By Tracy Will
For WisBusiness.com
MADISON — TomoTherapy’s CEO said Tuesday that recent stockholder lawsuits against the company are “most likely some lawyer trying to make some money,” and should not pose a threat to the business.
Thomas “Rock” Mackie, CEO of the successful medical tech start-up, said Tuesday that “shareholder suits arise when stock prices fall, common for all companies,” scoffing at the notion that it was a serious threat to his company,
“There have been 6,000 in last decade, only four have gone to court, and end up being a way for law firms to get money from insurance companies,” he said.
TomoTherapy, founded by Mackie in 1997 when Waukesha-based General Electric Medical decided to leave the radiotherapy business, has become a multi-million dollar enterprise with a three-building campus in Madison’s west-side University Research Park.
Mackie spoke as part of the Smith & Gesteland Executive Speaker Series sponsored by Edgewood College at its west side business school location near Middleton.
Mackie offered business executives a variety of stories detailing his five rounds of fund-raising to get TomoTherapy off the ground. He offered a range of rules to promote creativity among staff in a highly technological setting. “Some of the best ideas come from unstructured Tomo meetings,”Mackie said.
He offered candid appraisals of his competition and said TomoTherapy was becoming a widely accepted and respected brand based on its products’ ability to treat many cancers, even bone marrow cancer, without harming adjacent vital organs.
“This is a DNA kill machine,” he said. “Tomo can kill 100 million to 10 trillion cancer cells and compares favorably to chemotherapy due to its precision. Urologists are buying the machine to treat prostate cancer. We can even handle metastasizing cancers that were only treated with chemotherapy a few yeas ago.”
The company began as a spin-off using Mackie’s background as a radiology professor at the University of Wisconsin Medical School. He and a core group of scientists built the first prototype at the University Synchrotron facility in the rural town of Dunn, south of Madison, and started the company with $150,000 garnered from the sale of an earlier start-up company, Geometrics. Less than a decade later TomoTherapy shares trade on the Nasdaq exchange under the symbol “Tomo.”
With the help of John Nies of Venture Investors LLC, Mackie said the company used both venture capital and angel investors to get started. The first sales were to Canada before the company gained FDA approval. After the FDA approved the equipment, the first patient was treated in 2001 and the company became profitable in 2003.
Asked if the recent loss of a top sales executive indicated trouble ahead for the company, Mackie replied, “we lost Beth Klein, our global VP of sales. She’ll be replaced with a longtime TomoTherapy employee before Christmas. Sales is not threatened by Beth’s departure,” he said, then referred to a slide that showed the firm’s extensive market penetration in less than a decade.
“Hitachi is handling our Asian sales, and TomoTherapy is the preferred scanning radiology treatment equipment in Taiwan and Korea,” Mackie said.
Pointing to another slide showing dozens of TomoTherapy radiologic scanners sold in Europe, Mackie said, “Italy was our first sale in Europe because they liked the design. We like beer so our European division is based in Belgium.”
Mackie said his experience suggested that the most important thing to know about raising money with venture capitalists was that they want a return on their investment, so don’t use them if you want to grow a “mom-and-pop” business to hand down to your children.
And his most important rules for success are, “plan for disaster and design for success, don’t give up, stay with it if reward trumps risk, do what you do well and ignore the competition, hire people better than yourself, and have them hire people better than themselves, share rewards and spare risks, network, and be skeptical, yet optimistic.”
