Forum Video Archives


March 8, 2011: CIMIT Accelerator—Launching a New Model for Medical Device Commercialization

This CIMIT Forum presented an overview of the CIMIT Accelerator Program and its benefits to entrepreneurs, academic hospitals and investors, followed by a panel discussion.

A New Model for Innovation

PRESENTER: Michael Dempsey CIMIT's Entrepreneur in Residence and Accelerator Program Leader DESCRIPTION: Michael Dempsey introduced the Accelerator program and gave an overview of the program's selection criteria expectations, expectations and outcomes.

Presentation Summary: It is difficult to introduce an innovative medical device into the marketplace, and many clinicians do not have the business expertise to plan for the many stages involved in commercializing a new product. The objective of the CIMIT Accelerator Program is to find, fund, and facilitate projects with a realistic chance of widespread clinical adoption or handoff to industry within twelve to eighteen months. The program was launched in July, 2010, and its goal is to become self-sustaining. It considers approximately 300 ideas per year, and of these, approximately four projects are chosen. The program invests in teams, not technology, so to be considered for funding, the project or principal investigator must be known to CIMIT. The principal investigator must also be willing to accept significant facilitation, including timelines and milestones. Projects are selected for the Accelerator Program based on criteria such as market size, strength of intellectual property, and market competitiveness. Since it was launched last summer, the Accelerator Program has selected three projects, each of which has received approximately $200,000 in funding.

BENEFIT TO ENTREPRENEURS

PRESENTER: Steve Schiefen Founder and CEO, HanGenix DESCRIPTION: Steve Schiefen gave an overview of his experiences as an entrepreneur and the CEO of one of the first companies spun out of the Accelerator program.

Presentation Summary: HanGenix is a company that was spun out of the CIMIT Accelerator Program last fall. The company produces products designed to reduce hospital-acquired infections caused by poor hand hygiene. Its products have a large potential market because one hundred thousand deaths per year are caused by hospital-acquired infections. The products themselves consist of portable transmitters that send reminders about hand hygiene to hospital staff members. Through the Accelerator Program, the engineers and business leaders at HanGenix were able to make connections with clinicians, who helped them identify what software would go best with the company’s existing hardware. HanGenix installed a system for its first customer in August and has its next three customers lined up. After being spun out of the Accelerator Program, the company has continued its product development. The business plan that it crafted with the help of the Accelerator Program has made it easier for the company to attract additional investment because risks to investors have been reduced.

BENEFIT TO ACADEMIC HOSPITALS

PRESENTER: Frances Toneguzzo, PhD Research & Licensing Director, MGH and Research Ventures & Licensing Director, Partners Healthcare Systems DESCRIPTION: Dr. Frances Toneguzzo gave an overview of the Accelerator program from the perspective of the licensing offices of hospitals who have produced the base IP.

Presentation Summary: Today’s economic environment is not very hospitable to early-stage medical device companies. Investors have become highly risk averse, and federal funding for academic research is tight. Sources of funding such as the CIMIT Accelerator Program are important because they help bridge funding gaps for research and development. Most investors are only interested in products or companies that have demonstrated technical and clinical feasibility. Shortening a product’s time to market is of the utmost importance to investors, who seek to maximize their rates of return. Academic researchers hoping to commercialize a new medical device need to work in a mode that resembles commercial product development more than academic research. Concrete objectives help projects stay on schedule. Determining who is accountable for making sure that deadlines are met remains a complicated issue.

BENEFIT TO INVESTORS

PRESENTER: M. Joshua Tolkoff Managing Director, Ironwood Capital DESCRIPTION: Josh Tolkoff discussed the Accelerator from the perspective of a potential investor in the companies that are spun out of the Accelerator program.

Presentation Summary: The main goal of venture capitalists is to maximize the return on their investments.  Improving clinical outcomes and building good companies are secondary objectives.  As one seeks to commercialize a new medical device, one is in the business of risk reduction.  Venture capitalists will not want to fund a project with a high chance of failure.  On average, it takes a successful project 18 months and 36 visits with distinct funds to obtain funding.  Once a project receives money, its leaders must lower risks further.  Biological risks are hard to control, so market risks must be carefully understood.  The CIMIT Accelerator Program can help innovators create low-risk business plans.  Having a good executive team in place helps ensure that a new product will progress steadily through the multiple phases of research and development.

PANEL DISCUSSION

PANELISTS: Steve Schiefen Frances Toneguzzo, PhD Joshua Tolkoff MODERATOR: Michael Dempsey