Partnership to Speed Ideas to Applications
Harvard Business School ranks Alabama near the top among states with jobs in medical device development. UAB and Southern Research are determined there’s even more untapped potential. A new partnership aims to speed production.
Art Tipton (left), CEO of Southern Research, and Robert Hergenrother, who will lead the new AIMTech.
Frequent collaborators UAB and Southern Research are teaming up once again, this time with a partnership that will attempt to tap into the lucrative and growing medical device market.
The new Alliance for Innovative Medical Technology (AIMTech) seeks to combine the medical and engineering expertise at UAB — the University of Alabama at Birmingham — with the research and development work conducted at Southern Research, to create and market medical devices such as cardiovascular stents and joint replacements.
The long-term goal is to license products and create spinoff companies in a field that, according to the U.S. Department of Commerce, is expected to grow nearly 21 percent, to $133 billion, by the end of next year.
“Between the two organizations, we have everything it takes to see a need, engineer and test a solution, and then commercialize the product,” UAB President Ray Watts says. “We have the expertise to do the whole process. This is just a natural for us.
“We are increasingly learning how to interface medical devices with the body and have the body accept them, and create a better outcome for our patients. So this (partnership) presents a lot of opportunities. It will help our patients, it will help our innovation and entrepreneurship, and it will create companies and jobs in Alabama.”
The format for AIMTech is similar to that of the Alabama Drug Discovery Alliance, another UAB-Southern Research collaboration. The primary difference is that, while it can take up to 10 years and $10 million for a new pharmaceutical drug to make the complicated regulatory journey from laboratory to marketplace, the time and expense needed for medical devices usually is half to two-thirds less.
“It’s a faster and less expensive development pipeline for medical devices, so it’s not as risky in terms of the investment compared to the pharmaceutical space,” says Art Tipton, president and CEO of Southern Research. “We’re talking about (having products) in three to five years.
“This needs to be financially self-running in a couple of years. We want to make sure we have the right mix of partnerships that are bringing in either licensing revenue or potentially royalties from product sales within that five-year time frame,” Tipton says.
Robert Hergenrother, the former head of research and development at medical device coatings company SurModics, has been brought in to lead the AIMTech program. Hergenrother has been involved in the creation of 15 neurovascular, diagnostic, wound care and orthopedic medical devices during his career, and 18 of his inventions have been patented in the U.S.
“We have a lot of expertise here, with people who have worked in medical device companies, but we haven’t really had that as a strong focus area,” Tipton says. “When I sat down with Dr. Watts and Iwan Alexander, the new dean of the UAB School of Engineering, we felt like we had a lot of the pieces to do this, but we didn’t have a single person driving it.
“That’s why I wanted to hire Bob. If this is going to be successful, we need to have a central person to drive this full time, every day — somebody who is not trying to do three or four others jobs. Bob is a Ph.D. engineer who has spent his entire career in medical device companies. We wanted somebody who could easily translate between the surgeons and the engineers but also had a business perspective to developing these products as well.”
AIMTech will focus on creating medical devices in five areas: cardiology, orthopedics, ophthalmology, rehabilitation engineering and trauma. Hergenrother says some of the developments will be elaborate devices, while others will simply be small instruments that are used during surgical procedures.
“The important thing is to have a mix of products,” Hergenrother says, “because some of those smaller, simpler tools, you can probably get those to the market a lot faster. They’re probably not going to be as lucrative long-term, but it gives you a mix of things you can provide to people.”
Hergenrother says there will be three primary components in the AIMTech development process: identifying the clinical need for a specific product, creating a technical solution and then assessing the ability to place that product in the marketplace.
“A lot of universities don’t focus on that final piece,” Hergenrother says. “Does anybody really want to buy this? Before we spend a lot of money, let’s talk to clinicians and patients and see how they are doing things now, and does our idea really improve on what they’re doing?
“We’ve been working with the doctors at UAB to interview multiple people and get this feedback. If it’s all pointing in the same direction, I’ll make the effort to get the funding and really develop this. But if not, let’s make the adjustments now before we make a lot of investment. You need more than just a cool idea to make (a product) attractive to companies.”
One reason there is optimism that the AIMTech program will be successful is that Birmingham and Alabama have become emerging leaders in the development of medical devices in recent years. Alabama ranked third nationally in the creation of new medical device jobs in 2010, according to a study released by the Harvard Business School’s Institute for Strategy and Competitiveness.
And that ranking came before last year’s announcement that Germany’s Evonik Corp. is opening a global innovation center in Birmingham that will focus on the research and development of medical devices. The multimillion-dollar project is expected to create more than two dozen high-paying jobs, according to the company.
“All of Evonik’s medical device research-driven innovation is going to be centralized in Birmingham. That’s a big deal for our community,” says Steven Ceulemans, vice president of innovation and technology for the Birmingham Business Alliance. “It shows that there is opportunity there, that we can get economic success out of the medical device field.
“There is a tremendous breadth of capability and knowledge at UAB and Southern Research. But the challenge is how to transition those individual disciplines and promote innovation out of that huge depository of knowledge. How do you apply it, how do you advance it into products that ultimately the marketplace needs, and how do you get them to market?
“Often what it takes is some connective tissue, a mechanism to bridge the networks and create innovation out of science and knowledge. You take a centralized area of focus — in this case medical devices — with dedicated people to really look at which areas of technology have the capability to bridge the gap from the initial idea to the ultimate application. And how do we connect the dots and manage that process? UAB and Southern Research have done that with AIMTech.”
Cary Estes and Cary Norton are freelancers for Business Alabama. Both are based in Birmingham.