The Medical Device Industry: An Entrepreneur & Angel Investor's Perspective
Published date : 31 January 2013
Article date : 31 January 2013
Which Medical Device was very pleased to have an opportunity to put a number of intuitive questions to US based entrepreneur, angel investor, clinician and award winning, Dr. Adam Bazih.
Based in Los Angeles, Dr. Bazih is CEO at SMART Image and a driven entrepreneur. He has developed and licensed a wide range of medical devices and, amongst his accomplishments he is also a prolific author of scientific and technical material.
Which Medical Device: What do you predict will be the top 5 innovative technologies for 2013?
Dr. Adam Bazih: I guess that what we’ll see is the introduction of new devices as well as expanded use of a number of existing technologies. At the top of my forecast would be the development of devices that can improve on stroke prediction, detection and monitoring using EEG and other low cost modalities. Next would be ultra affordable real-time imaging modalities for brain and body imaging which are some of the technologies in which I’m currently invested and participating.
I can foresee expanded use and application of EEG technology for connected devices such as for the control of prosthetic limbs, speech and complicated gesturing/machine control. And, expanded use on advanced 3D Tissue Printing technologies. The other area that is likely to advance is the use and application of hospital robots (telemedicine).
WhichMD: What are the biggest challenges to medical device innovation today?
Dr. Bazih: I’d say that the two fundamental challenges are funding and, ironically, commercialisation and marketplace requirements.
In regards to funding, as larger device companies focus more on acquisition versus internal innovation, society is increasingly relying on smaller companies to shoulder the burden. Between engineering, quality control, and clinical trials, medical device innovation is an expensive and long-term endeavour. Our new economy is very risk adverse; this has percolated from government (e.g., NIH, EU, institutional to angel and venture investors as well).
As for commercialisation and marketplace requirements, I’m referring to the fact that in most cases, a device, as with most products, must have a clear business plan that can lead to profit. I’m completely guilty of this practice when evaluating any piece of technology. Simply put, most enterprises need to make financial sense and have gold at the end of the rainbow to attract investment, commercial partnerships and come to fruition.
This mentality and process can stifle medical device innovation. Unlike consumer electronics or many other industries, medical devices are in the end about health and quality of life. Too often, I see amazing device technology that solves a very specific need, one that has potential to better lives but the market opportunity is too small - these companies and ideas never get funded. In developed nations we rely on governments and endowments to pick up the slack but grant funding is increasingly harder and harder to procure and even after funding, many of these ideas collect dust in the very institutions that they were created. I really feel as a society that we need to push the translation of innovation to real-world benefit. In essence, this is a society problem that has implications for the entire globe; and really means changing our framework and thinking. We need to ask ourselves, how can we concurrently develop and facilitate niche devices as well as distribute less profitable devices to underdeveloped areas of the world.
WhichMD: As an investor, what are the 3 top criteria you look for when evaluating a device?
Dr. Bazih: This is a partially hypocritical response, as compared to how I answered your second question but as an investor evaluating a device, I really have to ask, is there a market or real pain that is being addressed? If the answer is yes, it doesn’t mean that the device will be successful but it least tells me whether there is meat on the bone. This question is really true for any technology in any category. Often researchers have to solve the most complicated problems in the most elegant way but a real need hasn’t been solved - this makes an exit hard (i.e., licensing, partnerships, additional fundraising).
The Team: an important co-factor for any piece technology is the team behind it. I don’t solely invest in technology. Yes, the technology is critical but you’re also investing in the team that can engineer and commercialise it. I especially look for technology that has a diverse team around it. A strong engineering or clinical team is usually par for the course but other key ingredients include regulatory experts, commercialisation and/or reimbursement experts as well. A piece of advice that I often give startups, especially to those running on lean budgets and holding precious equity is to setup an advisory or affiliate body of experts early on in the areas with which you’re weak. Most medical device ideas are science/medical heavy but lack the business expertise to guide fundraising and commercialisation. Look for key partners early on.
4P’s (product, price, placement, and promotion): this works for any widget, and is nuanced with medical devices, but still holds true. One always has to remember IP, regulatory, and quality issues as well. These have tremendous repercussions - for example, a CE class III device is very different from a class II product.
WhichMD: How important is the role of "human centered design" in terms of individual customisation and in the device industry? Do you think that we’re moving away from the "one size fits all model"?
Dr. Bazih: Firstly, human centered design is important and becoming more and more relevant. I recently read an AMR (Gartner) Research study where 46% of surveyed device companies said that customer and patient insight drove innovation. We’ve already seen personalisation in pharma and cancer treatment; tailored plans, personalised for the patient. I was just at CES 2013 in Las Vegas, NV. It’s amazing the number of personalised consumer healthcare products that are already on or coming on the market. Virtually all of them are designed to tailor or customise health for the end user. It’s many years out but looking at some of the new developments with 3D tissue and even implantable printing all point toward the future of customisation.
WhichMD: The role of patients in medical device selection: is the future of medicine moving away from a paternalistic approach where patients, instead of doctors, choose the devices to suit their needs?
Dr. Bazih: It depends, certain fields of medicine allow for greater patient input. A specific example is device safety. As patients have greater access to data and reports, they are enabled to have a more engaging dialog with their physician regarding risks and side effects. Orthopaedics with total joint replacement and neurosurgery with hydrocephalic shunts are example specialties, whereby patients are having a greater voice in what device is used. All this said, I wouldn’t necessarily say that patients are choosing their devices but the selection process is most certainly becoming a dialog between the caregiver and recipient.
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