The Medtech Entrepreneur - Founders share their stories of starting and growing a business in Ireland - Irish Medtech Association
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The Medtech Entrepreneur Founders share their stories of starting and growing a business in Ireland
Contents
01 Finding your purpose, a passion 44 The unifying voice of design
for medtech innovation Design thinking connects manufacturers,
Welcome from Irish Medtech Association healthcare professionals and patients to ensure
Director Sinead Keogh usability and success
04 Positioning startups for success 50 Spinning out
Irish Medtech Association Chair Conor Hanley sets Getting from academic research centres to market
out how the group is nurturing entrepreneurship takes initiative but with the right preparation it can
be a smoother journey
06 A go-to destination for growth markets
Irish Medtech Association Vice Chair John O’Brien 52 Investing in medtech
talks about the sectors ambition for growth From seed funding and business angels, to VC,
research funding and M&As, CEOs share their
08 Irish medtech’s first champions experience and tips for making it from one
Business founders tell us how FDI experience milestone to the next
helped usher in a new age of medtech startups
and innovation in Ireland 62 Demonstrating patient benefits
and safety
20 Top 10 steps for starting and Early engagement with the regulator will
growing a startup help manage expectation and help you get
Irish Medtech Executive Ciara Finlay guides you market approval
through key medtech startup milestones
66 Identifying and breaking into
26 Why Ireland? strategic markets
Find out why Ireland is a location of choice for Market pathways differ for medtech companies,
starting and growing a business find out how commercial strategy can help
position startups for sucess
28 Taking a chance on success
What motivates entrepreneurs to get started with 70 How collaboration is driving innovation
their own business, we talk to CEOs to find out Strategic partners can give medtech companies
an edge by helping them add value with their
30 Getting your leadership team right unique expertise
While you need specialised skills to develop
medtech, we give you an insight on why 75 Ireland’s medtech community
everybody must be a leader in a startup Ireland’s startup ecosystem offers an incomparable
array of supports, check out our who’s who for the
35 Transforming lives by developing medtech community
new technologies
Why identifying unmet patient needs and 88 A lending hand
commercial opportunities is the first step for A comprehensive guide to startup reliefs and
medtech startups schemes with guidance on funding opportunities
to help you get off the ground
39 Clinical strategy, the cornerstone
of medtech 91 About Ibec
Understand why regular engagement with the
clinical community ensures patient safety in
transformative technologies
42 From iterative to disruptive innovation
Leaders talk you through device development
for medtech which involves rigorous testing
as well as R&D
Introduction
Finding your
purpose, a
passion for
medtech
innovation
T
“ I’ve worked in the medtech he new millennium
marked the beginning
sector for over a decade, of a new age for
medtech innovation
but I’m still amazed by the
and growth in Ireland.
Since the Irish Medtech
passion and sense of purpose
Association was established
as part of Ibec in 2000, under
Sharon Higgins’ leadership,
that people bring with we’ve witnessed a wave of
entrepreneurs emerge and
them to change lives daily a multitude of new medtech
startups born in Ireland.
by developing innovative Since I joined Ibec in 2006
I’ve enjoyed being part of
technologies,” Irish Medtech this important work to help
Ireland’s medtech industry
Association Director Sinead move up the value chain.
While we continue to be
Keogh reveals. recognised internationally for
manufacturing excellence,
companies here have taken
ownership of complete supply
chains, increased the level of
R&D, as well as embraced
smart manufacturing,”
she adds.
Ireland’s medtech sector
now boasts more than
450 medtech businesses,
including 9 of the world’s
top 10 medtech companies.
continued overleaf
A roadmap to starting and growing a business 1
Introduction
John O’Brien,
Sinead Keogh
and Conor Hanley
“ We must continue to speak out as the voice of
Irish medtech to help develop policies and
conditions to ensure entrepreneurship can thrive.”
2 The Medtech Entrepreneur
Of the 450 medtech promote, but also those who
businesses here, 60% have tried, failed, and then
are homegrown and as
Global trends many as four out of five are
tried again. It takes great
courage to believe in yourself
and growth startups or SMEs.
“The success of Ireland’s
and take risks by founding a
startup.
Globally the top three global medtech hub has seen “We’re lucky in Ireland
areas dominating €316 million in investments to not only have some
market share will and 2,300 jobs, as well exceptionally talented
continue to be invitro as €178 million financing people but also a supportive
diagnostics at 13.4% raised by startups, publicly ecosystems with a range
with sales of €71 billion, announced in the past couple of supports like Enterprise
cardiology at 12.2% of years. The continued Ireland, BioInnovate Ireland,
with €65 billion, and growth of Ireland’s medtech and the Health Innovation Hub
diagnostic imaging at sector is a bet worth taking, Ireland to name but a few of
8.6% with €45 billion, with a growing number of the key players profiled here.”
by 2024. But, Neurology successful acquisitions making But more can be done to
is set to be the fastest headlines.” Keogh remarks. realise the sector’s potential,
growing device area The Irish medtech “My big ambition for Ireland is
with 9.1% growth community connects people, to be a location of choice not
(CAGR) reaching €14 she explains “Ireland now only for startups, but also for
billion by 2024. boasts some worldclass investors. We need to attract
Orthopaedics, medtech serial entrepreneurs more global investment into
connected health, and founders like Ian Quinn, Ireland to help transformative
as well as ear, nose John O’Shaughnessy, John technologies get to patients.”
and throat (ENT) will Power and John O’Dea “The Irish Medtech
continue to be strong who shared their stories Association will continue to
growth areas with with us here.” nurture entrepreneurship as
growth of 3.7%, 5.9%, “You can never the voice of Irish medtech
and 5.7% respectively. underestimate the power of and part of Ireland’s leading
Orthopaedics will reach people coming together to business group Ibec. We’re
€42 billion in sales by deliver a shared vision and calling on the Government to
2024, while connected that’s what we do in the help the industry succeed by
health reaches €15.7 Irish Medtech Association. developing the right policies
and ENT reaches We’ve been blessed with and conditions to encourage
€12 billion. experienced CEOs and senior risk taking.”
business leaders sitting She adds, “If we get this
around a table together to right we can make Ireland
guide the industry to success one of the top 10 global
by setting out an ambitious startup communities, with
strategy for future growth.” more startups founded here
“And we couldn’t achieve and international business
this without our numerous leaders choosing to grow their
working groups who offer business here.”
specialist expertise to “We hope that aspiring
champion key priority areas entrepreneurs will be inspired
such as advanced factory, by the success stories
digital health, leadership presented in The Medtech
development and regulatory Entrepreneur. I’d like to thank
affairs.” all our members who shared
Keogh has been bowled the lessons they learned on
over this year after setting- their journeys starting and
up the Founders Circle, “I growing businesses in Ireland,
have a deep admiration for and I’d also like to recognise
entrepreneurs. I’ve had the Irish Medtech Association
opportunity to hear about the Executive Ciara Finlay’s role
highs and lows of starting bringing their stories together
a business. The successes here.” Keogh concludes.
which we applaud and
A roadmap to starting and growing a business 3
Introduction
Positioning
startups
for success
“ The Irish Medtech Association is pushing
Ireland forward to cement its position
as an international leader in connected
health,” says Irish Medtech Association
Chair and FIRE1 CEO Conor Hanley.
T
he company was with novel digital health-
set-up in Dublin five enabled solutions will promote
years ago where it’s better patient pathways
developing a novel with a reduced need for
remote monitoring hospitalisation,” Hanley
solution to improve outcomes advises.
for heart failure patients. “Given the strength
Heart failure affects around of Ireland’s business and
90,000 people in Ireland with medtech ecosystems, we’re
up to one in five people will in a strong position for FIRE1
developing it at some point to accelerate the development
during their lives. It affects and commercialisation of
mainly middle-aged to older our first product which has
people, while over 50yrs are received strong support
the group most at risk younger from global investors, having
people can develop it. announced a €40 million
Globally it’s estimated that financing investment last year.”
at least 26 million people suffer Serial entrepreneurs are
from heart failure, with an common in the medtech
ageing population the impact industry and Ireland has
of heart failure is expected to some of the best in the world.
increase substantially. Hanley adds, “I know from my
“Heart failure is a life- own experience that
threatening disease and a startups play a
significant burden on patients unique role in
and the health system. the medtech
Managing patients at home ecosystem.
Conor Hanley
4 The Medtech Entrepreneur
They help drive innovation and To help us better compete startup ecosystem, but it’s a under the 2016 Financial
develop novel life changing we’ve identified the, one, two, lifeline for medtech startups, Act did not go far enough
technologies. I have seen three of supporting startups: “To get medical technologies to bring us in line with our
personally with FIRE1, and into the health system and nearest competitor, the UK.
n Attracting and retaining
before that BiancaMed, to patients, startups must We need the right business
talent with share options
that Irish startups stand overcome numerous hurdles, environment to support
out with worldclass teams, n An appropriate venture from proving technological reinvestment and serial
technologies and the drive to capital ecosystem feasibility and clinical trials, to entrepreneurship,” he warns.
develop amazing solutions to getting regulatory approval to Hanley concludes,
improve lives and help people n Encouraging risk taking get market access, this takes “Success doesn’t happen
get healthy.” and reinvestment funding. The number of VC overnight. We will continue to
He cautions that, “While with incentives like a firms and dedicated health engage with our members,
collaboration between large competitive CGT rate technology funds here is not as well as government and
multinationals and startups Ireland is the greatest sufficient to meet the ambition policymakers, as we work to
is proven formula for getting employer of medtech of this growing sector.” bring in a more supportive tax
transformative technologies to professionals, per capita, in “But, there’s an opportunity environment, better access to
the market, more needs to be Europe with 38,000 people to expand our VC landscape funding and talent for startups
done to help small businesses working in the sector and and build more partnerships in Ireland. It took many years
make it big. The top ten 4,000 jobs to be added by the between firms here and key for Ireland to become a global
medtech companies in the end of 2020. locations such as California. medtech hub. Now, as we
world occupied 39% of the “To compete with global To secure this vital element look to the future, we must
market, in 2017.” multinationals, medtech of the startup ecosystem, ensure that entrepreneurship
As Chair of the Irish startups need to be in a the Government must adopt and innovation remain at the
Medtech Association, Hanley position to attract and retain a proactive approach or risk heart of what we do. And that
says Ireland needs “The right talent. To do this we’re losing Irish businesses to more we take advantage of avenues
business environment to scale calling on the Government to competitive startup hubs.” for future growth.”
and drive sustainable growth. introduce a new, best in class, Lastly, we need to
Or risk losing promising flexible share option scheme address our uncompetitive
startups to relocations to that’s easy to use.” Capital Gains Tax. “Ireland
Silicon Valley or Israel and Hanley highlights the has the third highest rate
other locations known for fact that venture capital is of CGT in the OECD at
thriving entrepreneurial bases. the lifeblood of any thriving 33%. Improvements made
“ Success doesn’t happen overnight. We will continue
to engage with our members, as well as government
and policymakers, as we work to bring in a more
supportive tax environment, better access to
funding and talent for startups in Ireland.”
A roadmap to starting and growing a business 5
Introduction
A go-to
destination
for growth
markets
“ Medtech is an critical
industry that’s not only
driving growth it’s
also improving lives,”
Vice Chair of the Irish John O’Brien
Medtech Association
and S3 Connected
Health CEO John
O’Brien highlights.
6 The Medtech Entrepreneur
“ This trend is driving healthcare, lifescience and
medtech organizations to develop services and
solutions that demonstrably improve outcomes for
patients through solutions that support, enhance,
augment and sometimes replace their products.”
M
edtech sales prominent and successfully products,” he explains.
worldwide are sector in Ireland and is Talking about his own
forecast to reach constantly innovating. The company, O’Brien says, “S3
€530 billion move to value-based care Connected Health works
by 2024. and payment for outcomes is with global medtech and
This represents growth of already influencing medtech lifesciences companies to
€168.6 billion between and I want to help where I design, develop and deploy
2017 and 2024. can in driving awareness and digital therapy and patient
“In Ireland there is an knowledge of how connected support programs that
established ecosystem of health solutions in medtech increase awareness, assist
medtech, pharma and tech are a key part of addressing self-management, gather
companies and so you have this challenge.” real-world-evidence, and
mix of people from these Healthcare spending in improve access, adherence
background with worldclass the OECD grew an estimated and outcomes for patients and
skills. These are some of the 2.5% in 2017, with increased healthcare professionals.”
key ingredients you need demand for services, ageing O’Brien offers advice
to build a connected health populations and the rise of for aspiring entrepreneurs,
company,” O’Brien notes. chronic diseases putting “When building a company
As part of the Irish pressure on health systems. in the connected health
Medtech Association O’Brien Hospitals account for space a critical learning is to
wants to “Put Ireland on the 40% of health spending, but understand that an effective
map as a go-to destination connected health presents technology solution alone
for connected health an opportunity to develop is not enough. You need to
innovation, development and technologies that empower understand how your solution
commercialisation.” patients, and help them get on will fit in into care pathways
With sales of €15.7 billion the right care pathways. and that these care pathways
forecast by 2024 it’s an “In S3 Connected Health can be quite resistant to
attractive area for both FDI we believe that the move change. Your solution needs
multinationals and startups to value-based care and to be very low friction and
to explore. payment for outcomes must bring benefits to all
Ireland is a strategic is happening and will stakeholders in the system
location of choice not only for accelerate. This trend is and have a path to scale.”
global medtech, but also as driving healthcare, lifescience The Medtech Entrepreneur
a base to tap into the second and medtech organizations showcases inspiring examples
biggest global medtech to develop services and of the dynamic medtech
market, Europe accounting for solutions that demonstrably startups leading across
27% of the world market at improve outcomes for exciting growth areas with
€115 billion. patients through solutions that advice from leading CEOs
O’Brien adds, “The support, enhance, augment and Founders.
medtech industry is a very and sometimes replace their
A roadmap to starting and growing a business 7
Irish medtech’s first champions
Irish medtech’s
first champions
Ireland’s ability to attract foreign
direct investment helped set the
scene for a worldclass manufacturing
hub. Medtech’s founding fathers used
their experience as global suppliers
for ICT businesses and R&D leaders
in medtech FDI multinationals to
follow their passion and make a
difference. Taking a risk on medtech
has paid off for these entrepreneurs
and they’re paying it forward by
investing both their time and money
in the next generation of medtech
leaders. By learning from their fears,
hopes and dreams we can ensure
that medtech startups achieve new
heights in the future.
8 The Medtech EntrepreneurA roadmap to starting and growing a business 9
Irish medtech’s first champions
From
entrepreneur
to investor
Over the course of 40 years, Ian Quinn has
gone from someone who had little knowledge
of medtech to becoming a major player in the
industry with his company Creganna Medical
and now an advocate and financial supporter
of medtech startups in Ireland.
F
or Ian Quinn, the the minimally invasive vascular product development and board level as chairman. Five
“oh my goodness” surgery space came to us. new components. Being years later, he sold his majority
moment in his The result was that over a first to come in through the stake to global investment firm
medtech journey few years, Creganna gained design route worked like a Permira, which subsequently
came in 1995 when 80% of the world supply of dream. We graduated to also sold Creganna to sensor and
the company he co-founded that component and to this becoming manufacturers of connector manufacturer TE
in 1980, Creganna, was day it has retained that market the components.” Connectivity for €820 million.
approached by medtech giant share.” This was the catalyst for a
Boston Scientific. It was a scramble to meet whole series of development
“Our original market demand initially, but once that within the company. Giving something
base was mini computer was achieved a decision had Processes and capabilities back
manufacturing, which had to be made about what to were added and a strategic
Over the years, Quinn had
disappeared by 1995. In do next. In 2003, Creganna decision was made for
diagnosed the medtech
survival mode, we became a divested its operations in all Creganna never to compete
industry as being over-
company that solved unusual other industries to focus solely with its customers. “We also
dependent on foreign
manufacturing problems. on the medtech sector. put Chinese walls in place
multinationals and felt there
Boston Scientific came to “We had heavy as we were designing and
weren’t enough smaller Irish
us with just that. It was to dependence on this one developing for competing
companies. Following his
do with a component for an component and didn’t want customers, so they had to
substantial dividend from
angioplasty catheter used to to risk it being discontinued trust us. Our customer base
selling his stakes in Creganna,
unblock the coronary arteries,” or taken from us. Customers came to include all the major
he decided to put money
recalls Quinn. had started asking us to do medtech companies in the
aside to be made available
“We solved the problem prototypes to help them with vascular area and a large
for investment in medtech
for Boston Scientific; then next generation products number of minor ones,”
startups.
essentially got all of its involving that component, says Quinn.
“There is a myriad of
business for that component so we decided to become In 2005, Quinn sold a
medtech startups at various
worldwide. At that time, we medical device designers and minority stake in Creganna
stages all over the country
had no experience of medical developers,” explains Quinn. to a New York private equity
and – unlike computer
devices as such. The rest of “That brought us into firm, stepping back as CEO
manufacturing or textiles – this
the medtech companies in the entry stage for fresh but continuing to contribute at
10 The Medtech Entrepreneuris an industry that’s here to with a high success rate,” “The programme has
stay. My objective is to make says Quinn. done just what I said it would.
What would sure it does stay by having a While pursuing his interest In practice, over half of the
you do mix of foreign multinationals
as well as Irish startups and
in startups, Quinn was given
a tour of the design courses
teams go on to implement
business plans and bring their
differently mid-sized companies that
hopefully might soon become
available at Stanford University
in the US. “One of them,
startups to a stage where
they are investable by angel
knowing multinationals themselves,” BioDesign, struck me as investors,” he notes.
he says. being particularly suitable for “I have been asked back
what you Having been inundated Ireland. I happened to meet to Stanford to give talks to
know now? with proposals from startups
looking for investment, Quinn
President of NUI Galway Jim
Browne and told him about it,”
Fellows of the BioDesign
course. When they heard
“I would hire great introduced the criterion that he says. Soon after, in 2011, about the commercialisation
engineers and candidates must have gone BioInnovate Ireland came funding available through
managers earlier. through the BioInnovate about and Quinn was asked to Enterprise Ireland they went
For too many Ireland programme and chair its advisory board, which green with envy. There is no
years I tried to do achieved commercialisation he did for a number of years. such thing in the US.”
everything myself. funding from Enterprise Ireland
The company was before he will consider them.
getting very big and So far he has invested in a
needed management number of such startups,
skills that perhaps including Embo Medical.
I didn’t have. I was “The companies that
great at the startup emerge from the BioInnovate
stage, in building programme are better thought
the company and at out than startups in general.
customer service, but They have gone through
I could see I needed the wringer and competed
to step back as CEO for Enterprise Ireland
in 2005 and become commercialisation funding
chairman. In the early
stages, I was very
afraid of debt, but I
should have been less
afraid which would
have enabled the
company to move
faster and purchase Ian Quinn
better equipment.”
“ There is a myriad of medtech startups at various
stages all over the country and – unlike computer
manufacturing or textiles – this is an industry
that’s here to stay.”
A roadmap to starting and growing a business 11Irish medtech’s first champions
John O’Shaughnessy has played an important
role in the evolution of the medtech cluster in
Ireland from managing a global business to
founding two very successful companies. He
wants to see that cluster growing in strength
so it can have an even greater impact on
medical science, employment and the
economy of the country.
John
O’Shaughnessy
Going F
rom a very early age
John O’Shaughnessy
had strong thoughts
and feelings about
wanting to set up
his own business some day.
As he puts it, he effectively
out on
began his “apprenticeship” in
medical devices in 1982, by
jumping at the opportunity to
join CR Bard when it set up in
Galway. One year later and at
the age of 34 he became the
company’s General Manager.
Bard (now Medtronic in
your
Galway) was the world’s
pioneer in the development
of minimally invasive medical
devices for the treatment
of cardiovascular diseases.
O’Shaughnessy spent 16 years
with the company in ever-
increasing senior management
positions. During that time,
own
he set up the very first
medical device research and
development function in the
country and prior to leaving
had full business responsibility
for Bard’s Cardiovascular
Products Division outside
the US.
12 The Medtech Entrepreneur“I saw opportunities to travels to the brain, lodges the minimally invasive medical
realise my ambition of starting in an artery, and restricts device industry.
What my own business in 1996 blood flow. Over 80% of all Cambus Medical is also
would and took the risk of leaving
a very high profile senior
strokes are caused by acute
ischemic events. Until recently
world leader in metallic and
plastic micro-components
you do management position with
a global company to set up
the “treatment time window”
was treated with a clot-
for medical devices and
employs around 140 staff at
differently MedNova along with three
others,” says O’Shaughnessy.
dissolving drug that had to be
administered in a specialised
its headquarters outside
Galway in Spiddal.
knowing Headquartered in Galway, stroke unit within four hours of A medtech spin-out from
what you MedNova pioneered the
development of medical
the onset of symptoms.
“We identified the need
the BioInnovate programme,
Loci Orthopaedics is finalising
know devices for the treatment of
atherosclerosis in arteries
for an alternative treatment,
and developed EmboTrap,
the development of the InDx
thumb implant to reduce
now? leading to the brain in order a device which would pain and improve mobility in
to prevent stroke. As its mechanically remove the clot. thumbs affected by arthritis.
“The experience I CEO, O’Shaughnessy led two We raised over €25 million “I very much enjoy being
gained with Bard fundraising rounds in excess in venture capital funding, involved in medical device
was priceless but of €20 million. In conjunction including from Fountain Health innovation. There was a
I could have left at with the investment arm of Care Partners and Delta two-year gap from the time of
least five years earlier Deutsche Bank, he managed Partners, both Irish VCs,” says selling MedNova to starting
than I did and started a structured sale of MedNova O’Shaughnessy. Neuravi and I had many
more companies. to Abbott Laboratories. Halfway through Neuravi’s offers of directorships,” says
The landscape for “Abbott Laboratories’ US clinical trial the co- O’Shaughnessy. “I chose
financing startups initial investment came in founders received several Crospon, Vistamed and
has much improved 2001 culminating in a final offers of interest from various Cambus because they were
over the past years. exit in 2005. The investors suitors. This resulted in the all very innovative and trading
If I were starting out realised an exit valuation of recruitment of JP Morgan internationally and I felt I could
today I would be US$120 million. MedNova Bank to run a sale and auction contribute to their future
setting my sights on proudly became the first process. Johnson & Johnson growth plans.”
scaling the startup in successful exit of an Irish- became the successful bidder In the case of Loci
order to develop the founded and venture-capital during the early part of 2017 Orthopaedics, O’Shaughnessy
company with a global backed medical device with an all-cash, 100% upfront put an investor syndicate
reach and resist the startup in the country,” notes offer which the shareholders together. That investment,
path of early exit or O’Shaughnessy. accepted. The VC investors which was conditional on
sale of the business.” made in excess of nine times him being the Chairperson,
return on their investment. made up a substantial part of
Co-founding Neuravi’s EmboTrap product the overall €2.8 million seed
Neuravi is now sold by Johnson & round.
Johnson in markets all over “Apart from funding, I bring
With a successful exit under
the world. contacts with key medical
their belts, Eamon Brady,
opinion leaders, financial
the former Chief Technical
institutions, State agencies
Officer and co-founder of Other medtech and with the global medical
MedNova and O’Shaughnessy
researched over 20 medical
business Interests technology business,”
says O’Shaughnessy. “My
treatment opportunities. At present, O’Shaughnessy
involvement adds to the
“These had either been is Chairman of Irish medtech
company’s business credibility
brought to our attention or companies Vistamed,
and it strengthens its image as
were ideas which we pursued Cambus Medical and Loci
a well managed company with
independently. We finally Orthopaedics and was
good corporate governance.
focussed on ‘acute ischemic previously Chairman of
Good corporate direction
stroke’ and formed Neuravi Crospon.
and the development of
were Eamon assumed the role With 500 employees in
management skills in leaders
of CEO and I became part- Carrick-on-Shannon, Co
is a key component of the
time Executive Chairperson,” Leitrim and Roosky, Co
growing medtech ecosystem
O’Shaughnessy explains. Roscommon, Vistamed is a
in Ireland.”
Acute ischemic stroke is world leader in the provision
caused when a blood clot of thermoplastic extrusions to
A roadmap to starting and growing a business 13Irish medtech’s first champions
The first
generation
of medtech
startups
Having started, built and
successfully sold two Irish
medtech companies, John
O’Dea has seen significant
evolution in the industry
and is passionate about
encouraging new startups
led by unmet clinical needs.
W
hen John “The only indigenous
O’Dea founded companies around at that
respiratory time were sub-suppliers to
company the medtech industry. When
Caradyne in Caradyne, MedNova and John O’Dea
1997, he was part of the first Aerogen were formed in
generation of indigenous 1997/1998, this represented
finished device medtech the beginning of medtech
startups in Ireland. A true startups creating devices for
engineer, he was working end users in Ireland. All of
in an R&D management the founders came from R&D
position at Nellcor Puritan groups in multinationals. We
Bennett when he decided were all learning as these
to go it alone with his own were our first companies in
company. this space,” says O’Dea.
14 The Medtech Entrepreneurof acquisitions such as this
in recent years is a success
John O’Dea’s top tip for story for the Irish medtech What
startups: How to traverse industry. It shows that Ireland
is not just a country of ideas would
the journey to market with a strong manufacturing
base, but is also an
you do
“Rather than trying to raise a lot of money to build execution country where differently
a big team, keep things tight in the early years. You
will only have a couple of bites at the funding well, so
companies can get products
out to the market. Lots of knowing
delay this by being really lean early on and do as much
as you can on a shoestring.”
points are aligning to confirm
that Ireland is a major centre
what you
for medtech startups. The
ecosystem is as good as
know
“There was a different the ingredients were right – I
it gets in the world,” says now?
O’Dea.
support infrastructure back had a ready-made team of “One of the challenges “Endoflip was a great
then as Enterprise Ireland eight people from Day One coming from this success is story that worked out.
was only in its infancy. Our who had worked with me at that early-stage seed funding There was nothing
first steps were also Ireland Caradyne,” he recalls. is more constrained than it like it before and we
Inc’s first steps into finished “Things didn’t go as used to be as there are more built a brand new
devices and we paved the smoothly as with Caradyne. startups going after the same market. However,
way for other companies.” We went through two product pot.” Crospon was very
Caradyne designed and development phases, as Aside from setting up and technology-led rather
manufactured non-invasive we quickly realised the first running his own businesses, than led by having
ventilation and humidification idea wasn’t working. Having O’Dea has generously given identified a clinical
technology at its base in started out with a device of his time to the medtech need. Crospon is not
Galway. “Building a device for glucose monitoring industry over the years as a template I would
and building the clinical for diabetes, we made a Chair of the Irish Medtech use now if I was doing
evidence base is a long quick twist to endoscopic Association and Chairman of a medtech startup,
journey. With Caradyne, diagnostics,” says O’Dea. “If the External Advisory Board especially after
we started off with a basic a concept isn’t working, you for BioInnovate Ireland. seeing the success
R&D platform and went into have to know when to kill it “The Irish Medtech of the BioInnovate
manufacturing. There comes and execute Plan B.” The Association is a fantastic Ireland programme,
a point where you have got to concept behind Crospon’s networking resource, which is focussed
invest in sales or marketing product Endoflip originally allowing large and small on identifying and
or look for a partner. For came from technology companies to meet each assessing unmet
me as an R&D guy, learning licensed from Professor other in an informal way. It clinical needs. Being
about sales and marketing Barry McMahon who was in is also important in terms of technology driven is
was great training. We found Tallaght Hospital at the time. lobbying. During my time as a very difficult road to
a large US distributor to work Crospon’s Endoflip Chair, in 2013, we did some travel. A lot of things
with and grew from there,” and Esoflip technologies early work on lobbying for have to fall into place,
says O’Dea. are changing the face of the establishment of a single, which thankfully they
In 2004, US company esophageal function testing. cohesive national research did for us after ten
Respironics acquired The minimally invasive ethics committee structure years with Crospon.
Caradyne, which broadened medical devices transform in Ireland,” says O’Dea. Last It is very challenging
Respironics’ existing the patient experience February, the Government raising funding for
ventilation offering from when it comes to swallow approved proposals by a device business
hospital and home care testing and deliver a whole Minister for Health Simon that does not meet a
settings into paramedic and new diagnostic tool into the Harris TD to prepare a clearly defined clinical
emergency room settings. hands of gastroenterology General Scheme of a Bill to need, and a key thing
Two years after this, professionals. provide for national research I would do differently
O’Dea felt he had the In 2017, Crospon was ethics committees. again would be to
confidence to go again with acquired by Medtronic In O’Dea’s opinion, the focus on establishing
another medtech startup in and integrated into its BioInnovate programme has that first.”
Ireland and chose to do this Respiratory, Gastrointestinal fundamentally changed the
rather than moving to work & Informatics business. medtech startup landscape
in the US. “I was interested The acquisition strengthens in Ireland. “It is the most
in certain medical areas and Medtronic’s position as an fertile source of new startups
2006 was a better time for end-to-end leader in the we have seen. With the
funding a company than in esophageal disease space support of Enterprise Ireland,
1997. The fact that I had a with innovative solutions the power of this programme
track record made it easier to from diagnosis to therapy. is incomparable.”
bring in funding as well. All of “The increasing number
A roadmap to starting and growing a business 15Irish medtech’s first champions
Making a
difference,
not just
making
a living
It is no wonder that budding medtech
entrepreneurs find founder and CEO of
Aerogen, John Power, inspiring. Even in the
face of adversity, he never lost faith in his
ground-breaking product for aerosol drug
delivery over the past 22 years.
F
ounder and CEO of Aerogen’s aerosol drug “As a Design Engineer I what is already there. This is
Aerogen John Power delivery system can reduce could have had a career in a complete step change in
believed he could the length of time a patient any area of engineering, but I terms of drug delivery and
develop the best needs to be on a ventilator wanted to work in a sector in efficiency for patients most
solution possible to or treated in an Emergency which I believed I could make in need of it. That sort of
address a clear unmet clinical Department. Improved aerosol a meaningful difference and satisfaction is hard to achieve
need for an aerosol drug drug delivery means they that’s why I love working in the in other sectors.”
delivery system for ventilated recover faster and have a medtech sector. When I go A chartered engineer,
patients. His unwavering belief shorter stay in hospital. Its into hospitals and see patients Power had over 20 years’
in the product ever since has proprietary vibrating mesh on life support equipment product design and
brought the company to a technology turns liquid supported by Aerogen’s commercialisation experience
point where this year it will medication into a fine particle drug delivery system I know in the aerospace, automation
have been used to treat more mist, gently and effectively how critical it is to them,” and Med-tech sectors in
than 7 million patients around delivering drugs to the lungs of he says. “It is not like we various roles before he
the world. critically ill patients. are an alternative version to decided to establish his own
16 The Medtech Entrepreneur“ Having associations under one umbrella (Ibec)
representing medtech, ICT and pharmaceuticals is
very helpful as technologies are converging now.
You can’t look at medtech in isolation anymore.”
medtech company in 1997. Surviving a
“I had been involved in both hostile takeover
MNCs and in startups so
had a good grounding in In 2000 Power merged his
the entrepreneurial process medical device company
along with the discipline and (then called Cerus Medical)
more formal experience within with a US bio-pharma
international businesses. Back company Aerogen Inc which
then, there wasn’t the sort of he helped to bring public on
funding available that there is Nasdaq later that year. The
now. I had to raise the money company was subsequently
myself and remortgaged the acquired by San Carlos
house twice over the years to based Nektar Therapeutics
pay the company’s bills.” and in 2008 Power led a
leveraged management
buyout of his strategic
business unit from Nektar.
“We went public very
successfully at a US $300
million market valuation. I
did the roadshow alongside
the CEO Dr Jane Shaw and
we got ‘out the door’ just
John Power
before the markets crashed
when the dotcom bubble
burst. Shareholders switched
from long play investments
to those with a fast return
on investment. Aerogen
back then was a typical
bio-pharma business with
long development times
and so funding dried up and
eventually the company was
put on the market. This meant
any company could buy it,
including a competitor and
that’s exactly what happened
when Nektar acquired us in
2005 says Power. Working
in a MNC again did not suit
me and by 2008 I negotiated
to buy out my part of the
business, raising money from
high net worth individuals. It
was tough starting again from
scratch effectively having to
buy my own business back
after ten years. I wouldn’t
A roadmap to starting and growing a business 17Irish medtech’s first champions
have done it if I didn’t totally look at medtech in isolation What’s next?
believe in the product and the anymore.”
What potential impact it could have.” Power is an adjunct As for what’s next, well
Power firmly believes if you
would From the outset as a
medtech entrepreneur in
lecturer at NUI Galway
and a founding member don’t move forward you are
you do Ireland Power recognised
the need to be global and
of the BioInnovate Ireland
programme which is located
moving back. For the past
four years Aerogen has been
differently the importance of protecting
intellectual property to achieve
there. In 2016 he received an
honorary doctorate from NUI
investing its own money in
the development of Aerogen
knowing that. “We have been granted Galway for his outstanding Pharma and specifically in
what you over 100 international patents
since 2000. As some expired
contribution to the medtech
industry along with four
two drugs combined with
its next generation aerosol
know over the years, we needed
others in support of them.
others in the region. Aerogen
employs 250 people, most of
technology. “I believe Aerogen
has the opportunity to build
now? The category we are in whom are based in Galway. a major Irish Speciality
Pharmaceuticals business
represents the most patents “Half of our workforce
“I could have done issued in Europe. We filed came out of NUI Galway and to go alongside its medtech
without the sleepless heavily all around our area as Galway Mayo Institute of success,” Power notes, “We
nights and fear of competitors from the Far East Technology. We have a great now have two drugs in the
losing my house when would try to copy us and try to allegiance with NUI Galway clinic and successfully through
I was trying to support sell into Europe.” so I try to give as much of my phase 2a and will be starting
a young family. But 2b trials in Q3.” One of the
time as I can as an adjunct
every part of the drugs in particular held a
lecturer. One of the interesting
entrepreneurial journey Investing time special interest for Power
makes you more things has been that I have
ended up giving lectures for many years and that
resilient. There is great A prominent figure on the
to students of engineering, is inhaled surfactant for
strength in knowing medtech scene in Ireland now
science and business courses premature babies.
you can hit the bottom for many years, Power was a
of the barrel and still and was also involved in He explains pre-term
member of the board of the babies are often lacking this
climb out.” Irish Medtech Association BioInnovate – there are not too
I was lucky to many people who have been essential lubricant for the
(previously the Irish Medical lung and as such currently
crack a good idea Devices Association) for about involved in all four faculties in
early on and make the university,” says Power. go through a very invasive
nine years up until 2018. procedure to apply it, delivery
it successful, but I “We were focussed on “One of the great things
strongly believe in about BioInnovate is that it of Aerogen’s surfactant in
pushing entrepreneurship and aerosol form through a nasal
continuous learning gives startups the opportunity
R&D, looking to encourage cannular will be minimally
both formally and to get commercialisation
through business new startups and more R&D invasive and Power believes
within existing multinationals. grants”, in Power’s view. “With
experience. You can this programme, success is could result in the biggest
always pick up ideas The Government eventually positive impact to pre term
responded with new not measured by how much
and strategy from money you make. If a team infant mortality rates seen in
other sectors. For research grants and tax the last 30 years. Now that is
incentives,” says Power. doesn’t manage to get a
example Aerogen’s worth going to work for.
“Having associations company off the ground, they
strategy of integrating
technology inside under one umbrella (Ibec) have still gained tremendous
ventilation platforms representing medtech, ICT experience. It is all part of
could be compared and pharmaceuticals is very the learning curve as an
to what “Intel Inside’ helpful as technologies are entrepreneur.”
did with chips in converging now. You can’t
computers.
There are an infinite
number of needs
that often don’t
get recognised. As
people go through a
process of work, they
don’t realise it could
be done differently.
We should think
about medtech now
in the same way as
consumer products
– everyone uses an
iPad now, but did
we think we needed
a computer without
a keyboard when it
didn’t exist?”
18 The Medtech EntrepreneurIreland is one of top 5 global
medtech hubs and the
seventh most competitive
economy in the world
As many as 9 of world’s top 10 medtech
businesses have a base here
The greatest employer of medtech
professionals in Europe, per capita,
with 38,000 professionals
Ireland is one of the top exporters
in Europe at €12.6 billion
A roadmap to starting and growing a business 19The startup roadmap
Top 10 steps
for starting
and growing
a startup
Ciara Finlay
20 The Medtech EntrepreneurStartups fuel the innovation pipeline for
the medtech sector. These business are
founded by highly motivated doctors,
engineers and business professionals to
develop new technologies that transform
healthcare and improve patient’s lives.
T
here are a number technology address these
Medtech Brew
of key milestones needs in an innovative way
on the road to and what are the potential
success for risks? Understanding the
medtech startups, clinical need is not enough, For nearly four years we have run
Irish Medtech Association you need to consider
Medtech Brew with BioInnovate
Executive Ciara Finlay tells the clinical commercial
us, from identifying an unmet context to understand the to help startups get insights from
clinical need and commercial financial drivers behind your industry experts, share best
opportunity, to attracting technology. Once you find practice and network. It has
funding, then getting to the problem which your grown in popularity with 80+
market and driving sales. technology is trying to solve people attending the first event
This journey takes time and you need to ask, are there and up to 180+ people attending.
money; some startups run any competitors? If there
Areas covered to date include:
out of both along the way. are, how is your product
Those who succeed can differentiated?
2016
either grow their business
by adding new markets and • Starting, sustaining, and growing a
products or exit and start 2. Getting your medtech company
all over again with a new leadership team • The commercial model – the journey
startup. Here we explore the right to your first sale
top ten most common steps
Once you have a good idea, • Access to funding for startups
for starting and growing a
medtech business to help you can start to build your
business around. There are 2017
you on your journey.
two key streams for this,
• Innovation for medtech: clinical
technology development
collaboration with business
1. Identifying an and attracting funding to
• Design with the patient in mind
unmet clinical need help your business reach
key milestones. But first • Building your leadership team and
and commercial you need to bring together board for success
opportunity a team that has a strong
There first question you must track record to help you 2018
ask yourself when starting realise your ambition. When
• Standing out from a crowd: PR for
a medtech business is, is putting together a team you
small businesses
there a sizeable market need subject matter experts
opportunity? This involves that can help give you an • Connected health: The new frontier
identifying an unmet clinical advantage. You also need for startups
need, having an idea about to add experience with your • Top trends in quality and regulatory affairs
a health technology or board who will help steer you and what it means for your business
product that can address on the right path and avoid
patient needs and add common pitfalls. This will 2019
economic value. If you have help build trust with potential
investors and re-assure them • Supporting innovation and growth with IP
a good idea, you need to
make sure that it stands that your new startup is less • The clinician/innovator: Identifying and
out. Does your proposed of a risk. addressing unmet needs
continued on page 24
A roadmap to starting and growing a business 21The startup roadmap
The medtech startup
Market
penetration
Scale startup
Launch sales and/or exit
& marketing
Mezzanine
funding
as you begin to
drive sales and
make profit
(debt and equity)
While startup founders may
take different paths to start and
grow a medtech business, here
we’ve set-out the most common
milestones that signpost your
journey to success.
Make post-market
product
adjustments
Break into
the market
Work with
Secure regulatory patients and
Get clinical healthcare
approval by
validation professionals
demonstrating
safety,efficacy and with clinical
clinical benefit trials
22 The Medtech Entrepreneurcycle
Review
IP
landscape
Identify an
unmet clinical Develop
need and initial
Do you have an
commercial innovative product
business
opportunity plan
that stands out from
competition?
Build core team
and add
expertise with
strong leadership
Design
Protect and develop
IP product
prototype
Attract startup
funding (grants,
VC and business
Pre-clinical angels)
validation to
Attract expansion funding test for safety
to support clinical trials and efficacy
and company growth
(grants, VC, investment
banks and corporate
investors)
A roadmap to starting and growing a business 23The startup roadmap
3. Addressing 5. Intellectual There are a number of 7. Clinical
clinical need and property key funding milestones you investigations
need to reach to move from
device development Medtech is arguably the most one stage to the next or Early engagement with
Now you can begin to develop innovative sector in Europe risk failure. Then, you can clinical and ethics experts
your technology. First you with nearly 14,000 patents progressively raise more to can help you successfully
need to develop a prototype filled with the European support expansion with hiring, manage clinical studies.
as proof of concept. Then as Patents Office. As you begin production, marketing, and Once you have developed
you continue to design and to grow your startup you value building activities. The your technology, you must
develop your technology you need to do a review of the key funding milestones take begin to test it for safety and
need to identify any potential IP landscape to ensure your you from: initial efficacy with pre-clinical
risks and ensure technological position is not already taken. validation. Early engagement
Then you need to protect n Concept, usually with with clinical and ethics experts
feasibility.
your IP to avoid copycats and seed funding can help you successfully
dissuade early competition. n Establishing your manage clinical studie When
4. Your business There are three different ways startup, with funding you’ve had success in this
plan to do this including, patents, from state grants, stage, you may move on
trademarks and registered venture capitals and to first in human clinical
Along with developing your designs. But to protect your investigations to gather
business angels
technology, you need to build idea, you need to identify more data and build clinical
a business plan to help you how ‘inventive’ your device is n Testing the safety experience of the product in
on your journey to market and early on to demonstrate that and efficacy of your use. After the technology has
raise funding along the way. it’s a novel or unique device. technology with clinical been successfully used in the
A good idea is not enough Early strategic work with IP trials, with expansion pilot trial and clinical endpoints
to get ahead. You need a experts can save you down funding from venture have been reached, then you
practical business model. the road and increase your capitals, family, get clinical validation.
You must ask, how much do technologies attractiveness investment banks, and
you need to raise to support with investors. corporate investors
R&D, clinical trials, regulatory
n When you’ve gone 8. Identifying the
approval, market access, right regulatory
to market, had your
distribution costs and still 6. Financing first sale and are pathway
make a return on investment
in an acceptable time frame. As you begin on your startup trying to drive profits, For your product to get
To sell your technology you journey your company’s you may reach the to market, you need
need to ask, what’s your worth is low, you’re high mezzanine funding stage regulatory approval. To
reimbursement strategy. When risk and raising money can underpinned by debt get regulatory approval
you’ve identified which country be expensive. Pre-money and equity you need to demonstrate
you’re going to market in first valuation will give an early n Once you’ve achieved product safety, efficacy and
you need to understand the indication of your worth by liquidity, you may look to clinical benefit. The Food
implications of this such as checking your leadership scale your businesses or and Drug Administration is
regulatory pathways and the team, similar companies, exit by being acquired. the regulator in America,
implication of different health reviewing the market size the channels for regulatory
systems. Then you need to along with key players, and The market opportunity to approval are either the 510(k)
consider whether you’ll sell identify how much money you justify returns for VCs can be demonstrating equivalence
on a fee-for-service basis need to reach key milestones. as large as €320-500 million to another legally marketed
or value-based payments, As you move from one per year. The capital required technology or premarket
remember that you’re milestone to the next, raising will be different for each approval (PMA) to go to
generally not selling directly money gets less expensive opportunity, a large funding market by demonstrating
to clinicians, you’re dealing if technical and commercial injection will be predicated on sufficient scientific evidence
with hospitals, third party milestones are well managed a greater market opportunity to provide assurance. In
organisations and government as the risks are reduced for to satisfy the need for Europe the regulations are
health systems. investors. But you should significant returns from set by the European Union
always include safety amounts investors. and companies are held to
to help you manage potential a high standard to achieve a
delays or overruns. Conformité Européenne (CE)
24 The Medtech Entrepreneurmark. While the EU set the 9. Breaking into 10. Exiting six years of a company’s
regulations CE marks can be the market or scaling existence. For any VCs these
granted under these rules by first six years are focused
any one of 58 notified bodies. Your first sale is an important When you’ve achieved on building and growing
Achieving regulatory step on the road to success. significant market penetration, portfolios. Finding the right VC
approval is not only an The most common market you can either develop at the right time to invest in
important step for selling medtech startups pursued a strategy to scale your your business is a major driver
your product, it’s required for first are either the USA which business or look to exit by of success. The following four
most companies that may is the largest medtech market being acquired of go public years then focus on portfolio
wish to exit. The majority of (43% of the global market) or with an IPO. Many startups maintenance and realisation
startups are acquired post- the European Union (28% of pick the acquisition route of investments. Sometimes,
commercialisation, and you the global market). As both with entrepreneurs using the funds have a one or two
must plan ahead to make the largest global market and experience to then start new year extension.
it to this milestone. Once a single market, the USA is companies, but competition is An acquirer’s willingness
your technology has gone an attractive first destination. getting tougher with changes to pay depends on profits
to market and is in use To get there you need to in M&A. Global medtech and how the startup can
you will begin post-market identify the right distribution firms are becoming more strategically enhance its
surveillance. At this stage channels. Then as startups strategic making fewer, larger portfolio by expanding either
there may be further product look to grow they develop deals, the value of mergers its product range or creating
updates to improve clinical as sales & marketing strategies to and acquisitions grew 178% a gateway into new markets.
well as cost-effectiveness of drive sales and break into new globally and were worth €49 The average time-to-exit for
the technology. markets. billion in the first half of the medtech startups is 7-9 years.
2017 alone. This activity is By this time companies have
complemented by divestments spent an estimated €40 million
as companies refine their growing their business. Nearly
business plans. one in five medtech M&A
Only 1 in 4 medtech deals are around the €45-€90
acquisitions occur within million valuation range.
“ Achieving regulatory approval is not only an important
step for selling your product, it’s required for most
companies that may wish to exit. The majority of
startups are acquired post-commercialisation, and
you must plan ahead to make it to this milestone.”
A roadmap to starting and growing a business 25You can also read
