Medical Devices: States and Communities All Across the South Develop the Climate and Resources to Help this Industry Thrive
See a need. Fill a need. It's what medical device companies do. Take, for example, the Texan neurosurgeon who didn't like the performance of the saw he used to open the skull. So he improved it using diamond bits, inventing the Midas Rex ® and a company now called Medtronics.
See a need. Fill a need. It's also what southern states and communities are doing to proactively support medical device companies. They are improving upon existing resources and developing new ones to create fertile ground. They are building medical infrastructure, research programs, and university support, all to create the right environment for medical device success.
Take Texas for example. Nancy Williams, President of the Health Industry Council in Irving, Texas touts the entrepreneurial spirit of the Dallas/ Fort Worth area and she recalls the days when that area was filled with the defense industry. The industry is gone, but the highly creative people are still there and they are very inventive.
North Texas-based company Advanced Neuromodulation Systems (ANS) originally made implantable heart devices, but as the company changed hands they looked for ways to expand their business and now are making in-roads into managing chronic pain and neurological diseases such as Parkinson's and epilepsy. And, as for growth, ANS ranks 36th in Fortune Small Business magazine's 100 Fastest-Growing Small Companies 2005 index and is the fastest growing medical company in Texas on the list.
Williams sees vast opportunities in the South for this particular subset of the bio industry. She has just finished a medical device survey that indicates the growth of that segment in Dallas/Fort Worth. Her goal is to double the industry's size over the next year. The state of Texas is providing a good jump-start with its new Emerging Technology Fund, providing $1.5 million in grants starting in October and another $1.5 million next year.
Williams feels that primarily her draw in North Texas is a central US location, great access through interstates and the world's largest industrial airport, distribution at the area's FedEx hub and the very business-friendly tax structure that Texans enjoy. However, it can't hurt that in the metroplex of Dallas/Ft Worth, there are over 90 major hospitals and two major medical schools. Four universities in the region offer a specialty in biomedical engineering, and a number of schools offer advanced degrees in biotechnology.
Freedonia Group, a leading international business research company, agrees with the assertion that this part of the market is ripe for the picking. Here are a few of their segment growth predictions for the US market:
- Medical imaging equipment will grow 7.6 percent annually through 2008, driven by more procedures involving diagnostic imaging.
- Patient monitoring systems will grow 6.7 percent annually through 2008. Blood glucose test strips and optical sensors will lead gains, followed by multi-parameter telemetry stations and apnea, cholesterol, and coagulation monitors.
- Medical and dental adhesives and sealants will grow 8.4 percent annually through 2009 based in part on new product development and increasing acceptance of these materials in surgical and consumer settings.
- Diabetes monitoring products and therapies is expected to grow 9.5 percent annually through 2008.
- Biochip products and services will grow 20 percent annually through 2008. Gains will be led by uses in drug discovery and epidemiological research,
- Personal mobility devices will grow 6.9 percent annually through 2007 driven largely by the increasing mobility impairments of an aging population.
Bill Martineau of the Freedonia Group said that with new, tougher standards on the prevention of infection, disposable supplies such as medical gloves, surgical drapes, and waste disposal supplies would be in high demand. He also expected that the market for test strips would grow over 10% annually.
Opelika , Alabama has already capitalized on the growth of the US market with a $110 million expansion of a Sweden-based company, Gambro. Al Cook, director of economic development for Opelika, confirmed that the textile skills of their workforce gave them the final edge they needed to beat out hundreds of other competitors. That makes sense once you know that Gambro manufactures a cellulose-type fabric for its renal dialyzers. The company's other key site selection needs focused on clean, dependable power and a comprehensive workforce-training program. Cook said Opelika was able to deliver both components with the help of their state and local team.
As a state, Alabama is focused on nurturing and growing their medical device sector. Mike Alder, Executive Director of the Biotechnology Association of Alabama, is working hard to anticipate and provide for their needs. He goes on to say that Birmingham is a center for medical research with the location of the University of Alabama at Birmingham (UAB), its Comprehensive Cancer Center and leading-edge research.
To illustrate that point, UAB researchers have received a $112,000 grant from the International Retinal Research Foundation (IRRF) to build the first clinical version of a new diagnostic machine for age-related macular degeneration (AMD). The device is designed to detect macular degeneration as much as four years before clinical signs of the disease are evident.
Later this year, UAB's new 300,000-square-foot, 12-story Shelby Interdisciplinary Biomedical Research Building will be opened. It will generate $100 million in new grants and increase UAB's research space to over 1.4 million square feet
Biohorizons, a company that makes innovative dental implant devices for the global market, began as a spinout of technology developed at UAB. Although the company's beginnings were only in 1997, they are now the 5th largest dental implant company with offices in Canada and Spain, and sales of over $20 million.
Located in Birmingham, Southern Research Institute is currently working with the pharmaceutical industry as a whole but has already begun a process to hone in on the medical device industry by hiring an engineering developer who holds several patents in the industry. Michael D. Johns, VP of Engineering, shares "SRI has a core competency in creating, analyzing and testing new materials. You can be developing a material for aerospace and find that it has great applications in biomedicals. Engineers and life scientists are an interesting group to put around a table."
SRI recently spun out its first medical device company, Brookwood Pharmaceuticals. Formed from the drug-delivery group of SRI, these specialists have been carrying out government research and developing products since the early 1970s. Today, they handle product development for international and domestic customers. Their subsidiary, Lakeshore Biomaterials, manufactures biodegradable polymers for customers such as OsteoBiologics making bone and cartilage repair products. Arthur Tipton, president and CEO of Brookwood Pharmaceuticals, says the synergy with SRI is very productive. "We know what materials to pick and the regulatory issues and they know engineering design, fabrication and prototyping. The strength of SRI is phenomenal."
Alabama also has an interesting participant in the growing bioterrorism industry: Intramicron, which makes filtration materials for facemasks. The company was formed in June 2001 to commercialize the microfibrous materials technology developed at Auburn University.
Arkansas is another southern state with strong advantages and resources for medical device companies. The University of Arkansas for Medical Science (UAMS) initiated a biotech business component called BioVentures, an incubator program that provides support for start-up companies, particularly biomedical entrepreneurs. As of June 2005, UAMS has filed 298 patent applications with 131 patents issued or allowed, 167 patents pending and 28 licensing agreements. They have found their patent applications growing at 25-30 percent annually.
Florida is the recognized leader in the medical devices industry, ranked #2 in the number of FDA registered Medical Device establishments. Aware of its above-average age population, Florida is equipped with a significant health services sector and the research and development to proactively support it. With the recent location of a 350,000 square-foot expansion of The Scripps Research Institute in Florida, and a $30 million investment in three life-science related Centers of Excellence, Florida has demonstrated its future commitment to building a world-class research base. Abundant medical facilities are a complement to the research component by providing testing grounds for medical device development, and 12 Florida universities have technology transfer programs in place to assist in the commercialization of research discoveries.
The College of Engineering at the University of South Florida is one of three programs nationally offering a Graduate Certificate in Regulatory Affairs with an emphasis on medical devices. It has been developed to provide requisite technical skills to professionals in, or anticipating a move, to the medical device industry.
An additional advantage for Florida is the National High Magnetic Field Laboratory (NHMFL), the only facility of its kind in the United States. The NHMFL develops and operates high magnetic field facilities that scientists use for research in bioengineering, biochemistry, materials science, engineering and various other fields.
Already, Florida's medical device manufacturers are growing at a rate of 2.3 percent annually with over 400 companies already located there. The state has designated biomedical technology a "high impact" industry and qualifying companies are eligible for special incentives.
Success stories in the Florida medical device arena include:
- Medical Education Technologies, (METI) that develops learning tools for the medical profession. Stan – a human patient simulator –speaks, breathes, has a heartbeat and even "dies." METI has also developed prototypes to simulate children, babies, and even surgical procedures. With technology that was developed at the University of Florida at Gainesville, the company began operations partnering with a Sarasota aerospace company well versed in flight simulations.
- NovaVision™ specializes in Vision Restoration Therapy ™ (VRT™) based on groundbreaking research in neuroplasticity. VRT™ is the first and only FDA-cleared, patented, non-invasive medical device that may restore vision in stroke and traumatic brain injury patients, a condition previously considered untreatable. To date, more than 700 patients have been treated with VRT™ and clinical results are positive. NovaVision™ recently secured $12 million in venture capital to help expand the national network of partner clinics offering VRT™.
- Arthex Inc has developed and produced more than 2000 products and educational services for surgeons that make surgical procedures easier and safer. One such innovative product is FiberWire ®, used in arthroscopic surgery as an extra-strength suture. Their products are used in more than 60 countries.
In fact, Florida's medical device industry finds that international markets account for more than one-third of the sector's revenues. And industry leaders expect more growth in emerging markets.
Meanwhile, in Tennessee, Memphis has emerged as an active market in the medical device industry. This community is so strong in fact that it is ranked second in the nation in Orthopedic Medical Device and Instrument manufacturing. Memphis is home to such medical device notables as Smith & Nephew, Medtronic Sofamor Danek, Wright Medical, Gyrus ENT, and more. Add to that the research facilities at the Medical Education Research Institute, University of Tennessee Health Science Center, The University of Memphis and Christian Brothers University and you have one of the finest medical device communities anywhere.
So where is the perfect location for the medical device company looking for the fastest way to success? The South, in general, is well known for its high-quality manufacturing mentality. And climate, too, is key in creating a productive environment and maintaining shipping schedules. From there, each location has its own strengths and selling opportunities. In many cases, southern states are focusing on growing the medical device industry by providing the medical infrastructure, research programs and university support that creates a breeding ground for an industry with astounding brainpower.
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