Not many people in Ireland are aware of the fact that the country is already the Silicon Valley of Europe when it comes to medtech, and substantial exits and IPOs will feature in the next chapter for the industry.
While the digital sector is getting all the glory, Ireland’s medtech scene is a hidden gem of an industry, comprising a vibrant indigenous – as well as multinational – cohort of start-ups and industrial giants.
Not many people outside of the industry are aware that 50pc of ventilators in acute hospitals worldwide are manufactured in Ireland.
Few know that 33pc of the world’s contact lenses are made here.
It would be a surprise to realise that 80pc of global stent production is carried out in Ireland or that 75pc of orthopaedic knee products come from Ireland.
The sector employs 27,000 people, and Ireland is the second-largest employer of medtech professionals in Europe.
There are over 400 medtech companies in Ireland, having grown from 250 over the last three years.
Fast-growing start-ups include players like FIRE1 and X-Bolt Orthopaedics, as well as publicly-listed players, like Mainstay, that have made Ireland their home.
Unlike ICT, it is largely a homegrown industry, with more than 60pc of medtech companies based in Ireland indigenous and a significant proportion of these are SMEs.
Magnet for medtech venture capital
If anything, there is growing evidence that Ireland is becoming a magnet for medtech investment, with players like Lightstone Ventures with more than €175m under management, setting up in Dublin, organisations like The Foundry forging a hallmark for success and successful individuals like David Hanley spearheading new ventures.
Last week, at a medtech innovation conference organised by Seroba Life Sciences, EY and Enterprise Ireland, 50 medtech start-ups pitched for funding from venture capital firms with €13bn in funds under management. Corporates in attendance included Johnson & Johnson and Baxter Healthcare.
Among the companies pitching to investors was X-Bolt Orthopaedics, a company established by Brian Thornes, a former orthopaedic surgeon who was inspired to start his company when he was fitting a plasma TV to a wall using an expanding bolt.
His invention has been patented in Europe, trialled in more than 250 patients in the UK, and is expected to secure approval from the US Food and Drug Administration soon.
The X-Bolt uses an expanding bolt to substantially reduce the risk of complications and the need for extended hospital bed days in hip-fracture patients that occur in one in every 20 patients, and it could potentially result in substantial savings for hospitals.
Thornes is seeking to expand into the US and will pitch to VCs at the Innovation in Med Tech conference for funding to expand the business and bring his product to market in the US.
“Where we are at, at the moment, is we are having our third spin at trying to get FDA approval and we are confident that is nearly there. We will also be publishing our clinical trial in the next months and we expect surgeons around the world to take note of it.”
Thornes is one of a growing number of medical professionals who are joining forces with engineers and manufacturers to create what could one day be global household names.
“When I left orthopaedics in 2005 I said I would give it two years. And every two years I say the same. There is a fear of going back to the medical profession with my tail between my legs and that keeps me going.
“Ireland is a natural environment for medtech thanks to its community of good engineers, academic institutions and surgeons and everybody talks to each other. Nobody has all the answers and that’s why when you have that lightbulb moment problems get solved. It’s a good network with everybody helping each other out.”
Novel new technologies will save and enhance lives
Among the overseas start-ups that were present was Quanta Fluid Solutions, from the UK, which has developed a novel portable kidney dialysis machine that is a quarter the size of traditional machines.
CEO John Milad explained that enabling people to operate these machines in the home will cut down on resources being used in hospitals and lead to greater independence for patients.
“It is a device that can be used in a variety of locations and increases the range of people who are able to operate dialysis machines.
“This breaks the paradigm of patients needing to go into centres and being passive recipients of care delivered by nurses only. It empowers patients to be engaged in their own treatment, frees them from having to go to clinics and so provides them with a wider range of opportunities.
“One of the reasons we are so driven and passionate is that today home dialysis and patient self-care is only a small niche segment of the population. In the UK, only 5pc of patients dialyse at home and we believe this can be increased to 15pc if we give them the right tools.”
The Foundry hammers medtech start-ups into shape
One of the world’s most successful medtech incubators, The Foundry, based in California, is actively involved in helping Irish medtech players reach their potential and recently scored a coup by recruiting Irish medtech entrepreneur Conor Hanley along with John Britton and Fiachra Sweeney to spearhead Foundry Innovation & Research 1 (FIRE1), which is developing a novel remote monitoring device.
Hanley, the company’s new CEO, is a seasoned medtech executive who held senior management positions with ResMed, as well as being CEO and co-founder of BiancaMed. Hanley will be a speaker at Inspirefest, which will be held between 30 June and 2 July.
Companies incubated by The Foundry have gone on to generate over $2bn in value for investors.
Hanson Gifford III co-founded The Foundry in 1998. In his role, he invents and identifies new technologies, and forms, finances, staffs, and provides ongoing support for The Foundry’s new companies. He is a co-inventor on more than 225 issued US patents.
“Medtech is a huge sector of the Irish economy actually and it started 35 years ago when Bard put a manufacturing plant here and since then every other manufacturer has followed.
“So there is a huge base of manufacturing for the medical device sector here and this has generated a huge base of knowledge and talent and we are seeing the flowering of this through new start-ups.
“There’s an incredible base of expertise in engineering, manufacturing, R&D and quality but less involvement in sales and marketing, but that is changing.
“We formed FIRE1 here in Ireland and we are thrilled to have Hanley, Britton and Sweeney join. Hanley started Biancamed which he sold to ResMed for a very good outcome.”
On whether he believes Irish medtech will produce household names, Gifford said that is already the case. “Covidien was an Irish company and it’s a household name, owned by Medtronic. There are a number of companies out there that people don’t realise are Irish but its early days and many more will get to commercialise and we will see those names here in Europe and across the world.”
As well as Seroba Life Sciences, there are a number of venture capital players active in the life sciences and biotech space, including Lightstone Ventures, which took part in the $7.5m Series B investment in FIRE1.
Global medtech VCs flock to Ireland
Heading up Lightstone Ventures in Dublin is Jason Lettman, who explained that the $175m fund has enjoyed successful exits, including that of Twelve, also incubated by The Foundry, and which was bought for $440m up front by Medtronic.
“We opened an office here and I relocated from San Francisco to Dublin and what really attracted us from a medtech perspective is the hub; the people and the experience and skillset are second to none. We were looking for a place where we could come, invest, incubate some companies and bring along some serious talent and leadership. In order to find the right people Ireland given the track record made a ton of sense.”
“An example of that is FIRE1 in which we were able to pull together the financing behind a compelling idea and hire a team led by Conor Hanley.”
Lettman said that all the pieces exist in terms of talent, expertise, funding and IP for more Irish medtech firms to appear on the world stage.
“You have all the pieces here but need to keep feeding it and building it and having successes. Once the cycle of success starts the industry becomes self-perpetuating.”
So what’s next? “Looking to the future, we are seeing an increasing trend of large and mid-sized global corporates in the medtech space bolstering organic R&D growth through the acquisition of smaller, more innovative medtech players, which presents Ireland’s burgeoning start-up community with a significant opportunity,” explained Aidan Meagher, partner and head of Life Sciences at EY.
“To continue to build Ireland’s reputation as a hub for medtech innovation, it is essential that we continue to nurture these high potential start-ups and support them to grow their business from lightbulb moment through to a successful exit or IPO.
“Coming up with that big idea that could be the next big global health solution is just the beginning of the journey, so it is crucial that these start-ups are supported to get access to funding, growth their business, and ultimately take that next step in realising its value.”