Pediatric Healthcare Innovators Compete for Funding
The FDA, according to its website, currently supports eight consortia that provide advice and funding to help commercialize technologies for pediatric care. The FDA defines “pediatric” as encompassing devices used for patients who are 21 years of age or younger at the time of diagnosis or treatment.
Many of the consortia hold innovation competitions where winners are awarded grants and support services. For example, PR Newswire reports that the New England Pediatric Device Consortium (NEPDC) has awarded three companies grants and in-kind services for products aimed at preventing the dislodgement or unintended removal of catheters or tubing. According to NEPDC’s Request for Abstracts, the grants are up to $50,000 each. NEPDC offers quarterly grant opportunities; the next abstract deadline for grant funding is October 9, 2017, with applications due on October 23, according to PR Newswire.
The National Capital Consortium for Pediatric Device Innovation (NCC-PDI) has narrowed a record number of 98 applications from across the globe down to twelve finalists, according to PR Newswire. This is the 5th annual Pediatric Device Innovation Symposium hosted by NCC-PDI, a FDA-funded consortium led by the Sheikh Zayed Institute for Pediatric Surgical Innovation and A. James Clark School of Engineering at the University of Maryland according to the competition’s homepage. NCC-PDI highlights that up to six finalists will be awarded up to $50,000 each after the presentations held on September 24, 2017.
Another consortia, the Atlantic Pediatric Device Consortium (APDC), announced that it will hold Round 1 winner presentations at its 7th annual Pediatric Device Innovation Competition on September 25, 2017. The proposal deadline was July 31, 2017, and award winners will be notified on October 30, 2017, according to APDC.
Also, in January of 2017, the Philadelphia Pediatric Medical Device Consortium (PPDC) announced that it chose three companies from eight finalists to receive seed grants of $50,000 each. The PPDC announced that the Request for Applications for its next Sponsored Project Proposals begins on September 11, 2017.
According to a 2016 FDA review, the FDA-funded pediatric consortia have advised 406 pediatric device projects and innovators since 2013, and as of the first fiscal quarter of 2016 there were 10 patents obtained and 5 devices available for use in the care for pediatric patients.
Increase in Funding to Med Device Startups
Despite a drop in the second quarter of 2016, medical device funding is expected to finish stronger this year than in 2015. CB Insights has released a report on the funding and deal activity within the medical device industry since 2012. CB Insights reports that “after hitting a 4-year high of $1.5 billion in the second quarter of 2014, funding to medical device startups has sobered considerably.” Funding in 2014 was elevated by a $172 million Series G round secured by California based Proteus Digital Health. Overall, the medical device industry is on track for a modest increase in deals and dollars to private companies in 2016, after seeing a decline in both in 2015.
As of August 8, 2016, funding and deal activity have reached $2.1 billion and over 288 deals. At the current rate, total year funding would reach $3.5 billion and total year deal count would reach 476 deals. The funding has been bolstered by $75 million in Series C funding secured by California based Acutus Medical in March 2016 and recent funds raised by Minneapolis based CVRx, $93 million in August 2016.
The first and second quarters of 2016 are among 5 of the last 10 quarters to have 120+ deals. Funding in the first quarter of 2016 managed to break $1 billion, a feat that didn’t occur in 2015. However, the second quarter’s slip to $757 million saw the first sub $800 million quarter since the first quarter of 2015.
The deal and dollar share by stage for 2016 looks to be similar to those for the last four years with early-stage deals, including Seed/Angel and Series A, making up 29% of total deal share to-date. The top three “Most Active Early-Stage Medical Device Investors” are reported as Germany based High Tech Gruenderfonds, Memphis based ZeroTo510, and Philadelphia based Ben Franklin Technology Partners. Interestingly, “Other” funding rounds have been trending up and currently represent the largest share of deals at 42%. “Other” includes corporate minority rounds, VCs, and convertible notes. The top medical device investor overall is reported as New Enterprise Associates with Versant Ventures a close second.
CB Insights reports the top most well-funded medical device startup as Theranos, securing $400 million in total funding. Theranos was recently sanctioned by the U.S. Centers for Medicare & Medicaid Services (CMS) and banned from receiving Medicare and Medicaid payments.
Each of the top five has raised upwards of $250 million. However, the funding figures exclude debt rounds and lines of credit.
UW Donation to Morgridge “Fab Lab” For Medical Device Innovations
University of Wisconsin-Madison alums, Dr. James Berbee and Karen Walsh, have agreed to a five-year, $300,000 gift to the Morgridge Institute for Research through their Berbee Walsh Foundation. According to the press release, their intention is to “create a prototype pathway for clinical devices between University of Wisconsin-Madison clinicians, students and the Morgridge Advanced Fabrication Laboratory, or ‘Fab Lab.'”
According to its website, Morgridge provides research assistance in a number of medical device areas, including regenerative biology, medical engineering, and core computation. The website states that some projects currently in the works are more effective ways to maintain health of organs prior to transplant, feedback sensors to warn of the possibility of injury when installing breathing tubes, and a multi-source x-ray tube. Berbee and Walsh’s donation provides the ability for students to be full members of the Fab Lab team, instead of one-time participants, thus allowing them to work closely with clinicians throughout the process.
According to Morgridge CEO Brad Schwartz:
“What’s really exciting about this project is its potential to improve patient care by unlocking great ideas from people at the front lines of medical care”
Further, according to Kevin Eliceiri, the interim director of Morgridge Medical Engineering and the Fab Lab: “I expect this program to have a great impact and generate a fair amount of intellectual property.” For example, participants can tap into the well-established connections with the Wisconsin Alumni Research Foundation for timely IP support.
The press release notes that Dr. Berbee was an engineering graduate who founded the Berbee Information Networks in Madison in 1993, now owned by CDW, and got involved with Morgridge as he received help from the Fab Lab for early prototypes of his new otoscope. Walsh was an assistant dean at the UW-Madison College of Engineering and helped launch the schools first-ever campus innovation prize, the School’s Prize for Creativity.
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