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About 10 years ago Rick Mangat was a PhD student in pharmacology at the University of Manitoba. He needed a machine that would measure the effects of drugs on blood vessels surrounding the hearts of lab rats to complete his doctoral thesis, so with the help of the National Research Council's Institute for Biodiagnostics, he invented one.

"All I was trying to do was get my PhD and get out of Winnipeg," he says.

He got his machine, his doctorate and a whole lot more. Today the same imaging technology, marketed under the brand name Spy by a company based in Mississauga, Ont., which Dr. Mangat founded, is being used by heart surgeons across the United States to improve the outcomes of coronary bypass operations. It is also finding a place in plastic surgery and prostate procedures.

"It is a solid step forward in improving surgical outcomes," says Dr. Lenox Baker, a heart surgeon at Sentara Medical Center in Norfolk, Va., which is recognized as one of the top heart centres in the U.S. "We took some on a trial basis and were so impressed that we have bought three of them."

But while Dr. Mangat's Spy system is being used all across the United States, Canadian patients may have to wait quite a while to benefit. Novadaq Technologies, the company he founded with financial support from Winnipeg's Richardson family, has sold 99 Spy systems south of the border but just one in Canada — to Sunnybrook Health Sciences Centre in Toronto, where it is used chiefly for experimental purposes.

Spy is a prime example of one of the paradoxes in creating new technology in Canada, says Dr. Mangat — even for life-saving systems.

"There just isn't the funding to pay for these systems here," he says. "If you want to commercialize research, especially medical research, you have to shoot for the U.S. market."

You must also have the support of understanding investors with deep pockets.

Novadaq was founded almost eight years ago after Dr. Mangat was persuaded by heart surgeons such as Dr. Wilbert Keon, director of the University of Ottawa Heart Institute, that he had a potential medical and commercial gold mine on his hands. The company went public in June, 2005, but is not yet profitable.

Novadaq needs to distribute about 200 Spy systems to break even, says company president Dr. Arun Menawat. He came to Novadaq in 2003 after running such companies as Cedara Software, which created the applications that drive magnetic resonance imaging (MRI) and other medical imaging devices.

The company is halfway to its goal. Not bad, he says, considering it began selling only late last year.

He also estimates it has taken $50-million to get the technology to this stage. That money came from such angels as the Richardsons, the U.S.-based HIG Ventures and the Hospitals of Ontario Pension Plan.

Novadaq's business model is based on those of such companies as Kodak and Gillette. While it is happy to sell Spy systems for about $250,000 each, it would prefer to provide them free, then make money selling the fluorescent dye each system depends upon. Buy a machine and Novadaq charges $200 to $300 a unit for the dye. Accept it for free and the price jumps to between $600 and $800.

Novadaq also has another arrow in its quiver, a line of tiny optical instruments called Pinpoint, which can be inserted in small incisions to let surgeons see what is happening inside the body. Procedures can also be recorded and viewed later, as with the Spy line.

The Spy system, however, offers the greatest potential for commercial success, says Doug Loe, an analyst at Versant Partners in Toronto.

"This is now proven technology, and it is entering a market where there is absolutely nothing similar," he says. "It not only allows surgeons to be absolutely certain that any [blood vessel] grafts they perform do not leak, but it also creates a permanent record of the procedure, which can be used if problems arise in post-operative care."

Having that permanent record can reduce liability if something goes wrong. The potential impact on medical liability insurance is one of the system's major selling points among certain surgeons, says Dr. Menawat.

Grafts are fundamental to bypass surgery. Dr. Baker says as many as 10 separate grafts may be taken from veins elsewhere in the body to replace vessels damaged by heart disease. Each one must be meticulously rejoined to the circulatory system and checked for leaks and blockage.

In the past, surgeons had to rely on their vision and postoperative imaging tests. If a graft leaked or blood flow was obstructed, the patient went back on the operating table. Spy, however, can be wheeled on a cart right into the operating room.

"That's a first," says Dr. Baker. "What Spy does is deliver medical imaging right to the operating table where you need it. It is the first imaging technology to do that."

The surgeon injects a special fluorescing dye into the patient and then shines a red laser on the open chest area. Within six seconds the laser makes the dye fluoresce. An infrared camera then records the images generated and proprietary software translates those images on a display.

"You can actually see blood flow through the grafts and immediately tell if there are leaks or obstructions," says Dr. Menawat.

Will Spy ever make its way back to Canada?

Dr. Mangat has a plan. He is working with Hartley Richardson, head of the Winnipeg-based Richardson Group of companies, to create a national philanthropic campaign that will raise funds to allow local hospitals to purchase one or more of the Spy systems. He says they are already working out details with Dr. Alan Menkis, director of cardiac sciences research at Winnipeg's St. Boniface General Hospital, to be the first recipient.

"Depending on how that goes, our goal is to then try to roll out the campaign across Canada," he says.

Special to The Globe and Mail