Novel Collaborative Relationships Emerge on the Medtech Landscape

Bringing a medical device from concept to commercialization has never been an easy task. The process typically requires an extensive and daunting assortment of skills, resources, and capabilities in product design, manufacturing, regulatory approval and compliance, reimbursement, marketing, and distribution. The medtech industry has a long and successful history of overcoming hurdles to market through strategic, collaborative efforts. This month's MX: Issues Update looks at three such innovative arrangements.

GE Healthcare and the University of Pittsburgh Medical Center

Earlier this month, GE Healthcare, a unit of the General Electric Co. (Fairfield, CT), and the University of Pittsburgh Medical School (UPMC; Pittsburgh) announced the formation of a new company, known as Omnyx LLC (Pittsburgh), which will focus on the development of products for the digital pathology market.

According to Omnyx CEO Gene Cartwright, “Digitizing pathology will allow Omnyx to provide doctors with better tools for the full care continuum, enhancing their decision-making capabilities in key disease areas.” His remarks reinforced the linkage with GE's molecular diagnostics business, where he previously served as the unit's president.

Jeffrey Romoff, president and CEO of UPMC, said, “The formation of Omnyx underscores UPMC's strategy of leveraging its medical, technology, and research expertise to create solutions that benefit patients worldwide.”

The formation of Omnyx is the result of a joint venture agreement that was structured two years ago between the two parties. It is the first standalone company in GE's history to be formed with an academic medical center. The new company will be headquartered in Pittsburgh, with additional offices in Piscataway, NJ, and other GE Healthcare locations.

Omnyx's immediate goal is to develop a powerful “virtual microscope” within two years. The company says such a product would increase productivity in pathology labs by as much as 20%.

“Digital pathology provides a platform for the creation of new tools that will help pathologists screen large numbers of slides in search of a small nest of cells or a few bacteria to quickly and accurately diagnose disease,” said George K. Michalopoulos, MD, PhD, professor and chairman of the pathology department at UPMC.

There are reportedly 1.5 billion tissue samples analyzed annually in the United States, and billions more at labs around the world, as an essential part of diagnosing myriad diseases. Creating, viewing, storing, and retrieving such samples continues to be done largely by manual means, which inhibits getting critical diagnostic information to physicians in a timely manner. UPMC labs alone review an estimated 2 million pathology slides each year.

The market for digital pathology instrumentation is expected to reach $2 billion within the near term, and Omnyx will have competition from established firms such as Aperio Technologies Inc. (Vista, CA), BioImagene Inc. (Cupertino, CA), and Bacus Laboratories Inc. (Lombard, IL), which is a unit of Japan's Olympus Corp. But rather than fretting over Omnyx's powerful lineup of resources, several competitors expressed optimism that the new entry would stimulate interest in and demand for digital products and services, which have experienced sluggish adoption rates in the pathology space.

GE and UPMC each contributed $20 million to the launch. Omnyx will operate as an independent entity, but GE reportedly may buy the entire company eventually.

SpineMark

In early April, contract research organization SpineMark Corp. (San Diego) introduced a new business model to the spine industry, which the company has dubbed the spine research organization (SRO). The announcement coincided with the launch of the company's first multisite SROs serving the Denver and Los Angeles regions. According to the company, the purpose of the SROs is to unite the regions' leading spine experts under one organization while providing patients in their respective communities with access to the most advanced spine care therapies available. The organizations offer participating physicians and hospitals support and third-party resources for clinical trial management.

SpineMark says it can offer a wide range of services to spine device manufacturers, including site recruitment, rapid patient enrollment through its multisite network of SROs, regulatory consulting, reimbursement, preclinical studies, clinical trial development and management, protocol development for IDEs and 510(k)s, CE mark applications, FDA submissions, marketing, third-party payer information, preclinical coverage decisions, and postmarket studies.

Noting that spine device manufacturers, researchers, and clinicians are all aware of the increasing demand for greater transparency in clinical research, Marcy T. Rogers, SpineMark president and CEO, says, “The SRO model provides intermediary third-party oversight to ensure the highest quality monitoring and surveillance of clinical trials.”

SpineMark does not see itself as an incubator for new spine technologies, nor does it plan to invest in or establish a portfolio of emerging companies. “That's not our model,” says Rogers. “While the companies we work with will undoubtedly develop innovative technologies, our role is to provide a service infrastructure to ensure that those technologies become available to the broadest array of physicians and their patients who can benefit from them by fostering collaborative research, facilitating regulatory approval and reimbursement, and streamlining market commercialization.”

William Blake Rodgers, MD, an orthopedic surgeon and director of the Midwest Spine Center (Jefferson City, MO), sees the SpineMark SRO as a viable concept that should help facilitate and advance the adoption of new spine technologies. “The research network has real value,” says Rodgers. “Their position on transparency is extremely important. Fairly or unfairly, we cannot be seen as paying for answers when we should be paying for the questions that will lead to solid research. I am also pleased to learn that they do not plan to invest in spine companies, as that could potentially compromise the independence and integrity of the model.”

SpineMark says the SRO concept has been well received by spine device manufacturers. The company plans to launch SRO sites and spine centers of excellence across the country and in international markets.

Beaumont Commercialization Service

Also in April, Beaumont Hospitals (Royal Oak, MI) announced the launch of a new commercialization service that it says will help medtech manufacturers, physicians, and inventors bring their ideas for new medical devices from concept to reality. Beaumont claims that the full-service commercialization center is the first of its kind in the United States to blend product development knowledge with the experience of physicians and clinical staff at one of the highest-volume hospitals in the nation.

Beaumont is a major teaching facility that is affiliated with the medical schools of Wayne State University (Detroit) and the University of Michigan (Ann Arbor, MI). It operates hospitals in Royal Oak, Troy, and Grosse Point, Michigan.

The commercialization center is a part of the Beaumont Services Co., which builds hospitals around the country. Steve Ebben, vice president of planning and marketing for Beaumont Services, says, “All too often, physicians or other inventors have a brilliant concept for a medical device but lack the resources and time that are needed to make that idea a reality. When the services of the commercialization center are combined with the ideas of inventors, the innovation that results will help shape the future of healthcare.”

Ebben describes the service as a hospital-based medical device development center focused on the commercialization of intellectual property–protected products for medical manufacturers. The center plans to work with inventors at Beaumont, as well as other medical facilities and businesses, to turn emerging technologies into market-ready products for manufacturers to license or buy.

John Shallman, director of strategic business development for the Beaumont Commercialization Service, says, “We offer a complete range of services . . . anything and everything needed to bring a medical device from concept to commercialization.” Services include: product feasibility research; creation of intellectual properties; product design and engineering; prototyping; materials and components sourcing; contract manufacturing; testing; safety and efficacy assessment; regulatory compliance and preparation for FDA submission, reimbursement, and marketing and distribution services.

“We can do it all by providing a complete turnkey solution, or offer services on an a la carte basis as needed,” says Shallman, who reports that the service has been generally well received. “While we're not yet able to disclose the names of the companies that have either contacted us or have already submitted projects for review, several are well-known names in the industry.”

Shallman also said that Beaumont will start developing the patents it currently holds on a variety of medical instruments and imaging devices.

Beaumont currently envisions working with manufacturers and physician-inventors on products that could either become the exclusive property of the initial client, or be sold or licensed to another company. Joint-venture projects are also within the purview of the commercialization center.

Shallman also anticipates the possibility of in-house product development of projects that could eventually be spun off as independent companies. “We're not there yet, though,” he says. “Right now, our goal is to keep the concept of commercialization center clean and simple.”

© 2008 Canon Communications LLC

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