ST. LOUIS — Just a few years ago, Stereotaxis was on the brink of insolvency, losing millions of dollars a year with millions more in debt.
Now, the local medical device company is growing revenues, adding investors and leaving its longtime home in the Cortex technology district. It expects its new space, at the Globe Building in downtown St. Louis, to more than triple manufacturing capacity.
Stereotaxis CEO David Fischel said the new building is designed for collaboration.
“It can accommodate significant growth of the team,” he said.
Stereotaxis is cutting the ribbon on its new home on Wednesday. But the move represents more than Stereotaxis’ success. The company was the first tenant at Cortex in the early 2000s. Its move to downtown’s Globe Building marks a key step for the new Downtown North Urban Insight District, north of Washington Avenue.
The effort, led by entrepreneur Jim McKelvey and his partner at The StarWood Group, John Berglund, aims to capitalize on a swath of momentum in St. Louis:
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- The startup environment at T-REX tech incubator on Washington Avenue.
- The growing geospatial industry here with the new National Geospatial-Intelligence Agency’s western headquarters just a few miles north.
- And now, the Downtown North district, which includes financial services firm Block Inc., formerly known as Square.
Downtown has struggled to attract companies over the past few decades as business fled west or out of the region altogether, and it has one of the highest office vacancy rates in the region. But it has scored some recent victories: The PwC Pennant Building opened last year at Ballpark Village — the area’s first new office building in more than 30 years. Local private equity firm Larson Capital Management opened an office at 100 North Broadway, three blocks north of Ballpark Village, last year.
The Globe has already attracted geospatial firms and recently secured as a tenant Virginia-based Westway Services Group, a leading developer of sensitive compartmented information facilities, which allow the government and companies to process, handle or discuss classified or sensitive information.
“The interiors of the Globe blew me away,” Berglund said. “They are as good as any tech space here in St Louis.”
More details about the district, including its borders, will be revealed later this year, Berglund added.
Stereotaxis specializes in making technology for cardiac ablation procedures, one of the major categories of treatment for arrhythmia, or irregular heartbeat. The procedure requires navigating a long flexible tube, called a catheter, into the heart and burning certain parts of the heart muscle.
Founded in 1990, Stereotaxis in 2004 became St. Louis’ first biotech startup to file for an initial public offering but later fell on hard times. Its robotic systems weren’t being used continuously, and by 2016, having piled up around $18 million in debt, Stereotaxis was delisted from the Nasdaq stock exchange.
Six months later, Fischel became the company’s chairman and CEO. He’s steered the company through financial recovery, including its relisting on the New York Stock Exchange in 2019.
When COVID-19 hit, hospitals canceled elective care, slowing demand for Stereotaxis’ systems. Delays have improved, Fischel said during the company’s quarterly earnings call Thursday, but haven’t disappeared.
“We don’t necessarily know when COVID impacts will be completely gone in hospitals,” he said.
And more recently, supply and labor shortages have slowed hospital construction projects, which has led to some order delays.
Over the years, more hospitals have adopted Stereotaxis’ robotic systems. Fischel said about 140,000 procedures have now been completed worldwide at 100 hospitals. And the technology has improved: Newer models are more reactive, with less lag time between the physician’s command and the catheter’s action.
Stereotaxis is spending more on research and development — 30% of its revenue last year. It aims to apply its technology to other procedures, like blood clot removal.
The company has about 130 employees worldwide, about 90 of them at the downtown headquarters, and is hiring dozens more.
It’s still not making money. Losses last year rose to more than $12 million. But revenues grew $8 million or almost one-third to $35 million on the year.
In its previous home at Cortex, the company was split up across the first and third floor, Fischel said. Now all of its employees, common space, and manufacturing area are in one loop on the ground floor of the Globe Building, facing Tucker Boulevard.
The company’s new downtown location, Fischel said during the earnings call, “will serve as the foundation for many years of growth.”
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