Thought Leaders Convene Before Return of Trade Show to New York Home, by Gareth Pickering

Johnson & Johnson’s  grand opening of its new Innovation Centre in Cambridge, Massachusetts, was met with interest by Medical Plastics News. Accordingly, the 9,000 sq ft (836 sq m) facility will serve as a “hotbed for life science innovation”. The choice of location seemed obvious—close to J&J’s head office in New Brunswick, New Jersey. However, we suspect one of the main reasons one of the world’s largest OEMs chose Massachusetts is the sheer strength of the USA’s east coast as a centre of excellence in medtech.

The northernmost part of the east coast of the USA—often affectionately known as the BosWas (Boston-Washington) Megalopolis—stretches north-south from Boston to Washington along the Atlantic seaboard. It includes major cities such as New York and Philadelphia, as well as Hartford, Springfield, Stamford and Baltimore and is a powerhouse driving the medtech industry.

Boston has one of the largest biotech clusters on the US east coast. More than 500 biotech and pharmaceutical companies are based in the area, employing nearly 50,000 people and, according to some reports, almost US$2 bn has been invested there by venture capitalists in the past two years alone.

This is a huge chunk of land that harbours some fascinating statistics. According to MassMEDIC, Massachusetts’s medical device industry association, in 2011 Massachusetts was home to 400 medical device companies, with surgical and medical instrument manufacturers leading the pack. It was also the second largest employer of people in the medical device industry behind California, employing some 24,268 within seven medical device manufacturing categories. Furthermore, the Massachusetts medical device industry was responsible for creating more than 80,000 jobs in related industries in the state. MassMEDIC quotes its source as a study by business consultancy Deloitte, The Medical Device Industry in Massachusetts. Looking further south, Pennsylvania’s medical technology industry ranks seventh in size nationwide, with US$5.49 billion in sales in 2006*. However the east coast medtech industry is really dominated by New England, Boston and the area around Boston.

As you get down to New Jersey and Delaware, you enter an area where there is a heavy concentration of pharmaceutical companies, in contrast to the medical device and biotech concentration in the north east. Much of the pharmaceutical emphasis in the mid-Atlantic region is related to the evolution of chemical companies who dominated this area a century ago. As Dan Lazas, president of US marketing agency Lazas Marketing, points out: “This is the old chemistry-based area, so companies like DuPont were set up there over a century ago. It’s when you go up into New England though, that is when you start seeing the high concentration of medical devices.”

This region, fertile with ideas and rich in medtech pedigree, saw innovations such as the Foley Catheter developed in Boston back in the 1930s. The region’s universities were one of the first to offer specific plastic processing courses and the first medtech organisations evolved here.

The Massachusetts Biotechnology Council, MassBio, located in Cambridge, is the nation’s oldest biotechnology trade association, having been founded in 1985.

The reasons for the strength of this region are manifest. What’s really at the heart of why this region works so well is a symbiotic relationship between its world-leading universities (see next section), hospitals, clinicians, manufacturers and the industry bodies. All these groups come together with coherence and purpose.

The east coast knowledge base

The knowledge base and the manufacturers really knit together on the east coast. Indeed according to Lazas, “many of the clinicians often become the manufacturer”, bringing new devices to the market. Devices are borne out of their inventors’ direct experiences in cardio-surgical theatre.

Take a look at the list of world-leading Institutions in this region—Princeton (New Jersey), Harvard (Cambridge, Massachusetts), Yale (Connecticut, between New York and Boston), Massachusetts Institute of Technology (MIT), University of Massachusetts (UMass) at Lowell (Cambridge) and Amherst, Boston University, University of Rhode Island, University of Connecticut (Uconn) Health Center—the list goes on.

It tells you something of what you need to know about this region. The grey matter is here. It was these institutions from where many of the firsts for medtech sprang. In the 1970s, the University of Massachusetts at Lowell developed a plastics engineering programme that would look at the processing of plastics for medical technology. It was a new way of looking at things.

According to Larry Acquarulo, president and CEO of US medical polymer supplier Foster Corporation, in the 70s and 80s three academic centres—MIT, UMass at Amherst and UMass at Lowell—all offered courses in polymer science and engineering. Larry recalls that UMass at Lowell was the first to offer a full plastics engineering programme. “Many plastics courses were teaching how to make polymers, few were offering to teach how to “process” plastics,” he says. “Indeed,” Larry goes on, “UMass Lowell was one of the first institutions to offer specific polymer processing courses. It also went on to offer one of the first PhDs in this in the late 80s. This plastic processing technology was important in the early development of angioplasty catheters, balloons and other minimally invasive vascular devices.”

It was UMass at Lowell which was one of the first to set up advanced manufacturing centres at junior and community colleges. The state has funded programmes for advanced manufacturing, allowing 18-20 year olds to train. As Larry says: “These will be the technicians that will set up your equipment and run your machines.” Cleverly, these centres are capturing the fallout from experienced engineers in other sectors where the global slowdown has left companies with no option but to let talent go (aerospace, for example) capturing and retraining them for the plastics processing industry.

It’s a point echoed by Rubin Shah, managing director of medical balloon innovator and film extrusion specialist Polyzen in North Carolina: “The universities have such a strong education presence, not only in plastics engineering but in biomedical engineering as well. And it’s this convergence of the talent pool and the demand for that [plastics processing] specialism.”

Along with the universities, the region also boasts some of the world’s great hospitals. As Steve Wilcox, principal at Philadelphia-based medical device design consultancy Design Science, points out: “Many of the world’s great hospitals are in the northeast, so it’s an important area for medical device companies to do research.”

He adds: “Also, several key consultants in the medical device space are on the East Coast—Ximedica in Rhode Island; Farm, Wiklund Research and Design in Massachusetts; RTEmd medical device software in Pittsford, New York; Med-Errs failure mode and effect analysts in Horsham in Pennsylvania; HS Design in New Jersey; and our firm, Design Science, to name a few.”

It’s not just about having the brains; there is a real commercial engagement between the universities and the manufacturers in the area. The universities “get” how to bring ideas to market. Working closely with the manufacturers the universities provide the framework for what Dave Shalaby, president at custom bioabsorbable polymer developer and manufacturer Poly-Med, described as “realisation—the entire process of designing, developing and bringing a medical device to market.”

Dave goes on to say: “Every university has expertise in realisation—from patenting, to IP management, development and all the way through to royalty and revenue protection. The major universities all have skills.”

Peter Gabriele, vice president of emerging technology at medical technology developer and manufacturer Secant Medical, illustrates the point perfectly: “It’s easy to stand back and look at the region as a hotbed of academic and medical centres. This area really puts the fingerprint on biomedical technology.” Gabriele talks of how the region is pioneering the concept of translational science. “As time goes on, you will begin to see the government encourage the concept of translational science. This region is very well equipped to support science and quickly turn it into a commercial activity.”

Gabriele talks of manufacturers (including Secant Medical) “walking the corridors” of the universities, so close are the relationships between industry and academia. Indeed, Secant Medical currently works alongside several institutions such as the McGowan Institute for Regenerative Medicine at the University of Pittsburgh in Pennsylvania, and Johns Hopkins University School of Medicine (Baltimore, Maryland). According to Gabriele, Johns Hopkins is one of the most highly regarded medical research and biotechnology organisations in the world, and enjoys some of the highest levels of research funding. 

Secant Medical, perfectly located in Perkasie, Pennsylvania, in the heart of this east coast medical cluster, is currently developing early stage polymeric bioabsorbable elastomers for use in regenerative medicine. Uses could include coating technology and fibre technology for large surface area bioabsorbable applications.

The manufacturers

So, the seed bed for a thriving manufacturing community is there—excellence in technical design, research and academia with clear strength in commercialising engineering ideas. The next element is the manufacturers themselves.

The east coast boasts an impressive blend of small, medium and large medtech companies. The region does not simply rely on the big players. Many of these smaller companies are run by the very alumni from the courses already mentioned. The east coast is home to all the majors. As Dave Shalaby says: “All the major companies are based in New Jersey and Massachusetts, we have J&J, Medtronic, Covidien, Pfizer (New York).” Observers say that it’s small to medium size companies that are targeting neglected diseases.

Industry associations

Binding the universities, hospitals, clinicians and manufacturers together is the plethora of industry associations, membership bodies and organisations which all work together advising and lobbying, as well as bringing together investors with clinicians, universities and manufacturers. UMass at Lowell recently launched its incubator, M2D2, which focuses on medical device development. This incubator launches medical device companies directly from the university. M2D2 has been a critical influence on many people.

In addition to this there are other significant hands-on, proactive and well-run organisations and industry bodies. The Society of Plastic Engineers (SPE), with around 20,000 members around the world, has its home in Connecticut on the east coast. Much of the SPE’s early growth was along the east coast. Len Czuba, SPE president in 2005-06, three-times chairman of that organisation’s Medical Plastics Division and owner of medical device consultancy firm Czuba Enterprises adds: “the New England region also represents some of the highest density of SPE membership directly behind the Detroit, Michigan and Ohio auto regions. SPE’s ANTEC (their flagship technical conference) has repeatedly found that Boston is the most appealing host venue, drawing record attendance both in speakers, students, exhibitors and attendees.”

Of all the industry associations two bodies are particularly prominent—AdvaMed, representing the length and breadth of the USA’s medical device manufacturing industry, and MDMA, the Medical Device Manufacturers Association, mainly representing small to mid-sized medical device makers. As Steve Wilcox points out “AdvaMed is probably the most important [of the organisations]. They are advocates, lobbyists, and disseminators of information.”

Other notable bodies include The South Eastern Medical Device Association. SEMDA is a clear example of how the government and universities and manufacturers have knitted together.

Three Massachusetts-based bodies—MassMEDIC, Beacon and MassBio—play prominent roles in integrating the medical device stakeholders in and around the state. A fourth, Massachusetts Medical Society, is one of the oldest continuously operating state medical societies in the USA. Hailing from New England, the society’s first chapters were founded in the north east. It’s a state-wide professional association for physicians and medical students. Beacon, which stands for Biomedical Engineering Alliance and Consortium, ties together hospitals, universities and advanced manufacturers with the specific aim of getting clinicians and inventors matched up. Finally the Massachusetts Biotechnology Council (MassBio), a not-for-profit organisation that represents and provides services and support for the Massachusetts biotechnology industry, is the nation’s oldest biotechnology trade association (founded in 1985). All these organisations underpin the sector and demonstrate just how much willingness there is for co-operation.

Grey matter is one thing; however cash is always king and these organisations also bring in financial resources by bringing investors in to the sector and championing venture capital models in medtech.

The state-financed Pittsburgh Life Sciences Greenhouse (PLSG), a nationally recognised investment firm, has worked with, or helped to fund, 300 fledgling companies in its eight-year history. When ideas, enthusiasm and industry meet capital, good things happen.

Governments

At the macro level the east coast also enjoys close political contacts. The east coast is one of the largest tax contributor to the US economy, and, as Rubin Shah, says “We have Washington.” Having the nation’s capital within close proximity makes lobbying easier. The medtech industry enjoys wide support in the east coast and Governors Deval Patrick of Massachusetts and Dannel Malloy of Kentucky are supportive of advanced manufacturing and medical device provided incentives.

Steve Wilcox goes on to echo this: “Of course, the capital is here, so we have a number of key organisations near Washington, DC—the FDA, the AAMI (Association for the Advancement of Medical Instrumentation), and AdvaMed, for example.”

Peter Gabriele from Secant Medical makes the point that the east coast has the advantage of close proximity to the FDA’s headquarters (Silver Spring in Maryland). Sometimes perceived as the unwelcome state trooper of the medtech sector, the FDA is more than an arm of the federal government, Gabriele argues. He points out the FDA is “really working hard to improve the landscape” and is an important resource for knowledge and information. “Try entering a search term into the FDA website—you’ll be pleasantly surprised with the volume of information available free of charge.” He continues: “Over the past ten years the FDA has played a more visible and active role [in medtech].”

Conclusion

The east coast model provides a blue print for co-operation between manufacturers, universities, clinicians, government and supporting industry associations. Looking ahead and with the return of MD&M East to New York’s Javits exhibition centre next year, the medtech industry looks confident, strong and robust.

The landscape may well look a little different as the major players’ appetite grows for perusing M&A deals. According to Kevin Bottomley, managing director of UK-based Results Healthcare corporate finance, there will be a significant increase in M&A activity over the next 12 months.

The Javits centre will see MD&M East return next year, it will be a stronger leaner, more confident medtech sector and the stakeholders of the east coast region will have played a critical role in delivering this. 

Medical Plastics News would like to thank the following thought leaders for their help in preparing this article: Larry Acquarulo, Len Czuba, Peter Gabriele, Ryan Heniford, Dan Lazas, Rubin Shah, Dave Shalaby and Steve Wilcox.

*TribLive—Life sciences century spurs new wave of medtech companies in Western Pennsylvania http://triblive.com/x/pittsburghtrib/business/s_672676.html#axzz2ZNsLVprJ.