Enterprise—Firm

One Carlsbad-based medical device maker prides himself in having raised more than $30 million in venture capital money, during a time when others in the same field were struggling.

Gregory J. Gruzdowich, president and CEO of Woodside Biomedical Inc., said he was able catch investors’ attention, because they realized the potential of the firm’s unique niche product. ReliefBand , an electronic device worn on the wrist to ward off nausea , was approved by the Food and Drug Administration in October 1998 for prescription use to treat nausea and vomiting caused by chemotherapy, pregnancy and as a result of surgery. In March 1999, the FDA extended approval of the device for over-the-counter sales for motion sickness.

Staggering Market Potential

While the product has yet to make a breakthrough on the market, the potential market size is in the billion-dollar range, said Gruzdowich. He estimated an annual $400 million marketing potential for prescription use in the United States alone, estimating there are about 2 million cancer patients undergoing chemotherapy every year and an equal number or more pregnant women suffering from morning sickness.

However, that is only a tiny fraction compared to the $1 billion potential on the retail side. Gruzdowich estimates between 25 million and 50 million Americans get nauseated on boats, in cars and airplanes every year. Gruzdowich hopes ReliefBand will become the preferred drug-free anti-nausea alternative.

The company has sold some 50,000 units since ReliefBand hit the market in early 1999, he said.

Disposable, Reusable Options

The idea to combine traditional Chinese acupuncture with electrical stimulation to override the waves of nausea was the brainchild of Larry Bertolucci. The Chinese have long used acupuncture along a specific nerve point near the wrist called the pericardium 6 to relieve nausea. Bertolucci, a Stanford-trained physical therapist, sought to develop a device that could stimulate this nerve point continuously without puncturing the skin as acupuncture does. He came up with a battery-driven bracelet that has two small electrodes on the underside and a rotary-dial control on the upper side for users to choose among five levels of stimulation. No one quite understands how stimulating the wrist appears to take nausea away, Woodside reported. Another bracelet on the market designed to simply put pressure on the pericardium 6 to reduce nausea has been effective for some people, Gruzdowich said. In 1991, Bertolucci started Woodside’s predecessor , Maven Laboratories , with $2 million from private investors. But the firm never took off. After six years of research and development, the prototype “ReliefBand” was still riddled with flaws, Gruzdowich said. The product was difficult to produce and use, he said. A major problem was that it used too much power, forcing users to replace batteries too often.

Device Is Adjustable

In 1996, Menlo Ventures, a San Francisco-based venture capital firm, invested $2 million in Bertolucci’s technology. But after one year of disappointing news, Menlo decided to clean house at Maven, said Gruzdowich. They called on Gruzdowich ,formerly CFO of the San Diego-based health care firm Pyxis Corp. , to turn the firm around. Living off his Pyxis’ investment returns, he was spending most of his time golfing and being a dad, but missed the thrill of being an entrepreneur. He was critical at first, but after seeing ReliefBand’s potential, Gruzdowich finally agreed to take up the challenge.

New Team Involved


New Team Involved

The restructuring plan called for a new management and R