Upstate South Carolina s Medical Device Cluster A guide to the potential of the Medical Device Cluster of South Carolina
Medical Device Industry Regional excellence in the Medical Device industry has emerged in Upstate South Carolina. The biomedical products and services provided in the Upstate contribute to the medical health of nations worldwide as well as the economic health of the local, national and international companies located in this region. The Upstate has a long-established infrastructure and examples of successful companies operating at each part of the Medical Device supply chain, from high purity raw materials production through manufacture to local sterilization, packaging and distribution. World-class entities feed this supply chain, and the Upstate, home to over 50 Medical Device companies, was identified in a recent Batelle report as one of six emerging medium-sized U.S. regions for the Medical Device industry. This brochure has been designed as an introduction to the Upstate s Medical Device activity. More detailed information on this economic cluster can be found on the web at www.newcarolina.org. 1
Business, Education & Research in the Upstate An area known for its high quality of life, great weather and beautiful surroundings, Upstate South Carolina is also one of the economic engines of the southeastern United States. This region is located in northwestern South Carolina. In addition to being home to over one million people, it is also a strategic business location for the North American headquarters of companies like BMW and Michelin and has more engineers per capita than any MSA in the US. Located less than two hours from both Atlanta, GA and Charlotte, NC, the Upstate has a strong manufacturing base and a network of excellent hospitals, technical training students and over 25 colleges and universities attended by over 72,000 students. The Upstate area of South Carolina is a strategic business location which has attracted company headquarters such as BMW and Michelin. 2 3
Medical Devices Supply Chain Raw Materials Materials Synthesis Processing Subcomponent Manufacturing Functional Device Manufacturing Post-Manufacturing Processing Distribution & Sales The materials used in the manufacture of Medical Devices require much higher levels of purity and quality control than in most other markets. Raw materials providers for the Medical Device industry must hold themselves to the highest standards and possess specialized expertise. Upstate companies are successful in meeting these requirements some, like Ortec, Inc. (the producer of Altasorb, industry leading bioabsorbable monomers and polymers), have been in business for over 25 years. Before being used in manufacturing processes, raw materials often are altered (for example, the polymerization of monomers to polymers). This needs to be performed using stringent and internationally approved protocols, some very specific to Medical Devices, in order for the end product to be used inside or in contact with the human body. Companies like Poly-Med, Inc. have found Upstate South Carolina to be an ideal place to process materials for use in biomedical applications. Medical Devices are typically constructed of many individual parts, which may be manufactured in many different locations. This type of manufacturing again requires specialized skill and procedures. For example, capacitors to be used in defibrillators (or ICDs) are manufactured in the Upstate by St. Jude Medical, a leading international provider of cardiac devices, and one of our Upstate Success Stories. Once a Medical Device is assembled to the point of functionality, it is almost ready to go into, or have contact with, a human body. The FDA requires that manufacturers of functional devices register them in its database, and 36 companies in the Upstate fall into this category. These include emerging companies such as CreatiVasc, providers of intuitive vascular technologies that address the universal problems of kidney dialysis connectivity, and large, established companies such as Bausch & Lomb, makers of contact lenses. After manufacture, functional devices need to be packaged and sterilized, and 11 Upstate companies are listed in the FDA database under this category. This stage often requires substantial transport of the devices for reliable and large-scale sterilization unless you operate your Medical Device business here! STERIS Isomedix Services, a leading provider of contract sterilization services, offers gamma, EO, and E-beam technologies through 21 North American locations. Three of their facilities have both gamma and EO capabilities and one of those locations is in Upstate South Carolina. A final aspect of the Medical Device manufacturing industry is distribution and sales, and 23 Upstate companies are registered with the FDA in this part of the supply chain. Located conveniently on Interstate 85 between Atlanta and Charlotte, with good land availability, quick air access via the GSP International Airport and in-state seaport access in Charleston, many companies find our area a strategic site for their distribution activities. An Upstate Success Story : A Spotlight on St. Jude St. Jude Medical is an international company that develops and manufactures Medical Devices including pacemakers, implantable defibrillators and heart South Carolina operation has grown from a handful of employees to a self-supporting high technology facility with fully staffed and equipped R&D and operation designs and manufactures a capacitor component used in the company s line of implantable defibrillators. A two-phase expansion was announced Pickens County plant to include a 100,000 square foot facility and an additional 60,000 square foot facility, both located at the Pickens County Commerce Park. and expand its hybrid electronics operation. Through this growth, St. Jude is bringing approximately 600 new jobs to Pickens County, stimulating the economy and valves. Starting as an entrepreneurial effort in the engineering functions. As part of St. Jude Medical s in 2004 that greatly increases St. Jude s footprint in the This new expansion has allowed St. Jude to consolidate illustrating their role as an exemplary player in the early 90s under the name of Maven Capacitor, the Cardiac Rhythm Management division, the Liberty, SC Upstate. St. Jude is expanding operations of their component R&D manufacturing into a single location Upstate Medical Device industry. 4 5
Resources & Partnerships Supporting the Medical Device Supply Chain Research Universities Start-up Grants and Seed Funding Intellectual Property and Contract Law Professionals Growth Financing Clinical Trials MEDICAL DEVICE SUPPLY CHAIN Entrepreneurial Support Resources Business Incubators Contract Research and Testing Facilities Local Pharmaceutical Industry Educational Institutions/Workforce Research Universities The Upstate boasts a major research university, (highlighted on page 10 in the Upstate Success Story), that has a proven track record as a source for biomedically relevant ideas and inventions. CURF (Clemson University s technology transfer operation) has been nationally recognized for commercialization excellence and had consecutive record breaking years in FY07 and FY08 in terms of both number of licenses and number of start-ups. Clemson s research resources are available to the Medical Device industry through contract, as outlined in the Contract Research and Testing Facilities Section. There are also opportunities to license University intellectual property and to create sponsored research to obtain solutions to specific industry challenges. Start-up Grants & Seed Funding SCLaunch!, a collaboration between the state s research authority and South Carolina s university research foundations, provides up to $50,000 grants for university based start-ups and up to $200,000 in convertible debt financing to in-state knowledge-based companies. Since 2006, 111 companies have been funded, 23 of which have received over $100,000 each, and have matched 12 SBIR grants. In addition, the South Carolina Small Business Innovation Research (SBIR) Phase-0 program provides seed grants of up to $6,000 to start-up companies to catalyze SBIR applications. Intellectual Property & Contract Law Professionals There are 49 firms in South Carolina employing 146 patent attorneys and 39 patent agents. Approximately 60 of these 146 patent attorneys are located in the Upstate. Several IP boutique firms focus only on intellectual property, the largest being Greenville law firm Dority & Manning, which has 17 attorneys and 3 patent agents devoted exclusively to IP law. Growth Financing The Upstate Carolina Angel Network (UCAN) is a group of accredited investors seeking investment opportunities in the Upstate, with a particular focus on early stage ventures. With regards to later stage and larger investments, South Carolina s Venture Capital Investment Act has paved the way for increased access to venture financing. In addition to these more formalized pathways, several Upstate Medical Device and biomedical start-ups raised over $5 million in private local financing in 2007/2008. Clinical Trials Clinical trials in the Upstate are being carried out in the disciplines of oncology (including pediatric oncology), cardiology, vascular disease and women s health. Between three of the Upstate hospitals, over 600 clinical trials are being conducted at any given time. This infrastructure creates an environment ideal for the development of Medical Devices and for expediting the process of moving the devices from the lab to the patient. Entrepreneurial Support Resources The annual Biomedical Entrepreneurship in Upstate SC summit is held each fall in Greenville. This day-long program covers issues specific to the Medical Device industry and serves as a meeting place for over 150 representatives from biomedical firms, start-ups and regional economic development organizations. NEXT, an organization with 50+ intellectual propertydriven companies, serves as a hub and a concierge service for knowledge economy entrepreneurs. Market analysis reports are provided by the Spiro Institute for Entrepreneurial Leadership at Clemson University, harnessing MBA students with technical backgrounds for specialized analysis. Business Incubators Through its T.I.P. (Technology Innovation Partnership) program, Clemson University connects entrepreneurs to university resources and capabilities, including wet lab incubator space: By 2009, five incubation facilities will be online, including space inside Greenville Hospital System s Patewood campus, offering approximately 25,000 square feet each of wet lab and office space. The NEXT Technology Center, also anticipated to open in 2009, provides office space to Greenville s entrepreneurial IT sector and has space which can be upfitted for wet lab companies. And SCBIO operates a 22,000 square foot incubation facility in Greenwood, SC, which includes approximately 5,000 square feet of wet lab space. Contract Research & Testing Facilities Godley-Snell Research Center: 22,000 square foot animal research facility Sonoco Institute of Packaging Design and Graphics: testing services addressing Medical Device packaging and shipping standards Clemson University s Electron Microscope Facility Local Pharmaceutical Industry Recognized as emerging cluster by Battelle study Regional focus in pharmaceutical manufacturing, companies include Glaxo Smith Kline, Nutra Manufacturing, Capsugel, Perrigo and others Source for fine chemicals produced in FDA approved environments The Upstate Medical Device industry gathers its inspiration from a diverse infrastructure of support resources. From start-up to established business, the Upstate boasts a number of resources positioned to augment every piece of the supply chain. Educational Institutions/Workforce Over 20 colleges and universities are located in the Upstate, including three public universities and four technical colleges. In Fall 2007, over 75,000 students were enrolled in these institutions. These institutions are preparing students to become key players in the Medial Device industry by offering degrees in Bioengineering, Biotechnology, Materials Engineering, Biology and Biological Sciences, Machine Tool Technology, Machine Shop Technology, Quality Control Technology and Surgical Technology. Nearly 500 degrees or professional certificates were awarded in these programs in the 2007 academic year alone. 6 7
Predictors & Benefits of Cluster Success Positioned in a region with high quality of life, vast and varied educational and research resources, and entrepreneurial activities, Medical Devices is a thriving industry. The presence of certain predictors in the region creates an environment of Efficiency, Innovation, and Growth & Prosperity, an ideal position to reap Cluster benefits and assure greater success to companies doing business in the region. Existing Capability at Research University(s) & Key User(s) in the Region Clemson University is an internationally recognized research university located in the Upstate ranked 27th among US News & World Report s top public universities with a goal of being in the top 20 by 2011. Clemson was also recently ranked first among the best places to work in academia by The Scientist. A 2007 Battelle report identified the Upstate as one of six emerging MSAs based on existing activity of local Medical Device companies. Superstar Researchers & Graduate Programs The Clemson University Bioengineering Department (highlighted on the previous page), established in 1963, is world-renowned in biomaterials research and still remains a leader in the field today, granting PhD s, Master s and Bachelor s degrees, and conducting research in cardiovascular devices & implantology, orthopaedic materials and tissue engineering, among others. The Hunter Endowed Chair and the Hansjörg Wyss Endowed Chair in Regenerative Medicine, both of which are appointments in Clemson s Bioengineering Department, are an additional supplement to the top-notch research talent of Clemson s biomedical faculty ranks. Creation/Attraction of Young Firms and R&D-Intensive Activities at Larger/ International Firms The long list of companies listed on NewCarolina.org under Medical Devices, is prime evidence of the Upstate s appeal. Start-ups founded in the Upstate include Ortec, Polymed, Glucotec, Sensortech and Maven Capacitor (now St. Jude see An Upstate Success Story on page 4-5). The Upstate Medical Device industry continues to grow through the attraction of larger firms such as Deltex Medical, a UK based hemodynamic monitoring company that will be establishing its presence in the US by locating in Greenville. Entrepreneurial Resources Greenville s annual Biomedical Entrepreneurship in Upstate SC summit NEXT, a hub and concierge service for knowledge economy entrepreneurs Clemson University s Arthur M. Spiro Institute for Entrepreneurial Leadership has educational, research and outreach programs to assist current and future entrepreneurs and inventors with market analysis, business planning and mentoring partnerships with experienced business executives. The Upstate Carolina Angel Network (UCAN) is a network of investors that provides a source of investment capital for local entrepreneurs. SCLaunch!, instituted to implement the Innovation and Research Centers Act, is a program that assists high growth business creation in the state. Since its inception in 2006, 69 companies received formation and development services, 28 companies received direct investment (up to $200,000 per entity), and four companies received follow-up investment totaling $30 million. Research Parks The Clemson University Advanced Materials Center is an Innovation Campus and Technology Park located three miles off I-85. The Center is home to several research facilities where scientists and engineers engage in research topics ranging from traditional bricks and ceramics to fiber optics. The Clemson Translational Bioengineering Research Center will be located on the fourth floor of the GHS Patewood Campus. This space will house the research center, industrial incubators, meeting facilities and state-of-the-art surgical skill facilities. Under the construction on the campus of Clemson University s Advanced Materials Center is a research and innovation complex that will feature high-tech incubator space for advanced materials-based start-up companies and companies exploring the opportunity of relocating to the Upstate. The Innovation Center is expected to be complete by August 2009. High Quality of Life Only a couple hours from Charlotte, Atlanta and the beautiful Carolina Coast, Greenville was rated as one of Relocate-America s Top 10 Best Places to Live in 2008. The Greenville Drive (a Boston Red Sox farm team) play 70 home games a year at 2006 Ballpark of the Year Fluor Stadium in downtown Greenville. Combined with mild winters, large lakes for boating and fishing, more than 200 mountain waterfalls in the region, superb golf courses, as well as a dynamic business community, the Upstate offers an unparalleled quality of life. 8 9
An Upstate Success Story: Clemson University Bioengineering Success Analysis for Upstate South Carolina s Medical Device Cluster Founded in 1963, Clemson University s Bioengineering program is one of the oldest in the country. Clemson Bioengineering, renowned for their research in biomaterials, is the birthplace of the Society for Biomaterials, the largest professional society in the world dedicated to materials for Medical Devices. This society now has daughter organizations in countries worldwide, and the most prestigious award given at the Society s annual meetings is the Clemson Award. Clemson Bioengineering has a proven track record in developing Medical Device technologies, the most notable of which was a hip stem coating licensed to Zimmer one of the most profitable licenses in the history of licensed university Medical Device patents. These technologies are also stirring entrepreneurial activity, with ten companies licensing biomedical technologies in the past three years, eight of which are start-up companies based on Clemson biomedical technologies. In addition to creating profitable technologies, the Clemson Bioengineering department Predictors of Success Check List Research Universities Superstar Researchers Graduate Programs Creation/Attraction of Young Firms R&D at Larger/International Firms Entrepreneurial Resources Research Parks High Quality of Life Because all predictors are present, maximum cluster benefits are possible Cluster Benefits MAXIMUM CLUSTER BENEFITS EFFICIENCY INNOVATION GROWTH & PROSPERITY industry players and entrepreneurs feed off each other additional ideation and initiatives Benefits of a Cluster A cluster is, quite simply, a group of complementary businesses that focus on or service the same industry. They come together to increase efficiency and innovation within that industry, while boosting the overall economy in their region by attracting more businesses to the area and enhancing existing businesses. Because the Upstate Medical Device industry meets all the predictors for cluster success, we are poised to reap optimal benefits at the convergence of heightened efficiency, innovation and growth. has produced 45 years of graduates, serving as a pipeline to the FDA as well as to the international Medical Device industry, providing a valuable pool of talent and technologies. 10 11
The Medical Device industry isn t the only vibrant business cluster in Upstate South Carolina. Similar synergies associated with a competitive, winning economy can be found in other Upstate industries such as Aviation and Composites and statewide in Agribusiness, Apparel, Automotive, Distribution Services, Engineering, Nuclear, Recycling, Textiles and Tourism. Support of these clusters comes from dedicated people within those industries and from New Carolina, whose Competitiveness Initiative is a statewide drive to help strengthen South Carolina s core industries and develop a stronger overall economy for the state. If you d like to learn more about clusters or be a part of the activity, you can find helpful information at www.newcarolina.org. Contact Information Medical Devices Cluster Chair Dr. Matt Gevaert Clemson University Research Foundation CEO of KIYATEC, LLC 864-650-7540 mgevaert@newcarolina.org 12
www.newcarolina.org 1411 Gervais Street, Suite 315 Columbia, SC 29201 803.760.1400