John Gargaro, CEO, Mercury Medical

In an interview with Invest:, John Gargaro, CEO of Mercury Medical, underscored how they are prioritizing supply chain resilience and product innovation, outlined the logistical advantages of being in Tampa Bay that support Mercury’s international operations, and how they leverage AI for product development and market analysis.

How does Mercury Medical differentiate itself from other healthcare solution providers in the area and nationwide?

While there is an abundant supply of medical device companies in the area, Mercury Medical differentiates itself as we are both a distributor and manufacturer. Our primary market is critical care, specifically within the field of airway management. This involves areas such as neonatal emergency medicine, respiratory care, and anesthesia because managing airways is critical in these medical specialties.

We manufacture and sell our proprietary products and also distribute products for other companies. Our niche lies in the innovative side of healthcare. We do not compete with large distributors like Cardinal Health or Owens & Minor. Instead, we stay focused on our mission, which is to develop clinically differentiated products and introduce them into the critical care space. 

What makes Tampa Bay, and especially Clearwater, an ideal location for Mercury Medical’s operations?

There are a couple of factors that come into play. While we sell internationally, to Europe, South America, Central America, and the Middle East, it is much easier than you might think to do this out of Tampa. The infrastructure here lends itself to moving products and people in and out of the area efficiently.

The airport is one of the best I have ever traveled through. It is easy to navigate and provides excellent access to international destinations. For instance, I can get direct flights to London, Frankfurt, and Mexico City from Tampa Bay. Our business is located in Pinellas County, which is just a 20-minute drive to the airport. Additionally, a recent Gateway infrastructure project has improved our location’s desirability even further.

The ease of logistics, combined with access to both international and domestic markets, makes Tampa Bay an excellent hub for running a medical device business.

What have been some recent significant achievements, given Mercury Medical’s leadership in innovative healthcare solutions?

Mercury Medical prides itself on creating solutions for patients that eliminate unnecessary costs and pinpoint therapeutic needs. One example is our Flow-Safe II+ device, which has been widely used in the emergency medical services (EMS) space. It addresses respiratory distress in patients with conditions such as asthma, COPD, emphysema, or heart failure.

When EMS picks up a patient experiencing respiratory distress, traditional methods involve mechanical ventilators or basic oxygen masks. However, the Flow-Safe II+ allows for non-invasive ventilation without requiring a mechanical device. It is the only disposable device in the world capable of providing BiLevel or BiPAP support. While most disposable CPAP devices deliver continuous high pressure, which makes exhalation harder for patients, our device uses dials to adjust pressure, making it easier for patients to breathe out while still maintaining open airways.

This innovation is particularly beneficial in urgent care centers and hospitals. In urgent care settings, where resources are limited, our device offers an affordable way to provide respiratory support. Patients who need more than a basic oxygen mask but do not require a mechanical ventilator can benefit significantly. The Flow-Safe II+ ensures patients receive appropriate care without over-treating or under-treating them.

Another significant achievement involves our neonatal device, the Neo-Tee. This device has been a market leader for over ten years. It provides a cost-effective solution for resuscitating infants using only the oxygen flow from a wall source, eliminating the need for complex machines. While competitors have since entered the market, our Neo-Tee remains a testament to Mercury Medical’s innovative approach to simplifying critical care.

How do you envision expanding the reach of Mercury Medical’s innovative solutions?

We aim to bring our Flow-Safe II+ into hospitals and urgent care centers across the country. Hospitals, with their extensive resources, often have respiratory therapists and mechanical ventilators readily available. However, not all patients require such intensive interventions. The Flow-Safe II+ bridges this gap by offering a middle-ground solution that is both effective and cost-efficient.

Urgent care centers, which are increasingly popular as standalone emergency rooms, are another key area of focus. These facilities often lack advanced respiratory equipment, making our device an ideal fit. By providing a safe and innovative solution for respiratory distress, we hope to improve patient outcomes while reducing the burden on larger emergency departments.

How are emerging healthcare technologies influencing your product development or service strategies?

AI is a phenomenal tool that you can now use in all aspects of development. It is amazing how accessible it has become. In terms of applications for product development, AI allows you to model things. For instance, if we plan to create a product with a specific flow rate and volume, we can input those parameters into AI. Instead of building a prototype to test if it works, which traditionally takes time and resources, like with 3D printing a part in our engineering department, we can now model it digitally. While the model may not be perfect, it can provide insights that save time and prevent the creation of prototypes that fail. This significantly reduces the back-and-forth of physical testing.

From a marketing perspective, AI can analyze data, such as hospital statistics. For example, if a hospital has 300 live births annually, AI can quickly determine what percentage might involve premature babies or those with immature lungs. It is a much faster method than manually searching databases. The amount of help we can get through these artificial intelligence platforms is astounding.

What do you see as the biggest growth opportunities for Mercury Medical in the next few years? 

If you look back a couple of years to COVID, it highlighted two significant aspects of our industry. First, it brought attention to respiratory care, a specialty that had been somewhat neglected. Second, it changed how we approach treatment, especially regarding intubation and ventilators. This has led to greater international investment and awareness of respiratory care innovation.

Respiratory care has often been viewed as a cost center for hospitals, unlike specialties such as orthopedics, cardiology, or neurosurgery, which generate revenue. For instance, treating a patient with pneumonia has not historically been profitable. However, there is now a global emphasis on improving respiratory care, not just for financial reasons but because it is essential for patient well-being. Mercury is well-positioned to maximize this increased awareness. Breathing might not be the most glamorous aspect of medicine, but it is vital. COVID taught us hard lessons about its importance, and we are committed to innovating in this space.

Are there plans to expand into new markets or introduce groundbreaking products that you can share?

Our traditional focus has been on acute care centers, but we see opportunities in surgical centers and ambulatory care centers. In the U.S., many surgeries, including hip and knee replacements, are now performed in surgical centers instead of hospitals. While these centers are efficient, they need to be better prepared for rare complications, such as acute respiratory events. This is where we see potential.

Surgical centers are challenging markets because they lack standardized business models. Some are owned by hospitals, others by physician groups, and some by private equity companies. Despite these challenges, we aim to improve respiratory care in these settings. Ambulatory care centers also represent a growth area for us, as they increasingly handle procedures that traditionally required hospital care. These markets are priorities for us as we expand.

Looking ahead, what are your top priorities for Mercury Medical over the next 2-3 years?

One critical priority is our supply chain. During COVID, we realized the vulnerability of relying on a single source. Previously, all our product components were made in Malaysia and assembled at Mercury. When Malaysia shut down during COVID, it was a frightening time. Since then, we have developed a redundant U.S. supply chain. This effort, though time-intensive and costly, now ensures that we can source components from both Malaysia and the U.S. This dual-sourcing strategy ensures business continuity and reliability for our customers.

Another priority is expanding our clinical focus. We aim to provide unique, cost-effective products, like our Flow-Safe and Neo-Tee devices. Additionally, we are exploring opportunities beyond airway management, such as wearable devices that monitor oxygenation or heart failure indicators. These innovations could help patients identify potential issues before they become severe.