After a mite-killing product failed to pan out more than a decade ago, the Ambler-based entrepreneur H. Augustus “Gus” Carey pivoted to a new threat: bedbugs.

With bedbug infestations roiling neighborhoods in Philadelphia and other U.S. metro regions, Carey says he has put $12.6 million into university research, federal and state approvals, and marketing for pesticide-treated bedbug-killing fabric liners for mattresses, box springs, sofa beds and futons. But he’s still waiting for the product to catch on, with four employees, a contract plant in the U.K., and about $1 million a year in sales.

Allergy Technologies has broken modestly into the hotel market with liners impregnated with permethrin. Orkin, the exterminator, estimated in a 2016 report that a bedbug-infested room could cost a hotel $6,400 in lost revenue and other costs. But the costs could be vastly higher if the presence of bedbugs in a hotel goes viral on social media, experts say.

And recently, Allergy Technologies announced a project in a 500-unit low-income housing complex in Philadelphia to evaluate whether the liners, branded as ActiveGuard, could be used to prevent bedbug re-infestations. Terminix, the extermination firm, has identified Philadelphia with its neighborhoods of rowhouses as one of the nation’s most-infested cities since 2014. Last year, a bedbug infestation closed a city charter school, the Southwest Leadership Academy, for a day.

The preventive mattress liners — which cost $69 to $85 on retail on the company’s web site — are part of the program at the housing complex that includes pest-sniffing dogs to find bedbug-infested units, resident education on the insects, and a contracted exterminator. An independent data monitor and a housing authority representative are participating in the project, the company says.

Allergy Technologies estimates that the project could cost it $200,000. But if successful, the bedbug approach — extermination plus prevention — could cut the complex’s bedbug bill roughly in half from its current $140,000 a year, company president Joseph Latino said. Philadelphia Councilman Mark Squilla confirmed the project in his district, though neither he nor Allergy Technologies would disclose the housing complex’s location because of the bad publicity associated with bedbugs.

“If it works and they make money, God bless them,” Squilla said, adding that Philadelphia needs to shed its “stigma” as one of the nation’s bedbuggiest cities.

On the upside, Philadelphia has become a source of research and ideas on how to treat the bed-dwelling blood suckers with one of the nation’s top bedbug researchers, University of Pennsylvania associate professor Michael Levy, on the case. And, a new Philadelphia bedbug law passed in December 2019, sponsored by Squilla, requires tenants to report suspected bedbug infestations to landlords. The law will take effect on Jan. 1.

Michelle Niedermeier, program coordinator for the Pennsylvania Integrated Pest Management Program and based at the Navy Yard, said that she does not recommend products such as the ActiveGuard liners because of human exposure to chemical-based permethrin which can cause headaches, dizziness and nausea if inhaled. She also is concerned with permethrin washing into the city’s water system when consumers wash the liners.

A Penn State researcher developed a fungus-based product, branded as Aprehend that is registered with the Environmental Protection Agency, for sale for bedbugs by the private company ConidioTec. Niedermeier said it was the only bio-pesticide for bedbugs and could be considered one option. Niedermeier is a Penn State employee but said she has nothing to do with the product. According to the Aprehend web site, “the fungal spores germinate within 20 hours of contact and then penetrate the cuticle of the bedbug and colonize inside, resulting in death.” An application lasts for three months, the site says.

Allergy Technologies has registered to sell its mattress liners with the Environmental Protection Agency and claims that they work for two years. The company labels the liner packages as “not to be washed.” Clothing manufacturers treat jackets and other outerwear with permethrin, and it’s an ingredient in lice shampoo, Latino noted. Permethrin, which is also used to treat military apparel, mimics the bug-killing active ingredient in chrysanthemum flowers.

Maryland officials and others have warned that a could cause eye, skin, nose, and throat irritation. Latino said the side effects with permethrin result from direct contact with the skin, whileActiveGuard is bound to the fabric rather than an applied spray or dust that may be in direct contact with the person.” A fitted sheet is also placed over the liner. He said that ActiveGuard is registered for sale in both Maryland and other states.

Marty Overline, owner of Philadelphia’s Aardvark Pest Management in Frankford, said that she used ActiveGuard liners "extensively a few years ago. They do work. But you have to use them with other methods, vacuuming, using the dryer, laundering. You can’t just put them on the box spring and mattress and expect them to do the trick.”

Overline, a member of a city task force on bedbugs, said he cut back his usage of the liners when he developed back problems and couldn’t lift box springs and mattresses.

Bedbugs infestations spiral out of control when they’re not treated, Overline said. “With people with dementia, you will get thousands of bedbugs into their bedrooms. There’s only so much food for a thousand bedbugs, so let’s go to McDonald’s next door,” he said of bedbug migration. “They do move from rowhouse to rowhouse.”

Gus Carey’s uncle, William P. Carey, founded W.P. Carey Co., a real estate investment firm, and the W.P. Carey Foundation donated $125 million last year to put the family name on Penn’s law school, among other big donations nationwide. Gus, 62, a former managing director of in the W.P. Carey firm, came to bedbugs in a roundabout way.

He began looking into biotech companies and bought two U.K. firms in 2003 and 2004 that had developed nearly identical products impregnating the permethrin on fabric liners for mattresses to kill dust mites, a big source of allergens that worsen asthma globally, Latino and Carey said.

But Allergy Technologies had a hard time cracking the U.S. dust mite market. With the U.K. deals, Carey acquired the intellectual property and U.S. approvals to sell the liners as a medical device in the United States, offering relief to asthmatics suffering mite-related asthma. But Carey couldn’t claim that ActiveGuard helped asthmatics more than existing products, or plastic encasements for mattresses and box springs, unless Allergy Technologies conducted a big field study.

Around 2006, a Massachusetts official considering ActiveGuard for mites mentioned to Carey that the liners could be used for bedbugs, a growing pest. Carey embarked on university research to study the liners for use against bedbugs and Latino expanded the government approvals for ActiveGuard. The company estimates that it has spent $7 million alone on research and related costs.

The Department of Housing and Urban Development estimates that bedbugs infest about 12.5 percent of public housing units nationwide. Allergy Technologies says it has sold its products to public housing officials, or their managers, in Baltimore; Syracuse, N.Y.; Buffalo; and Akron, Ohio. The project team plans on publishing results of the Philadelphia student in the Journal of Housing and Community Development. The company expects to have the article finished in about two years.

Allergy Technologies believes that if it can show that ActiveGuard prevents bedbug re-infestations in low-income housing, the product can be used in universities, apartment buildings and even summer camps.

So many years later after purchasing the technology to kill dust mites, Carey said, “I never thought I’d be Mr. Bedbug.”