The MassMEDIC Annual MedTech Showcase: A Funding Resource for Startups

Industry advocacy and trade groups are important resources for companies of all sizes, especially the highly regulated medical technology industry. In New England, medical device companies should count the Massachusetts Medical Device Industry Council, more commonly called MassMEDIC, among their biggest assets and resources. Nowhere is the group’s reach and influence more evident than during its annual MedTech Showcase, most recently held in November in Boston, Mass. During the event, startup companies present their technologies to association members and potential investors. The meeting, which has been held annually for a number of years, draws more than 400 attendees from the sector’s financing, consulting and manufacturing sectors. More than 260 innovative technology ideas have been presented at the conference over the years, with many finding funding or acquisition opportunities at the event. The presenting companies are a mix of local firms and companies from outside New England.

Boston, however, clearly knows medtech. Massachusetts is home to the second-largest cluster of medical device companies in the United States, with 80,000 workers, annual exports that account for 14 percent of all goods shipped from the commonwealth and an economic impact in Massachusetts of more than $8.5 billion.¹

Why It’s Important
MassMEDIC places special emphasis on providing services to early-stage medical device companies, which are the engine of future growth and innovation in this industry.

Before the presenting companies at the MassMEDIC event began their pitches, Neil Oberoi, managing director of healthcare investment banking for Bank of America Merrill Lynch, discussed the growth of the 2014 medtech initial public offering market and the current criteria he feels is necessary for a medical device startup to go public. According to Oberoi, the magic mix of factors necessary before a company should consider going public includes having a $25 million to $50 million sales run rate; a differentiated product; an attractive market; a great management team; and a track toward profitability.

Interesting Presentations
The companies presenting at the showcase last fall had compelling value propositions. Among the notable presentations was information from these interesting startups:

• Perimeter Medical Imaging of Toronto, Canada, which presented its Optical Tissue Imaging System, an intra-operative imaging device that provides real-time capability to review tumor margins during lumpectomy procedures for the treatment of breast cancer. Paul Weber, president and CEO, presented market data showing that of the 170,000 breast cancer lumpectomies performed annually in the United States, 26 percent require a re-operation due to cancer tissue missed during the first procedure.² Weber estimated that repeat procedures cost an average of $9,000, which represents a large unnecessary expense to the healthcare system. Weber also estimated the market for breast cancer lumpectomy.

• Sano LLC of Wellesley, Mass., which presented an innovative wound diagnostic medical device called WounDx, characterized by the company as a novel, low-cost disposable, point-of-care diagnostic that measures wound enzymes to personalize treatment and reduce treatment time and costs. Although many companies have tried to launch a wound diagnostic, no reliable product yet exists, according to Paul Hayre, president of Sano. Hayre noted that most wounds are treated subjectively, based on the amount of fluid, color, smell, peri-skin condition, etc. He estimates the market for wound diagnostics to be large, as seen in Chart 3.

• ChemGreen Innovations Inc., a Canadian company developing novel polymers, with two strategic partnerships already in development in the antimicrobial and conductive sectors (for use in a pressure monitoring device). The firm’s technology has applications in antimicrobial plastics (catheters, etc.), antimicrobial sensors, and drug-delivery polymers. According to ChemGreen, its manufacturing technology is cost-effective (low solvent use, reduced waste) and does not release volatile organic compounds into the air. Nauman Farooqi, Ph.D., president and CEO, presented the technology, which he said was part of a rapidly growing market, as presented in Chart 1.

Technology Prevails
The medtech startup industry is beginning to see a positive trend in funding once again, a subject that has been one of the greatest obstacles to medtech growth for the past few years. Is it time to pursue the great idea you have been thinking about for a medical device? 

References

1. www.massmedic.com
2. www.perimetermed.com/perimeter-founded.html

Editor’s note: Readers are invited to submit market data and trend questions to Maria Shepherd. Periodically, selected questions will be presented in this column, with answers from Maria.

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Maria Shepherd has 20 years of leadership experience in medical device/life-science marketing in small startups and top-tier companies. Following a career including roles as vice president of marketing for Oridion Medical (a company acquired by Covidien), director of marketing for Philips Medical and senior management roles at Boston Scientific Inc., she founded Data Decision Group. Shepherd recently was appointed to the board of the ALIGO Healthcare Investment Committee. She can be reached at (617) 548-9892, [email protected], www.ddecisiongroup.com, or followed on Twitter @MedTechResearch.