$78 million invested as Innovation Works celebrates 20 years

Aethon turned a couple hundred thousand dollars into an international robotics company with delivery robots in hospitals and hotels.

TissueInformatics used a six-figure grant to build a ground-breaking tissue engineering company that raised more than $25 million before a top biotech company bought it.

Both Pittsburgh-area companies were among the first to receive funding from Innovation Works decades ago. And both said that the initial investment led to millions more.

“Without Innovation Works, we probably would not have gotten started as a company,” said Aldo Zini, CEO of Aethon. “It wasn’t just the money, but they also opened some doors for us in order to raise more.”

Innovation Works has been providing early-stage investment to young Pittsburgh startup companies for 20 years. The organization celebrated its anniversary last week by recognizing the achievements of the companies it has helped start and fund.

In its 20 years, Innovation Works, now based in the North Side’s Nova Place, has worked with more than 1,000 companies. Nearly 300 were formed with direct assistance from the organization, and 376 companies received investments totaling $78 million. The companies went on to raise an additional $2.1 billion.

Innovation Works claimed it has created or retained nearly 12,000 jobs, nearly two-thirds of which don’t require an advanced degree. More than half of the companies have a woman founder; 72 percent of the founders came from local universities, and 86 percent of the companies work source from vendors in Pittsburgh, according to information complied by Innovation Works.

“I’m proud of the companies and the entrepreneurs. We have a saying here that we succeed when they succeed. At the end of the day, it’s not about us,” said Rich Lunak, president and CEO of Innovation Works, where he has worked since 2005. “We all take a lot of pride in that.”

The organization calculated that $3.60 was returned to the state economy for every $1 of state money invested. The company receives $3.5 million a year in state money.

Zini said there was a lot of skepticism over robotics companies in the early 2000s, when Aethon was just getting its start. The dot-com bubble had just burst and some investments in robotics in the 1990s didn’t pan out, leaving investors shy.

“Innovation Works, they stepped up,” Zini said.

The organization invested a few hundred thousand in Aethon over a two rounds of investing starting in 2002. Since, Aethon raised more than $50 million. ST Engineering bought Aethon in 2017. The Singapore firm kept the company in the Pittsburgh-area and allowed it to grow.

Aethon has added 18 people to its team over the last 10 months and plans to add another 10, Zini said. The company is moving into a larger building. It has robots in China, Turkey, Singapore, Australia and all over Europe.

But Zini hasn’t forgotten who helped the company at the beginning. He’ll talk to the staff at Innovation Works whenever he is looking for new hires or advice.

“And they’re still helpful,” Zini said.

When four doctors and scientists at University of Pittsburgh spun TissueInformatics in 1997, the startup scene in Pittsburgh was shaky. The city, and its reputation, was still recovering from the collapse of the steel industry, said Dr. Peter Johnson, who came to Pitt in 1987 to train as a plastic surgeon and was one of the three founders of TissueInformatics, which used machine vision to identify pathology slides.

Johnson said building a biotech company in Pittsburgh was rare at that time.

“They took a leap as one of the first to say this was a sector that we really need to invest in,” Johnson said.

TissueInformatics went on to raise $25 million over five years. In 2004, Paradigm Genetics, a North Carolina company, bought the startup. Johnson moved to the Raleigh area where he still lives. He recently bought a 40-acre farm, grows barley and plans to open a distillery.

Innovation Works invited Johnson back to Pittsburgh two years ago to speak. He was impressed the growth of the tech scene. And he expects Innovation Works to keep it growing by finding undiscovered technologies and taking chances, just like it did years ago.

“They’re going to figure out where the fringe is,” Johnson said.

Aaron Aupperlee is a Tribune-Review staff writer. You can contact Aaron at 412-336-8448, aaupperlee@tribweb.com or via Twitter @tinynotebook

UMASS Lowell M2D2 / Advancing Med Device & Biotech Innovations

Thursday, September 13, 2018

DESCRIPTION

Created especially for healthcare startups and medtech innovators: A half-day workshop packed with authoritative insights on leading-edge technologies, new best practices, business intelligence, and networking opportunities (with continental breakfast and light lunch included).

WORKSHOP AGENDA

7:30-8:00 Coffee w/continental breakfast

8:00-8:15 Welcome & Introductions

8:15-9:15 Blockchain & Artificial Intelligence – Real World Healthcare Applications

  • Speakers: Kris Srinivasan, CEO, Life Sciences, Alpha MD & Edward Bukstel, CEO, Clinical Blockchain

9:15-9:45 Blockchain: What Startups need to succeed; What larger corporations like J&J can do to support their growth

  • Speaker: Kate Merton, Head of JLABS NYC & Boston — J&J Innovation

9:45-10:15 Healthcare Industry Update

  • Speaker: Ibraheem Badejo, Senior Director, New Ventures, J&J Innovation

10:15-10:30 Break

10:30-11:00 Continuum of Medical Affairs in a Startup Company

  • Speakers: Dr. Peter Johnson & Dr. Gerald Klein, Co-Principals, MedSurgPl, LLC

11:00-11:30 Friction Points in Health Communications at Point of Care

  • Speaker: Richard Nordstrom, CEO, Liberate Ideas, Inc.

11:30-12:00 Lunch Break

12:00-12:45 Mock interview with Investors: One or more investors with successfully financed entrepreneur and startup pitch. How to deal with Investors.

  • Speakers: Steven Schwartz, Robert Bausmith

12:45-1:00 Ice Cream Hour: One-on-one interactive meetings with the speakers and the management of JLabs while you enjoy ice-cream during Q&A.

  • You are welcome to send in your questions in advance via email to Kris@AlphaMD.com or ask during Ice Cream Hour.  You will also be able to talk in person with Kate Merton, Head of JLABS NYC & Boston, and Dr. Ibraheem Badejo, Senior Director, New Ventures, J&J Innovation.

 

MedSurgPI: Physician Functional Service Provider

GERALD L. KLEIN, MD; PETER C. JOHNSON, MD; ROGER MORGAN, MD

     MedSurgPI is the preeminent Physician Functional Service Provider.  We provide medical strategy, medical monitoring, medical affairs, and medical writing from our experienced physician team of seasoned executives.  Our goal is to provide this outsourced service to increase efficiencies and decrease cost for drug, device, diagnostic, and nutritional development services.

     MedSurgPI doctors are flexible and can provide short term assistance or long term collaboration. 

     Whether you want a medical strategy, clinical trial guidance, medical monitor or an interim Chief Medical Officer, contact MedSurgPI, LLC at:  info@medsurgpi.com.

James D. Hundley, M.D. of MedSurgPI co-authors book: My Hip Hurts!

James D. Hundley, M.D., Physician Associate with MedSurgPI, LLC has co-authored a book My Hip Hurts!: Causes and Treatment of Hip Pain in Seniors.  Authors Dr. Hundley and Richard J. Nasca, M.D. are two orthopaedic surgeons with over 100 combined years of training and experience.  This is an exciting book as Drs. Hundley and Nasca describe conditions of the hip suffered by older people, what can be done for them, and what they would recommend.  Simple drawings and x-rays are used for illustration along with a glossary to help understand medical terms.

This book is available through Amazon at the following link:  My Hip Hurts!: Causes and Treatment of Hip Pain in Seniors 

Globalization of Clinical Trials: Benefits and Risks

Aparna Shekar1,2, Gerald L. Klein, MD3, and Peter C. Johnson, MD3

1Ph.D. Candidate, Vanderbilt University, Nashville TN, 2Intern, MedSurgPI, LLC., Raleigh NC, 3Principal, MedSurgPI, LLC., Raleigh NC

Clinical trials are scientific experiments designed to test new medications, devices or other therapeutic interventions, or to further gain insight on those treatments for use in human medicine. They aim to produce insight into the safety and efficacy of medical interventions and strive to produce improvements in medical care. Clinical trials have evolved substantially since James Lind’s Scurvy trial in the 1700s1, to become more structured and supervised, and to generate more rigorous, reproducible results. But along with being thorough came a new set of challenges - clinical trials today face a gamut of scientific, ethical, regulatory and financial roadblocks. Biopharmaceutical development is a global business today.   Companies are routinely conducting clinical trials in foreign nations with the intent that the data will also to be used to support US claims2,3. In 2008, 80% of all marketing applications submitted to the FDA contained data from foreign clinical trials (https://oig.hhs.gov/oei/reports/oei-01-08-00510.pdf). There are several reasons for this trend, including but not limited to lower costs of conducting trials abroad. In 2013, the Tufts Center for the Study of Drug Development estimated that the total costs for developing, seeking approval and marketing a new chemical entity costs $2.6 billion on average, creating an impetus for decreasing the costs of clinical trials.  Countries that have grown to be popular choices for conducting clinical trials include those in Latin America, Asia, Europe and Africa where lower operating costs occur.  Some of these lower costs include  human resources, clinical procedure costs, site monitoring costs, regulatory, and compensation in case of injuries/deaths that may occur4. Other significant benefits of foreign clinical trials include the ability to enable globalized medical product discovery and development, expand diversity of the test subject pool, shorten drug development timelines and less litigious and, importantly, to test patients that are naive to treatments not found in third world countries. Due to these advantages, the number of foreign clinical trials conducted to meet US FDA regulations has more than doubled over the past decade.

However, there are major risks involved in conducting clinical trials outside the United States. Companies need to consider and prepare in advance to understand country-specific insurance requirements, legal restrictions and regulations regarding conducting clinical trials with human subjects. They also need to determine if the trial design conforms to FDA standards so that trial data can be accepted by the FDA for review. In the absence of prior careful consideration, sponsors may inadvertently violate local insurance laws, expose themselves to excessive liability, or even unknowingly purchase insurance coverage that is well beyond the requirements of a particular country. It is particularly important for sponsors to thoroughly understand and follow FDA guidelines for conducting clinical trials in a foreign country. Under Section 1123 of the Food and Drug Administration Safety and Innovation Act (FDASIA) of 2012, data from foreign clinical trials should be accepted by the FDA, provided such studies comply with U.S. federal standards on Good Clinical Practices (GCPs).  As of 2016, the FDA has issued guidelines stating that it may accept clinical trials conducted outside the US under the classification of an Investigational New Drug (IND) and comports with all FDA regulations as if the trial were being conducted within the United States. Additionally, it may consider a trial not conducted under the classification of IND, so long as the study conforms to whichever of the following rules provides greater protection of the test subjects: (i) the ethical principles contained in the 1983 version of the Declaration of Helinski or (ii) human rights regulations in the foreign country in which the trial is conducted. The new Questions and Answers (Q&A) Guidance from the FDA issued on February 21, 2018 provides further clarification on how to conduct these trials.  The International Conference on Harmonization (ICH) and World Health Organization Good Clinical Practice (GCP) standards provide a unified measurement for the USA, European Union, Japan, Australia, Canada, the Nordic countries and several others. A complete list of countries that have adopted this guideline is available online at www.ich.org. Additionally, research groups have also developed methods that can predict country-specific financial requirements, outcomes of trials and risks involved in foreign locations that are developing countries, that may help sponsors in identifying an appropriate country in which to conduct their trial5,6.  This new Q&A guidance document emphasizes the importance of a description of how investigators were trained to comply with GCP and how the study was monitored so that the investigations were done in accordance with the protocol (Section 812.28(b)(12)).

 

Ultimately, it is important to maintain scientific integrity and patient safety, which leads to better trial outcomes. Several resources are available that can help companies understand the strict guidelines that they are required to follow to manage potential risks. Companies can seek aid from experts on ICF and GCP guidelines, foreign insurance policies, medical insurance policies, informed consent requirements and FDA liaisons. Our experts from MedSurgPI, LLC. can aid pharmaceutical and medical device companies in making informed decisions and adopting appropriate steps before they embark on conducting clinical trials in foreign countries.  MedSurgPI, LLC. by providing experienced product development expert services to its clients is well positioned to bridge the business and medical understanding that such risk management requires.

 

 

References:

1          Lind and scurvy - 1747 to 1795.

2          Capeding, M. R. et al. Clinical efficacy and safety of a novel tetravalent dengue vaccine in healthy children in Asia: a phase 3, randomised, observer-masked, placebo-controlled trial. The Lancet 384, 1358-1365, doi:10.1016/s0140-6736(14)61060-6 (2014).

3          Ezeome, E. R. & Simon, C. Ethical problems in conducting research in acute epidemics: the Pfizer meningitis study in Nigeria as an illustration. Dev World Bioeth 10, 1-10, doi:10.1111/j.1471-8847.2008.00239.x (2010).

4          Dezfuli, M. Outsourcing Clinical Trials Outside of the US. Pharmaceutical Regulatory Affairs: Open Access 06, doi:10.4172/2167-7689.1000194 (2017).

5          Lorenzo, C., Garrafa, V., Solbakk, J. H. & Vidal, S. Hidden risks associated with clinical trials in developing countries. J Med Ethics 36, 111-115, doi:10.1136/jme.2009.031708 (2010).

6          Hidden risks associated with clinical trials in developing countries.

AlphaMD and MedSurgPI have entered into a partnership to provide comprehensive Product Development and Commercialization with Medical Affairs Services to clients worldwide. →

This service is a proprietary process to assist start-ups and established Life Science companies launch their drug, diagnostic and medical device products successfully from concept through launch and post-market surveillance. It encompasses proof-of-concept studies, clinical trial assistance, market research, product development, health economics and outcomes research services, a successful launch, data analytics and pharmacovigilance.