An Inside View: CEO Promotes Successful Business Collaborations

Medical Device & Diagnostic Industry Magazine
MDDI Article Index

Originally Published February 2000

Whether he's negotiating licenses, collaborating with small firms, or overseeing strategic alliances, Donald Hetzel, president and CEO of Instrumentation Metrics Inc. (Tempe, AZ), has a knack for fostering successful relationships between companies. "Such relationships frequently exist between a large and a small company," he explains. "It's important to understand the motivations and goals of the small company and the way the small-company culture operates. Often, this type of arrangement fails due to a lack of appreciation of the cultural and strategic differences between the two."

From 1981 to 1996, Hetzel served as vice president, corporate research and development, for Becton Dickinson (Franklin Lakes, NJ), where he honed his skills at building meaningful business interactions. "Many of the company's relationships were characterized by equity investments, R&D contracts, and, in some cases, a seat on the board of directors," Hetzel explains.

During this period, Hetzel represented Becton Dickinson on the board of Applied Biosystems Inc. (Foster City, CA), a developer of DNA and protein sequencing and synthesis technology, since acquired by Perkin-Elmer. As such, Hetzel had an "inside view" of the company, and Applied Biosystems, in turn, gained access to Becton Dickinson resources. "It was a two-way street," Hetzel says.

Hetzel realizes that such collaborative relationships are not unique to Becton Dickinson, nor were his duties there. "Many companies are managing a lot of simultaneous relationships," he says. One such company is Pfizer Inc., where Hetzel began his career as a research chemist in 1967. "Pfizer today has many such interactions with small companies, which has been a very productive strategy for them." He advises other companies involved in similar relationships to develop a team that interacts with the other company. "I think it's very important that there be an advocate for the project on each side—both for the large company and the small company—someone whose major responsibility is the health of the collaboration."

Hetzel says it's important to understand cultural differences between companies.

In 1972, Hetzel became Pfizer's first director of licensing for nonpharmaceutical healthcare products and technology. "At this time, the licensing and development division was formed to bring all the scattered licensing operations throughout the company under one experienced executive. This was an effort to bring that kind of an operation together under one leader," he says. Having come directly from the research laboratory, Hetzel found this job a great introduction to business: "I worked for Robert Feeney, an experienced executive, and he taught me how one went about evaluating products and technology and acquiring them via licenses."

In 1974, Hetzel became vice president of research and development for Howmedica, a subsidiary of Pfizer. When the medical device amendments passed in 1976, he developed a regulatory affairs group, a corporate quality assurance group, and a clinical research group to help the company comply with the regulations. Part of the challenge was helping the senior executives adapt to the slow but steady accretion of regulations. "It was a very interesting time for me, and I learned a great deal about administering and managing technology and product development, as well as regulatory functions."

Hetzel's background and skills in the management of medical technology have prepared him for his current position with Instrumentation Metrics Inc., a technology company nearing commercialization of noninvasive analytical instrumentation for diagnostics. The company is using near-infrared diffuse reflectance spectroscopy to measure blood glucose and is in the process of conducting early human trials with its first device for clinical use.

Hetzel views the regulatory process as a chance to continue building positive relationships: "I look for open and constructive dialogue with FDA throughout the process—beginning early on—so that as product development progresses, there is a discussion of how best to test for safety and efficacy, what the agency would like to see in terms of a submission, etc. This way, the company can respond in a timely way, since time is clearly money, especially for a small company."

Kassandra Kania is associate editor of MD&DI.

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