Medgadget editor Dan Buckland took time off from his MD studies at Harvard Medical School and MIT, where he is working on a PhD in Bioastronautics, to go to Minnesota to visit the headquarters of Medtronic. He filed the following report. (Dan also tells us that more reports are coming up.)
Medtronic is one of the largest, if not the largest, medical device company in the world. So the direction they see medical gadgets heading in is probably a pretty good indicator of where they, and all of us, are going to go. Last week Medtronic announced at an investor meeting that they had 60 major new products coming out next year and they continue to buy smaller companies at an impressive rate. Aside from buying companies, they also act as almost VCs for several startups where they have seats on the boards. Stephen Oesterle MD, their VP of Medicine and Technology, describes their investments thusly:
“I work with a small group of people to invest in a portfolio of about 70 companies that would look like a VC portfolio, with the exception that we are not in it to make money. We are definitely not in it to lose money, but we are mainly in it to promote small companies doing interesting things that we think are relevant strategically to Medtronic. An example is a little company in Palo Alto called Nanosys, they have captured a lot of IP in the area of nanotechnology for display, flash memory, coatings, etc. I sit on that board and try to help see how those technologies are relevant to our business. One example there is that we are interested in deep miniaturization of microelectronics, which has some ramifications for battery technology and you can use silicon nanotubes to enhance batteries. So we say to them that their technology could enhance our batteries (Medtronic makes their own batteries).”
We asked if being in that position gave them first chance at the products of these companies and he responded,
“No we don’t. First of all other investors would not want to be involved. We are passive investors. If we were to influence the outcome it would spoil it for the other investors who are in it to make money.”
They spend about $1.7 Billion a year on their own R&D, and according to Dr. Oesterle about 20% of that goes to research, the rest to development. In interviewing Dr. Oesterle about the future of medical devices, two main themes emerged. He believes that minimally invasive is the future for most surgeries and that everything in the body is electrically active, and hence able to be modulated. He also sees Medtronic as a company that specializes in delivery and implantation. Delivery refers to delivery of both drugs and electricity.
As examples of this philosophy he showed a video of a next generation no-lead pacemaker with a 7 year battery that is placed entirely in the apex of the heart. It has already been tested in a visible heart at the University of Minnesota. Dr. Oesterle also described targeted delivery in the brain of biologics for Alzheimer’s disease, Medtronic’s electrical stimulation of spine for pain augmented by accelerometers (the accelerometers detect the position of the patient to dial up or down the power depending on the assumed distance of the spinal cord from the electrodes), and their interest in Alnylam because, “Medtronic is heavily invested in siRNA technology. We are not interested in discovering targets or the actual short nucleotide chains of siRNA, we are interested in delivering them.”
Another big thrust for Medtronic, mentioned both by Dr. Oesterle and in the investor meeting, is closed loop diabetes management. Medtronic already produces most of the hardware required for the entire system, continuous glucose monitoring, insulin pumps, and batteries, and is working on validating and certifying the software. The next step in this product development is adding a remote-monitoring component. Dr. Oesterle foresees operators in Minneapolis able to monitor diabetic children in summer camp in New York, calling them up to ask about missed meals or to potentially change insulin regimens from afar. This also goes along with Medtronic’s interest in a standard telemetry system that could potentially let all of their products talk to each other, assuming adequate protection from non-authorized sources, from any distance. A current implementation of this can be seen in their Conexsus™ Wireless Telemetry used for cardiac products.
As a caveat to the progress Medtronic sees in the future, Dr Oesterle mentioned the largest challenge to their products.
“Our challenge in all this is quality. Our biggest challenge is quality. What do you do if your cell phone doesn’t work? You just curse and throw it away. But if it is implanted that is a different issue. First you don’t just throw it away, and second if it malfunctions that will be a problem. So we have uncommon quality boundary conditions that are not seen in consumer grade electronics.”