Seven Steps to Innovation Insights from experts on where it’s needed and how it’s done By Leslie Mertz
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nnovation isn’t easy. Not every idea is great, and not every great idea evolves into a final product or solution. So what does it take to move from the drawing board to realization, especially in the field of biomedical engineering, which seems to be churning out one great idea after another? It’s not about luck, according to the experts. The road to success has many twists and turns, but by passing a few guideposts along the way, the journey can be a rewarding one.
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1. Identify an Unmet Need
“The most important thing is your starting point, and there are two different models for reaching it,” said Tony Voiers, chief executive officer of Novocor Medical Systems. “In one model, which is more traditional, you develop an interesting technology and then go looking for a home for it. I’m not a subscriber to that model anymore. Although there are a lot of successful companies that have gone that route, there are also a lot more unsuccessful ideas that never made it out because they are basically a hammer looking for a nail.” The better model is to find an unmet need first, Voiers said. “If you can come up with a solution to that unmet need, you know you already have a market built in.” An example of that philosophy is Voiers’ company, Novocor, which emerged from an unmet need identified by undergraduate students in a 2007 capstone course offered by the joint department of biomedical engineering at the University of North Carolina (UNC) and North Carolina State University. To learn the basics about innovation development, “the students spend time in the field looking for areas where clinicians or other medical professionals are having a problem or an issue, or where medicine could be delivered better, and then innovating around that and figuring out how to improve it,” Voiers said. At one point, students rode in the backs of ambulances and watched the paramedics in action. One of their observations was that the paramedics needed immediate access to ice-cold saline, which is used to slow metabolism and reduces tissue damage in cardiac-arrest patients. The ambulances, however, had no refrigerators and lacked the power or space to add one. As a result, treatment was delayed until another vehicle could arrive with the cold saline, Voiers said. The undergraduates’ solution was to save both time and the cost of dispatching a second Digital Object Identifier 10.1109/MPUL.2013.2289461 Date of publication: 24 January 2014
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mobile-imaging platforms that address medical diagnostic and imaging needs. Although the ideas generated from the fellows at the Tata Center are developed for emerging economies, Hanumara pointed out that they aren’t confined to them. “If you come up with an efficient solution that can provide top-quality health care in a developing economy, there’s no reason we can’t learn from that here,” he said.
2. Choose Wisely “‘Innovation’ is an easy word to bandy about, but it’s not so easy to see which specific areas are going to respond to that in the quickest and most profitable ways,” said Sodini, LeBel Professor of Engineering and part of MIT’s Microsystems Technology FIGURE 1 Andrew DiMeo (center) and Tony Voiers (right) explain Laboratory. He is also the founder and codirector of the Medical their company’s saline-cooling technology, called HypoCore, at Electronic Device Realization Center (MEDRC), a collaborative the medical technology and health care conference TEDMED. effort to stimulate innovation. Emergency medical professionals use ice-cold saline to treat Sodini is involved in one of the most rapidly expanding patients who have experienced cardiac arrest. The infusion of chilled saline slows the metabolism and prevents further tissue areas of health care innovation: microelectronics. “Microelecdamage. (Photo courtesy of Andrew DiMeo.) tronics has been disrupting industries for the last 30 years: watches and calculators in the 1970s, computers in the 1980s, and communications and consumer electronics over the last vehicle by developing small, easily stowed, instant chemical two decades. Medical devices are really poised to be in that cold packs that could chill the saline as it’s being delivered, he same kind of category,” he said. explained. “That is exactly where the Novocor idea came from.” In selecting the areas that had the most promise, the MEDRC The medical device design course at the Massachusetts settled on three: 1) developing wearable and minimally invaInstitute of Technology (MIT) also teaches students to look for sive monitors with diagnostic quality; 2) finding ways to lower unmet needs. Here, however, clinicians bring their problem the cost of imaging (perhaps through wearable ultrasound or areas to the students, said Nevan Clancy Hanumara, Ph.D., other systems); and 3) point-of-care solutions that move lab who manages and teaches the hands-on medical device design analysis functions from the medical lab to the course at MIT with Prof. Alex Slocum and Prof. patient’s home, Sodini said. The latter would be Charlie Sodini. Hanumara is also the resident especially beneficial for the growing number of postdoc in MIT’s Precision Engineering Research The road to success older patients who need frequent blood work Group. “The clinicians actually compete to work has many twists and or other tests but have difficulty getting to and with our students. They desperately want to be turns, but by passing from the medical lab. He remarked, “The whole innovators, and the ones we work with in the a few guideposts idea here is to use microelectronics to push these Boston area are leading clinicians who want along the way, the diagnostic and monitoring capabilities closer to to work together to design something that will the patient.” make everybody’s life easier.” In the fall 2013 journey can be a Beyond microelectronics, other areas will semester, nine clinical projects went through a rewarding one. advance health care. One of them is microfluid14-week design process to result in a proof-ofics. “Microfluidics has been out there for years, concept prototype. but other than glucose monitors, it hasn’t taken off quite yet. I Striving for better patient outcomes is a major driver of think there will be a number of these kinds of monitors becombiomedical innovations. This extends well beyond industrialing available in the next four or five years,” Sodini said. ized countries, where wealthier populations have an insatiable demand for the best new technologies. “There’s a huge population in the world that does not have access to quality health 3. Make It Enticing care, so we must come up with efficient solutions for them too,” It’s not enough to come up with a great idea. That idea has to be said Hanumara, who is also affiliated with MIT’s Tata Center, nurtured and developed into something that will turn an inveswhich places one of its focuses on developing quality health care tor’s head, said Ken Nisbet, associate vice president-technology solutions for developing countries. Specifically, its fellowship transfer at the University of Michigan (U-M), one of the largest program brings students’ technical education to bear on projects research universities in the world with 2013 research expendithat benefit emerging India. tures topping US$1.3 billion. “I think of the word ‘innovation’ Tata Center efforts in 2012 included projects to design and fabas a combination of creativity, imagination, and looking at probricate a high-performance, low-cost prosthetic knee; to develop lems while seeking solutions,” Nisbet commented. At universia prosthetic foot that can be mass-manufactured and produced ties, creativity and imagination run rampant, and while they are inexpensively; and to tap into the ubiquity of cell phones and a powerful source of new discoveries and innovations, markettheir increasing capabilities for the purpose of developing able products are often an afterthought, he added. 30 ieee pulse ▼ january/february 2014
FIGURE 2 The start-up company Rest Devices is rolling out its new product, the Mimo baby monitor, a sensor-outfitted garment for infants that tracks sleep patterns, temperature, and more. The plastic turtle (bottom right) attaches to the garment with magnets and relays the information to a base station. (Photo courtesy of Rest Devices.)
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have any “great examples,” “The major research universities are by nature focused on but he noted, “I am working basic research and testing the boundaries of knowledge, often on convincing companies with funding from the government, so the findings are very, to do so.” very early in the development process,” he said. “Innovation, however, is not just discovering something, but also applying it to a societal need. Trying to take these early discoveries 4. Carry a Torch and turn them into market solutions is often quite difficult,” Innovation doesn’t happen Nisbet said. overnight. The idea for a To do this, “the research talent that conceived of that origiproduct to cool the saline on nal idea needs to be complemented by other talent, such as ambulances, for instance, was applied-development talent and market-awareness talent. We a good one, but it languished five need to find people who can help steer the project to the point years until a group of graduate stuwhere we can interest a market partner,” Nisbet dents in the joint departsaid. That kind of nurturing is also necessary to ment’s graduate-level medical Striving for better attract investors, who are reluctant to put their technology and design course resurrected it. They patient outcomes money into such early-stage projects because felt it had potential and developed a business of the risk involved. “At a university, we never model for it, explained Andrew DiMeo, Sr., Ph.D., is a major driver really produce something that can be put on the assistant professor of the practice, and the departof biomedical market tomorrow. It has to go from us into the ment’s director of industrial relations. At about the innovations. hands of an existing company or a start-up comsame time, Voiers was thinking about beginning a pany that can finish the job of commercializing medical-device start-up company on his own. He the new innovation.” also serves as an executive coach for the course. Companies need to step up, too, Hanumara said. On the one Voiers considered about a half dozen ideas, and used the folhand, they know that innovation is critical because having the lowing screening questions to whittle down the pool: latest and greatest product keeps the company on top. “Com▼▼ Is there a clear unmet medical need that doctors/caregivers panies are always worried that they are not innovative enough immediately recognize? and that someone else is more innovative than they are,” he ▼▼ Do I care about the medical need? remarked. On the other hand, innovations can be expensive ▼▼ Is the market size large enough? (He was specifically looking and risky endeavors. “I’ve seen a reticence of companies to pick for a total addressable market of US$500 million or larger.) up early-stage stuff because they’re either hedging their bets ▼▼ Is there a simple, straightforward regulatory path? (He was or they’re being cost conscious because the margins are tight.” searching for 510(k) or 510(k)-exempt opportunities.) Hanumara explained that companies are set up to maintain ▼▼ Has proof of concept been demonstrated? the status quo so they don’t lose market share, to make incre▼▼ Is the technology patentable? mental improvements, and to bring new products to the marHe ultimately settled on the saline-cooling technology, ket, provided those products “are in a space they already know.” because it not only met all the criteria, but also was the only He said, “I would ask companies to be a little more open to the opportunity that had pre-existing clinical data to support the unknown, to take a look at some of the early projects, and to product. “The availability of clinical data was really the clincher come on board and see if they can support and guide a project for me,” he said. After licensing the technology from the univerinto a commercially viable product.” At the moment, he doesn’t sity, both he and DiMeo began building the company Novocor
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FIGURE 3 The base station transmits real-time information from the Mimo baby monitor to parents’ smartphones. (a) The screen shows an infant’s breathing patterns, her swaddle temperature (whether the temperature just inside the garment in too hot, too cold, or normal), and the room temperature, which is tracked by the base station. (b) The screen shows when the baby was awake, asleep, and even when she rolled onto her stomach. (Images courtesy of Rest Devices.)
Medical Systems around the product, which is now called HypoCore (Figure 1). The product has passed through proofof-concept prototypes, and the company is now constructing its first commercial usable prototype. “In all,” DiMeo said, “it took a combination of innovative product development and invention disclosure combined with good business modeling, multiple classes looking at it, and a torchbearer who was willing to hang onto the thing all that time before it got to the point where it was ready for angel financing.” In this case, DiMeo became the torchbearer, the person who just wouldn’t let the idea fade away. A product’s champion can be the inventor, a clinician, a technology transfer officer, a businessperson who is looking for something new, or any number of other people who may have an interest in the technology. “It takes a great deal of entrepreneurship to carry one of these ideas over what can potentially be several years,” DiMeo commented. “Innovation really comes down to someone who is committed to carrying a torch.” For the cold-saline project, Dimeo took on that role because he wanted to show his students that it was indeed possible for one of their products to make it to the marketplace and have an impact on society. Sometimes the torchbearers are the inventors themselves, such as Thomas Lipoma and Carson Darling, two students who went through the medical device design course at MIT two years ago, recalled Hanumara. Lipoma and Darling, joined by two other MIT students, cofounded Rest Devices based on their class project: a sensor-outfitted shirt to noninvasively monitor respiration patterns and diagnose sleep apnea in adults. “We knew pretty early on that we wanted to start a company, so while we were still undergraduates, we were actively looking 32 ieee pulse ▼ january/february 2014
for ideas and projects,” Lipoma said. They settled on the sleep shirt because it had both strong market traction and a potentially large market. The four began working full-time on the company, and shortly after they graduated, the idea had progressed sufficiently to attract outside funding: US$500,000 by mid-2011. The company now sells the adult sleep shirts to researchers, but its primary product has transformed into a “onesie,” called the Mimo, which is a one-piece infant outfit that serves as a baby monitor (Figure 2). Like the diagnostic adult shirts, the onesies are based around “these really cool, really thin, vinyl respiration sensors that we have. When we press them onto any kind of garment, they can pick up respiration through the movement of the chest,” Lipoma said. Besides the sensors, which are on the outside of the material and therefore have no contact with the skin, the onesie comes with a small plastic turtle that attaches with magnets to the garment and relays the sensor information to a base station. “The combination of the turtle and the sensors provides parents with real-time information about breathing, skin temperature, body position, and movement to determine whether the child is asleep, awake, too hot, too cold—pretty much everything,” he said. Algorithms run in the background to watch for such potential concerns as a pause in breathing or the baby rolling onto his or her stomach, and can send alerts to a parent’s smartphone (Figure 3). The four MIT alumni have put in considerable time and effort to bring this project to fruition. As the payoff for their dedication to that initial idea, the Mimo begins shipping nationwide in early 2014.
5. Don’t Go It Alone Inventors do not have to venture into the unknown alone. Centers are popping up across the country to bring together all of the players that make innovations possible. One is the Global Center for Medical Innovation (GCMI), an independent, nonprofit organization in Atlanta that was founded by leading research and academic centers in Atlanta, including Georgia Institute of Technology (Georgia Tech). “With Emory University, Georgia Tech, and other research universities throughout the region, the medical device industry here should be bigger,” said Tiffany Wilson Karp, general manager and chief operating officer of GCMI. “And when you look at the fundamental reasons why, it’s that someone comes up with an idea, but they aren’t sure what to do next. For example, you might have a physician with a great idea to improve hospital efficiency or to improve patient care, or an academic researcher who’s got a great new medtech invention, but they may not necessarily know what it takes to get a their idea to the market.” GCMI is designed to assist with those topics that can be difficult for innovators to navigate, she said. That includes regulatory pathways and strategies, the intellectual-property landscape in the context of the industry, the wants and needs of investors, and the investment potential of a product. GCMI also includes a 12,000-ft 2 medical device commercialization center complete with full design engineering and prototyping
FIGURE 4 Innovation can be difficult to track. Michigan’s University Research Corridor measures the impact of its three major research universities—Wayne State, Michigan State, and U-M—through economic benefit, number of start-up companies, growth in R&D, and other measures. (Images from an infographic prepared by the University Research Corridor, used with permission from Jeff Mason, URC executive director.)
capabilities, sophisticated three-dimensional printers, a complete machine shop, and validating clean room space. The commercialization center opened in April 2012 and came on the heels of an i6 Challenge grant the GCMI won from the U.S. Department of Commerce in 2010. “In addition, we’ve got an ever-growing network of industry experts that we know and trust. So when someone comes in with an idea or has a question they need answered, we know whom to call or to bring in to answer critical questions and accelerate the commercialization process,” Karp said, noting that the center’s network includes academic researchers, physician entrepreneurs, small start-up companies, and new-concept groups throughout the industry. Investors are also part of the network. “We have ongoing dialogues with investors to find out what technologies they’re interested in, what types of companies they might invest in, various levels of funding, and how they want ideas pitched.” All of that helps the inventor tell their story in the best light, she said. Michigan’s University Research Corridor (URC) has a slightly different premise. It is an alliance between U-M, Michigan State University, and Wayne State University, which when combined, account for about 94% of all the academic research and development (R&D) taking place within the state of Michigan, said Jeff Mason, URC executive director. “Last year, more than US$2 billion in R&D went on within these three research institutions,” he said (Figure 4). In essence, the URC serves as a marketing center that brings attention to the state and its R&D capabilities, potentially stimulating new research and encouraging commercialization. It also fosters collaborations so that faculty and researchers can join forces on common research interests or share equipment, Mason said. Single-university centers have also joined the innovationpromoting bandwagon. “The MEDRC brings together people from medical device and microelectronics companies, physicians and clinicians from Boston hospitals that are just across the river from MIT, and technologists from MIT,” Sodini said.
“We include all three because it takes all three. Doctors or clinicians know exactly what they want, but the volumes on those products are often very small, usually just for their patients. For technologists, their technology is the only thing that’s important. And from the industry standpoint, they just want to have something they can sell and sell at volume, especially in microelectronics. So the center pools all of these together.” That type of merger works, Sodini said. The proof lies in one of his research group’s own projects, a vital signs monitor that is worn at the ear (Figure 5). “It measures your electrocardiogram (ECG), for both heart rate and timing information; it measures your ballistocardiogram (BCG), which is a mechanical signal that occurs when the blood is expelled out of the left ventricle and into the aorta; and the third signal it picks up is the photoplethysmogram (PPG), which yields oxygensaturation level and the time of arrival of the pulsatile,” Sodini explained. “This allows us to use timing information from two or more of the signals to acquire cardiac parameters such as the pre-ejection period, heart contractility, and cardiac output, or even estimate the mean arterial blood pressure.” The project couldn’t have proceeded without collaboration, he noted. The prototype development required an understanding of the physiology from the medical side and knowledge of the electronics from the engineering side, and layered on top, a start-up company is handling the commercialization. Strong collaborations just make good sense because each partner brings something different to the table, commented Hanumara. “For instance, academia is really good at ideation and industry is fabulous at execution,” he said. “Companies are always worried that they aren’t innovative enough. They see all of our new ideas, and they wonder how we can do it. The answer is simple: It’s because we don’t do what they do well.”
6. Be Flexible Sometimes, the development direction may need to take an unexpected turn, especially when it’s important to bring in some january/february 2014 ▼ ieee pulse 33
PPG LEDs and 2.4-GHz Transmitter Photodiodes Microcontroller USB Interface Earbud
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2.4-GHz Receiver
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(c) BCG Accelerometer
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FIGURE 5 Collaboration is critical for biomedical innovation. An example of a strong collaboration is the wearable vital signs monitor developed by graduate students Eric S. Winokur and David Da He and the research group of Charlie Sodini of MIT’s Medical Electronic Device Realization Center. (a) The device is worn at the ear and is shown here with electrocardiograph electrodes attached. The details of the device are shown in (b)–(d). (b) The wearable vital signs monitor, (c) the PC interface, and (d) the back side of the wearable vital signs monitor. A wireless receiver for the device plugs into a computer’s USB port. The project was supported by the MIT Medical Electronic Device Realization Center and a Natural Sciences and Engineering Research Council of Canada fellowship. (Photo and images courtesy of Charlie Sodini.)
cash flow while waiting for a medical device to go through clinical testing and the regulatory approval process. In the case of Rest Devices, the shift from the adult shirt to the onesie came for a few reasons. One was that the diagnostic adult shirt is designated by the U.S. Food and Drug Administration (FDA) as a class-one medical device and therefore must go through the FDA approval process, which includes clinical testing. That takes time—as much as five years, Lipoma estimated—and costs money. Still, they didn’t view the FDA approval as an insurmountable obstacle. The cost is high but not extreme; the pathway is rather long but relatively straightforward; and consultants are available to help start-ups through the process, he said. The bigger complication was insurance reimbursement. “Who’s going to pay for it? How are they going to pay for it? There are so many variables at play, so much politics around insurance reimbursement, and it’s all changing so quickly right now that it’s almost impossible to predict where the 34 ieee pulse ▼ january/february 2014
entire marketplace is going to be after you do get FDA approval,” Lipoma said. “There are a lot of problems that need to be fixed before we will feel really confident as a start-up making a medical device.” With all that in mind, the onesie made more sense as the company’s initial product. Since it is a consumer product and the company is not making any medical claims, it doesn’t need the FDA nod and sales can begin immediately. And by selling directly to consumers, insurance reimbursement isn’t involved. That’s not to say a medical device is not in their future, he said. “Ideally, we want to be the first hospital–home product, so if your child is coming out of the hospital with a onesie, we think it should be the Mimo onesie so you can track your baby,” he said, and that will demand FDA clearance. “We’ll have to validate that our product is doing what we say it is at a clinical level.” For now, though, Lipoma and the other 20-somethings running Rest Devices are happy to have the flexibility to continue their aspirations toward a medical device, while also putting out a consumer product that will give their bottom line a boost.
7. Understand the Barriers Money is always an issue, and it can be a barrier to biomedical innovation. “Venture capital or angel investors are not quite ready to invest in university research at an early stage, and unfortunately, available funding sources to bring it from research endeavor to a product that’s ready to spin out of the
An Investor’s Point of View What exactly are investors looking for in a new technology? That depends, according to Bob Crutchfield, the general partner for Harbert Venture Partners’ (HVP) health care practice. HVP of Birmingham, Alabama, is an institutional venture capital investor firm that sponsors alternative asset investment strategies, including those in the biomedical arena. “We are early-growth-stage investors, so what we’re looking for before we deploy capital is evidence of market adoption demonstrated by revenue, which means customers,” he said. HVP doesn’t invest until a market-launch product is ready, Crutchfield said. “We want to see the regulatory processes completed and approvals received in most cases. An alternative would be having a surrogate for revenue.” He provided two examples. In one, HVP invested in nContact Inc. of Morrisville, North Carolina, which developed a device to treat atrial fibrillation in a far less invasive way than the standard, aggressive surgical procedure, Crutchfield said. “The beauty of this product was that they already had FDA approval, they were already in the market, and they had a couple of customers who were early adopters and were using the product. So we came in and put capital to work to grow and expand the business,” he said. “Today, that product is beginning to be recognized as the leading solution to treating patients with atrial fibrillation.” In the second example, Crutchfield described HVP’s investment in Intelliject of Richmond, Virginia, which developed Auvi-Q, an epinephrine-injection device for emergency treatment of lifethreatening allergic anaphylaxis. “One of the things with Intelliject that was very appealing to us was its management team, including the inventors who created a very elegant solution to the delivery of epinephrine,” Crutchfield said. He described the device as an easy-tocarry and easy-to-use automated delivery platform that has a large and
growing market. “What we also liked was that it had capabilities for using other types of drugs, so there was expandability.” HVP got involved rather early in the development stage of the Intelliject product, Crutchfield said, because it had a surrogate for revenue. The surrogate was a corporate partner, French pharmaceutical giant Sanofi, which agreed to “take the product to market if we could get it through the regulatory pathway,” he said. It has worked out well. “We’re having really great success today.” Overall, Crutchfield advised research universities, which he said are doing the vast majority of the research behind new biomedical products, to take several steps to entice investors. University offices of technology transfer and licensing must not only view licensing as a means of creating monetized value for technologies under development, but also as a means to nurture those technologies that have potential for becoming operating companies, he said. For the latter, universities must provide “the right level of support, management, guidance, interactions with the business community at the appropriate times, and help in positioning technologies to get them through proof-of-concept prototype development phases. That provides clarity around what the addressable market is and what the regulatory hurdles are. That’s very important to an investor,” he said. Most venture capitalists today want to invest with an eye toward growth equity, Crutchfield said, and aren’t interested in putting their money into initial research. That means universities need to take a more active role in bringing research projects further down the commercial pathway so that they’re closer to market readiness. “If universities become more focused on the economic development aspects of commercialization—where they’re actually trying to facilitate the building of companies—then I think you’ll see investors potentially moving downstream again and maybe coming into these deals earlier.”
Insurance reimbursement is in dire need of an overhaul in university are very small,” DiMeo said. That means it may the United States, said Carol Lewis, associate director of the be months or even years before enough funding is cobbled UNC Health Care System’s Center for Innovation. The center’s together to move a project forward (see “An Investor’s Point main objective is to promote innovation in health care delivof View”). ery across the UNC Health Care System and the UNC School Nisbet agreed that money can be a major impediment. “Most of Medicine. “We have these wonderful disruptive innovations of the basic research here at U-M and at other research unithat are good for the patient and good for the payers because versities is funded by federal, state, or university sources, but they’re less expensive overall, but they are not there are fewer options to fine-tune the research necessarily financially supported through reimand get it to a point where an investor would bursement models. So, we end up spending a lot be interested.” Technology transfer offices like Academia is really of time talking with collaborators to help us fund his, as well as innovation centers, can often good at ideation and some of the innovations, either through in-kind help either with grant-submission assistance or industry is fabulous contributions or even direct funding to launch direct funding. Nisbet’s office, for instance, propilot projects that will demonstrate the value of vides some of that necessary funding, along with at execution. these innovations.” access to talent to address key commercialization Karp identified the same obstacles. “There’s issues. still an issue in the difficulty in getting innovations through While the lack of funding can and sometimes does stop techthe FDA, but I think that it’s getting better. Health care reform, nology development in its tracks, insurance reimbursement can and specifically reimbursement and regulatory uncertainty, become an even bigger barrier once a product reaches the comremain critical areas that we need to address as a country for mercialization stage, Lipoma explained. “It’s easy to think of the investor dollars to start flowing again.” She added, “Until we FDA as the only problem, when in reality for a lot of different really address those fundamental, macro issues, I think we’ll devices and a lot of different companies, insurance is going to be see continued tightening of the purse strings for investments a much bigger issue down the road.” january/february 2014 ▼ ieee pulse 35
Measuring Success
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in their early stage, and that is really hurting innovation in this country.”
The demand and the drive for health care innovation is stronger than ever, and with so much excitement over new discoveries and products, the next quandary is how “innovation” can be measured. “That’s a really good question and an especially tough one to answer for the ones planting the seeds,” DiMeo said. “At universities, you’re seeing more metrics on the number of spinout companies, whereas in the past, technology transfer was measured more in cash, such as royalties, brought in. Of course, the next question is: Does that mean good, sucare so many untapped areas where cessful spinouts? That’s going to be hard to say until you get technology can really help to transdown to measurements on such things as jobs created.” form health care. That’s why the CenSuccess stories are one way to measure the impact of innoter for Innovation is here and has support.” vation, said Nisbet. Examples of university research that has The center also launched a program called spawned start-up companies over the years are many, including Bright Ideas for Health and, in March 2013, put out a very recent start-ups in Ann Arbor, Michigan, such as Tissue Regengeneral challenge to employees using a social media/crowderation Systems Inc., which is creating a skeletal sourc i ng tool to identify unmet needs and reconstruction and bone regeneration technolpotential solutions. “We got back more than 100 ogy platform that it licensed from U-M and the good ideas and floated a handful up to the top as The demand and the University of Wisconsin, and Histosonics Inc., winners. At this point, we’re working to impledrive for health care which is using U-M technology to develop nonment some of the ideas that had the fewest barinnovation is stronger invasive, image-guided therapeutic ultrasounds riers to implementation. It was a very fun and than ever, and with for benign prostatic hyperplasia (BPH, or benign interesting exercise, but one of the challenges enlargement of the prostate) and other condiwith this kind of crowdsourcing is that while you so much excitement tions. “If you want to talk about the impact of might get a lot of good ideas, if you don’t have the over new discoveries innovation, the best way to describe it is with funding or the buy-in from the leaders in that and products, the stories,” he said. area to then do something with those ideas, what next quandary is UNC’s Center for Innovation measures the have you really accomplished? We’re trying very how “innovation” success of its individual projects one at a time, hard to have that closure on the back end. That’s can be measured. Lewis said. “Each project has its own set of outimportant.” comes, which have to involve both cost improveShe said the center is also trying to gauge the ment as well as quality-of-care improvement.” internal culture for innovation at UNC. “We’re Measuring the success of the center is a little thornier, she said. looking at surveying our own employees to find out how inno“In that case, we’re looking at the number of innovations we’re vative they feel we are as an organization and whether they feel supporting; we’re tracking dollars that we’re bringing in from they can bring innovation to their areas.” While UNC is ceroutside sources; and we’re trying to figure out how to gauge our tainly no stranger to innovation, she said there’s always room for impact on the organizations culturally, and that’s very difficult.” improvement. “A culture of innovation is a pillar that we must Fortunately, she said, UNC and the affiliated UNC Health Care support.” System are already leaders in innovation, so they have quite a When all is said and done, the definitive metric for success high starting point. lies at the heart of health care innovation, according to DiMeo. “We know that health care innovation is critical,” Lewis “Ultimately, it’s going to come down to patients’ lives saved or said. At the center, innovation efforts are “aimed at reducing number of patients’ lives positively impacted. Whether the innothe overall cost of care while improving quality at the same vations are coming out of universities or companies, at the end of time, so we’re focused on all kinds of disruptive innovations the day, the important thing is that we’re enhancing the health related to care-delivery models and the payment models that and quality of life of patients.” support them,” she said. That includes biomedical devices as DiMeo added, “If you can improve health outcomes, that’s well as innovations involving more effective and efficient use innovation. If you can reduce the costs of health care, that’s of the workforce, coordination and transition of care, and new innovation. And if you can do both of those things, then that’s kinds of payment models. “We’re really looking across the truly something innovative.” board,” she said. Lewis also noted that new opportunities are around nearly Leslie Mertz ([email protected]) is a freelance science, medical, and every corner. “Technologies involving social media, patient technical writer, author, and educator living in northern Michigan. engagement, and changing patient behavior are just a few. There
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nnovation isn’t easy. Not every idea is great, and not every great idea evolves into a final product or solution. So what does it take to move from the drawing board to realization, especially in the field of biomedical engineering, which seems to be churning out one great idea after another? It’s not about luck, according to the experts. The road to success has many twists and turns, but by passing a few guideposts along the way, the journey can be a rewarding one.
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1. Identify an Unmet Need
“The most important thing is your starting point, and there are two different models for reaching it,” said Tony Voiers, chief executive officer of Novocor Medical Systems. “In one model, which is more traditional, you develop an interesting technology and then go looking for a home for it. I’m not a subscriber to that model anymore. Although there are a lot of successful companies that have gone that route, there are also a lot more unsuccessful ideas that never made it out because they are basically a hammer looking for a nail.” The better model is to find an unmet need first, Voiers said. “If you can come up with a solution to that unmet need, you know you already have a market built in.” An example of that philosophy is Voiers’ company, Novocor, which emerged from an unmet need identified by undergraduate students in a 2007 capstone course offered by the joint department of biomedical engineering at the University of North Carolina (UNC) and North Carolina State University. To learn the basics about innovation development, “the students spend time in the field looking for areas where clinicians or other medical professionals are having a problem or an issue, or where medicine could be delivered better, and then innovating around that and figuring out how to improve it,” Voiers said. At one point, students rode in the backs of ambulances and watched the paramedics in action. One of their observations was that the paramedics needed immediate access to ice-cold saline, which is used to slow metabolism and reduces tissue damage in cardiac-arrest patients. The ambulances, however, had no refrigerators and lacked the power or space to add one. As a result, treatment was delayed until another vehicle could arrive with the cold saline, Voiers said. The undergraduates’ solution was to save both time and the cost of dispatching a second Digital Object Identifier 10.1109/MPUL.2013.2289461 Date of publication: 24 January 2014
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mobile-imaging platforms that address medical diagnostic and imaging needs. Although the ideas generated from the fellows at the Tata Center are developed for emerging economies, Hanumara pointed out that they aren’t confined to them. “If you come up with an efficient solution that can provide top-quality health care in a developing economy, there’s no reason we can’t learn from that here,” he said.
2. Choose Wisely “‘Innovation’ is an easy word to bandy about, but it’s not so easy to see which specific areas are going to respond to that in the quickest and most profitable ways,” said Sodini, LeBel Professor of Engineering and part of MIT’s Microsystems Technology FIGURE 1 Andrew DiMeo (center) and Tony Voiers (right) explain Laboratory. He is also the founder and codirector of the Medical their company’s saline-cooling technology, called HypoCore, at Electronic Device Realization Center (MEDRC), a collaborative the medical technology and health care conference TEDMED. effort to stimulate innovation. Emergency medical professionals use ice-cold saline to treat Sodini is involved in one of the most rapidly expanding patients who have experienced cardiac arrest. The infusion of chilled saline slows the metabolism and prevents further tissue areas of health care innovation: microelectronics. “Microelecdamage. (Photo courtesy of Andrew DiMeo.) tronics has been disrupting industries for the last 30 years: watches and calculators in the 1970s, computers in the 1980s, and communications and consumer electronics over the last vehicle by developing small, easily stowed, instant chemical two decades. Medical devices are really poised to be in that cold packs that could chill the saline as it’s being delivered, he same kind of category,” he said. explained. “That is exactly where the Novocor idea came from.” In selecting the areas that had the most promise, the MEDRC The medical device design course at the Massachusetts settled on three: 1) developing wearable and minimally invaInstitute of Technology (MIT) also teaches students to look for sive monitors with diagnostic quality; 2) finding ways to lower unmet needs. Here, however, clinicians bring their problem the cost of imaging (perhaps through wearable ultrasound or areas to the students, said Nevan Clancy Hanumara, Ph.D., other systems); and 3) point-of-care solutions that move lab who manages and teaches the hands-on medical device design analysis functions from the medical lab to the course at MIT with Prof. Alex Slocum and Prof. patient’s home, Sodini said. The latter would be Charlie Sodini. Hanumara is also the resident especially beneficial for the growing number of postdoc in MIT’s Precision Engineering Research The road to success older patients who need frequent blood work Group. “The clinicians actually compete to work has many twists and or other tests but have difficulty getting to and with our students. They desperately want to be turns, but by passing from the medical lab. He remarked, “The whole innovators, and the ones we work with in the a few guideposts idea here is to use microelectronics to push these Boston area are leading clinicians who want along the way, the diagnostic and monitoring capabilities closer to to work together to design something that will the patient.” make everybody’s life easier.” In the fall 2013 journey can be a Beyond microelectronics, other areas will semester, nine clinical projects went through a rewarding one. advance health care. One of them is microfluid14-week design process to result in a proof-ofics. “Microfluidics has been out there for years, concept prototype. but other than glucose monitors, it hasn’t taken off quite yet. I Striving for better patient outcomes is a major driver of think there will be a number of these kinds of monitors becombiomedical innovations. This extends well beyond industrialing available in the next four or five years,” Sodini said. ized countries, where wealthier populations have an insatiable demand for the best new technologies. “There’s a huge population in the world that does not have access to quality health 3. Make It Enticing care, so we must come up with efficient solutions for them too,” It’s not enough to come up with a great idea. That idea has to be said Hanumara, who is also affiliated with MIT’s Tata Center, nurtured and developed into something that will turn an inveswhich places one of its focuses on developing quality health care tor’s head, said Ken Nisbet, associate vice president-technology solutions for developing countries. Specifically, its fellowship transfer at the University of Michigan (U-M), one of the largest program brings students’ technical education to bear on projects research universities in the world with 2013 research expendithat benefit emerging India. tures topping US$1.3 billion. “I think of the word ‘innovation’ Tata Center efforts in 2012 included projects to design and fabas a combination of creativity, imagination, and looking at probricate a high-performance, low-cost prosthetic knee; to develop lems while seeking solutions,” Nisbet commented. At universia prosthetic foot that can be mass-manufactured and produced ties, creativity and imagination run rampant, and while they are inexpensively; and to tap into the ubiquity of cell phones and a powerful source of new discoveries and innovations, markettheir increasing capabilities for the purpose of developing able products are often an afterthought, he added. 30 ieee pulse ▼ january/february 2014
FIGURE 2 The start-up company Rest Devices is rolling out its new product, the Mimo baby monitor, a sensor-outfitted garment for infants that tracks sleep patterns, temperature, and more. The plastic turtle (bottom right) attaches to the garment with magnets and relays the information to a base station. (Photo courtesy of Rest Devices.)
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have any “great examples,” “The major research universities are by nature focused on but he noted, “I am working basic research and testing the boundaries of knowledge, often on convincing companies with funding from the government, so the findings are very, to do so.” very early in the development process,” he said. “Innovation, however, is not just discovering something, but also applying it to a societal need. Trying to take these early discoveries 4. Carry a Torch and turn them into market solutions is often quite difficult,” Innovation doesn’t happen Nisbet said. overnight. The idea for a To do this, “the research talent that conceived of that origiproduct to cool the saline on nal idea needs to be complemented by other talent, such as ambulances, for instance, was applied-development talent and market-awareness talent. We a good one, but it languished five need to find people who can help steer the project to the point years until a group of graduate stuwhere we can interest a market partner,” Nisbet dents in the joint departsaid. That kind of nurturing is also necessary to ment’s graduate-level medical Striving for better attract investors, who are reluctant to put their technology and design course resurrected it. They patient outcomes money into such early-stage projects because felt it had potential and developed a business of the risk involved. “At a university, we never model for it, explained Andrew DiMeo, Sr., Ph.D., is a major driver really produce something that can be put on the assistant professor of the practice, and the departof biomedical market tomorrow. It has to go from us into the ment’s director of industrial relations. At about the innovations. hands of an existing company or a start-up comsame time, Voiers was thinking about beginning a pany that can finish the job of commercializing medical-device start-up company on his own. He the new innovation.” also serves as an executive coach for the course. Companies need to step up, too, Hanumara said. On the one Voiers considered about a half dozen ideas, and used the folhand, they know that innovation is critical because having the lowing screening questions to whittle down the pool: latest and greatest product keeps the company on top. “Com▼▼ Is there a clear unmet medical need that doctors/caregivers panies are always worried that they are not innovative enough immediately recognize? and that someone else is more innovative than they are,” he ▼▼ Do I care about the medical need? remarked. On the other hand, innovations can be expensive ▼▼ Is the market size large enough? (He was specifically looking and risky endeavors. “I’ve seen a reticence of companies to pick for a total addressable market of US$500 million or larger.) up early-stage stuff because they’re either hedging their bets ▼▼ Is there a simple, straightforward regulatory path? (He was or they’re being cost conscious because the margins are tight.” searching for 510(k) or 510(k)-exempt opportunities.) Hanumara explained that companies are set up to maintain ▼▼ Has proof of concept been demonstrated? the status quo so they don’t lose market share, to make incre▼▼ Is the technology patentable? mental improvements, and to bring new products to the marHe ultimately settled on the saline-cooling technology, ket, provided those products “are in a space they already know.” because it not only met all the criteria, but also was the only He said, “I would ask companies to be a little more open to the opportunity that had pre-existing clinical data to support the unknown, to take a look at some of the early projects, and to product. “The availability of clinical data was really the clincher come on board and see if they can support and guide a project for me,” he said. After licensing the technology from the univerinto a commercially viable product.” At the moment, he doesn’t sity, both he and DiMeo began building the company Novocor
(a)
(b)
FIGURE 3 The base station transmits real-time information from the Mimo baby monitor to parents’ smartphones. (a) The screen shows an infant’s breathing patterns, her swaddle temperature (whether the temperature just inside the garment in too hot, too cold, or normal), and the room temperature, which is tracked by the base station. (b) The screen shows when the baby was awake, asleep, and even when she rolled onto her stomach. (Images courtesy of Rest Devices.)
Medical Systems around the product, which is now called HypoCore (Figure 1). The product has passed through proofof-concept prototypes, and the company is now constructing its first commercial usable prototype. “In all,” DiMeo said, “it took a combination of innovative product development and invention disclosure combined with good business modeling, multiple classes looking at it, and a torchbearer who was willing to hang onto the thing all that time before it got to the point where it was ready for angel financing.” In this case, DiMeo became the torchbearer, the person who just wouldn’t let the idea fade away. A product’s champion can be the inventor, a clinician, a technology transfer officer, a businessperson who is looking for something new, or any number of other people who may have an interest in the technology. “It takes a great deal of entrepreneurship to carry one of these ideas over what can potentially be several years,” DiMeo commented. “Innovation really comes down to someone who is committed to carrying a torch.” For the cold-saline project, Dimeo took on that role because he wanted to show his students that it was indeed possible for one of their products to make it to the marketplace and have an impact on society. Sometimes the torchbearers are the inventors themselves, such as Thomas Lipoma and Carson Darling, two students who went through the medical device design course at MIT two years ago, recalled Hanumara. Lipoma and Darling, joined by two other MIT students, cofounded Rest Devices based on their class project: a sensor-outfitted shirt to noninvasively monitor respiration patterns and diagnose sleep apnea in adults. “We knew pretty early on that we wanted to start a company, so while we were still undergraduates, we were actively looking 32 ieee pulse ▼ january/february 2014
for ideas and projects,” Lipoma said. They settled on the sleep shirt because it had both strong market traction and a potentially large market. The four began working full-time on the company, and shortly after they graduated, the idea had progressed sufficiently to attract outside funding: US$500,000 by mid-2011. The company now sells the adult sleep shirts to researchers, but its primary product has transformed into a “onesie,” called the Mimo, which is a one-piece infant outfit that serves as a baby monitor (Figure 2). Like the diagnostic adult shirts, the onesies are based around “these really cool, really thin, vinyl respiration sensors that we have. When we press them onto any kind of garment, they can pick up respiration through the movement of the chest,” Lipoma said. Besides the sensors, which are on the outside of the material and therefore have no contact with the skin, the onesie comes with a small plastic turtle that attaches with magnets to the garment and relays the sensor information to a base station. “The combination of the turtle and the sensors provides parents with real-time information about breathing, skin temperature, body position, and movement to determine whether the child is asleep, awake, too hot, too cold—pretty much everything,” he said. Algorithms run in the background to watch for such potential concerns as a pause in breathing or the baby rolling onto his or her stomach, and can send alerts to a parent’s smartphone (Figure 3). The four MIT alumni have put in considerable time and effort to bring this project to fruition. As the payoff for their dedication to that initial idea, the Mimo begins shipping nationwide in early 2014.
5. Don’t Go It Alone Inventors do not have to venture into the unknown alone. Centers are popping up across the country to bring together all of the players that make innovations possible. One is the Global Center for Medical Innovation (GCMI), an independent, nonprofit organization in Atlanta that was founded by leading research and academic centers in Atlanta, including Georgia Institute of Technology (Georgia Tech). “With Emory University, Georgia Tech, and other research universities throughout the region, the medical device industry here should be bigger,” said Tiffany Wilson Karp, general manager and chief operating officer of GCMI. “And when you look at the fundamental reasons why, it’s that someone comes up with an idea, but they aren’t sure what to do next. For example, you might have a physician with a great idea to improve hospital efficiency or to improve patient care, or an academic researcher who’s got a great new medtech invention, but they may not necessarily know what it takes to get a their idea to the market.” GCMI is designed to assist with those topics that can be difficult for innovators to navigate, she said. That includes regulatory pathways and strategies, the intellectual-property landscape in the context of the industry, the wants and needs of investors, and the investment potential of a product. GCMI also includes a 12,000-ft 2 medical device commercialization center complete with full design engineering and prototyping
FIGURE 4 Innovation can be difficult to track. Michigan’s University Research Corridor measures the impact of its three major research universities—Wayne State, Michigan State, and U-M—through economic benefit, number of start-up companies, growth in R&D, and other measures. (Images from an infographic prepared by the University Research Corridor, used with permission from Jeff Mason, URC executive director.)
capabilities, sophisticated three-dimensional printers, a complete machine shop, and validating clean room space. The commercialization center opened in April 2012 and came on the heels of an i6 Challenge grant the GCMI won from the U.S. Department of Commerce in 2010. “In addition, we’ve got an ever-growing network of industry experts that we know and trust. So when someone comes in with an idea or has a question they need answered, we know whom to call or to bring in to answer critical questions and accelerate the commercialization process,” Karp said, noting that the center’s network includes academic researchers, physician entrepreneurs, small start-up companies, and new-concept groups throughout the industry. Investors are also part of the network. “We have ongoing dialogues with investors to find out what technologies they’re interested in, what types of companies they might invest in, various levels of funding, and how they want ideas pitched.” All of that helps the inventor tell their story in the best light, she said. Michigan’s University Research Corridor (URC) has a slightly different premise. It is an alliance between U-M, Michigan State University, and Wayne State University, which when combined, account for about 94% of all the academic research and development (R&D) taking place within the state of Michigan, said Jeff Mason, URC executive director. “Last year, more than US$2 billion in R&D went on within these three research institutions,” he said (Figure 4). In essence, the URC serves as a marketing center that brings attention to the state and its R&D capabilities, potentially stimulating new research and encouraging commercialization. It also fosters collaborations so that faculty and researchers can join forces on common research interests or share equipment, Mason said. Single-university centers have also joined the innovationpromoting bandwagon. “The MEDRC brings together people from medical device and microelectronics companies, physicians and clinicians from Boston hospitals that are just across the river from MIT, and technologists from MIT,” Sodini said.
“We include all three because it takes all three. Doctors or clinicians know exactly what they want, but the volumes on those products are often very small, usually just for their patients. For technologists, their technology is the only thing that’s important. And from the industry standpoint, they just want to have something they can sell and sell at volume, especially in microelectronics. So the center pools all of these together.” That type of merger works, Sodini said. The proof lies in one of his research group’s own projects, a vital signs monitor that is worn at the ear (Figure 5). “It measures your electrocardiogram (ECG), for both heart rate and timing information; it measures your ballistocardiogram (BCG), which is a mechanical signal that occurs when the blood is expelled out of the left ventricle and into the aorta; and the third signal it picks up is the photoplethysmogram (PPG), which yields oxygensaturation level and the time of arrival of the pulsatile,” Sodini explained. “This allows us to use timing information from two or more of the signals to acquire cardiac parameters such as the pre-ejection period, heart contractility, and cardiac output, or even estimate the mean arterial blood pressure.” The project couldn’t have proceeded without collaboration, he noted. The prototype development required an understanding of the physiology from the medical side and knowledge of the electronics from the engineering side, and layered on top, a start-up company is handling the commercialization. Strong collaborations just make good sense because each partner brings something different to the table, commented Hanumara. “For instance, academia is really good at ideation and industry is fabulous at execution,” he said. “Companies are always worried that they aren’t innovative enough. They see all of our new ideas, and they wonder how we can do it. The answer is simple: It’s because we don’t do what they do well.”
6. Be Flexible Sometimes, the development direction may need to take an unexpected turn, especially when it’s important to bring in some january/february 2014 ▼ ieee pulse 33
PPG LEDs and 2.4-GHz Transmitter Photodiodes Microcontroller USB Interface Earbud
Microcontroller Coin Cell Battery
2.4-GHz Receiver
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(c) BCG Accelerometer
PPG Front End
Power Management ECG Front End
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FIGURE 5 Collaboration is critical for biomedical innovation. An example of a strong collaboration is the wearable vital signs monitor developed by graduate students Eric S. Winokur and David Da He and the research group of Charlie Sodini of MIT’s Medical Electronic Device Realization Center. (a) The device is worn at the ear and is shown here with electrocardiograph electrodes attached. The details of the device are shown in (b)–(d). (b) The wearable vital signs monitor, (c) the PC interface, and (d) the back side of the wearable vital signs monitor. A wireless receiver for the device plugs into a computer’s USB port. The project was supported by the MIT Medical Electronic Device Realization Center and a Natural Sciences and Engineering Research Council of Canada fellowship. (Photo and images courtesy of Charlie Sodini.)
cash flow while waiting for a medical device to go through clinical testing and the regulatory approval process. In the case of Rest Devices, the shift from the adult shirt to the onesie came for a few reasons. One was that the diagnostic adult shirt is designated by the U.S. Food and Drug Administration (FDA) as a class-one medical device and therefore must go through the FDA approval process, which includes clinical testing. That takes time—as much as five years, Lipoma estimated—and costs money. Still, they didn’t view the FDA approval as an insurmountable obstacle. The cost is high but not extreme; the pathway is rather long but relatively straightforward; and consultants are available to help start-ups through the process, he said. The bigger complication was insurance reimbursement. “Who’s going to pay for it? How are they going to pay for it? There are so many variables at play, so much politics around insurance reimbursement, and it’s all changing so quickly right now that it’s almost impossible to predict where the 34 ieee pulse ▼ january/february 2014
entire marketplace is going to be after you do get FDA approval,” Lipoma said. “There are a lot of problems that need to be fixed before we will feel really confident as a start-up making a medical device.” With all that in mind, the onesie made more sense as the company’s initial product. Since it is a consumer product and the company is not making any medical claims, it doesn’t need the FDA nod and sales can begin immediately. And by selling directly to consumers, insurance reimbursement isn’t involved. That’s not to say a medical device is not in their future, he said. “Ideally, we want to be the first hospital–home product, so if your child is coming out of the hospital with a onesie, we think it should be the Mimo onesie so you can track your baby,” he said, and that will demand FDA clearance. “We’ll have to validate that our product is doing what we say it is at a clinical level.” For now, though, Lipoma and the other 20-somethings running Rest Devices are happy to have the flexibility to continue their aspirations toward a medical device, while also putting out a consumer product that will give their bottom line a boost.
7. Understand the Barriers Money is always an issue, and it can be a barrier to biomedical innovation. “Venture capital or angel investors are not quite ready to invest in university research at an early stage, and unfortunately, available funding sources to bring it from research endeavor to a product that’s ready to spin out of the
An Investor’s Point of View What exactly are investors looking for in a new technology? That depends, according to Bob Crutchfield, the general partner for Harbert Venture Partners’ (HVP) health care practice. HVP of Birmingham, Alabama, is an institutional venture capital investor firm that sponsors alternative asset investment strategies, including those in the biomedical arena. “We are early-growth-stage investors, so what we’re looking for before we deploy capital is evidence of market adoption demonstrated by revenue, which means customers,” he said. HVP doesn’t invest until a market-launch product is ready, Crutchfield said. “We want to see the regulatory processes completed and approvals received in most cases. An alternative would be having a surrogate for revenue.” He provided two examples. In one, HVP invested in nContact Inc. of Morrisville, North Carolina, which developed a device to treat atrial fibrillation in a far less invasive way than the standard, aggressive surgical procedure, Crutchfield said. “The beauty of this product was that they already had FDA approval, they were already in the market, and they had a couple of customers who were early adopters and were using the product. So we came in and put capital to work to grow and expand the business,” he said. “Today, that product is beginning to be recognized as the leading solution to treating patients with atrial fibrillation.” In the second example, Crutchfield described HVP’s investment in Intelliject of Richmond, Virginia, which developed Auvi-Q, an epinephrine-injection device for emergency treatment of lifethreatening allergic anaphylaxis. “One of the things with Intelliject that was very appealing to us was its management team, including the inventors who created a very elegant solution to the delivery of epinephrine,” Crutchfield said. He described the device as an easy-tocarry and easy-to-use automated delivery platform that has a large and
growing market. “What we also liked was that it had capabilities for using other types of drugs, so there was expandability.” HVP got involved rather early in the development stage of the Intelliject product, Crutchfield said, because it had a surrogate for revenue. The surrogate was a corporate partner, French pharmaceutical giant Sanofi, which agreed to “take the product to market if we could get it through the regulatory pathway,” he said. It has worked out well. “We’re having really great success today.” Overall, Crutchfield advised research universities, which he said are doing the vast majority of the research behind new biomedical products, to take several steps to entice investors. University offices of technology transfer and licensing must not only view licensing as a means of creating monetized value for technologies under development, but also as a means to nurture those technologies that have potential for becoming operating companies, he said. For the latter, universities must provide “the right level of support, management, guidance, interactions with the business community at the appropriate times, and help in positioning technologies to get them through proof-of-concept prototype development phases. That provides clarity around what the addressable market is and what the regulatory hurdles are. That’s very important to an investor,” he said. Most venture capitalists today want to invest with an eye toward growth equity, Crutchfield said, and aren’t interested in putting their money into initial research. That means universities need to take a more active role in bringing research projects further down the commercial pathway so that they’re closer to market readiness. “If universities become more focused on the economic development aspects of commercialization—where they’re actually trying to facilitate the building of companies—then I think you’ll see investors potentially moving downstream again and maybe coming into these deals earlier.”
Insurance reimbursement is in dire need of an overhaul in university are very small,” DiMeo said. That means it may the United States, said Carol Lewis, associate director of the be months or even years before enough funding is cobbled UNC Health Care System’s Center for Innovation. The center’s together to move a project forward (see “An Investor’s Point main objective is to promote innovation in health care delivof View”). ery across the UNC Health Care System and the UNC School Nisbet agreed that money can be a major impediment. “Most of Medicine. “We have these wonderful disruptive innovations of the basic research here at U-M and at other research unithat are good for the patient and good for the payers because versities is funded by federal, state, or university sources, but they’re less expensive overall, but they are not there are fewer options to fine-tune the research necessarily financially supported through reimand get it to a point where an investor would bursement models. So, we end up spending a lot be interested.” Technology transfer offices like Academia is really of time talking with collaborators to help us fund his, as well as innovation centers, can often good at ideation and some of the innovations, either through in-kind help either with grant-submission assistance or industry is fabulous contributions or even direct funding to launch direct funding. Nisbet’s office, for instance, propilot projects that will demonstrate the value of vides some of that necessary funding, along with at execution. these innovations.” access to talent to address key commercialization Karp identified the same obstacles. “There’s issues. still an issue in the difficulty in getting innovations through While the lack of funding can and sometimes does stop techthe FDA, but I think that it’s getting better. Health care reform, nology development in its tracks, insurance reimbursement can and specifically reimbursement and regulatory uncertainty, become an even bigger barrier once a product reaches the comremain critical areas that we need to address as a country for mercialization stage, Lipoma explained. “It’s easy to think of the investor dollars to start flowing again.” She added, “Until we FDA as the only problem, when in reality for a lot of different really address those fundamental, macro issues, I think we’ll devices and a lot of different companies, insurance is going to be see continued tightening of the purse strings for investments a much bigger issue down the road.” january/february 2014 ▼ ieee pulse 35
Measuring Success
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in their early stage, and that is really hurting innovation in this country.”
The demand and the drive for health care innovation is stronger than ever, and with so much excitement over new discoveries and products, the next quandary is how “innovation” can be measured. “That’s a really good question and an especially tough one to answer for the ones planting the seeds,” DiMeo said. “At universities, you’re seeing more metrics on the number of spinout companies, whereas in the past, technology transfer was measured more in cash, such as royalties, brought in. Of course, the next question is: Does that mean good, sucare so many untapped areas where cessful spinouts? That’s going to be hard to say until you get technology can really help to transdown to measurements on such things as jobs created.” form health care. That’s why the CenSuccess stories are one way to measure the impact of innoter for Innovation is here and has support.” vation, said Nisbet. Examples of university research that has The center also launched a program called spawned start-up companies over the years are many, including Bright Ideas for Health and, in March 2013, put out a very recent start-ups in Ann Arbor, Michigan, such as Tissue Regengeneral challenge to employees using a social media/crowderation Systems Inc., which is creating a skeletal sourc i ng tool to identify unmet needs and reconstruction and bone regeneration technolpotential solutions. “We got back more than 100 ogy platform that it licensed from U-M and the good ideas and floated a handful up to the top as The demand and the University of Wisconsin, and Histosonics Inc., winners. At this point, we’re working to impledrive for health care which is using U-M technology to develop nonment some of the ideas that had the fewest barinnovation is stronger invasive, image-guided therapeutic ultrasounds riers to implementation. It was a very fun and than ever, and with for benign prostatic hyperplasia (BPH, or benign interesting exercise, but one of the challenges enlargement of the prostate) and other condiwith this kind of crowdsourcing is that while you so much excitement tions. “If you want to talk about the impact of might get a lot of good ideas, if you don’t have the over new discoveries innovation, the best way to describe it is with funding or the buy-in from the leaders in that and products, the stories,” he said. area to then do something with those ideas, what next quandary is UNC’s Center for Innovation measures the have you really accomplished? We’re trying very how “innovation” success of its individual projects one at a time, hard to have that closure on the back end. That’s can be measured. Lewis said. “Each project has its own set of outimportant.” comes, which have to involve both cost improveShe said the center is also trying to gauge the ment as well as quality-of-care improvement.” internal culture for innovation at UNC. “We’re Measuring the success of the center is a little thornier, she said. looking at surveying our own employees to find out how inno“In that case, we’re looking at the number of innovations we’re vative they feel we are as an organization and whether they feel supporting; we’re tracking dollars that we’re bringing in from they can bring innovation to their areas.” While UNC is ceroutside sources; and we’re trying to figure out how to gauge our tainly no stranger to innovation, she said there’s always room for impact on the organizations culturally, and that’s very difficult.” improvement. “A culture of innovation is a pillar that we must Fortunately, she said, UNC and the affiliated UNC Health Care support.” System are already leaders in innovation, so they have quite a When all is said and done, the definitive metric for success high starting point. lies at the heart of health care innovation, according to DiMeo. “We know that health care innovation is critical,” Lewis “Ultimately, it’s going to come down to patients’ lives saved or said. At the center, innovation efforts are “aimed at reducing number of patients’ lives positively impacted. Whether the innothe overall cost of care while improving quality at the same vations are coming out of universities or companies, at the end of time, so we’re focused on all kinds of disruptive innovations the day, the important thing is that we’re enhancing the health related to care-delivery models and the payment models that and quality of life of patients.” support them,” she said. That includes biomedical devices as DiMeo added, “If you can improve health outcomes, that’s well as innovations involving more effective and efficient use innovation. If you can reduce the costs of health care, that’s of the workforce, coordination and transition of care, and new innovation. And if you can do both of those things, then that’s kinds of payment models. “We’re really looking across the truly something innovative.” board,” she said. Lewis also noted that new opportunities are around nearly Leslie Mertz ([email protected]) is a freelance science, medical, and every corner. “Technologies involving social media, patient technical writer, author, and educator living in northern Michigan. engagement, and changing patient behavior are just a few. There
36 ieee pulse ▼ january/february 2014
