KALAMAZOO — Southwest Michigan’s legacy in the life sciences industry and the area’s strong talent pool led accuFD Inc. to set up shop in Kalamazoo.
The life sciences startup that’s commercializing devices for use in so-called liquid biopsies views Kalamazoo as having a “very strong scientific and entrepreneurial talent pool,” said CEO Paul Neeb.
Setting up accuFD’s headquarters in Kalamazoo is “driven by the ability to attract world-class talent to successfully execute the plan,” said Neeb, a veteran executive in the industry locally.
“Ultimately, in my opinion, companies land where they land because of people,” he said. “I’m here as the CEO and perhaps, even more important, we believe this is a location that we can attract the right talent we’re going to need to develop the product and get it to its first commercial version, and then all of the sales and marketing items we will need to execute on as the company begins to grow.”
In Kalamazoo, accuFD’s headquarters and lab are situated in a market that an industry trade group ranked first among medium-sized metropolitan areas in the U.S. for the concentration of its medical device manufacturing employment. Ann Arbor was seventh among medium-sized markets with private-sector employment of 75,000 to 250,000 jobs, and the Niles-Benton Harbor area ranked third among small markets in the nation.
Michigan also was one of nine states that Biotechnology Innovation Organization, or BIO, and Columbus, Ohio-based research firm TEConomy Partners LLC rated as having a “sizeable” employment force in medical devices as of 2014 and one of four states — along with Tennessee, Pennsylvania and Vermont — with a “concentrated” labor pool.
In Kalamazoo, Neeb and partner Anton Simunovic, chairman and CEO of Connecticut-based technology commercialization firm Vener8 Technologies Inc., launched accuFD in June. The firm’s first commercial product is a disposable device to better manage and protect the integrity of blood samples from cancer patients used in genetic testing, Neeb said. The device separates plasma into components for labs to test for biomarkers that provide an early cancer diagnosis or the status of a patient as he or she receives treatment.
Based out of a business incubator at the Western Michigan University Homer Stryker M.D. School of Medicine, accuFD uses technologies and patents licensed from General Electric. The company enters a field that JPMorgan & Co. estimates has a $20 billion or greater global market potential. Additionally, Forbes magazine this year cited liquid biopsies as a technology that will disrupt health care by 2020.
If the global market unfolds as predicted, creating a $500 million segment in the U.S., “we believe we will be in a position to be a significant player in that market,” Neeb said.
“This is a disposable tool to better manage the sample itself, so we’re in a position to participate in a massive, exploding market solving some significant problems,” he said.
Beyond liquid biopsies for cancer tests, accuFD also is pursuing the non-invasive pregnancy testing market.
Basing the corporate headquarters and lab in Kalamazoo positions accuFD in proximity to contract manufacturers with the injection-molding capabilities needed to produce the device, Neeb said. The company will “most likely” produce the device in Michigan, or at least in the Midwest, he said.
“The Midwest is just a fantastic place to have things made. There’s a long history of expertise in plastics and high-volume injection molding, and it’s a great place in my opinion to have devices made,” Neeb said. “In the near term, the next three to five years, there’d be no reason not to do it somewhere in the Midwest, and Michigan in particular. We’re in an excellent position to capitalize and rapidly grow our business from our base in Michigan.”
accuFD aims to bring its first product to market in the second half of 2017, Neeb said. Early customers include academic researchers and research institutions that are developing new therapeutic treatments and diagnostic tests, he said. In the longer term, the company could also target diagnostic labs.
Neeb expects accuFD will be able to generate “significant revenue” initially by selling the device for research uses.
The company presently employs fewer than five people and expects to expand “pretty quickly” as it begins to hire technical, sales and marketing staff, Neeb said. Now backed with funding from its owners, accuFD will need to raise further capital to support product development and will likely seek the backing of small family offices, he added.
Michigan medical device jobs:
A report issued every two years by the Biotechnology Innovation Organization, or BIO, highlights the strengths in the life sciences industry of each state, including for medical devices. Here’s a look at the medical device sector in Michigan as of 2014 and the percentage change from 2012:
- Businesses: 298, +24.2%
- Employment: 11,736, 5.7%
- Total employment impact: 53,530
- Average wage: $72,538, +9.0%
SOURCE: BIO and TEConomy Partners LLC