Tim Blair; Director of Strategic Partnerships

NAMSA

Lifescience Ecosystem

1. What is an Innovation Cluster?

2. Why do they matter to me?

Speed of Innovation and Information

50 Million Users

Mirror – 250 years

Radio – 36 years

TV – 13 years

Internet – 4 years

iPhone – 3 years

Instagram – 2 years

Angry Birds – 35 days

100 Million Selfies / day

Information to 2x

1900 – 100 years

1945 – 25 years

2015 – 13 months

2020 – 12 hours

You can hold all of the data

moving between EU and US in

the palm of your hand

Pure genius is rare: Invention

happens

because of the environment, the

previous, the necessity

Medical Device Ecosystems

Without competition, a cluster will fail.

"Competition can coexist with cooperation

because they occur on different dimensions and

among different players."

Medical Device Ecosystems

http://www.clustermapping.us/cluster/medical_devices

Traditional Medical Device Ecosystems

Medical Device Clusters Globally:

NoCal (Silicon Valley)

SoCal

Minneapolis

Boston

Warsaw, IN

Ireland (manufacturing)

Lyon, France - Switzerland

Israel (R&D)

Shanghai

Medical Device Ecosystems

All helpful data, but how do clusters originate?

How do medical device clusters originate and develop?

What is the “one” thing these locations have in common?

“Nine Number Ones”

Medical Device

Ecosystem

Medical Device

Ecosystem

Commercial

Success

Commercial Success

Someone has to be successful (early wins!)

Examples . . .

Target Therapeutics, Guidant in Silicon Valley (Dr Shockley from MIT)

New Jersey (rich history – Edison, Bell)

Medtronic in Minneapolis (Mayo Clinic)

DePuy in Warsaw, IN (1895)

Boston Scientific in Boston (Mass General)

Brings talent, economic growth, cash

Platform for entrepreneurs and spin outs

Medical Device

Ecosystem

Capital

Commercial

Success

Capital

Grants (NIH), SBIR, Institutional

Angel, Seed

Venture (A/B/C)

Tax Incentives, Banks

M&A, IPO

Economic Development Cooperation

Medical Device

Ecosystem

Capital

NGOs

Commercial

Success

NGOs

Non-Governmental Organizations which provide

intellectual capital / clinical know how, such as:

• Hospitals

• Universities

• Community Colleges (skilled trades, employment)

• Bio / MedTech Trade Associations (not just advocacy,

but networking, supply chain, training, buying consortia,

economic data)

Medical Device

Ecosystem

Capital

NGOs

Incubators

&

Accelerators

Commercial

Success

Incubators

Incubators/Research Institutions/Accelerators:

• Public or privately funded

• Accessibility to space, labs, prototyping facilities,

materials testing (specific)

• Mentors are critical

• Regulatory, preclinical, clinical, reimbursement

knowledge readily accessible

• Fail fast, iterate, bridge the early gaps

• Awesome Innovation at this level

Start Up Incubator Objectives

• An early “link” between Ideation and Industry

• Refine and prepare technology and a research team for success

• Research focused on getting the technology aligned with the market needs (innovation)

• Market opportunity 1. who is willing to pay for this product, 2. does this product address that opportunity

• Help companies on their journey

Incubator Advantages

• Increase value (work out the research bugs)

• Poise for next stage investments

• Mentors & Strategic Partners

• Networks of investors, industry, universities, hospitals,

researchers, manufacturing, engineering, regulators,

distributors, etc.

• Small % to no ownership exchanged

• Education

Concept/FeasibilityDesign Validation /

PreclinicalClinical Market Approval Post-Market

Medical Device

Timeline

Incubator Accelerator

Investment gap

Innovation Pain

Start Up Accelerator Objectives

• Cram 2 years into 2 months

• Poise the company for significant funding

• Refine and define the business models, marketing plans,

commercial strategy

• Typically focused on scaling the business

• Graduation will increase value

• Help companies on their journey

Accelerator Advantages

• Increase value (fast)

• Poise for larger capital / scale

• Education

• Mentors (10-100 Executive types)

• Strong networks of investors

• 3-9% piece of your business

• Help you avoid mistakes

IncubatorCreating entrepreneurs,

new technology, jobs

Start UpEntrepreneurs

AlumniStudentsInventors

BanksVC Firms

Corporate Support

Community ResourcesMentorsInvestors

Vendors / Suppliers

Academic Inst.Angel Firms

Corporate Structure

Seed Financing, FundsOrganizational commitment

& support to resources

Strong PULL for Incubator’s

Value propositionHigh value ROI

for time, money, andeffort

Incubators AcceleratorsAccess (Space) Access (Mentors & Capital)

Right Networking Right Networking

Right Equipment Right Tools

Low acceptance rates Low acceptance rates

Dedicated markets Dedicated mentors

6 mos - 2 years to graduate 3-6 months to graduate

Early Stage (typical) Early to Mid Stage (typical)

Innovation Scale quickly

Focused Learning Events Focused Learning Events

Poised for early funding Instructions for larger funding

Seeds & Soil Greenhouse

Apples Oranges

Innovators: What to look for vs Institution: What to offer

Both could be done in a singular designed building

Interesting Facts

• (1500) 71% reported a boost in creativity since joining a

shared work space

• 62% report the quality of work improved.

• 64% we better able to complete tasks on time

• 90% reported and increase in self confidence because

they now worked in a supportive community

Interesting Facts

• 2012 – North American incubation programs (2,000-7,500 depending on your definition)

• Assisted more than 40,000 companies

• Employment for more than 150,000 workers

• Revenues estimated at $30BB

• Recent data suggests # of Lifescience focused incubators are sharply declining (longer exits, funding gaps, regulatory hurdles)

• High success rates for companies who are able to enter incubators programs (2% acceptance rates)

Medical Device

Ecosystem

Capital

NGOs

Incubators

&

Accelerators

Supportive

Regional

Government

Commercial

Success

Supportive Regional Government

Not just supportive, active!

• Grants/funding for start-up ventures

• Employee development/training/transitions

• Tax incentives, R&D tax credits

• Advocacy at regional, state, national levels

• Collaborative

• Engaged

• Mutually beneficial

Medical Device

Ecosystem

Capital

NGOs

Incubators

&

Accelerators

Supportive

Regional

Government

Some

Local

Supply

Chain

Commercial

Success

Some Local Supply Chain (Innovation)

Some (not all), to make development easier:

• Materials development/assessment (metals,

polymers, coatings, adhesives, cleansers)

• Fabricators, machine shops, injection molders,

• 3D printers

• Contract manufacturers

• Labs, CROs

• The successful regions have > local supplier

support and an abundance of resources.

Medical Device

Ecosystem

Capital

NGOs

Incubators

&

Accelerators

Supportive

Regional

Government

Some

Local

Supply

Chain

Risk

Tolerance

Commercial

Success

Risk Tolerance

Includes competition, but also cooperation for

the whole to succeed

Loosen institutional handcuffs

Failures are “learning moment”

As long as you don’t make the same mistake(s)

And as long as there are more successes than

failures . . . over time

Question: Is failing fast really a good thing?

Medical Device

Ecosystem

Capital

NGOs

Incubators

&

Accelerators

Supportive

Regional

Government

Some

Local

Supply

Chain

Risk

Tolerance

Commercial

Infrastructure

Commercial

Success

Commercial Infrastructure

Support services . . .

IP/Legal/M&A

Bankers, Accountants, Insurance

Employment firms . . . Talent

Educational institutions

Travel, transportation, tourism – clean, easy

Medical Device

Ecosystem

Capital

NGOs

Incubators

&

Accelerators

Supportive

Regional

Government

Some

Local

Supply

Chain

Risk

Tolerance

Commercial

Infrastructure

Community

Commercial

Success

Community

Not traditional definition . . .

Online/E-exchanges/Social Media

Gathering places, informal networking

Chance meetings

Collaboration, idea exchange

Meet other cool people with similar interests

Diversity

3 Suggestions

Community . . . 3 C’s (conferences, connectors,

collaborators); spaces and places

Pull local and State government into your conferences . .

. Make them active?

Is there a common theme? Yes, the best innovations

hubs have active community and government activity.

Final Thoughts

We need more hubs of healthcare innovation!

• Jobs

• Next generations depend on global innovations for today’s global

markets

• Government cannot dictate what is considered innovative

• Need more collaboration across the healthcare sectors

(practitioners, regulators, global researchers, investors, big MedTech)

• Need more avenues for early technologies (big gap here!)