Dr. Stanley Sarnoff likes to think of his company, Survival Technology Inc., as "a congenial juxtaposition of Patrick Henry and Adam Smith . . . There's a profit motive and there's a patriotic motive."
And it's the patriotic motive that makes the 25-year-old Bethesda company unique.
Survival Tech is the only company in the United States that manufactures special automatic syringes containing antidotes for chemical warfare. The syringes are designed in such a way that Americans servicemen can easily and painlessly inject themselves within seconds with drugs that help them overcome the harmful effects of nerve gas.
As patriotic as the syringe may be, it is also proving to be very profitable for the company. Since its inception in 1958, Survival Tech has provided more than 53 million automatic injectors to the United States and its allies. In its fiscal year 1982 (which ended July 31), the injectors accounted for nearly 70 percent of the company's $20.3 million sales.
With the U.S. government becoming increasingly concerned about the Soviet Union's ability to use chemical warfare, sales of the injectors are expected to remain steady over the next few years, providing a healthy stream of revenue for a company that only six years ago was in such deep financial difficulty that some thought it wouldn't survive.
Just last April, the company received a $10.9 million contract from the Department of Defense for its injectors, and more significant orders are expected over the next year.
Yet, Cabot Caskie, the company's executive vice president, notes that "the heart and soul of the company" lies not in the automatic injector program but rather in Survival Tech's more modest cardiac program, which is designed to reduce fatalities from heart attacks.
"As an American, it is very nice to be doing something patriotic . . . But most of us here have to do more than that for a living. What most of us are here for is the heart program--and the opportunity to make a significant impact on death from heart disease," Caskie says.
The highlight of the company's cardiac program is its "survival heart system" to aid heart-attack victims before they reach the hospital. Under the system, a person who has a high potential for a heart attack would be given two pieces of equipment: a "Cardio Beeper" that can transmit an electrocardiogram over the telephone to qualified medical personnel, and a "LidoPen," a version of Survival Tech's special automatic injector filled with lidocaine, the drug used to stabilize irregular heartbeats during heart attacks.
If a patient thinks he is having a heart attack, he transmits his electrocardiogram to a special Survival Tech telephone number. There, a cardiac nurse will review the electrocardiogram and the instructions left by the patient's doctor. In most cases, Sarnoff says, the patient will be told to inject himself with the "LidoPen" and go immediately to the hospital.
According to Caskie, there are 600,000 fatal heart attacks a year, and two-thirds of these occur before the victim reaches the hospital. With the company's "survival heart system," Caskie believes the pre-hospital fatalities can be sharply reduced.
The chemical warfare and cardiac programs may seem like an odd combination for a successful business--but not to Sarnoff.
"There is very little difference between a soldier exposed to nerve gas and a person with a heart attack," he says. "Both are looking at death and both have drugs available which can importantly influence the outcome. And given the urgent time frame within which both must be taken care of, these individuals must take action on their own behalf of their own survival."
And, as Sarnoff proudly points out, Survival Tech supplies the technology--the automatic injector--that makes that possible. "We have two companies here," Sarnoff says. "One is a defense company; the other company, a commercial company. Each one by itself justifies enthusiasm."
Stanley Lanzet, an analyst with Drexel Burnham Lambert, agrees, calling it "a super company" that is attractive for high-risk investors because it is in two very good specialties: defense and medicine.
The cardiac program is particularly exciting to Lanzet. Noting that potential heart-attack victims number in the millions and that the cost of the product would be about $1,000 a year per patient, Lanzet says, "you don't have to do much figuring to conjure up a tremendous amount of revenue here. The impact could be tremendous."
Even so, Lanzet notes the revenues will not be coming in any time soon because the program is still being clinically tested. Although cardiologists hailed the program several years ago as a major step towards reducing fatalities, nobody assigned their patients to it.
One chief reason for the poor reception was that Survival Tech had no clinical data to prove that its program did indeed reduce heart-attack fatalities. A pilot study showed a 50 percent reduction in mortalities but it included too few people to be conclusive. Survival Tech is now running more comprehensive clinical tests that it hopes to use as marketing material.
However, the tests are not expected to be completed for another 18 months, so Sarnoff does not anticipate receiving any large chunks of revenue from the survival heart program for at least another two years.
Nonetheless, the 66-year-old Sarnoff says, "You are looking at a very happy man. . . . I am beginning to taste the realization of my long-held ambitions. . . . "
It has been a long haul for Sarnoff, a cardiologist who first became interested in chemical warfare in 1949 when he was asked to serve on an Army task force on chemical warfare.
At the time, Sarnoff recalls, he was shocked when he saw the standard-issue syringe being given to American servicemen. The "syrette", as it was called, resembled a miniature toothpaste tube. It was attached to a two-inch long needle and filled with an antidote for nerve gas. To use the syrette, the soldier had to force the needle back into the tube, remove the needle's cover, and then stab himself with the needle and squeeze the tube. "It was not for the faint of heart," says Caskie.
After seeing the syrette, Sarnoff immediately decided that "the American solider deserves something better than this."
He therefore began developing his special injector, coming up with 36 prototypes before he developed the concept for today's model, which ressembles a large felt-tip pen. To use it, a person unscrews the cap and pushes the pen, through clothes, into the thigh. The medicine is injected in seconds, and, to mollify queasy feelings, the needle becomes visible only after the shot is administered.
After Sarnoff had developed his injector, he took it to some major pharmaceutical companies. Despite Sarnoff's offer to give them the injector technology for free--without any royalty fee for the patents--the pharmaceutical houses turned him down, saying the market wasn't big enough. Besides they told Sarnoff they didn't believe the product would work, and therefore the Army wouldn't be interested.
In 1958, Sarnoff, at the time chief of cardiovascular research at the National Institutes of Health, created Rodana Research. In his spare time, he began developing the injector in earnest for the Army.
When the first sizable contract was awarded in 1962, "we were off and running," says Sarnoff. In 1966, after suffering a heart attack, Sarnoff left NIH and began devoting all of his time to Rodana, which he subsequently incorporated into a new company, Survival Tech.
The new company went public in 1969. While the stock is traded over-the-counter, the bulk of it--nearly 75 percent--is still held by Sarnoff.
Although off and running, the company's good times were still far off--so far off that in 1976, Sarnoff said he almost thought Survival Tech wouldn't survive.
"We hung in there, though," says Caskie. Today, the company's earnings are around 25 cents are share, compared to a negative 35 cents a share in 1976 and negative 66 cents a share in 1977.
"Things are definitely on the uptick," Caskie says.
Even so, the company still has several hurdles to overcome. As Brian Dovey, the company's former president, notes, the injector represents Survival Tech's strength as well as one of its weaknesses because it makes the company vulnerable to any changes in that market.
That is one reason why the company is moving to diversify its product line, notes Dovey who left Survival Tech this year after being offered another job that was too good to pass up. Dovey still remains on Survival Tech's board of directors, however.
In addition to filling the injector with lidocaine for heart-attack patients, Survival Tech is also making the injector with a drug used to stop severe allergic reactions. This injector is being marketed primarily to people who suffer life-threatening reactions from bee stings and other insect bites.
Although Caskie says the EpiPen is easier to use than the conventional syringes being marketed to allergy patients, its acceptance has been slow, primarily because it costs twice as much.
The company is also making pre-filled syringes, which an increasing number of hospitals are using to avoid drug mix-ups that can occur when conventional unmarked syringes are filled in the hospital. Yet, Caskie says, "we're only a gnat in that market," noting that the large pharmaceutical houses make many more pre-filled syringes than Survival Tech.
Dovey also points out that the company has "never really mounted a first-grade marketing effort," a weakness he believes is slowly being overcome. Marketing will play an important role when the company gets ready to launch its survival heart system on a commercial scale. Although that day is nearly 18 months off, the company is already gearing up for it.
For instance, Caskie notes, the company just bought a small heart-monitoring company in Houston, which, along with Survival Tech's New York heart-monitoring office, will serve as the backbone of the company's cardiac program.
Among other things, Caskie points out that Survival Tech's Houston office gives the company an important presence in the "center of heart care in America. If we can get that community behind our heart system, we can short-cut our commercial marketing. Just think of the interest we will get if Dr. DeBakey and Dr. Cooley put their patients on our system." Based in Houston, Michael DeBakey and Denton Cooley are two of the nation's top heart specialists.
Meanwhile, the company continues to develop products to help the military manage mass chemical-warfare casualties on the battlefield. In addition, Survival Tech has developed a respirator that will handle four casualties simultaneously. Currently, a respirator can handle only one person at a time.
All this activity is creating a lot of excitement at Survival Tech, which just moved into a new, modern, brick building in Bethesda. Yet, one employe notes, at the rate the company has been hiring in the past few weeks, the new building could soon become too small.
"I'm having the time of my life," says Sarnoff, noting that many of his medical school classmates are retired. "I can't imagine giving this up when it is so sweet."