This column highlights companies in the business of providing solutions to social and environmental challenges.  Featured companies are typically held in the Small Cap Innovations portfolios offered to Walden clients.

Chances are, you, or someone you know, has had to undergo a surgical procedure. Fifty years ago, surgery was routinely “open.” The surgeon used a blade to make a single, large incision in the skin, gaining direct access to the bones, organs, and vessels beneath. Today, using specialized techniques, surgeons can perform operations through tiny incisions. For patients, such minimally invasive surgery generallymeans less trauma to the body, less blood loss, smaller scars, and a decreased need for pain medication. Patients tend to leave the hospital and return to normal activities sooner than with conventional open surgery.

ArthroCare Corporation is a significant player in the field ofminimally invasive surgery.The Austin,Texasbased company makes products that utilize its patented coblation technology. Coblation uses low-temperature radiofrequency energy to cut, sculpt, or remove soft tissue. Coblation hasmany advantages over traditional tissue-cutting techniques like electrocautery and lasers, chief among them being that it operates at a lower temperature. Coblation-based devices operate at temperatures in the 40°C to 70°C range whereas conventional electrosurgical devices like lasers operate at temperatures greater than 400°C. Instead of exploding tissue structures under high-heat, coblation gently dissolves the target tissue. This means the surgeon is able to complete the procedure more precisely, thereby reducing damage to surrounding healthy tissues, and potentially speeding the patient’s recovery time.

ArthroCare was founded in 1993 and its first coblation patent was granted four years later. Its patent profile for coblation technology is strong. The company has more than 100 U.S. patents, approximately 50 international patents, and more than 100 additional applications pending globally.

The majority of the company’s coblation-based devices have been developed for the sports medicine market (particularly orthopedic) and the ear-nose-and-throat market. ArthroCare holds about 45 percent share of the U.S. tonsillectomy market and hopes to replicate this success internationally. Spinal surgery and urologic and gynecologic procedures are new endeavors for coblation technology and represent significant growth opportunities for the company. ArthroCare’s plasma disc decompression spinal procedure, which is geared for patients with herniated discs, is particularly promising.

To date, coblation has been used inmore than fourmillion surgeries worldwide. One of the most appealing characteristics of coblation is that it is a “platform technology,” meaning that it has wide-ranging applications for soft tissue removal throughout the body. This bodes well for persistent, long-term growth for ArthroCare as coblation is adopted in new clinical areas.