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Company Background

Founded in 1995 in Phoenix, Arizona, Operculum, Inc. is presently a clinical-stage medical device company established to develop and market its proprietary, non-incisional tubal ligation/contraceptive device, the ZRO. The ZRO is a small, transcervical occlusion device that is inserted slightly past the entry duct of the fallopian tube, in an office setting under local anesthesia, replacing traditional abdominal tubal ligation which requires hospitalization. The ZRO prevents pregnancy by providing a scaffold structure that seals the fallopian tube by means of in-growth from the body’s natural tissue, resulting in permanent birth control. For bilateral placement of the ZRO, existing hysteroscopes and hysteroscopic instrumentation can be utilized, further reducing expensive barriers to market entry. A proprietary inserter (instrument) is also available from the Company to reduce the time required for bilateral placement to five minutes or less with a short learning curve. These products will fill specific market needs, increase Company returns, and reduce additional procedural costs.

The Company believes that the female sterilization market is beginning a conversion from costly, conventional hospitalization and laparoscopic tubal ligation surgery to cost-effective, non-incision approaches involving next generation advanced implants, such as the ZRO device, administered under the care of women’s gynecologists in the comfort of their office. Additionally, the Company believes that reversibility from sterilization should be an option for women and can be successful with the ZRO device because, unlike tubal ligation, no tissues are cut, excised or cauterized using the ZRO device and procedure.

The ZRO is also a cost-effective solution, particularly in highly populated, emerging growth countries such as China and India. ZRO offers a woman freedom from hormone-based contraception or less effective, burdensome barrier type contraception. The Company believes that the ZRO’s most unique design feature allows for the removal of the implant allowing the fallopian tube to return to its normal, non-occluded anatomical state. The ZRO completes a market need for a permanent, less invasive, less costly option to tubal ligation, which is the most common form of permanent birth control worldwide.

The early clinical experience of first generation devices from competitors and a perceived market need for a potential reversal of the sterilization process led to a re–evaluation of the design objective. The latest device is named, Choice™, provides the capability for easy removal from the tubal anatomy or uterine cavity, thus providing the possibility of patency (tubal opening) and the potential restoration of fertility.  Unlike other competitive devices, the ZRO and Choice devices do not cut, clamp, induce thermal tissue damage, or require placement deep into the fallopian tube.

The company’s growing portfolio of patents is strong and consists of four issued domestic patents and one patent pending.

The company plans to pursue both domestic and international markets for their products. At present, to achieve commercial sales in international markets, a $6 million capital raise is required. These funds will be used to perform an international and domestic clinical study to prove safety of the ZRO device and obtain CE mark approval. A Phase II domestic IDE study estimated to cost $20 million will be required to commercialize the device in the U.S.

In 1994–1996, more than two million tubal sterilizations were performed in the USA. The market has shown a pattern of steady growth with evidence that a device of this caliber can stand alone as a unique and truly innovative product. The potential commercial impact of the ZRO device is recognized not only in health cost containment economies but also in developing countries due to the lower costs to produce the ZRO device which uses standard, existing instrumentation that laparoscopists use today.

The two most common forms of contraception in the USA are female sterilization and oral hormones (the Pill). Women worldwide seek alternative methods of contraception as evidenced by the steady decline of the use of contraceptive pills. Pill usage is down from 35% of all contraceptive users in the 1990’s to about 27% in 2004. Due to the long and costly regulatory path to secure a claim for sterilization reversibility for permanent contraceptive devices or procedures, the company does not plan to prove or promote reversibility capabilities of the ZRO and Choice devices at this time. However, the physician may remove the ZRO device using the same endoscopic procedures used during device insertion, upon request of the patient.  The ZRO and Choice devices are anticipated to result in little morbidity to surrounding tissues where the device was once anchored along the opening to the fallopian tube.