By Lori Sichtermann

Wayne Barlow

In 1966 a group of 14 engineering and physics faculty members from the University of Utah and Utah State University set out to develop a company that specialized in aerospace technology. With the Vietnam War serving as the backdrop to a tense business environment, the faculty members redirected their entrepreneurial abilities and entered the clinical laboratory device market to form the company known today as Wescor Inc. Wescor develops, manufactures, and markets high-quality instrumentation and other products for the medical, scientific, and industrial markets.

Clinical Lab Products recently spoke with Wayne Barlow, president of the Logan, Utah-based company about the spirit of entrepreneurship and the pivotal role it plays in the future of the industry.

CLP: Wescor did not begin as a medical-device manufacturer, nor is that the only segment of its business operations. Could you give a brief history of how the company developed into what it is today?
Wayne Barlow: In 1966 when we started the company, there was a positive entrepreneurial mood in the industry, and there were many opportunities at that time for commercial applications for aerospace technology.

In the beginning we operated primarily as a United States government contractor, and shortly after entering this market, the company was purchased by Block Engineering. In 1970, six associates from the original 14 founding faculty members and I purchased the company back from Block Engineering and changed the name to Wescor.

We gradually entered markets where we could use our engineering and manufacturing capabilities. By 1970, the mood of Congress had changed because of the Vietnam War, and they were becoming less inclined to spend money if it had anything to do with defense. As a result we and other small companies in the aerospace industry found ourselves competing against the giants. We felt that it was a survival necessity to get away from government contracting.

In 1972 we introduced our first product, the vapor pressure osmometer. Because of this product’s success, we developed other products for the clinical laboratory market.

CLP: What are some of the clinical laboratory products offered by Wescor?
Barlow: We offer the colloid osmometer, with applications in open-heart surgery, to detect the onset of pulmonary edema and to monitor colloid therapy. We also manufacture sweat-testing systems that enable clinicians to diagnose cystic fibrosis (CF), a genetic disease. Our Sweat Check™ system was the first commercial system available that could perform the test without false results or error intervening.

In addition to a diverse family of products, we also manufacture a stand-alone cytocentrifuge under the trade name Cytopro®. Although this product is pivotal in the industry, our main claim to fame is in the area of sweat testing. In order to diagnose CF, physicians must consider a long list of symptoms and signs. The disease is a difficult one to diagnose in a clinical setting because not all patients have the same set of symptoms. Additionally, it can sometimes be confusing for physicians because other childhood diseases can mimic CF; therefore, physicians rely heavily on the laboratory sweat test to either confirm or exclude a laboratory diagnosis.

CLP: Wescor provides equipment for a variety of industries. What are the specific divisions of Wescor, and why has the company decided to diversify in such a way?
Barlow: For a small company, we’re fairly diversified. Wescor is organized into three operating divisions. The biomedical products division is the largest and oldest of the three. Our information products division specializes in manufacturing rugged computer terminals for the trucking industry. And our third division is our environmental products division specializing in sensors, data loggers, and data collection methods for field research.

We’re diversified in such a way because we look for opportunities to use our engineering and manufacturing capabilities to benefit our customers. This may seem like a trite philosophy, but I really believe in this old-fashioned idea.

CLP: How are the company’s products marketed?
Barlow: With regard to the biomedical products division in the United States, we sell our products through manufacturing representatives. We have 13 different companies consisting of about 45 salespeople that cover the US on a franchise basis. They go out and solicit the sale and we provide them with demonstration equipment.

Outside of the US, our products are sold through scientific instrument dealers. We prefer to use exclusive distributors in each country, and we are well-represented in Eastern and Western Europe, as well as in the Orient, Australia, and New Zealand.

CLP: Does Wescor have new products in development or newly released products?
Barlow: We typically spend between 15% and 18% of our total revenue on research and development. We recently introduced our Nanoduct™ neonatal sweat-analysis system, which is the second generation of the Macroduct® sweat-collection systems. The Nanoduct has the ability to consistently diagnosis CF at birth. This is very important because a child born with CF can be given extra years of life and live a higher quality life if the treating doctors know what they are dealing with as early as possible. Currently, the disease is not curable, but it can be quite effectively managed. If physicians know that they are dealing with a patient who has CF at an early age, they can start giving enzyme supplements. This enables the patient to get the nutritional value of their food so that he or she can grow at a normal rate. It also allows the patient to deal with the consequences of the disease much better than if it was left untreated.

CLP: What makes Wescor stand out from its competitors?
Barlow: The nature of our products is unique, but I also believe in the old-fashioned idea that service to your customer is as important as the product you sell. Because of this, we have a philosophy of providing quality service and products.

The success Wescor has seen in the various markets in which it operates is due to the fact that we do provide good service and follow-up. Most of our products are somewhat esoteric in that they require a fair amount of training or education to use them. As a result, we make sure that our representatives are well-trained in the installation of our products. They are responsible for making sure that the equipment is installed properly in the lab and that the staff using the equipment has the proper training and information. We also supply our customers with contact info in the event they run into trouble.

CLP: What evolutions or trends have you seen in the industry, and how has Wescor evolved with the change in customer demands?
Barlow: Not all the trends are good, I’m afraid. I’ve been in this industry a long time and I’ve seen the radical change that has occurred in the medical device industry since the 1976 medical device amendments to the Federal Food, Drug, and Cosmetic Act, followed by the 1990 Safe Medical Devices Act. During the early 1990s, the FDA came close to destroying the medical-device industry. Fortunately, that didn’t happen, but I did witness the death of literally thousands of small start-up companies that failed to succeed simply because they were not able to get a product cleared for the marketplace.

In many cases the methodology used by the FDA to regulate the device industry is borrowed from the drug regulations model. The result of this regulatory burden is that we no longer see the dynamic, entrepreneurial nature within the device industry.

When Wescor was first founded, the industry was full of other small start-ups, and we bootstrapped our way into this marketplace with all sorts of innovations. Throughout the course of the ’50s, ’60s, and ’70s, ours was a tremendously vital and dynamic industry with thousands of start-ups coming in each year. Many of these companies succeeded and went on to become bigger companies. There was always a new seed crop coming along as companies matured and merged into larger companies.

That kind of character doesn’t exist anymore and that start-up spirit is rarely seen in the device industry today. The start-ups today are associated with some new idea or concept so revolutionary that they can attract $15 million of venture capital up front to get it started.

Sadly, most of the people who are inventive and entrepreneurial in character are also smart enough to look at the device industry and see the heavy burden of regulation that it has to bear. These people see the barriers to getting permission to simply go to the marketplace and they decide to go elsewhere with their inventive talents.

However, there are companies like Wescor that managed to survive in spite of the demanding regulations. The reason is that we had mature products on the market when it became very difficult to get new products through.

Since 1997, with the passing of the FDA modernization act, we have had a new relationship with the FDA. We now have dialogue with the administration, and they are in a more user-friendly mode in terms of getting products into the market. So there is hope for the future, but I doubt that the industry will ever return to what you might call the glory days when it was ripe with entrepreneurial fever. The future looks relatively bright, as long as we can maintain a communicative and cooperative relationship between the industry and the FDA.

CLP: How would you sum up Wescor’s philosophy?
Barlow: Wescor is dedicated to the customer, quality service, and quality products. We are not interested in making a quick sale for a quick buck. Instead, we would rather develop a long-term clientele. We’ve been fortunate to see this happening in the past. Many of our customers who buy our clinical products are buying their second, third, or even fourth Wescor product. We feel that the investment of our energy and our time spent serving the customer is paying off and helping us to be a company that will survive into the future.

Ultimately, you can never be perfect, and of course there is always room for improvement. However, we’re successful, because we’ve emulated those qualities that make any company successful.