticipating five to 10 hires by early 2022. "Maybe one in five people we hire shows up the second day."