Moving a unique medical device idea from concept into a commercially viable product, no matter how impressive the technology, can be a daunting road to travel. Oftentimes, it's the regulatory process that presents the greatest hurdles.
That's why SpringMed Group (Winston-Salem, North Carolina) was conceived. A medical device business accelerator, it differs from the more commonly known incubators and even venture capital firms.
"We can do as much or as little as a company needs," President Jon Wilson told Diagnostics & Imaging Week. "What we found most prevalent with early stage medical device companies is that they have no idea of the complexities of the regulatory process, specifically design control."
Appropriate funding in addition to FDA experience, engineering and rapid prototyping are essential in order to have any reasonable chance for success. To this end, SpringMed provides competencies that improve the development time line and successful launch of new medical devices.
"SpringMed is a holding company, but also manages our intellectual property group," Wilson said. "We work with early stage companies to provide everything they need. It's light years away from incubator operations. We're capable of doing complete design and engineering work through manufacturing and we provide this on a contract basis. We also do a number of devices on our own. We own all the IP and the ideas that come to us from physicians or other companies."
Because SpringMed operates like a full-service contract development company, it can offer significant advantages in speed and cost savings," he said. "We've done design control for FDA and for ISO certification. We know precisely what has to be done from design through regulatory.
"There are a tremendous number of companies that need this kind of expertise and unless they can raise $10 million to $20 million, they can't do it," Wilson said. "If companies aren't prepared for the regulatory process, they'll fail. They can get hammered by the FDA."
SpringMed keeps a relatively low profile and doesn't even have a web site. "We are approached by most of our client companies by word of mouth. We keep a relative low profile because you can get a lot of crazy ideas," he said. What we don't do is to supply venture funds. We've had a number of discussions with venture companies. Fundraising is always a challenge. Ninety nine out of 100 companies are rejected by venture capital companies."
But the 1% taken over by venture firms typically must relinquish control. "We don't take control," Wilson said. "We usually get 30% of a company."
Along with SpringMed's in-house staff of 12, the company owns Cathtek (Winston-Salem, North Carolina), which serves as its manufacturing arm. Both are housed in the Piedmont Triad Research Park, a technology hub in North Carolina, which last week was the host location for the Council for Economic Development's (Durham, North Carolina) 17th annual Biotech 2008 Conference, co-sponsored by the North Carolina Biotechnology Center and the North Carolina Biosciences Organization (both Research Triangle Park).
"We were the first commercial tenant in the research park," Wilson said. "Over the years we've brought forth 12 companies, but we also do a lot of a la carte development work for a variety of other companies."
As evidence of SpringMed's efforts, consider one of its client companies, C Change Surgical (Winston-Salem, North Carolina), which has created a device to control the temperature of irrigation and lavage fluids during surgery. IntraTemp is mobile, allowing for a more efficient way to guarantee the correct temperature.
"We did all of their regulatory work," Wilson said. "There's really nothing on the market that satisfies this need. Clinical data demonstrate that even mild hypothermia induced during an operation pulls a lot of body heat out of the patient, which can increase infection rates and reduce healing times." He added: "Even half a degree can have a measurable impact on healing. We did all of their regulatory work n and helped to develop their patents. Now they have six to seven patents covering this technology."
Another company in the SpringMed portfolio is Diatek (Winston-Salem), which developed a hemodialysis catheter. "That's a Class I control device that we took through FDA approval in less than 18 months. Then the company was sold to Arrow International (Reading, Pennsylvania) about three years ago."
Although Wilson favors developing home-grown companies, SpringMed doesn't limit itself geographically.
"We're working with a company in Pennsylvania that's developing a left ventricular assist device," he said of Cardiac Assist (Pittsburgh). "It's a device used with patient who have suffered 85% cardiac insufficiency who are not surgical or transplant candidates. We developed a series of catheters that can be inserted in the left ventricle of the heart and a very sophisticated pump is used to recirculate the blood. You are downloading 90% of workload of the heart. They are still in clinical trials."
Wilson suggests that the SpringMed model could be successfully repeated in other locations and for other technologies.
"If you look at companies such as Boston Scientific (Natick, Massachusetts) and Johnson & Johnson (New Brunswick, New Jersey), the majority of their new technology is not organically grown. It comes from early stage companies like these, out of university environments. If these new companies don't succeed, that's a base of technology that isn't going to hit the market," he said.
Indeed, a local nanotechnology firm is following suit. QuarTek International (High Point, North Carolina), which develops smart materials, nano-sensors for diagnostics, nano-tagging and remote sensing devices, has launched NanoAccelerator. This arm of the company partners with technology entrepreneurs to help eliminate the barriers and obstacles that exist in product development and helps to maximize success opportunities.
In return, QuarTek takes an equity stake in the partner company in a range of 7% to 20%.