Medical Design & Outsourcing - MAY 2016

MAY 2016 www.medicaldesignandoutsourcing.com

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Everything You Ever Wanted to Know about Starting a

Medical Device Company *

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2 Medical Design & Outsourcing 5 2016 www.medicaldesignandoutsourcing.com

Starting a medical device company in this day and age is a far cry from what it was 10 or even 5 years ago, and a world apart from the days before the 1976 Medical Device Amendments to the Federal Food, Drug, & Cosmetic Act. Medtech innovators face a raft of challenges in getting their products to market, ranging from skittish venture capital investors, to designing and running clinical trials, to the formidable burden of winning FDA or CE Mark approval and then keeping it.

Medical device legend Dr. Tom Fogarty, who 50 years ago spent just $2,000 developing the ubiquitous catheter that bears his name, doubts he could get that device commercialized in todays environment.

If you were to submit that today, it was so unheard of by the FDA, they would just make you do animal after animal, bench test after bench test, and then they would make you do this in a human I dont know how many times, Forgarty says.

HERES WHAT WE SEE

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Despite the challenges, medtech startups abound. In fact, there are some 1,189 startup medical device enterprises with an average valuation of $4.6 million, according to AngelList, a portal that aims to connect nascent companies with investors, talent and incubators. Maybe thats because, when you get right down to it, developing a successful medical device is a profoundly gratifying experience.

Its wonderful to be able to innovate, particularly in the medical field, as Fogarty says. If you develop something thats adopted by other physicians, youve touched many patients. If you just operate on somebody, youve touched one patient.

Young companies are at the vanguard of innovation in our industry, driving the creation of new technologies to address unmet needs across a range of diseases and conditions.

But having a revolutionary idea is a far cry from actually bringing it through to commercialization. In this issue of Medical Design & Outsourcing, we sought to answer some of the key questions facing new medical device firms.

How can I get my device approved? What do I do to make sure it stays in compliance once I do? Where should I look for a reliable outsourcing partner? What about protecting my intellectual property? And how can I raise the cash to fund it all?

Youll find the answers to these questions and more in the following pages, along with a look at a few of the startups we found most intriguing. M

So you want to start a medical device company?

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CONTRIBUTORS

HARRY

DORSCH THOMPSON

HARTZELL

TISSONE

WURDEMAN

NEELY

HARRINGTON

LUIS TISSONE is the Director of Life Sciences at Trelleborg Sealing Solutions. Luis has worked as a Regional Sales Manager for Helix Medical and prior to that in positions ranging from supply chain operations to marketing and sales. He has a BS in Industrial Engineering from Argentinean Catholic University and a Business Administration & Management degree from Harvard University.

HEATHER THOMPSON is Senior Editor of Medical Design & Outsourcing. She has more than a decade of experience covering technology, regulatory, and business trends in the medical device and diagnostics industry.

SHANE WURDEMAN is a certified prosthetist and research scientist at the Hanger Clinic in Houston. He holds a degree in physics, a Masters in prosthetics and orthotics, and a PhD in biomechanics and has published multiple manuscripts and book chapters in the prosthetics rehabilitation space.

MATTHIAS DORSCH is Product Manager for Rechargeable Lithium Ion Coin Cells at VARTA Microbattery. He holds a degree in Electrical Engineering from the University of Applied Science of Wrzburg.

TOM HARRINGTON IS Technical Director, at Kent Elastomer Products. He has a bachelors degree in chemistry with a minor in geology.

CINDY HARRY, is Executive Director, Sales & Marketing, for Kent Elastomer Products. She has more than 30 years of experience in the tubing industry, including training through the University of Akron in leadership and lean manufacturing.

JULIANNE HARTZELL is a partner at Marshall, Gerstein & Borun in Chicago, where she chairs the firms medical devices group. She's litigated patent, trademark, copyright, and trade secret matters in federal courts throughout the U.S. and before the Patent Trial & Appeal Board.

STEVE NEELY, the founder of VSI Parylene, spent several years in the medical device and semiconductor industries before turning his focus to enabling innovative technology solutions. He holds a BS in Mechanical Engineering from the University of Colorado.

Contributor_MAY 2016_Vs6.indd 4 5/20/16 10:34 AM

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We ask the experts in a variety of key areas what every medical device startup needs to know, from rain-making to regulatory to reimbursement.25

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FEATURES

02 HERES WHAT WE SEE: So you want to start a

medical device company?

04 CONTRIBUTORS

08 SUPPLY CHAIN: Conquering the complex

implant supply chain

10 ELECTRICAL CORNER: Tiny lithium cells power

ever-shrinking wearable

medical devices

14 COATINGS LAB: Think parylene for thin,

complete, pinhole-free

coatings

17 PATENT PROTECTION: Four things the medical

device industry must know

about U.S. patent law

20 TUBING TALKS: Ideas for a 21st-century

tubing supply chain

24 MATERIALS: Encapsulated ePTFE

62 DEVICE TALKS: The leadership lessons of

John Brown, the man who

built Stryker

33 TOP 10 STARTUPS

68 AD INDEX

CONTENTS medicaldesignandoutsourcing.com May 2016 Vol2 No3

DEPARTMENTS

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43 Understanding nitinol implant design and manufacturing The nickel-and-titanium alloy known as

nitinol is a super-elastic shape-memory

metal responsible for major advances

in medical technology over the last 15

years. Heres what you need to know

when pursuing a manufacturer for a

new nitinol-based implant or device.

48 Microneedle technology and transdermal drug delivery: Market growth with advanced materials

Annual sales for the transdermal drug delivery market are expected

to meet 485 million units by 2030. Thats because its the perfect

blend of medicine and technology for drug delivery.

54 Advances in lower limb prosthetics Thanks to advances in microelectronics, hydraulics and motors,

modern medicine can help nearly every amputee achieve goals

and accomplish feats not possible at the turn of the century.

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SUPPLY CHAIN

Conquering the complex implant supply chain

The supply chain for medical devices, particularly implantables, is very complex. Although a distributor often manages the inventory, manufacturers hold it in title, there are multiple parties involved at any given stage, and inventory changes hands quickly. The result is a high-value inventory battling competing interests, and high risks to the manufacturer not to mention adherence to FDA regulations.

Thats why its hard to believe that many medtech companies still rely on antiquated logistics and inventory tracking. Some have decentralized systems that rely on a combination of ERP and spreadsheets. Others use manual entry systems into the ERP, shipping to either sales reps or hospitals. Both introduce risk to the process, by requiring recipients to confirm orders, or find missing information.

Seiyonne Suriyakumar, business development representative for Mobitor Corp., describes two orthopedic clients that were experiencing challenges:

Orthopedic Device Company 1A small company began experiencing rapid growth. As they grew, they struggled to continue using manual methods (calls, emails, faxes, whiteboards) to manage inventory. The manual nature of those requests meant the customer service team would often need to call reps back to confirm orders that they couldnt understand or that were missing information. Orders were then manually entered into their ERP system and, if necessary, inventory was then shipped out to either the rep or hospital. Once a case finished, the rep would again send over consumption information, triggering another cycle of manual

data entry, clarifications and questions. They had briefly looked at some cloud-based systems, but were dissuaded because they were so much more than the company required and werent flexible enough to fit (and were also far too expensive).

Orthopedic Device Company 2An established operation relied on a combination of their ERP and spreadsheets to track inventory. Without a centralized field inventory system, they had sub-par inventory planning, gaps in service, duplicative data entry and numerous discrepancies. The

company made the decision to move away from that system to cut costs. It needed to ensure employees had the right systems in place to be sustainable, and positioned for growth. The companies looked at several systems in-depth, but outdated UX/UI, a challenging integration process, and the lack of some key features kept them from partnering with anyone.

Does any of this sound familiar? If it does, there is an outcropping of firms that are creating a better system to help medical device companies manage this complex process.

H e a t h e r T h o m p s o n | S e n i o r E d i t o r |

M e d i c a l D e s i g n & O u t s o u r c i n g |

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www.medicaldesignandoutsourcing.com 5 2016 Medical Design & Outsourcing 9

One such company, of course, is Mobitor, which created the TurnsLift system. TurnsLift is a cloud-based platform designed to give both reps and operations teams full visibility into field inventory operations. Suriyakumar says TurnsLift is made up of several software modules. Users access them either through a web interface or via mobile applications.

Apple calls this approach a constellation, because each module can stand independently, but when required, they deep-link with each other to create a seamless experience, he explains.

Whats interesting about the modules is that they allow the user to perform specific functions (e.g., case scheduling, inventory management, consumption, billing, etc.) in a standardized way.

We built TurnsLift to provide a streamlined UX to encourage adoption and to specifically to address concerns that software was too complex and wasnt configurable enough, says Suriyakumar.

The software includes a workflow configuration engine, so device makers can change how statuses and notifications are triggered, and a software development kit so companies own IT teams can build proprietary modules on top of TurnsLift.

We built it mobile-first, to ensure that the UX on a smartphone/tablet looked like it was meant for a smartphone/tablet, not like a shrunken-down version of a desktop application, he says.

Its meant to handle unique situations like a mix of consignment and loaner inventory, expired parts in a kit,

inventory overloads [multiple destinations for the same inventory] in the field, and robust integrations to ERPs like SAP or

CRMs like Salesforce, Suriyakumar says. Its also meant to be a useful tool for both reps and distributors, while providing increased visibility and uniformity in inventory management for manufacturers.

As for the two orthopedic companies Mobitor has been working with, Suriyakumar says theyre confident that the system will help them master their inventories as they grow. Hes planning a demonstration with one firm later this month.

Because the stakes are so high in medical devices, companies need a logistics tool that is specific to their industry and workflows, not one that is generic and rebranded as medical, says Suriyakumar. M

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Designers of portable medical devices and electronic products are familiar with the challenges of space and weight reduction. There seems to be no limit to consumers requirement for making devices thinner, lighter, and sleeker. Consider an in-ear speaker or earbud as a stand-in for a medical device, with a form factor constrained by the size of the human ear.

In electronics, the constant reduction in a circuits size predicted by Moores Law has helped designers do more using less space. But in the domain of energy storage, chemistry, not electronics, determines the pace of size reduction, and unfortunately chemistry has no equivalent to Moores Law to drive reductions in battery cell sizes.

Still, innovation in battery technology still provides answers to OEMs demand for more energy in less volume. This article describes how improvements to a new type of coin cell are helping some of the industrys smallest electronics run longer between charges than previously possible.

The drawbacks of lithium technologyIn medical and consumer electronics, various types of lithium-ion technology have been widely adopted: Lithium-ion chemistries for rechargeable batteries provide better ratios of energy-capacity-to-volume and energy-capacity-to-weight than any other battery chemistry in mass production. Thats why most portable products with small size and weight requirements most often contain lithium-ion rechargeable cells.

In the past, OEMs faced extreme difficulties in scaling down lithium-ion batteries for use in devices much smaller than a mobile phone. The wireless headset using Bluetooth technology illustrates the problem.

In previous years, wireless headsets would use a custom lithium-ion battery assembly in which the cell was enclosed in an aluminium foil pouch. Flying leads made the connection to a host device.

This complex assembly was relatively bulky. Worse, pouch-style batteries are difficult to handle on a production line. They require manual assembly, making them inherently prone to inconsistent quality and damage. In addition, the pouch enclosure is prone to premature failure when subjected to shock and vibration. This is undesirable in earphones, which might be frequently dropped during fitness activities.

ELECTRICAL CORNER

Tiny lithium cells power ever-shrinking wearable medical devices

M a t t h i a s D o r s c h | P r o d u c t M a n a g e r |

V A R TA M i c r o b a t t e r y |

The CoinPower series of cells from VARTA Microbattery

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ELECTRICAL CORNER

Lastly, a custom part that is unique to one customer carries a higher supply-chain risk for the customer than a standard part, which is produced and stocked in high volume for multiple customers.

These drawbacks led to the development of an alternative for tiny devices, such as wireless headsets: The VARTA CoinPower, the industrys first rechargeable lithium-ion battery in a coin-cell form factor to offer the energy capacity required by small wireless consumer devices. The first generation of these coin cells was available in 12mm and 16mm diameters and provided an average 3.7V output.

Behind the introduction of the CoinPower cells lay technologies patented by the company, which allow for the automated production of coin cells with coiled electrodes. This method for coiling electrodes makes better use of the cylindrical space inside the case. In addition, VARTA Microbattery developed a patented design for closing the case. These technologies provide a higher energy density than previous li-ion coin cells with conventional stacked or layered electrodes. Automated production at the companys factory in Germany is highly repeatable and ensures that each manufactured unit operates according to its specification.

The higher capacity of the CoinPower product provids a crucial advantage for small electronic devices, and a strong, rigid stainless steel case offers easy assembly into end equipment, with almost

no risk of damage, and a high level of precision in the mechanical design of the battery assembly. The case also has a high tolerance for shock and vibration.

Its important to note that the supporting electronic circuit is also small. A CoinPower cell requires only a standard circuit protection device, available at low cost from suppliers such as Seiko and Mitsumi, plus two passive components. A wide range of ICs for standard battery chargers can control the cells charging process. The footprint of this circuitry is considerably smaller than the complex PCB generally implemented in custom battery packs. Whats more, the supporting circuitry need not be close to the battery, giving system designers freedom to optimize their board layout and mechanical design.

Device manufacturers can avoid the design, production cost, and risk associated with custom battery packs because the battery is a standard part, and the supporting circuitry is easily implemented using standard components.

Theres another important reason for the wide use of the first-generation product: Safety. Most lithium-ion batteries work safely within their rated voltage and current limits. But over-current or over-temperature conditions can cause thermal runaway, leading the device to explode or catch fire. For this reason, a lithium-ion battery requires safety and protection circuitry to electrically disconnect the cell when it exceeds safety thresholds.

The advantage of the VARTA CoinPower cell is that it offers an integrated protection mechanism, independent of external circuitry, which shuts the cell down before it enters an unsafe, over-current condition. This provides an extra level of protection for the users safety.

This Current Interruption Device is a mechanical fuse: When the pressure inside the cell rises above a certain level as happens when the cell is charged at an excessive current or voltage the upper and lower casings come apart by a small, controlled amount sufficient to break the circuit and permanently disconnect the battery. CoinPower cells are actually rated to withstand extreme

Some early batteries were contained in an aluminium pouch.

The Bragi miniature earphone, in the ladys ear, is also a complete music storage device powered by a rechargable VARTA Microbattery. The unit provides inspiration for small medical devices.



A few specs for VARTA Microbatterys CoinPower cells

Part number Average Nominal capacity Diameter Height Weight voltage (V) (mAh) (mm) (mm) (g)CP 1254 A2 3.7 50 12.1 5.4 1.6CP 1654 A2 3.7 100 16.1 5.4 3.2CP 1454 A3 3.7 85 14.1 5.4 2.4

The demand from consumer device manufacturers for higher capacity in a small space is not easing. One recent device thats stretching the limits of cell capacity is the so-called true wireless headset: Twin wireless ear buds without cable connections. An early example, the Dash from BRAGI demonstrates the possibilities for medical devices.

In this product, each earbud has a radio rather than the single radio in a conventional wireless headset. That means each earbud requires a battery.

To meet the product requirements, VARTA Microbattery is developing a third-generation of its CoinPower product for launch later in 2016. The cell will provide 20% more capacity and energy density, thanks to improvements in battery chemistry, electrode design, and production techniques. This new product will also be available in a 14mm diameter cell, adding to the 12mm and 16mm diameter versions available today.

This and other developments will meet the requirement for robust, easy-to-assemble, high-capacity batteries in the coin-cell form factor. The CoinPower cell will ensure that patients and other users can enjoy long run-times between charges and long cycle life.

F U T U R E T R E N D S I N S M A L L F O R M - FA C T O R L I T H I U M C O I N C E L L S

The Dash wireless earphones are powered by VARTAs Microbattery and come from manufacturer BRAGI. The units are a lot smaller than these appear.

12V/3C over-charging conditions, which put a far greater stress on the cell than industry standards specify. (1C is the current draw that will discharge a fully charged battery in one hour.)

Improvements to the li-ion coin cellThe li-ion coin cell has become the preferred battery choice for manufacturers of extremely space-constrained, portable devices requiring a high energy capacity of 50 mAh or more. Its found uses in consumer devices and medical and industrial equipment in which durability, high capacity and long cycle life are important.

The advantages of the original CoinPower product now have been extended with the introduction of the A2 and A3 series of cells. Improvements to chemistry and production techniques cells have increased their capacity, as well as extended their cycle life. The dimensions and energy capacity of these cells provide the best fit for the size and shape of the human ear, and for the requirements of manufacturers of earphones and true wireless technology.

Standard cycle life ratings for rechargeable batteries measure the fully charged capacity of the cell, as a percentage of its capacity when new, after 500 charge/discharge cycles at an operating temperature of 20C (68F). The formal specifications supplied by VARTA Microbattery show that, when stressed by executing 500 fast charge/fast discharge (1C/1C) cycles in the laboratory, the CoinPower A2 cells still retain more than 80% of their original capacity. Under gentler operating conditions (0.2C/0.2C), this value for remaining capacity rises to more than 85% after 500 cycles. In real-world applications, users are able to achieve outstanding cycle-life performance: customers typically report cells lasting for more than 1,000 cycles when mounted in an end product. M



COATINGS LAB

Think parylene for thin, complete, pin-hole free coatings

As modern medical devices push the limits of technology, parylene coatings are finding more places to assist evolving technologies. Parylene, a conformal polymer coating thats biostable and biocompatible, is suited to multiple industries and applications because its implantable; has outstanding barrier protection and electrical insulation properties; and a unique deposition method.

The coating processParylene is applied using a three-stage, vapor-deposition process. It lets the material deposit molecule by molecule onto parts placed in a vacuum chamber. This creates an extremely conformal coating that evenly covers grooves, crevices, gaps, and even sharp points. Because the coating is applied molecule by molecule, its thickness can be controlled to the micron.

S t e v e N e e l y | F o u n d e r |

V S I P a r y l e v e |

The pinhole-free coating is applied

in three stages.

The process works this way:

Stage 1: Parts are fixtured into a vacuum coating chamber. The solid parylene dimer in powder form is placed inside the vaporizer, where it turns into a dimer gas.

Stage 2: The dimer gas then flows into the pyrolysis furnace, which heats the dimer gas and turns it into a monomer (single molecule) gas.

Stage 3: Finally, the monomer gas enters a room-temperature deposition chamber,

which contains the fixtured parts, where the parylene deposits itself molecule by molecule onto everything in the chamber to create a thin and highly conformal coating.

Other considerationsAlthough the parylene process has several advantages over dip and spray coatings, there are process considerations. For example, the adhesion of parylene to the substrate is critically important in every application. To get the best adhesion, its important that parts are clean and free of oils and debris. With a clean substrate,

Coatings_5-16_Vs4.indd 14 5/20/16 10:58 AM

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COATINGS LAB

additional measures such as liquid surface activators or plasma treatment can be used to improve the bond between parylene and the substrate.

Because parylene evenly deposits on every surface in the vacuum chamber, areas that must remain free of coating are masked, or the coating is removed afterwards. When coating removal is necessary, its typically done with a

laser or via plasma ablation. During the device- and component-design stage, identifying the areas that must remain coating free can greatly improve downstream processing efficiency.

Inspection and testingQuality attributes for parylene typically specify the coating thickness, area of coverage, visual, and adhesion-testing

Parylene is well-suited for an application that calls for an ultra-thin, pinhole-free coating. Examples include devices that require a dielectric barrier, a chemical and moisture barrier, or catheters that require dry-film lubricity.

A few applications for the C and N varieties

Application ParyleneC ParyleneN

Analyticallabtrays Biostability Bloodhandlingcomponents Biostability Cathetermandrels Lubricity Lubricity Catheter/styluses Lubricity Lubricity Cochlearimplants, Barrier or dielectric hearingassist Feedertubes Crevicepenetration Laparoscopicdevices Dielectric strength Stents Biocompatibility barrier

For electronics

CoatingthicknessMaxelectricalinsulation

Microns Mils Volts per um (1mil = 0.001 in.) 1 0.04 220 2.5 0.10 550 5 0.20 1,100 10 0.39 2,220 15 0.59 3,310

Parylene also provides a chemical and moisture barrier for electronic circuitry.

requirements. Thin films can be measured non-destructively using spectral reflectance directly on the parts, or by measuring witness coupons that were coated with the parts.

Important propertiesParylene typically becomes a material of choice when an ultra-thin, pinhole-free coating is required for implantation, a dielectric barrier, a chemical and moisture barrier, or dry-film lubricity.

The two most commonly used variants of parylene are type C and type N. Depending on the application, the variant selected can optimize deposition time, crevice penetration, lubricity, dielectric strength, and barrier permeability properties.

Both parylene types are FDA-approved and have a USP XXII, Class VI biocompatibility rating, making them a perfect fit for medical device applications.

Designing with paryleneBecause each parylene coating application is unique, its helpful to develop the coating process along with the medical device to help ensure that its scaleable and high-quality. Process design conversations will include discussions about the proper parylene thickness and type, allowable clearances, plus dielectric-protection and barrier protection requirements, and cost expectations. Working with an experienced, innovative parylene coating provider ensures the best solution. Lead time is also critical when selecting a parylene coating provider, because faster iterations help a design evolve quicker and reduce time to market. M

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PATENT PROTECTION

Four things the medical device industry needs to know about U.S. patent law

Patents offer valuable protection for new products in the medical device industry, but patents laws and trends are changing quickly. Heres a quick update on recent changes.

Post-grant proceedingsIn recent years, the U.S. implemented major changes to its patent system when the provisions of the America Invents Act took effect. One of the most game-changing features of this law was the creation of new post-grant proceedings, including Inter Partes Review (IPR) and Covered Business Method (CBM) reviews. Subject to certain restrictions, IPRs and CBMs offer a forum for entities to challenge the validity of a patent in the patent office using a method that is quicker and less expensive than district court litigation. In these proceedings, invalidity also only needs to be proven by a preponderance, rather than the clear and convincing standard that is required outside the patent office. The administrative law judges who handle these proceedings also frequently have technical backgrounds that help them understand the technology at issue, and what one of ordinary skill in the art would have been likely to know at the time the patent was issued.

For these reasons, those challenging the validity of a patent have had high rates of success. The Patent Trial & Appeal Board (PTAB) has enacted recent rule changes that are expected to offer patents owners additional tools to defend against these invalidity challenges. However, even with the proposed PTAB changes, patent owners need to understand the profound effect these proceedings have had on patent strategy. Before enforcing a patent, a patent owner must now consider the strength of its patents and the potential that an accused infringer now has to use this alternative mechanism to challenge the patent. Similarly, an accused infringer needs to begin thinking early about its strongest invalidity case, because there are time limits on when these post-grant proceedings can be filed.

Patentable subject matterSimilarly, recent patent cases have changed the way medical device companies draft patents. Patent law has always included a requirement that a patentable invention be a new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof. 35 U.S.C. 101. However, courts have begun interpreting that provision much more narrowly than in the past, now excluding patent protection for wider categories of inventions that could be characterized as an abstract idea, law of nature, or natural phenomenon. In the medical device field, its now more difficult to obtain patent protection for software or the computer-implemented features of a medical device or for diagnostic methods that determine a physiological condition. Additionally, because patent examiners are more likely to issue rejections on the basis of section 101, the price to prosecute patents involving software and diagnostic methods and the time to obtain issuance of a patent in those areas have increased.

J u l i a n n e H a r t z e l l | P a r t n e r |

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Patent_5-16_Vs4.indd 17 5/19/16 5:30 PM

18 Medical Design & Outsourcing 5 2016

PATENT PROTECTION

To avoid these types of rejections by the patent office, patents attorneys must be more strategic in drafting claims. Some strategies to improve the likelihood of patent issuance are to focus the claims on physical transformations accomplished by the invention; synergies or unexpected results of combining elements; or improved functioning of the systems involved. Additionally, its helpful for the patent specification to include as much technical detail as possible about the problem the inventors were trying to solve, and about how the features of the invention are new and different.

Entities covered by patent claimsSimilarly, its important for medtech patent owners to be strategic in their understanding of the entity to be covered by its patent claims. Since 1996 and the implementation of 35 U.S.C. 287(c), medical practitioners of a medical activity or related healthcare entities are not liable for patent infringement. Accordingly, medical device patent owners tend to direct their claims to cover the makers of medical devices, rather than the people who use them. Its important to consider who will actually be performing the steps of the patent claims and how those entities are instructed to do so.

A recent decision by the Federal Circuit Court of Appeals (which has jurisdiction over all patent appeals), Akamai Technologies v. Limelight Networks, expanded the scope of patent infringement to cover situations in which multiple steps of a patent claim are performed by different entities. There was never any doubt that, if one entity performed all of the steps of a patent claim, it was liable for patent infringement. Similarly, if that entity performed only some steps, but directed or controlled conduct of the rest, it was still liable. But this definition excluded a company that offered a process to customers, but customers not under its direct control who performed some of the steps of the process.

Under the Akamai decision, patent infringement liability can now also be found when an accused infringer conditions receipt of a benefit to a third party on performance of the additional

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steps, and establishes the manner of timing of that performance, or when all participants in performing the steps are involved in a joint enterprise. This expanded definition of direct infringement helps patent owners to ensure that the claims issued are actually able to cover an entity that will be found to infringe.

ITC jurisdiction over digitally imported dataThe International Trade Commission, which has the authority to stop the importation into the U.S. of articles that infringe a patent, is a popular alternative to district court litigation. In a recent decision, however, the Federal

PATENTS ATTORNEYS MUST BE MORE STRATEGIC

IN DRAFTING CLAIMS.Circuit determined that the ITCs authority is limited to material things

and doesnt cover electronic data transmissions.

In that case, ClearCorrect Operating v. ITC, the patent related to the production of dental aligners. The accused infringer, ClearCorrect, scans physical models of patients teeth in the U.S. and creates a digital recreation of the patients initial tooth arrangement. The digital recreation is electronically transmitted to a related company overseas, which determines a final alignment for the teeth along with intermediate tooth positions moving toward the final alignment. The overseas entity creates digital models of the intermediate positions and transmits them to the U.S., where ClearCorrect makes 3D

prints of the models and manufactures the aligners.

The appeals court decided that the ITC did not have the authority to stop importation of digital data. This decision is limited only to ITC proceedings. There are no similar restrictions on the jurisdiction of U.S. district courts that would preclude finding patent infringement based upon the acts of importing digital data.

It is helpful to consider these recent changes in patent law when drafting patents to protect your inventions and when you are making decisions about how to enforce them. M

DISCLAIMER: The information in this article is for informational purposes only and is not legal advice. The views expressed are those of the authors and are not to be attributed to the firm or clients.


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TUBING TALK

A few ideas for a 21st century supply chain

The Internet has certainly shrunk the world by allowing almost instantaneous communication across its farthest reaches. The Internet has also let supply chains stretch around the world. Thats good because it opened doors for U.S. manufacturers. But the downside is that low-cost suppliers have more access to U.S. markets and working with lower-cost suppliers comes with risk.

For instance, after manufacturers began taking products overseas in the 1980s, some offshored natural-rubber products were insufficiently washed during the manufacturing process. High levels of natural rubber proteins in the material were found to be responsible for allergenic reactions to patients in the U.S.

This illustrates how lengthening a supply chain can cause major problems in product reliability. Unsurprisingly, events of this sort affect more than the companies directly involved. That gives domestic supply chains distinct logistic advantages, such as accessibility and access to the FDA, and theyre more easily monitored. Before reconfiguring to an offshore supply chain, consider the following advantages:

U.S.-based suppliers First, these companies will most likely have been audited by the FDA. That means Good Manufacturing Practices are in order as defined by the agency. A U.S.-based supplier can be audited by your internal quality department. Kent Elastomer Products has many medical device manufacturers performing annual audits.

In addition, U.S. production means shipments do not spend four to six weeks in a shipping container with unknown, non-medical products that may be subjected to contamination or variability with the elements such as temperature and humidity.

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TUBING TALK

Inventory assistance In an effort to keep product flow steady, trusted suppliers have access through customers secure portals to manage inventory levels. When suppliers have good working relationships, they provide access to their inventory to be closely watched by both supplier and customer.

Another example of how suppliers can help manage a smooth inventory flow is to carry inventory at the supplier facility. Customer releases can ship within 24 hours, saving the customer warehouse space and storage costs. Many times the cost is lower for the supplier to hold their customers inventory.

Partnerships in supply chains Our partnerships have been successful by incorporating Lean manufacturing

for cost-saving projects, improving inventory controls and developing new compounds for new products. Suppliers have launched themselves on a journey of continuous improvement by incorporating tools such as Kaizen teams. These groups gather regularly to attack and improve areas within the company found to be inefficient. The Kaizen groups are made of an eclectic group of employees, not upper-level managers, so solutions and process changes accomplished by the team associated with that process are often surprising and innovative.

For example, we involved a major customer in a Kaizen event held in our facility. Both companies formed one team and synergistically solved a quality issue.

Weve also had several projects

that resulted in new product offerings, such as lower-cost silicone alternatives. Weve been able to develop TPE compounds with properties that are similar silicone, which reduces costs. This has proven to be beneficial within the BioPharm market. TPE compounds also have an advantage where clarity, permeability, weldability, and flexibility are important properties.

Other products developed to meet client needs include the inclusion of antimicrobial resistance. There is a cost involved, but when weighed against preventing a hospital-acquired infection, which is even more costly, infection-resistant materials can pay for themselves.

Another example, the R&D team here has been able to give

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medical gloves and drain tubes X-ray-absorbing qualities. These attenuating gloves let surgeons safely perform tasks in an X-ray field to let the surgeon properly locate a drain tube.

A final thought A domestic supply chain and trusted suppliers will lead to several significant benefits, including improved communications, quick reaction times, improved quality, just-in-time deliveries, lower costs, and a long-term partnership. M

A partner in the supply chain may be able to provide unusual components such as radiation attenuating surgical gloves.

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MATERIALS

Exploring encapsulated ePTFE

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Expanded polytetrafluoroethylene (ePTFE) is a flexible, biocompatible material, used to cover stents and stent grafts. The lubricity, strength, and durability of the material makes it valuable during stent deployment and in situ. But as the manufacturing processes for it have improved, it is seeing renewed interest in other vascular applications, including transcatheter heart valves.

Material benefits in clinical useThe materials ability to collapse and expand repeatedly is critical to its use in vascular applications. ePTFE can cycle millions of times without breaking or coming off the device, which makes it valuable in the stent deployment process and resistant to wear in the body. It can adapt to blood vessels and their natural pulsatile action. Those pressure pulses create flexion that an encapsulated device must withstand.

ePTFE also features varying permeability, enabling outgassing while keeping blood cells flowing. It is chemically inert and hydrophobic. And its microporous nature encourages tissue ingrowth. Research has shown that endothelial cells that line all blood vessels can adhere and grow on ePTFE surfaces.

The material is also easy to work with, because of its temperature stability and its achievable thinness. Internal and external layers of coating measure in the micron scale, meaning that while the structure is deployed, it enhances the ability to navigate the vasculature but does not add significant thickness or diameter to the primary device.

THE MATERIALS ABILITY TO COLLAPSE

AND EXPAND REPEATEDLY IS CRITICAL FOR ITS USE

IN VASCULAR APPLICATIONS.

Meeting manufacturing needsOne of the traditional challenges of ePTFE is overcoming slippage during application to the stent. Encapsulation, rather than coating, solves the problem for cylindrical devices as well as complex geometries. The biocompatible material is applied via batch encapsulation to enable quick manufacture while maintaining quality and cost and time savings. The encapsulation process is suitable for stent structures and other long-term implantable devices.

One of the benefits of the encapsulation process is that it enables very thin coverage of the stent, down to 0.0005 in. The encapsulation process can also accommodate conical shapes, flared shapes, and double flared shapes.

The ability to encapsulate complex geometries is a critical development in manufacturing. It avoids the need to suture material to the metal: ePTFE sticks to itself around the metal of the stent, without delaminating or tearing.

A key advantage in the process is the time and cost savings it offers over traditional manufacturing methods. These methods include hand sewing bovine or porcine valves to polyester, for example. Such a process is long and labor-intensive, and garners the appropriate premium pricing. Further, as skilled as a hand sewer may be, a person cannot achieve micron level accuracy or achieve micron thicknesses. By contrast, in the time that it takes for 3 hand-sewn devices to be ready, the ePFTE encapsulation might produce hundreds of units that are substantially thinner.

Whats next As minimally invasive vascular procedures advance, the catheter sizes used for valves and stents will get smaller. Encapsulated ePTFE can help innovators improve clinical outcomes, reduce costs, and reduce time to market. M

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MED TECH STARTUPS

Everything You Ever Wanted to Know about Starting a Medical Device Company *

* but were too afraid to ask

So you want to start a medical device company? Then listen now to what we say in the following pages, because its sure to come in handy.

First, know hope: Venture capitals withdrawal from the increased risk presented by medtech investments doesnt mean you cant raise enough cash to get going. Youll just need to get creative, as we explain on page 26.

Now that youve got some scratch, page 26 also provides some insight on whether to spend it on outsourcing product design & development and prototyping services.

All set? Now you need to think about getting

your device on the market. Yeah, its a high bar, but on page 28 youll find some key considerations to incorporate into your business plan.

Once youve gotten that figured, you should turn to page 27 to learn about keeping that FDA or CE Mark approval with your quality systems.

And you still need to get paid, right? Page 30 will tell you all about buidling a reimbursement strategy into your plan.

Finally, to protect the intellectual property underlying all of this effort, turn to page 17 for a look at four things the medical device industry needs to know about U.S. patent law.

Cover Story Feat_5-16_Vs3.indd 25 5/19/16 5:19 PM


MED TECH STARTUPS

* Fundraising

* Outsourcing

Venture capital hasnt completely deserted the medical device sector, but most analysts agree that VCs are simply not as interested in medtech as they are in other sectors like biotech. Medtech attracted less than $5 billion in 2014, only 5.9% of all U.S. venture dollars that year, according to the Ernst & Young Pulse of the Industry report.

And its startups that are feeling the pressure most deeply. VC backing of earlier-stage medtechs now makes up a smaller share of a smaller pie due to the retreat of several stalwart medtech-focused VCs at a time when corporate venture investors have yet to fill the gap, according to the report. Seed, Series A and Series B rounds dropped 8% in 2014-2015 from fiscal 2013-2014 and made up only 29% of medtech venture investments in 2014-15.

Think smallAlthough VC has diminished, other funding sources are out there the biggest change is that theyre just much smaller:

Angel investors Often individuals with deep pockets and an interest in a specific disease or condition. Get busy networking with as many high-net-worth people as you can.

Private placement Use a private placement the sale of securities to a relatively small number of select investors to fund your vision by raising money from individual donors.

Incubators Public, private or academic incubators offer subsidized business accommodation, academic support and business mentoring, and connections with resources for prototyping, testing and clinical trials.

Entrepreneurial competitions Universities or large companies, hoping to attract technology partners, often offer technology contests with sometimes significant payouts in cash and in-kind services.

Crowdfunding Most effective after the early development phase, when the funds are needed for validation or prototyping. The same high risk and high capital needs medical technology

that made VCs chary of medical technology make the crowd a less optimal source of cash.

City, state, & county resources Local governments often use tax breaks and other incentives to draw entrepreneurs to development zones. And your area likely has technical associations formed to boost the industry, some with their own tech incubators. Trade associations offer access to universities or hospitals for clinical testing and connections to local angel investors and competitions. They can also provide opportunities for networking and mentorship.

As Aum Cardiovascular CEO Marie Johnson puts it, They dont give you money because theyre in love with the story. (Johnson raised $5 million for Aum via private placement.) The best advice for any medical device startup is that today, no medtech investment pitch, no matter the source receiving it, succeeds without compelling clinical date, a clear unmet and demonstrable cost savings over current treatments. M

RAISING CAPITAL IN A VC-LITE ENVIRONMENT

OUTSOURCINGARE YOU READY FOR AN OUTSOURCER?

HERES HOW TO FIND OUT.

Outsourcing your product development doesnt have to mean losing control of your technology. Although its one of the biggest decisions a startup will make, working with a contract supplier can deliver unexpected benefits.

Gary Boseck, VP of technical operations at Vention Medical, says there

are ways for startups to prepare for the challenges that come with working with an outsourcing partner.

And partnership, he says, is really the key word. CMOs want their clients to succeed. They have a vested interest in helping develop a technology that has potential in the market and

their expertise can contribute to the likelihood of success.

Getting a trusted CMO involved early in the process could even have some unexpected benefits. Boseck says some CMOs will provide funding for their most promising startup clients. Others hold contests to attract the best startup

Cover Story Feat_5-16_Vs3.indd 26 5/20/16 11:19 AM


MED TECH STARTUPS

* Quality Control

technologies and assist in developing those platforms for the market.

Readiness is allIts not an easy road from ideation to production, Boseck notes. As the saying goes, If it were easy, someone would have already done it. Thats precisely the point: Contract manufacturers have done it, and theyre willing and able to help startups do it as well.

There are a few questions medtech startups should ask themselves when considering whether to look outside the company for product development:

Canyouprovidewell-definedandstable product requirements? Although adjustments are expected and often necessary, keep in mind that mission creep can kill deadlines, Boseck notes.

Do you have clear priorities?

Whatever the challenges, your end goals should be very well defined.

Can you provide timely feedback to the team? Manufacturing cant take place in a vacuum. Startups, which often have limited staff, should commit to having a dedicated liaison with their CMO partner.

Will you actively engage with the CMO development team? This might be as easy as getting a team member on site frequently.

Do you understand the development process? If not, ask more questions.

What are the terms? Make sure IP and ownership of the work product is well defined.

Another important aspect of engaging with a CMO is the selection process, often a rigorous and challenging one, Boseck says. Some CMOs actively try to entice startups, but just because they claim to be

experts they may not meet your specific requirements, he cautions. Boseck advises budding medtech entrepreneurs to evaluate CMOs based on the following criteria:

Their expertise matches the project need. This should encompass design expertise, clinical familiarity, and component and assembly experience.

The CMO offers the full spectrum of needed services. These should include concept ideation and prototyping, clinical production and scalable commercial production.

The CMO is accessible and responsible. This is the due diligence portion of the analysis. Youll need to talk to a variety of clients, and conduct some online research, just to start. A good CMO has a reputation for building good working relationships, with an emphasis on trust and transparency. M

QU

ALI

TY

CONT

ROL

APPRO

VED QUALITY AND COMPLIANCE FOR STARTUPS:

WHAT YOU CAN IGNORE AND WHAT YOU CANT

Quality systems might be the last thing on your startups mind, as other activities take precedence. But its not a good idea to overlook the development of your quality system at the beginning.

I think its a good idea to put process and product planning in place right from the start, simply because once things get going, they get going fast, notes Timothy Lozier, director of marketing for ETQ. You might be too worried about R&D, product and supply chain, and then market approval, to think about compliance. But it will come to you, and you don't want to get caught off-guard.

Establish a quality management system that suits the company size and expected growth, adds Christine Santagate, client solutions advisor with

Regulatory Quality & Solutions. Make sure that its something that the current staff can manage and maintain. When a company institutes a [quality management system] thats too large, they set

themselves up for failure to comply with their own system.

Implementing and maintaining a QMS is a crucial part of regulatory

compliance. The medical device quality system is primarily concerned with production and post-production. FDA 21 CFR Part 820 defines the quality regulations for the U.S. market.

Otherwise, ISO 13485 can be used to build a quality system for global markets.

Although its time-consuming and expensive, establishing a total quality

WHEN A COMPANY INSTITUTES A [QUALITY MANAGEMENT SYSTEM] THATS TOO LARGE,

THEY SET THEMSELVES UP FOR FAILURE TO COMPLY WITH THEIR OWN SYSTEM.

Cover Story Feat_5-16_Vs2 BP.indd 27 5/19/16 12:43 PM


MED TECH STARTUPS

management system need not be as challenging as it sounds. The key is to build the system as you develop, focusing on the relevant aspects of quality and ignoring the others until theyre needed.

You have to find something you can scale with, says Lozier. There are systems out there that let you start off

small-scale and simple (yet effective), but as you grow you can grow the solution with your business.

Startups should begin building their quality and compliance programs during the development phase, he advises, by focusing on design controls, risk management, document control and record management, and supplier management.

Design controls, essential for a QMS, can also help with the design process by capturing key aspects of development to prove your product meets user needs and is safe and effective. Likewise, risk management works with design controls to create documents and records throughout product development, to demonstrate

that youve considered the risks and are doing something about them. Document management is the process that helps those pieces of the puzzle stay together.

The concept of planning and gaining control over the process is that as you grow, you'll always have them to lean on, Lozier explains. People can follow a

process, but if its not documented, then you run into issues.

Lozier emphasizes centralizing documentation, process and product planning.

Too often, companies take that first step towards documenting their processes, but it resides in spreadsheets, file systems, and other, more decentralized, often manual methods. Having a system thats able to manage and track these things, as well as serve as a central resource, is important to ensuring consistency in the operation. One source of the truth outweighs the risks associated with errant copies floating around the operation.

Lozier cites tools that offer free or scalable methods to handle compliance events, issue actions, and launch corrective & preventive actions (CAPAs). ETQ, for example, offers traqpath, a free download, and VERSE, a cloud-based quality management system that brings in document control/training and CAPA. In addition, both tools have a supplier component to them, which can help startups send actions and CAPAs to suppliers through secure external assignments.

Many vendors have programs that are specifically designed to help companies scale compliance.

These arent expensive tools, but are built with startups in mind, says Lozier. The benefit is that if youre a startup and you're looking to just put the pieces in place, you can do that for a low cost to your business, or even for free. That way, you're not ignoring it, or factoring in major investment on something you may not need now.

Committing assets to compliance is a future-proofing investment, he says. Youre going to have to meet the compliance standards and regulations as you grow, and, just like documenting your processes and controlling and tracking your quality and compliance operations, you don't want to be caught in growth mode and playing catch-up. M

PEOPLE CAN FOLLOW A PROCESS, BUT IF ITS NOT DOCUMENTED, THEN YOU

RUN INTO ISSUES.

* RegulatoryHOW TO PLAN YOUR REGULATORY STRATEGY

The regulatory burden for startup medical device businesses might be the most rigorous of any industry, and with good reason making products for implantation or use in the human body requires hurdling a pretty high safety and efficacy bar.

So building a regulatory strategy from the very beginning is crucial, and there

some key considerations every medtech startup should keep in mind, according to Christine Santagate, client solutions advisor at Regulatory Quality & Solutions.

First off, Santagate advises, startups should remember to budget for the testing and related costs associated with regulatory processes.

The regulatory strategy is really an

extension of the overall business plan and the costs associated should roll up into the overall budget. Unfortunately, testing and registration costs are sometimes overlooked when creating a business plan, she explains. The testing times and costs of sterilization validation, environmental testing, aging, biocompatibility and possibly clinical trials

Cover Story Feat_5-16_Vs3.indd 28 5/20/16 11:23 AM

THE ENGINEERS CHOICE

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MED TECH STARTUPS

are sometimes not fully understood, as the initial focus is usually on technology and not on the entire life cycle.

Another early consideration is where to pursue approval first. The relative ease of obtaining a CE Mark in Europe compared with the FDAs more stringent requirements has been an attraction in the past, but Santagate says thats changing.

It used to be easier to gain approval in Europe, but things are changing quickly. With the updated ISO 13485 and pending IVDR updates, notified bodies [in Europe] are going to have their hands full, she says. Small startups should focus on gaining approval in the country that allows the most opportunity and is manageable and sustainable for their small staff.

If the U.S. is the first target for commercialization, planning a detailed approach ahead of time helps determine

which pathway to pursue, depending on the type of device being developed. It can help to find a trusted partner with the expertise in this area, to develop a regulatory strategy up front and identify potential paths to market and its associated risks.

This strategy will assess applicable FDA regulations, device classification options, potential predicate device and product claims, indications and contra-indication options, and potential regulatory risks based on the companys marketing claims, product requirements, risk analysis, etc., Santagate notes. The advantage in working with a consulting group is that they stay up to date on all regulation changes. A group like R&Q has 80+ full time consultants with experience spanning nearly all FDA device classes and they can provide an experienced, independent review.

If your device is Class III, requiring the

FDAs most-stringent pre-market approval path, establishing a relationship with the agency and keeping the lines open should be your primary considerations.

Make sure that indications are clear and supported and that any study design is robust and appropriate data points are collected to support the submission, Santagate advises. Its all in the preparation this is a long process and up-front focus and attention to detail will be well worth the effort.

Santagate says a sound regulatory strategy can be an unexpected benefit for startups on the funding trail.

Potential investors are able to see that the company has a planned path forward, based on risk. It provides an additional layer of preparedness and overall understanding of the full funding requirements and how those funds will be used, she says. M

* ReimbursementREIMBURSEMENT TOPS THE MUST-DO LIST

Five years ago, if you asked a medical device executive about their top worry, regulatory specifically, the cost and uncertainty around winning favor with the FDA nearly always came first.

Today, those same executives are more likely to cite reimbursement as their top issue. Driven by the declining number of physicians owing their own practices 70% in 2002, compared with about 25% in 2011, according to the U.S. Medical Group Management Assn. and the resulting shift to group purchasing organizations, reimbursement has vaulted to the top of the list of must-do items for new medical device concerns.

"Reimbursement comes up in just about every discussion I've ever had with investors," says David Rosa, the former president & CEO of Sunshine Heart in Eden Prairie, Minn. "Today, they're

all looking to de-risk their investment, and they all want to know, up front, the likelihood of reimbursement."

"The hardest questions you're going to get are on the reimbursement side,"

adds Preceptis Medical president & CEO Steve Anderson. "It goes to the heart of everything we've been doing. Five years ago, we would've said, 'Oh, reimbursement, I don't need to worry about that.' But this is the big issue today. It's a big issue, and a big opportunity.

"It really is all about the money. The first real money we spent was on an outside analysis on reimbursement strategy. So it was fundamental to everything we've done," Anderson says.

In fact, Minneapolis-based Preceptis chose to develop its therapy to help children with hearing problems in part because of its relatively simple reimbursement path, he adds.

Bob Thompson, president of Gahanna, Ohio-based Comprehensive

THE HARDEST QUESTIONS YOURE GOING TO GET ARE ON

THE REIMBURSEMENT SIDE.



MED TECH STARTUPS

Reimbursement Solutions, says the key is targeting a truly unmet need.

There's a lot of opportunity out there," Thompson says. "If you direct your products toward unmet medical needs, you'll see the benefits particularly if you deal with the quality and cost-control issues that hospitals and payers are feeling."

The challenges vary by country, so its important to become familiar with the ins and outs of local reimbursement policies in your target markets before you start spending on product development. One challenge common to most markets is the gap between

reimbursement rates and the actual value of the technology. In many countries, rates are set using cost-based formulae by device or procedure type.

Because winning reimbursement hinges on clinical data, startups should plot their reimbursement strategy in parallel with their clinical and regulatory plans. Thats because collecting Class I data from randomly controlled trials and post-approval Class II data is key to a favorable review from a payer. Startups should also have a strategy for disseminating that data to peer-reviewed publications and at medical conferences once its collected.

In the U.S., an increasing number of payers are exploring value-based reimbursement models, not least the Centers for Medicare & Medicaid Services. Last July Medicare announced a program to bundle reimbursement payments for hip and knee replacement procedures, saying it wants to hold hospitals accountable for the quality of care they deliver to Medicare fee-for-service beneficiaries.

Startups that can demonstrate that their devices both improve outcomes and can be reimbursed based on that improvement stand a better chance of winning a favorable decision from payers. M


Merit Medical OEM offers thousands of quality components and innovative

devices to meet your needs.

Learn more at MeritOEM.com

Merit 9-15.indd 15 5/18/16 4:23 PM


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Ones to WatchTen companies were keeping an eye onIts tough to pick just 10 medtech startups to profile out of the hundreds or thousands dotting the U.S. landscape, but we tried anyway.

It helped that we kept our criteria simple: A relatively new company, with only one or two (or no) financing rounds under their belts. Some are so deeply in stealth mode that they never responded to our enquiries.

More important in our selection process was that the technology being developed sparked our interest. That made it even tougher to winnow the field, as the array of unmet needs being met by ingenious medical devices is truly inspiring.

In the following pages youll find brief looks at our choices, ranging from the radiofrequency ablation device for treating overactive bladder being developed by stealthy Amphora Medical, to Sonex Healths Stealth Microknife device for treating carpal tunnel syndrome.

And to all those startups who didnt make the cut: Its not you, its us we only had 10 slots and there are so many of you! Dont worry, theres always next year

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Amphora Medical

Aum Cardiovascular

Stealthy Amphora Medical is stingy with details about the technology its developing to treat overactive bladder. Founded by serial entrepreneur Danny Sachs and medtech veteran Ed Hlavka, Amphoras single-page website offers only contact information and a link to a lone patent.

But the company has managed to raise nearly $13 million for the device its

MAPLE GROVE, MINN.AMPHORAMEDICAL.COM

NORTHFIELD, MINN.AUMCARDIO.COM

developing to treat overactive bladder. According to the patent cited on its website, Amphoras device is designed to ablate nerves in the bladders trigone, the funnel-shaped portion that leads to the urethra. The tech aims to denervate a portion of the trigone without disturbing the bladders outer mucosal layer, according to the patent.

Amphora is running a pair of trials evaluating the device, according to ClinicalTrials.gov. The Caret-I trial, a Phase I/II study of 50 patients with a primary endpoint of device-related complications at 12 weeks, is slated for final data collection in October 2016. The Caret-II trial, a 2-phase safety and efficacy study, is designed to evaluate device-related serious complications at 4 weeks. Its final data collection is due in June 2016.

Amphora came up with $600,000 in a hoped-for $1.25 million equity round involving 4 investors back in 2013, according to SEC filings. The round was expanded to nearly $12.8 million last year, the filings show.

Amphora did not respond to our attempts to contact them, but well certainly be keeping an eye on this intriguing startup. M

Aum Cardiovascular is developing the CADence handheald heart disease diagnostics device, designed to identify obstructions in the coronary arteries by detecting the acoustic signals generated by turbulence created as blood flows past an obstruction.

Founded in 2009 by Marie Johnson SEC-registered funding - $456,000,

$3.3 million in 2011; $1.8 million in 2013; $5,006,150 in 2015 TOTAL: $10,562,150

Marie Johnson was working on a prototype computerized stethoscope

device designed to listen to heart sounds as part of her doctoral degree when her seemingly healthy, 41-year-old husband died suddenly from a heart attack.

Johnsons husband had recently been given a clean bill of health after undergoing a traditional stress test, which made the cause of his death even more shocking. She later found out that he had blockages in his coronary arteries, including ruptured plaque in the left anterior descending artery the aptly named widowmaker. Her husbands own coronary artery disease had gone undetected by traditional tests.

I had 2 young children, Johnson says. I knew right then I was going to work on eradicating this terrible disease.

So she set to work putting the principles of frequency analysis shed used in her doctoral program to create an acoustic device to identify obstructive coronary artery disease.

The device, later named CADence, would become the cornerstone of the company Johnson founded, Aum Cardiovascular.

The name is based on a Sanskrit syllable meaning to make a continuous low humming sound, akin to the

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Bigfoot Biomedical MILPITAS, CALIF.BIGFOOTBIOMEDICAL.COM

information the CADence device is designed to extract from diseased coronary arteries, the company says.

Johnson got the patent for her computerized stethoscope back from the University of Minnesota, where shed developed it, and set out to start Aum Cardiovascular with a relatively small grant from the federal government.

Medical Design & Outsourcing - MAY 2016

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