Against the backdrop of West Michigan’s nascent medical device industry and an expanding array of resources, high-tech health care startups are finding the tools they need to start and grow their businesses in the region.
Building off the region’s strength in the contract manufacturing sector, its universities, and available funding, these medical device startups are hoping to improve care for patients, whether in the form of better implantable devices, more efficient training platforms for physicians or products that help monitor the health of patients.
For this report, MiBiz spoke with four up-and-coming medical device companies based in West Michigan that are bringing or have brought innovations to market in recent years.
Advanced Interactive Response Systems LLC
- Headquarters: Newaygo
- Lead executive: Valerie Obenchain, founder and CEO
- Founded: 2013
- Description: Developer of products to help elderly patients and their health care providers administer and track oxygen use
Advanced Interactive Response Systems LLC has been making what founder Valerie Obenchain calls “some really cool design changes” to a product already on the market. The change allows moisture-exchange tubing, or cannula, to automatically humidify oxygen for patients, and is designed for mobility and to prevent the growth of bacteria.
“It takes the water molecules out of the air and draws those into the oxygen instantly to provide that humidification that’s needed so you don’t need to add water to it,” said Obenchain, the founder and CEO of Advanced Interactive Response Systems in Newaygo that develops products to administer and track patients’ oxygen use.
“Currently, the only way to humidify is with those traditional bubblers or humidifiers where you have an actual water cylinder, and those just are not portable. There’s been just not a good portable solution for humidification, and now there is,” she said.
Advanced Interactive Response Systems, or AIRS, received FDA registration and introduced its first product this past summer. The company plans to launch a second generation product in December that integrates the design change, made with in2being LLC, a Saline, Mich.-based design firm.
AIRS also is working on additional products such as a digital oxygen flow monitor that will launch in the first quarter of 2019. The flow monitor uses an app and tracks data on a patient’s oxygen use. The device can report data to a care provider or supplier “if something’s out of whack outside of normal parameters,” Obenchain said.
The monitor also can alert a patient’s family member to an issue.
In August 2017, AIRS closed on a Series A capital round that netted $540,000. This year in January, the company won $333,333 in the IPF Catalyst Challenge, a $1 million business plan competition for health companies in Chicago sponsored by philanthropic organization Three Lakes Partners that’s focused on the lung disease Idiopathic Pulmonary Fibrosis.
Winning the funding from the IPF Catalyst Challenge created awareness and will enable the company to complete the regulatory process for the oxygen flow monitor and bring it to market, Obenchain said.
The company distributes products directly and is working to get in with large medical and oxygen supply distributors. Products are produced by contract manufacturer Rose Medical in Grand Rapids.
“We’re still a small company and we’re really looking to bring awareness to the solutions that we offer,” Obenchain said.
Shoulder Innovations Inc.
- Headquarters: Holland
- Lead executive: Rob Ball, executive chairman
- Founded: 2009
- Description: Developer of new generation shoulder replacement system
Since coming to market in June 2016, the orthopedic implant developed by Shoulder Innovations Inc. has steadily grown in use. Surgeries with the shoulder implant in October were up 150 percent from the same month a year earlier.
The number of surgeries using the implant has grown about 300 percent in 2018. Revenues for Shoulder Innovations have grown accordingly.
“We continue to see good acceptance and adoption of our technology in the marketplace,” Executive Chairman Rob Ball said.
The growth came even with what Ball calls the company operating in a “constrained distribution mode.”
“We have intentionally limited the geography that we focus on to a very small portion of the United States. It’s just a function of our capital management strategy and we’re waiting for the full suite of products that we’re interested in to be complete before we do a national distribution,” Ball said.
The implant has been used in procedures at about 50 hospitals in Ohio, New England, Utah, California and the St. Louis area. Those are markets where Shoulder Innovations’ parent company, Genesis Innovation Group LLC, worked in the past with local commercial distributors that market and sell to local health systems and have “particular expertise in this space.”
Shoulder Innovations most recently closed on $2.5 million raised in a Series A equity funding round led by the Michigan Angel Fund of Ann Arbor and involving other existing investors. The additional capital will go to support new product development and to acquire inventory and assets needed to accelerate growth of the company’s Inset Shoulder platform for future products and systems now in development.
Wakestream Ventures LLC in Grand Rapids joined Michigan Angel Fund in the capital round, along with Holland-based Genesis Innovation Group and the venture capital fund cultivate(MD). Genesis Innovation Group and cultivate(MD) are both run by the founders of Shoulder Innovations.
Shoulder Innovations also just received U.S. Food and Drug Administration clearance for its InSet Humeral Short Stem System, an implant for the humerus bone in a shoulder replacement. The approval marks a key “huge milestone” for the company to expand its product portfolio, Ball said.
“That represents kind of a foundational component for a platform of products,” he said.
The first surgeries with the new product could occur next year, Ball said.
- Headquarters: Holland
- Lead executives: Jim TenBrink, co-founder and vice president of client development; Joel Zylstra, president
- Founded: 2009
- Description: Producer of medical models and trainers
After implementing design changes based on the feedback from surgeons in the area for the S2T Surgical Smart Trainer, a surgical training spine model, Holland-based Encoris Group Corp. plans to begin approaching prospective clients in the coming months.
Co-founder and Vice President of Client Development Jim TenBrink expects to have a final prototype ready in December. He’ll start to pitch the model soon afterward to top medical device companies and medical societies.
“Things are progressing beautifully,” TenBrink said. “We’re about ready to go to market. Definitely in January, we are certainly going to hit the road and start promoting the trainer to some of the biggest spine companies in the world.”
The design changes, made at Grand Valley State University’s Applied Medical Device Institute in Grand Rapids, improved camera images for the surgical trainer, which uses high-definition cameras, LEDs, and a software package that creates intricate, X-ray-like images displayed on a tablet or computer screen. Real-time imaging and web connectivity allow users to conduct training sessions through webinars, as well as reduces users’ exposure to X-rays.
The surgical trainer eliminates the need for researchers, device companies, surgeons and hospitals to use cadavers when conducting training on minimally invasive spine surgery techniques or a new spinal device. As well, the trainer helps cut back on the associated costs for travel, lodging, facility rental and support staff to bring groups together for training sessions. Sales reps for medical device companies, for example, can take the S2T Surgical Smart Trainer on the road to present and demonstrate a new product.
Encoris will first approach top medical device companies and medical schools that have a “dire need to cut costs when it comes to training on cadavers. It’s also in their best interest to minimize the dangers of X-ray, especially now with everything going minimally invasive that requires so much X-ray.”
TenBrink also intends to pitch the S2T Surgical Smart Trainer to hospitals, surgical groups, medical schools and research institutes. Tweaking the trainer’s design in the last year after getting the perspective of surgeons provided Encoris validation that it had something the market needs and would want, he said.
“What we’re building here, what we’re designing, is truly a game-changer,” TenBrink said.
Encoris plans to produce the S2T at its Holland facility. A training model costs $15,900.
TenBrink even envisions someday having Encoris training centers where surgeons could come “in their own time, in a very relaxed environment” and do surgical training with medical device sales reps “in a nice, clean, safe environment.”
UV Partners Inc.
- Lead executive: Tom Byrne, CEO
- Founded: 2015
- Description: Developer of a device designed to reduce infections acquired in hospitals and other settings
Since landing a $3 million investment last summer led by Grand Haven-based JSJ Corp., UV Partners Inc. is approaching significant milestones. Within the next month, the company expects an announcement from what CEO Tom Byrne describes as a “major medical partner” that would embed the UVAngel device in its equipment.
The deal aligns with UV Partners’ three-pronged commercialization strategy for its UVAngel device that consists of OEM partners to integrate the technology into their products, licensing the technology to a third party to develop new products, and branded products sold through a medical technology supply company.
An announcement also is pending on a major licensing agreement, Byrne said.
“We feel we have a strong base of intellectual property and we feel confident enough that partnerships are the way to go,” Byrne said. “We have really opened up the technology, both the hardware and software, and have really looked to partner with the industry to really attack the problem of infections and how these pathogens can proliferate on hard-to-clean, high-touch surfaces.
“Ultimately, that’s what we’re trying to do is create those healthier environments.”
The company’s UVAngel device disinfects surfaces using safe, low doses of ultraviolet light. The device mounts atop surfaces such as computer keyboards, touchscreens and medical equipment. The system’s sensors continuously monitor the surface for bacteria. When it senses germs, it zaps them with the UV light.
UV Partners targets the device at the health care, food service and retail industries.
Previously based in Livonia, UV Partners now operates out of Grand Haven following the JSJ investment. JSJ’s GHSP division handles manufacturing for UV Partners.
UV Partners brings the device to market as awareness heightens to address the problem of hospital-acquired infections, an issue that kills thousands of people annually in the U.S. The increased use of technology in medical settings — laptop computers and tablets for entering patient data in electronic medical records, for instance — heightens the potential to spread germs and the need for constant cleaning, Byrne said.
In addition to the pending contract announcements, UVAngel “has been picking up steam” among hospitals, Byrne said. The device complements, and is not intended to replace, existing cleaning and disinfecting practices or hand-washing policies now in place in health care.
“We know where our target is and where our place is with UV technology that’s been around for years. It’s not a new technology. It’s just being applied in a creative way to the problem and to the workflow,” Byrne said. “We’re a supplement to these existing practices.”