Medical Device Sector Seeks Investors

For Joseph Bronzino, there is no time like the present to invest in the state’s medical device industry.

The nation’s aging population will drive an ever increasing demand for biomedical products, from devices that rejuvenate hips and knees to robotics, medical lasers, and nanomanufacturing, said Bronzino, who heads the Biomedical Engineering Alliance & Consortium, or BEACON, a Hartford-based nonprofit.

“What [the sector] really needs is more money so it can do the clinical trials to see the device in a clinical setting,” Bronzino said.

Approximately 300 medical device companies employ about 5,200 workers along the nearly 70-mile stretch of Interstate 91 between New Haven and Springfield, Mass.

A number of those firms located in the so-called Knowledge Corridor will be among the 120 exhibitors at the MEDi 2008, a medical device conference at the Connecticut Convention Center Sept. 9 to 10.

The Connecticut firms compete with biomedical companies from across the country for public and private funding, and the state’s success in growing its biomedical cluster will hinge on the firms’ success in securing investments, Bronzino said.

They face tough competition from both California and neighboring Massachusetts, which ranked first among the states in risk capital and entrepreneurial infrastructure, according to a recent report issued by the Milken Institute. California was second. Connecticut ranked 13th.

Massachusetts has also received a healthy infusion of state funds.

In June, Massachusetts Gov. Deval Patrick signed a $1 billion life sciences bill, a 10-year commitment that provides $500 million in capital funding, $250 million for research grants and $250 million in tax incentives for life sciences projects. Another $4 million was allocated to build an “innovation center” at the University of Massachusetts at Lowell dedicated to developing, testing and commercializing medical devices.

Meanwhile, in Connecticut, Connecticut Innovations, a quasi-public investment arm, dedicates about $5 million to medical devices, said Matthew Smith, Connecticut Innovations managing director of investments.

“The demand is increasing sharply,” he said of medical device opportunities. “We’d like to expand funding. It’s more appealing because there’s faster development and faster regulatory response than pharmaceuticals.”

But Bronzino said that investment alone won’t be enough for the state to improve its competitive position in the biomedical field.

Precision Manufacturing

Financing aside, one key to building Connecticut’s medical device industry will be drawing precision manufacturers into the field, said Bronzino.

Frank Johnson, president and CEO of the Manufacturing Alliance of Connecticut, said a number of precision manufacturers are considering that option. “There are very high precision manufacturers who are perfectly able who for whatever reason never looked at it before,” Johnson said.

Others are testing the waters.

One such manufacturer, Glastonbury-based Habco, has designed and manufactured ground support equipment and test stands for military and commercial aircraft for 40 years.

A few years ago, Habco developed a catheter burst tester prototype, and Kristin Muschett, Habco president and CEO, is confident her company can produce medical devices.

“I’m looking for the potential in the market, what impact is it going to have for growth,” she said. “I need to make sure the technology crosses over and makes sense.”

“The economic climate is very favorable for the devices,” said John Enderle, director of the biomedical engineering program at the University of Connecticut. “We have an aging society that needs more and more health care devices.”

Venture capital money is flowing into the industry faster than ever, according to a report by Healthcare Corporate Financial News. About $1.1 billion was invested in medical devices in the first six months of 2008, more than the amount spent on biotechnology and pharmaceuticals.

The report shows that California, which has long dominated the medical device industry, got the largest share of venture dollars — $531 million in the first half this year.

Making a competitive play against California’s Silicon Valley is tough, but Connecticut has made strides in the past few years, especially in spine technology, said John Reynolds, an associate at the venture capital firm Foundation Medical Partners.

“We’ve seen some successful development of device and biomed opportunities in Connecticut, and that’s spurring on further generations of entrepreneurs,” Reynolds said. “It’s been more on biomedical than device in the past, but we have seen entrepreneurs form companies, we’ve met some good managerial talents, and it’s just a matter of building on that success.”

Price Is Right

If the price is right, medical device companies can be lured to Connecticut.

Stevens Proof of Concept Inc. selected the Nutmeg State as to develop and market its new product — a New York-made handheld device to target muscle pain — thanks in part to a $500,000 investment from Connecticut Innovations in April 2007.

“It’s a good central location for the resources we need,” said CEO Vikki Hazelwood. “We feel there’s an abundance of resources in the area, in terms of outside consulting help, future personnel, and places we can have things manufactured with quality.”

At Asnuntuck Community College in Enfield, Frank Gulluni, director of the school’s manufacturing center, is proposing the creation of a certificate program for medical device manufacturing. His students have already created prototypes for start-up companies looking to market ideas.