Once-fractured industry looks to step from shadows
PILOT PROJECT: Manufacturing operator Evelyn Som runs a pilot assembly line for components to be used in a medical device Ximedica is developing.
PBN PHOTO/RUPERT WHITELEY
REAL-TIME RESULTS: Kunal Mankodiya, an associate professor of electrical, computer and biomedical engineering at the University of Rhode Island, displays a watch developed to monitor patients with Parkinson's disease.
PBN PHOTO/MICHAEL SALERNO
CHARTING A COURSE: MedMates co-founder David Goldsmith gestures during a meeting at Ximedica in Providence. At right is Denice M. Spero, president and chief business officer of ProThera Biologics, a Providence biotechnology company.
PBN FILE PHOTO/ MICHAEL SALERNO
EYE ON GROWTH: From left, Michael P. Kelly, CEO of Nelipak Corp.; Santa Valenzuela, quality technician, and Michael Spolidoro, general manager, examine some of the custom-designed thermoform trays that the Cranston company produces for housing medical devices.
PBN PHOTO/ MICHAEL SALERNO
TECH COUTURE: From left, Harishchandra Dubey, a visiting scholar specializing in machine learning, Cody Goldberg, a University of Rhode Island senior majoring in biomedical engineering, URI biomedical engineering graduate students Tanya Wang and Mohammadreza Abtahi, and Kunal Mankodiya, URI associate professor of electrical, computer and biomedical engineering, are seen with devices developed as the result of a project about wearable technology in 2015.
Four years ago, MedMates was conceived at a brainstorming session about making economic growth happen in Rhode Island.
David Goldsmith, co-founder of the group focused on providing a voice and opportunities for businesses in the state's medical-technology sector, remembers it well.
Goldsmith, co-founder and director of Aspiera Medical in Woonsocket, a business that specializes in wound care, and Stephen Lane, co-founder of Ximedica in Providence, a medical-technology-development company, had just left a session about collaboration.
They began talking about the med-tech industry in Rhode Island, a sector they both operate in, and how it was "fairly fractured" with "everybody working in their own silos," said Goldsmith. They discussed how they met people from med-tech companies who before that day they never knew existed.
They wondered how many other companies were around "doing really interesting things that nobody's heard of," Goldsmith recalled.
"We said, ‘Let's form something so people have a place to go, where they can look for common ground and opportunities for collaboration,' " Goldsmith said.
Fast forward to 2016, and the formation of the group looks prescient. The med-tech sector has been singled out as one of promise in a recent Brookings Institution report on the Rhode Island economy because of its growth potential.
Gov. Gina M. Raimondo is focused on building a new economy based on advanced industries, such as med-tech.
MedMates itself has seen membership leap to 650 from the 50 it recognized at its first meeting in 2013.
Yet, some of the same problems that led to the group's formation remain, clouding the industry's ability to deliver on the promise Raimondo and others see in it.
BARRIERS TO GROWTH
Access to capital, to help fledgling companies further their goals, is difficult to obtain in Rhode Island, insiders say. And the Ocean State is essentially playing catch up when it comes to building an industry compared with other states, such as Massachusetts and its med-tech hubs in Boston and Cambridge.
And MedMates has struggled to consistently get the industry's message out, with turnover among leadership playing a role. Two key individuals, including Lane, are no longer with the group. "Continuity in personnel" has been a hurdle, acknowledged Goldsmith, as the organization has lacked the funding to hire employees full time. That's left it to often rely on volunteers, something that should soon change thanks to a Rhode Island Foundation grant that this month allowed it to hire Kelly Nevins as the group's first full-time executive director.
Another stubborn problem has been identifying the players in such a broadly defined industry.
Difficult to categorize, it is a sector that melds health care, science, technology and innovation. It touches everything from manufacturing and higher education to biotechnology, information technology, pharmaceuticals and retail.
Said Goldsmith, "It's a broad term that may mean different things to different people. In my mind it's any technology that is used in the medical field."
Turnover at MedMates has made it hard to pinpoint how many local companies are operating in the sector, Goldsmith said.
"We've been reliant on data other organizations gather," Goldsmith said, adding that the addition of the executive director will help work on this issue. That was one of the objectives last year – to find out how many companies were operating in the sector in Rhode Island.
"We're constantly finding companies, small and medium, operating in the shadows," Goldsmith said.
Providence may not be known as a medical-technology hub, but business leaders say it is considerably cheaper to set up there compared with larger cities such as Boston. Its proximity to major med-tech markets in Boston, Cambridge and New York is also seen as an advantage.
And several business leaders point to the networking MedMates provides at its meetings as a positive.
"We do know of quite a few success stories through MedMates," Goldsmith said. "They've secured funding they otherwise would not have secured." Firms specializing in everything from online health care to medical-identification bracelets and packaging speak to the broad reach the industry has across the Ocean State.
Nalari Health LLC in Providence focuses on the remote health care field, targeting patients who are elderly and individuals with intellectual and developmental disabilities, or who have severe mental illness and/or substance abuse issues, according to President Mark P. Treat.
"We connect those patients and their caregivers to a clinical service using remote technology. We are able to diagnose, monitor, prescribe and supervise care," Treat said.
He said the service has been active for about four years. The company works with a number of nursing homes and home health agencies, as well as community-based mental health organizations, health plans and hospitals.
Treat said his company does the majority of its business in Rhode Island, but also serves other parts of New England, as well as New York and New Mexico.
Treat, a MedMates member, said the group's meetings have connected him with an investor and a potential customer.
"We wouldn't have known they had a need and they wouldn't have known we existed, if not for that meeting," Treat said.
Despite challenges raising local capital, the Rhode Island native sees his home state as a great place to start a company. Cheaper rents than the Boston market are a key advantage, he says.
He also sees great promise for the med-tech industry as a whole, especially as the population ages – and baby boomers retire.
"Ten years from now very sick people are going to get a large portion of their care this way, and we're going to get better outcomes. It's a new way of doing things," Treat said.
Another med-tech business that melds technology and health care is HealthID Profile Inc. in Cranston. The firm helps users manage, track and share aspects of their health from any Web-enabled device. Users can input their health information on a bracelet or card, which have a chip embedded inside them and a code unique to that individual. The code can be entered on the company's website, to give an emergency responder or health professional data about the individual.
Company President Angelo A. Pitassi Jr. said the products are available at major retailers and online on Amazon.com. He said he's sold 22,000 since they became available at the end of 2014. A bracelet or card costs $20; a combination pack, $36.
The products were inspired by Pitassi's son, who was diagnosed with Type 1 diabetes at a young age.
HealthID users have at least one chronic illness, their average age is 49 and they take at least 6.5 medications a day. Use is split evenly between men and women. The service also provides email and text reminders to take medication. Pitassi said one of the main reasons why people do not take medication is because they forget.
HealthID also is part of the MedMates group.
On two occasions, Pitassi made presentations to other MedMates members about HealthID's products. He's also networked with Ximedica regarding product development since joining the group.
Nelipak Corp. in Cranston is new to MedMates. President and CEO Michael Kelly said his business, which specializes in thermoformed medical packaging, has grown from its origins in the Netherlands as a packing operation founded to employ women affected by World War II.
Today, the health care packaging company has five plants and employs more than 500 employees worldwide, including 87 in Cranston, with annual revenue topping $100 million.
"If you've had hip or knee replacement surgery, there's a good chance our tray would house that implant," Kelly said. "We custom design these packages so they're easy for clinicians to open in the operating room."
Kelly said the company's focus is to continue to expand globally.
Med-tech is growing 4-5 percent nationally, Kelly said. The aging population will continue to support the growth of his business, he believes.
Kelly acknowledged that there is a lot of competition, but Nelipak thinks it has an advantage by focusing solely on medical thermoform trays.
Care Thread Inc., a Providence firm specializing in secure, mobile-care coordination for health care providers, has been involved in MedMates from the beginning. Nick T. Adams, president, CEO and company co-founder, said the firm hopes to secure its first Rhode Island customer this year. Most of its customers are in Massachusetts and Connecticut.
While MedMates has not "directly" helped his company, Adams said it has helped him and his partner develop relationships and learn how to navigate the local med-tech landscape.
Adams, who moved to Rhode Island from Wisconsin specifically to start the software company, said he was often asked why he moved here.
"We're an hour from Boston and three hours from New York, in the most dense area of health care in the nation," Adams explained.
He thinks the local med-tech industry will grow, given time and support, from the "governor on down."
HOW BIG IS IT?
But measuring growth can be hard when no one seems sure of how big the industry is to start with.
The January Brookings report noted that state employment in the biomedical-innovation industry has stagnated – there were 31,548 jobs in 2013, a 0.2 percent decline from 2009 to 2013. The number of jobs is so large because all private hospitals were included, as well as health care centers, contributing 27,000 jobs. The remainder of jobs were from pharmaceuticals production, manufacture and research (1,500), and surgical and medical-device manufacturing (1,600) as well as research and development, biotech and medical labs (1,200).
The report said biomedical innovation is one of seven areas that represent "Rhode Island's best shot at getting its economy moving again," as the Ocean State has a "large health and life sciences industry cluster that is highly specialized compared to the nation."
It also noted more than 30 startups in biopharmaceuticals and medical devices have been formed in recent years.
But Brookings did cite hurdles to growth, including few industry-university connections, and concern that follow-on venture financing is hard to attract in Rhode Island.
A different snapshot of the med-tech industry from the state Department of Labor and Training shows a small but growing industry, with 302 jobs in 2015 (focusing on bioscience careers, as well as employment in medical and diagnostic laboratories), compared with 206 jobs in the same categories in 2005. Wages ranged from $46,000 to $130,000 last year.
And statistics from the Advanced Medical Technology Association from 2010 – the most recent year available – peg med-tech jobs in Rhode Island at 4,200 – both direct and indirect – with an average salary of $42,778 and annual contribution to the state economy at $759.2 million.
The med-tech sector's potential has caught the eye of state officials.
Raimondo, in a phone interview, said med-tech, like many industries, requires specific skills, such as designers who are able to design medical equipment, which is where a one-year, $175,000 state grant comes in. The funding will help train and connect workers in the local industry to 21st-century jobs.
"We do hear a lot from employers who just don't have access to a pipeline of people. … If we can train more people – I do know it's a good growth industry," Raimondo said. "Think about the trends, people are getting older, there's a lot more technology that goes into devices and technology … it builds on what Rhode Island is good at. Rhode Island is good at design … it makes sense for us to invest in this area."
R.I. Commerce Corp. Secretary Stefan Pryor, along with other state officials, attended a MedMates session last year to brainstorm ideas to expand the industry.
"Innovation is central to our plans for growing the Rhode Island economy," Pryor said. "It's essential that we support ventures that are innovating in ways that lead to job growth and economic activity. The med-tech cluster is fueled by innovation. … Therefore, it's important to us."
Of the many new incentive programs Raimondo debuted last year in her budget, the innovation voucher program may be the one most closely tied to the med-tech industry. It gives grants up to $50,000 for small businesses to fund research and development assistance from a Rhode Island university, research center or medical center.
The program funded grants to 11 companies, though 34 applied. Because it was oversubscribed, additional funding has been requested going forward, which would boost program funding from $500,000 to $1.5 million, according to Commerce RI spokeswoman Melissa Czerwein.
Raimondo spokeswoman Marie Aberger pointed to several new efforts underway to encourage growth in the sector:
n Creating an innovation district on the former Interstate 195 land in Providence.
n The Wavemaker Fellowship, which offers student-loan reimbursement for workers in science, technology, medicine and related fields.
n An innovation bond, part of Raimondo's fiscal 2017 budget proposal, would encourage innovation and collaboration among universities and private employers. The $20 million competition would create new innovation centers anywhere in Rhode Island, but would have to target at least one of the five industries identified by Brookings as having potential for growth in creating jobs, including med-tech.
MedMates member Randall S. Barko, CEO and president of Ximedica, has met with Raimondo and Pryor about growing the med-tech industry.
In the four years since he's been CEO, Barko said the discussions with Raimondo and Pryor represent the "most engagement [with top state officials] we've been involved with."
Ximedica, which also has offices in Minneapolis, San Francisco and Hong Kong, is an example of the growth potential of other local companies in the industry. More than half of Ximedica's business is international.
"If we were dependent upon Rhode Island customers, we wouldn't be in business. People have to think bigger," Barko said.
That also applies to growing the industry locally, he says.
He supports providing incentives that encourage companies to relocate here, and make it easier to do business.
READY TO LEAD?
Goldsmith thinks MedMates is poised to help foster industry growth.
"It's clear there is still a need for MedMates, for an organization to bring together all the parties and be kind of a hub for med-tech in R.I.," Goldsmith said.
Bolstered by a grant awarded in 2015 from the Real Jobs Rhode Island initiative through the state Department of Labor and Training, the advocacy group is focusing on repositioning Rhode Island as a leader in the med-tech sector.
The group will receive $175,000 for its "Medtech Innovation Engine" project, which aims to continuously create new and higher-wage med-tech jobs.
"The grant will enable us to recruit, train and mentor entrepreneurs in a way that previously was only a vision," Hope Hopkins, spokeswoman for MedMates and communications director at Ximedica, wrote in a recent letter to the group's strategic partners. The latter include Brown University's Center for Entrepreneurial Innovation and Tech Collective.
Creating a pipeline of local workers and entrepreneurs will help make that vision a reality.
At the University of Rhode Island, students in Kunal Mankodiya's "Wearable Internet of Things" course last year got a taste of the med-tech industry's potential.
Mankodiya, an assistant professor in URI's Department of Electrical, Computer and Biomedical Engineering, said 2015 was the first year the course was taught. One of his students, Cara Nunez, won the Rhode Island Business Plan Competition's Elevator Pitch Contest in December. She won for her proposal to create "Always in Control," which features a wearable eye-tracker that controls a robotic arm so mobility-impaired patients can complete small, daily tasks.
But in a sign of the challenges facing MedMates and the local industry, one of Mankodiya's students, J. Cody Goldberg, 22, a senior in biomedical engineering, will move to Cambridge, Mass., after graduation to work for a health-devices company, Gecko Health Innovations Inc.
Goldberg, an Amherst, N.H., native who said he likes helping people and is good at programming, said he ended up in Cambridge because there "are not a lot of biomed companies in Rhode Island.
"That's an ongoing problem most of us in the university are facing," Goldberg said.
Since the grant announcement, MedMates has formed a new collaboration with Social Enterprise Greenhouse. SEG has formed an accelerator program aimed at creating med-tech businesses that will launch in September.
Kelly Ramirez, SEG executive director, said the partnership with MedMates fits into SEG's health and wellness cluster-focus area. She said SEG will make its technical assistance available to emerging med-tech companies, including its network of advisers. The plan is to have between 10 and 15 companies in the cohort. A program manager already has been hired, Ramirez said.
In addition, MedMates connected with the Rhode Island Business Plan Competition, which, for the first time this year, offered a medical technology award during its May ceremony.
Neurocurious, led by Kurt Spindler, of Providence, won the new award. Spindler is developing a computer vision algorithm to automate collection of rodent-behavior data, aimed at reducing costs related to this component of pharmaceutical research and development. He won $10,000 in cash and $49,150 in professional and consulting services.
Goldsmith thinks MedMates meetings are catching on, attracting business representatives from not only Rhode Island, but the Boston area and Connecticut. He called MedMates' mission a "20-year initiative."
MedMates wants to be the "hub for all [industry] activities going on," and that's why the recent grant is important, he said.
"The grant provides us a foundation to map all of those resources and develop a strategy for growing jobs," Goldsmith said. "It helps provide funding we need to put the time in to accelerate this process." •