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[IP] From the Indianapolis Star
It's in his blood
Man's unrelenting pursuit of meter for diabetics has firm poised for success.
By Jeff Swiatek
December 24, 2000
In his decadelong quest to invent a better blood-testing device for
diabetics, Jim Connolly lived on a shoestring budget, using his basement as a
laboratory and traveling the country in an aging Chevy Citation, seeking
money from investors.
Once, desperate for gas money to drive to New York to meet with a potential
investor, Connolly volunteered to unload a fruit truck outside the
Indianapolis City Market for $30.
"That was a fairly good adventure," chuckled Connolly. He talked the New York
investor into writing a $40,000 check, in addition to $200 in cash to pay for
the trip back home.
Connolly is the classic case of a dogged entrepreneur trying to bring an
innovative product to market. But while most fall short of their goal,
Connolly achieved his.
Earlier this year, Connolly's Indianapolis company, Polymer Technology
Systems, began widespread retail sales of the BioScanner 2000, a hand-held
blood tester that fulfills the vision of Connolly and the dozens of
engineers, chemists and investors who helped him.
"We have something nobody else has, and we now have a way to capitalize on
it," said Connolly, 52, sitting in the company's combined office, labs,
production area and warehouse in Park 100 on the Northwestside.
Polymer Technology has 80 employees and will end the year with more than $1
million in sales of the BioScanner and its patented blood testing strips. But
success remains far from a sure thing.
The company still lacks permanent financing to expand its marketing and
product line. To get the funds, it soon may have to sell out to a larger
company or offer stock to the public. And there's the ever-possible threat of
being crushed by direct competition from any of the big firms that dominate
the diabetes blood-testing market.
Even so, Polymer Technology stands as a rare entrepreneurial success story
and a lesson in how ability, persistence and luck can pay off.
Connolly "has had a tremendous amount of success," said Duane Durkos, a
former business partner of Connolly's who runs BCD & Associates, a product
consulting firm in Zionsville.
"You've got to give him a huge amount of credit," said Durkos.
Connolly's background lent itself to his entrepreneurial task. He grew up in
Florida, with a father who sold insurance and a mother trained as a
physicist. In college, he took seven years to earn a bachelor's degree in
medical technology because, he said, he didn't like the theoretical side of
His inventive fires were lit during an internship with famed immunologist
Florence B. Seibert, who was then in her 70s. "That was a woman who really
defined passion for me," Connolly said of Seibert, who invented the first
reliable test for tuberculosis. "Florence Seibert showed me what real
research and development is."
Connolly got the idea for the blood scanner in the mid-1980s while working
for Roche Diagnostics Corp. of Indianapolis, which makes blood glucose test
strips for diabetics. Inserted into a scanner with a drop of blood, the
chemically treated strips measure a diabetic's blood-sugar level.
Connolly saw the need for a hand-held device that would test for more than
blood-sugar levels, because diabetics often suffer from high cholesterol and
other problems measurable in the blood. No such device existed. His zeal for
the invention grew during several other corporate jobs.
By 1992, Connolly had settled in Indianapolis working full time on the
project. An informal team of engineers and chemists had done much to develop
the dry chemical blood tests, along with scanner software that could read the
data and store it.
To finance the project, Connolly used his own money, at one point selling his
Rolex watch. Divorced at the time, he shared an apartment with Durkos for a
while and lived on whatever income was left from the research.
"One year," he said, "I had an income of zero."
Facing constant money constraints, the team's scientists improvised on the
Once, short the $10,000 it would take to buy an expensive polymer needed for
a cholesterol test, chemists bought a case of kidney beans at a Kroger store
and extracted a compound that worked just as well, Connolly said.
To save on travel costs, Connolly drove the Citation everywhere, meeting with
investors and scientists and coming straight home so he didn't have to pay
for a hotel room. He finally got rid of the car when mileage hit 235,000.
In 1993, Connolly remarried. He met his new wife, Giannina Hofmeister, while
attending Mass at a Zionsville church, where she played the organ.
Hofmeister said Connolly asked her repeatedly over nine months to go out for
coffee before she finally agreed. "He just kept being persistent," she said.
"I felt so sorry for him when I kept saying no."
Hofmeister would prove a welcome addition to Polymer Technology.
The former wife of Indianapolis jewelry store owner Gary Hofmeister, she used
her experience from that business to help Connolly. She also provided another
car and credit cards that weren't maxed out, while her house served as the
company's first office.
"Sometimes I paid company bills" from personal savings, said Hofmeister, who
is a concert pianist and was an associate professor at St. Mary-of-the-Woods
College in Terre Haute.
Hofmeister also accompanied Connolly on his road trips to generate more
investment capital, and she saw the same good-natured persistence he used to
"He believes so much in what he is doing there is absolutely no resentment
when somebody says no," said Hofmeister, who did the initial hiring at
Polymer Technology and bought its office furnishings at auctions.
When money ran out, Connolly managed to find more.
Hard up for cash to finance government-required human tests on the blood
scanner in 1996, Connolly ran into the wife of an investor at a funeral. She
referred Connolly to her husband, and he set up a meeting with merchant
brokers who raised $1.8 million for Polymer Technology.
"That was a turning point for our company," Connolly said.
The human testing took well over a year and demanded more time and money than
expected because some of the blood tests were first-time products that the
Food and Drug Administration hadn't seen before, said Connolly.
"There were no guidance documents from the FDA," he said. "You're playing a
game without any rules. It certainly made it difficult. We probably spent
more money on the FDA (approvals) than anything."
But Polymer Technology managed to win five consecutive FDA approvals for its
tests, the latest coming earlier this year.
The company's finances remained precarious as late as last December, when,
for the first time, it couldn't meet payroll.
Hofmeister was ready to sell her house to raise the needed money. "It was
that close," she said.
Instead, a friend summoned a dozen would-be investors to his house for a
spur-of-the-moment investor presentation by Connolly just before Christmas.
"He came away with enough checks to meet payroll," Hofmeister said. The
investor pitch-in, she added, "was like a Jimmy Stewart movie."
The company's balance sheet has since improved with income from product sales
pouring in and another round of private investor financing. Among investors,
Connolly said, is Indianapolis high-tech investor Rollin Dick, a former chief
financial officer of Conseco Inc. of Carmel.
The new money also allowed the company to hire a president, T. Scott
Housefield, a veteran business executive who was president of Brightpoint
International, an Indianapolis wireless communications firm. The coming of
Housefield in March relieved Connolly of some pressing responsibilities.
Now, Polymer Technology's footings look so solid that Connolly last month
felt emboldened to buy back his Rolex watch. "For three times what I sold it
for," he noted.
Next year will bring decisions on whether the company will put itself up for
sale or offer stock to the public, said Chief Operating Officer John R.
Sullivan, another ex-Brightpoint executive who joined the company in July.
"It needs to happen next year," Sullivan said, because many of the company's
more than 100 shareholder-investors have carried the company for years and
want the ability to cash out.
Polymer Technology should be attractive to a buyer or prospective
shareholders because it's expected to turn its first-ever quarterly profit in
2001, said Sullivan, who predicts annual sales could top $100 million in two
or three years.
In the coming year, the company also will pursue FDA approvals for up to
seven more blood tests and a larger version of the BioScanner built for
high-volume use in doctors' offices.
Hofmeister, who is a company director and secretary-treasurer, said she and
Connolly probably won't stay on as officers if Polymer Technology is sold.
Both need a break from the years of grueling workdays, she said.
Connolly has more reason than ever to be glad his vision became reality. He
recently was diagnosed with adult-onset diabetes, making him a candidate to
use his own invention.
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