Category Archives: biomaterials

Newest Medtech Startups, and I do mean MEDTECH

Since you’re reading this, I am going to assume you have some interest in medical technology, and just to make it bluntly obvious, I’m going to hammer a definition of it so you know exactly what I mean and what I don’t mean. Why I do this will become clear, but simply put, it’s to keep me from going insane.

In the most liberal definition of “medical technology” (which can still be restrictive, as I’ll mention below), I mean “the adaptation of scientific knowledge to the practical application of medicine”.  In your travels, I am certain you have come across uses of the term “medtech” that seem expansively broad, such as those that are simply the application of virtually any kind of technology to medicine.

If you call your doctor, does that make your phone a medtech device? What about surgical gloves, since they’re really just gloves? Ah, but what about surgical gloves coated with a material that prevents formation of post-surgical adhesions? Then, too, what about devices for wireless transmission of BP, pulse, pCO2 and other vital signs — are they just glorified telephones?

The point is that there is a wide range of perspectives that may variously be brought to bear when considering medtech and, since not everyone has the same perspective, it’s important to understand which perspective is in play.

Today, I saw a post about “medtech” companies at this year’s SXSW conference. Intrigued, I read on, only to find that most of these are technologies that have been applied to medical applications (and some not even that), but are for the most part not “medical technologies”:

  • a medication compliance device that chimes when doses are missed
  • a thermometer that connects to your iPhone or Android device
  • a smart diaper that monitors select analytes to potentially reveal UTIs, type 1 diabetes, dehydration, etc.
  • motion sensor-enabled underwear with micro-airbags to reduce injuries from falls in elderly
  • shoes to reduce the risk of plantar fasciitis, complications from diabetic neuropathy, etc.
  • wearable baby monitor to detect ambient temperature, posture and movement
  • mobile device to connect patients with mental health professionals
  • cloud-based service to connect individuals to the health/wellness resources of their employers

(Of course, the bottom line for many is whether the FDA or any other relevant governing body would consider a device a “medical device” or would otherwise conclude that its function, design or application is such that it must be regulated as a medical device, but even under that sort of all encompassing consideration, many of the above technologies would not likely be called “medical devices”. However, it’s not my definition that matters in those cases; it’s the FDA’s.)

I’m not placing a judgment that these devices are somehow inferior — not my point at all.  I have no doubt that there are countless non-medical technologies that can be applied to medical applications to create huge demand and/or solve big problems.  I just have to draw the line somewhere as I seek to describe, characterize and analyze an already large universe of innovations — I’ll leave the analysis of iPhone-enabled or otherwise information technology-centered devices to those who are better suited to the task. (If, in addition to the implants, surgical devices and range of other technologies requiring a physician to actually use, I had to also analyze any of those iPhone-enabled widgets, I would go mad.) My focus is instead on innovations that are intrinsically medical applications of knowledge that have been developed to improve outcomes, tap unmet patient demand, reduce healthcare costs or otherwise improve healthcare delivery. 

Fundamentally, these are technologies that have been developed to reduce symptoms, hasten recovery from disease or trauma (surgically-induced or otherwise), facilitate the removal of malignant tissue, restore normal organ or system function, facilitate the ongoing management of chronic disease, provide differential diagnostic information to facilitate courses of treatment, and many, many similar. By now, you should have a sense of what technology I would consider “medical” and what technology may have a medical application but which is not itself “medical”.

So what? Well, to be very specific, these are the most recent additions of startup companies to our Medtech Startups Database:

Company Product/technology
Medallion Therapeutics, Inc. Targeted, localized drug delivery
PB&B S.A. Use of biomaterials in aesthetics for non-surgical temporary & permanent breast and buttock enhancement, facial rejuvination solutions and adipose tissue engineering related therapies.
TS3 Medical, Inc. Vascular drill to cross chronic total obstructions (CTOs) and facilitate balloon angioplasty and stenting.
SynerZ Medical, Inc. Developing a device that mimics the actions of gastric bypass surgery for the treatment of obesity and Type 2 diabetes.
Biotrace Medical, Inc. Temporary cardiac pacing as treatment for reversible symptomatic bradycardia.
Rbpark, LLC Embolectomy devices
NeuroTek Medical, Inc. Non-invasive, migraine therapy device worn on the back of the head at the onset of or during a migraine to relieve pain.
RegenEye, LLC Ocular stent for treating age-based vision changes.
Reveal Optical, LLC Ophthalmic device company focusing on age-related macular degeneration (AMD), diabetic retinopathy, retinitis pigmentosa, hemianopia, and glaucoma.
Mimedis AG Custom surgical implants including using 3D printing.
Socrates Health Solutions, Inc. Noninvasive blood glucose monitor.
Gecko Biomedical Biodegradable sealants and adhesives in surgery.

Source: MedMarket Diligence, LLC

Entrepreneurs have for years been relentlessly conceiving and implementing innovations for therapeutics and diagnostics that leverage the advances in materials sciences and the individual and combined gains in understanding the onset, development and intervention to palliate, cure or otherwise eliminate disease.  Developments such as these have had a profound impact on patients’ lives and the costs (of all kinds) in the end result. 

Combine these medtech developments with other non-medtech developments in additional innovative ways and an even bigger impact can be made. 

Sales of Sealants, Hemostasis, Other Closure a Large, Shifting Market Worldwide

Products that provide hemostasis, closure, sealing and anti-adhesion of wounds comprised long established products (e.g., tapes, sutures, etc.) as well as a variety of advanced products such as fibrin and other surgical sealants, surgical glues, hemostats and products to prevent post-surgical adhesion.  While traditional products are being innovated to keep pace with advanced products (for example, through the development of absorbable sutures), the shift of caseload and product sales away from traditional products appears unrelenting.

As a result, the balance of the competitive landscape is forecast to shift over the next few years toward advanced sealing, hemostasis, closure and anti-adhesion products.  Below is illustrated, in a combined “donut” chart, this shift from 2012 to 2017 in the share of the global market for these products.

sealants_donut_2012-2017

Source: MedMarket Diligence Report #S190, “Worldwide Surgical Sealants, Glues, Wound Closure and Anti-Adhesion Markets, 2012-2017.”

These percentage shifts may not seem significant unless one considers that the global market for these products is over $5 billion.

 

Potential for the Use of Hemostats, Sealants, Glues and Adhesion Prevention Products, Worldwide

The MedMarket Diligence Report #S190, “Worldwide Surgical Sealants, Glues, Wound Closure and Anti-Adhesion Markets, 2012-2017″, details the complete range of sealants & glues technologies used in traumatic, surgical and other wound closure, including tapes, sutures/staples/mechanical closure, hemostats, fibrin sealants/glues and medical adhesives and anti-adhesion products. The report details current clinical and technology developments, with data on products in development (detailing market status) and on the market; market size and forecast; competitor market shares; competitor profiles; and market opportunity. The report provides full year actual data from 2011. The report provides a worldwide forecast to 2017 of the markets for these technologies, with emphasis on the market impact of new technologies through the forecast period. The report provides specific forecasts and shares of the worldwide market by segment for Americas (detail for U.S., Rest of North America and Latin America), Europe (detail for United Kingdom, German, France, Italy, Spain, Rest of Europe), Asia/Pacific (detail for Japan, Korea, Rest of Asia/Pacific) and Rest of World. The report provides background data on the surgical, disease and traumatic wound patient populations targeted by current technologies and those under development, and the current clinical practices in the management of these patients, including the dynamics among the various clinical specialties or subspecialties vying for patient population and facilitating or limiting the growth of technologies. The report establish the current worldwide market size for major technology segments as a baseline for and projecting growth in the market through 2017. The report assesses and projects the composition of the market as technologies gain or lose relative market performance over this period. The report profiles 122 active companies in this industry, providing data on their current products, current market position and products under development.

See description, table of contents and list of exhibits at http://www.mediligence.com/rpt/rpt-s190.htm.

New fundings in medical technology, March 2014

Fundings for medical technology in March 2014 stand at $593 million, led by the $101 million raised by Golden Meditech Holdings Ltd and the $75 million IPO funding of Lumenis. Below is a list of the month’s top fundings to date:

Company funding Product/technology
Golden Meditech Holdings Ltd has raised $101 million in a round of funding according to press reports Autologous blood recovery products as well as healthcare services
Lumenis Ltd has raised $75 million in an initial public offering according to the company RF and light-based ablation devices in ophthalmology, surgery and aesthetics
Unilife Corporation has secured $60 million in debt funding, according to the company Drug delivery devices
Alphatec’s Spine, Inc., has raised $50 million in a round of funding, according to the company Devices for the treatment of spine disease and trauma
NinePoint Medical, Inc., has raised $38.56 million of a planned $50 million round of funding according to a regulatory filing In vivo, high resolution imaging via optical coherence tomography
Invuity, Inc., has raised $36 million in a Series E round of funding according to the company Technologies to improve access and visualization in minimally invasive surgeries
EarLens Corp. has raised $36 million of a planned $38 million round of funding according to press reports Infrared-based hearing aid

For the complete list of medtech fundings during March 2014, see link.

For a full list of the fundings in medtech, by month, since 2009, see link.

Technologies at medtech startups in February-January 2014

Below is a list of the technologies under development at startups recently identified and included in the Medtech Startups Database:

  • Ophthalmology prescreening technology for detection of diabetic retinopathy, cataract, glaucoma, cornea problems and refractive errors.
  • Tissue engineered scaffolds to generate synthetic tracheas.
  • Embolectomy devices
  • Resorbable embolization material for use in interventional radiology and drug delivery.
  • Tissue attachment technology
  • Devices and procedures to improve nasal breathing.
  • Devices for minimally invasive, augmentative or reconstructive mastopexy.
  • Ocular stent for treating age-based vision changes.
  • Ophthalmic device company focusing on age-related macular degeneration (AMD), diabetic retinopathy, retinitis pigmentosa, hemianopia, and glaucoma.
  • Neuroscience-based technology (neuromodulation) for enhancing performance on cognitive tasks, for the healthy and impaired.
  • Portable, ultrasound-based device non-invasive, transcranial diagnosis of stroke.
  • Temporary cardiac pacing as treatment for reversible symptomatic bradycardia.
  • Product to improve treatment of kidney stones and product to reduce pneumonia in intubated patient and ventilated patients in the ICU.
  • Biometric medical device for orthopedic and other diagnostic applications.
  • Technologies for treating urological conditions and disorders.
  • Use of biomaterials in aesthetics for non-surgical temporary & permanent breast and buttock enhancement, facial rejuvination solutions and adipose tissue engineering related therapies.

For a historical listing of medtech startup technologies, see link.

Taking off the blinders: Medtech or Med Device Investment?

Tracking venture capital investment, if not on the whole by some geography, demands that it be viewed in discrete groupings, such as by technology type. The purpose is, of course, to see the trend, but the underlying assumption is that. from time point A to time point B, the grouping itself has not changed, irrespective of the amount of investment.

Why do I bring this up? Well, let’s take a topic like “medical devices”. While there may be some minor debate as to what constitutes a medical device (does it include diagnostic devices?), the majority of people understand what medical devices are.

But what about medical technology–medtech? Is this the same as medical device? Absolutely not. When is medtech not a medical device? How about when it is a polymer-based or biological extracellular matrix for orthopedic applications designed to induce cell growth? How about the fully bioabsorbable cardiac stent? How about liposome-encapsulated drugs? How about drug-eluting stents (considering the cost and value are contributed by both the stent and the drug)? How about topical dressings? Collagen dressings? Cultured skin grafts?

From the standpoint of analyzing markets and market opportunities, it is foolhardy to consider a market to be defined by a very specific technology rather than competing applications. For example, angioplasty, stenting, robotic cardiac surgery, percutaneous CABG and even cholesterol-lowering drugs all compete in the same “market” (treatment of coronary ischemia), regardless of technology.

For the same reason, I do not put much stock (so to speak) in analyzing investment solely in “medical devices”. My interest is investment in medtech. Of course, I am indeed interested in investment in medical devices, but only as the most significant component of medtech.

So, when I see reviews (I’m going to pass on specific references, but google for yourself) of 2013 medical device investment, particularly those that point to a decline, I cannot but help point out that such reviews are myopic, considering less than the whole. What I track is the broader medtech, and for 2013 there was a distinct 13% increase in 2013 medtech investment over 2012 medtech investment.

medtech_2009-2013

 

See for yourself and note that, going back to 2009, we have the data on each investment in these monthly totals.

Plastic Surgery Utilization Worldwide

The popularity of plastic surgery — whether for aesthetic or reconstructive procedures — is growing worldwide, driving the development and sale of a wide range of medical products.

The highest utilization of plastic surgery worldwide is in China, followed closely by India. Yes, of course, this is purely population-driven, with the #1 and #2 countries by population having the highest absolute volume of plastic surgery procedures. But, on a relative basis, compensating for those countries’ huge populations, the highest per capita utilization of plastic surgery is…anyone? Anyone? Buehler?

The highest per capita utilization of plastic surgery is actually in South Korea, followed by Greece, followed by Italy, followed by the U.S. Below is tabulated the plastic surgery procedure volumes (medical or surgical) by country for the top 25 countries:

Plastic Surgery Procedures by Country, 2011

Screen Shot 2013-12-18 at 11.31.14 AM

Source: MedMarket Diligence, LLC; Report #S710.

The Real Future of Medtech: An Opinion

I see graphics (and, please help me, “infographics”) on the the future of medtech. These are graphics produced most often by analysts who are walking backward looking at their feet; in other words, living by the tenet of “past is prologue”. The leading companies of five years from now can be simply predicted by a 5-year extrapolation of last year’s revenue growth.  Has “forecasting” really simply become a distillation of “more of the same”?

The future of medtech is dictated far more importantly by not what has already happened, or some expectation that past trends will simply continue on into future trends, but by what has not happened yet. The major thrust of any significant growth (and isn’t growth that in which we are most interested?) comes primarily from events that have not yet happened. Do you want to be Steve Jobs or Steve Ballmer?  Do you want to create demand or belatedly follow it?

If you have a short-sighted or narrow view, then you consider your competitors all who do what you do but who do it better, faster or cheaper. If you have a long view, you consider what might be possible based on available/emerging technology to tap into untapped demand or simply create latent demand that no company has yet been sufficiently visionary or innovative to seize.  What patient populations, clinical practice patterns and their trends are the pulse that you monitor (or are you even monitoring these)?  There is a gap between what is available and a whole set of patients virtually untreated, physicians unsatisfied, and third party payers struggling.  Are you an angioplasty catheter manufacturer — or a coronary artery disease solution?  Do you make devices — or outcomes?

Look at staid “device” companies like Baxter International and see that they have “biosurgery” divisions.  Look at Medtronic and appreciate that they are as sensitive to developments in glucose monitoring and insulin pump technologies as they are to the litany of cell therapy approaches under pursuit.

Virtually every area of current clinical practice is subject to change when considering drug/device hybrids, biomaterials, nanotechnology/MEMs devices and coatings, biotechnology, pharmaceutical (and its growing sophistication in drug development), western medicine and eastern medicine, healthcare reform, cost containment, RFIDs, 3D printing, information technology  – we hope you see the upside in this and not just the downside.

Of course companies, especially public ones, must consider the revenue streams in both Year 0 and Year 5, but if the focus is only on Year 0, then that number will also be the ROI in five years.