The rise of medtech – Communitech

When Armen Bakirtzian and two associates began Intellijoint Surgical in 2010, there have been solely a handful of different medical expertise corporations in Waterloo Area.

The three younger engineers, who started creating surgical-navigation expertise whereas they had been nonetheless college students on the College of Waterloo, acquired quite a lot of good recommendation about the way to launch a startup.

What they could not discover domestically had been mentors with important expertise within the specialised enterprise of medtech.

“So we went out actively to the U.S. to search out individuals who may assist us get smarter,” remembers Bakirtzian, Intellijoint’s CEO. “Our objective was to ingest all of that information and (carry it again to) KW and simply continue to grow our enterprise, as a result of it was our intention to remain in KW.”

The rise of medtech – Communitech

Armen Bakirtzian, co-founder and CEO, Intellijoint (Photograph courtesy Intellijoint)

Quick ahead 12 years. There are actually greater than 100 well being innovation corporations primarily based in Waterloo Area. There’s additionally a rising ecosystem of experience and help to nurture each early-stage and scaling health-tech ventures.

Consequently, Waterloo Area is now residence to corporations that make a variety of modern medtech merchandise, from blood-clot therapy expertise to surgical navigation instruments, post-operative monitoring programs, distant home-care and blood-testing platforms, life-science analysis instruments, medical imaging and record-sharing software program, a wide range of AI and nanotechnology parts for the makers of different medtech merchandise, and extra.

“There’s positively far more help than there ever was, and I believe that it’s all getting into the correct path,” says Ryan Denomme, who based Kitchener-based Nicoya Lifesciences in 2012 to assist cut back the price of scientific devices and make them extra accessible to researchers.

The medtech market

The power of at the moment’s medtech sector in Waterloo Area owes so much to a handful of forward-thinkers who see each a chance and a necessity to enhance the way in which Canada fosters well being innovation and makes it obtainable to clinicians and sufferers.

The worldwide marketplace for heath expertise is booming. In Canada, quite a few advisory our bodies and panels have concluded that we are able to enhance affected person care, cut back prices and gas prosperity by, first, leveraging Canada’s experience in expertise and life sciences, and second, altering the way in which we nurture and fund health-care innovation.

The numbers assist clarify why: 

Consulting agency Deloitte sums up the medtech alternative in its 2022 International Well being Care Outlook report:

“A collision of forces – a worldwide pandemic of historic proportions; exponential advances in medical science; an explosion of digital applied sciences, information entry, and analytics; knowledgeable and empowered shoppers; and a motion from illness care to prevention and well-being – (is) proving to be the catalyst for the medical, monetary, and operational transformation that well being care has lengthy promised to the world.”

Nearer to residence, all ranges of presidency have acknowledged the wealthy potential of Waterloo Area’s rising medtech ecosystem.

A couple of examples:

  • A yr in the past, the federal authorities introduced a $10-million funding to create a Southwestern Ontario health-tech innovation hub to commercialize expertise, begin corporations and create jobs. Led by the College of Waterloo, the community contains Western College, the Metropolis of Kitchener, and the privately-run Medical Innovation Xchange, a co-location hub in Kitchener. A lot of the federal grant – $6.5 million – was allotted to Velocity, UW’s flagship entrepreneurship program. 

  • One other regional help program is the Southern Ontario Pharmaceutical & Well being Innovation Ecosystem (SOPHIE). Funded by FedDev Ontario, SOPHIE is operated by two Hamilton-based organizations – the Synapse Life Science Consortium and enterprise accelerator, Innovation Manufacturing facility. This system gives startups with as much as $100,000 to entry medical and analysis experience. A number of Waterloo Area corporations have benefited from SOPHIE, together with NERv Expertise, Hyivy Well being and Tamvoes Well being Inc.

  • The Metropolis of Kitchener has agreed to take a position as much as $8.5 million in UW’s health-focused Innovation Enviornment, to be situated in a repurposed warehouse at 280 Joseph St., which is a part of the Well being Science Campus that features the UW College of Pharmacy in downtown Kitchener. Velocity would be the anchor tenant, sharing area with startup founders, researchers and health-care professionals, all centered on commercializing well being improvements.

  • This yr’s federal price range included $30 million to help Communitech and the Coordinated Accessible Nationwide Well being Community (CAN Well being) to speed up the adoption of Canadian-made innovation by way of an “built-in markets” strategy to health-care procurement. 

  • The Ontario authorities can be encouraging publicly-funded businesses to purchase Ontario-made merchandise by way of its new Constructing Ontario Companies Initiative (BOBI).

  • The Communitech-led Way forward for Well being initiative brings tech leaders, researchers and public-sector officers collectively to collaborate on methods to enhance Canadian well being care by way of innovation. This relationship constructing additionally units the stage for public businesses to obtain extra Canadian-made innovation.

  • In Could, the Ontario authorities introduced $1.6 million for a health-innovation expertise coaching program launched by the Kitchener-based Medical Innovation Xchange (famous above).

The College of Waterloo is taking part in a key function in fueling the analysis, expertise improvement and startup help upon which the area’s burgeoning medtech business is being constructed.

The college’s 2020-25 strategic plan contains quite a few references to well being innovation – a mirrored image of the rising curiosity amongst researchers to collaborate throughout disciplines to resolve health-care challenges. That curiosity – together with tangible tasks just like the Innovation Enviornment and management of the Southwestern Ontario health-tech community – symbolize a big wager on the intersection between well being and expertise.

“There’s a very robust need to help this rising and high-potential sector in Waterloo Area and Southwest Ontario,” says Sandra Banks, UW’s Vice-President, College Relations.

Communitech CEO Chris Albinson agrees.

“As we get well from the pandemic, there has by no means been larger alignment for fixing Canadian well being challenges with Canadian innovation out of Waterloo Area,” he says.

Medtech in Waterloo Area

Waterloo Area has many years of expertise launching startups and commercializing innovation. Nevertheless, with out the form of health-tech focus {that a} analysis and educating hospital usually gives, the area lacked depth in medtech experience, particularly on the scaling stage.

That is to not say there have been no health-tech corporations early on. Unitron Industries started making listening to devices in Kitchener in 1964. Northern Digital Inc. (NDI), one of many first spinoffs from UW, was launched in 1984 to make private computer systems however quickly pivoted to optical and monitoring expertise to help surgeons. And Mitra Imaging Inc., based in 1990 and bought to Agfa-Gevaert in 2002, made software program for managing and sharing medical photographs.

Regardless of the success of such corporations, it took years for a medtech ecosystem to take root in Waterloo Area.

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Elliot Fung, Government Director, Medical Innovation Xchange
(Communitech picture: Anthony Reinhart)

“The pathway to commercialization for medical expertise and well being innovation corporations is kind of completely different than conventional expertise corporations,” says Elliot Fung, Government Director of the Medical Innovation Xchange (MIX). “Medtech corporations that had been on the scaling stage – hiring as much as 20 folks, taking a look at their QA (high quality assurance) programs, and taking a look at certifications and Well being Canada approvals, they wanted a spot to have the ability to go to get knowledgeable recommendation, and that simply didn’t exist.”

MIX was launched in 2019 by Armen Bakirtzian and Intellijoint Surgical’s VP Finance, Joshua Mitchell. Their objective was to create a co-location hub the place established medtech corporations can “pay it ahead” by nurturing youthful scaling enterprises with medtech-specific mentorship and recommendation.

“I’m of the mindset that we do a fairly good job at beginning medtech corporations in KW, (however) we don’t do an excellent job at retaining and scaling our corporations,” says Bakirtzian, who served on the federal authorities’s Financial Roundtable on Well being and Biosciences. “The longer term we would like is a wholesome ecosystem of home, commercial-stage medical-technology corporations that had been born right here, which are being profitable right here, and that can survive right here.”

Situated subsequent to Christie Digital on Wellington Avenue West in Kitchener, MIX not too long ago expanded from 30,000 to 40,000 sq. ft of leased area. It’s at present residence to Intellijoint Surgical and 4 youthful medtech corporations: NERv Expertise, Vena Medical, Emmetros and Bloom Care Options.

One other group working to strengthen the native ecosystem is Waterloo MedTech, which was based in 2016 to “leverage the area’s distinctive collaboration innovation tradition to handle the hole between health-care analysis and its adoption in observe.”

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Laurie Lafleur, a director with Waterloo MedTech

“Our focus with Waterloo MedTech is to attempt to carry the health-care suppliers and the innovators collectively,” says Laurie Lafleur, a director of the group and a professor of well being data sciences at Conestoga School, in addition to a medtech development coach at Communitech.

From 2016 to 2019, Waterloo MedTech held seminars and annual conferences to determine gaps, issues and options associated to enhancing well being care by way of expertise and innovation.

Though these actions had been interrupted by COVID-19, Waterloo MedTech is at present working with space docs, hospitals, post-secondary establishments, tech founders and tech-support organizations to take inventory of the health-innovation ecosystem in Waterloo Area and develop a technique to strengthen it.

“Now we have a really wealthy and supportive ecosystem,” says Lafleur. “What we’re endeavor to do, actually, is that, as an ecosystem, we agree these are our core strengths, that is the place everyone within the ecosystem is sitting, that is the place we overlap, and that is the place challenges are. And from that, we hope to develop a set of suggestions.”

That ecosystem contains well-established organizations which have been offering help to space founders in a wide range of tech industries for years.

“From my perspective, with the ability to have, early on, a extremely robust community of individuals by way of Communitech, the Accelerator Centre and Velocity – unbiased of what particular subject I used to be in – I discovered that basically useful, simply to know the fundamentals of beginning an organization,” says Nicoya’s Ryan Denomme. 

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Ryan Denomme, founder and CEO, Nicoya (Photograph courtesy Nicoya)

Medtech challenges

Medtech founders face distinctive challenges that distinguish their journey from that of different tech corporations. Two of essentially the most important are: first, strict regulatory requirements; and second, a risk-averse health-care procurement system that is not structured to purchase new, modern services.

The regulatory facet is comprehensible. For good motive, most nations require that diagnostic and therapeutic medical gadgets obtain authorities regulatory approval to make sure security and effectiveness. In Canada, the federal authorities has a four-tier classification system primarily based on the chance related to utilizing the gadget. For instance, a Class 1 gadget like a thermometer is deemed to hold much less threat than a Class 4 gadget, akin to a coronary heart pacemaker.

It could take years to safe a medical-device licence. This validation course of usually entails in depth session with medical professionals, lab work, animal trials, medical trials and manufacturing refinement. And time is cash. Founders want buyers with deep pockets – and a fair deeper understanding of the medtech business – to finance the lengthy street to product approval and first revenues.

Take NERv Expertise. The Kitchener-based scale-up has developed a extremely promising patient-monitoring system that alerts medical workers to post-operative problems akin to infections, fluid leaks and inside bleeding. After eight years of consulting, designing, constructing, testing and refining, NERv is near asserting last regulatory approval from Well being Canada.

“(We) went by way of two huge technical pivots, and these technical pivots had been virtually fully pushed by the wants of the medical ecosystem,” says CEO and co-founder Youssef Helwa. “These modifications occurred by having ongoing conversations, and validation, and beta models, and check models being handed to surgeons and listening to their suggestions.”

One other instance is fellow MIX tenant Vena Medical. Based by UW college students in 2016, the corporate has developed a ground-breaking expertise that helps docs take away harmful blood clots from a affected person’s veins. After six years of creating and refining its expertise, Vena acquired Well being Canada approval earlier this yr. Its product, the Vena Balloon Distal Entry Catheter, was used on a affected person for the primary time in June. Since then, it has been used on at the very least 5 sufferers at a number of Canadian hospitals, together with the London Well being Sciences Centre in London, Ont., The Ottawa Hospital and the College of Alberta Hospital.

As soon as a Canadian medtech firm completes the regulatory marathon, it usually runs right into a second main hurdle: a risk-averse procurement system that makes it more durable for Canadian medtech innovators to promote at residence than overseas.

Typically talking, cash-strapped Canadian hospitals solely obtain authorities funding to purchase services that exist already on official reimbursement lists; there’s little if any price range allotted to strive modern new applied sciences.

We’re creating all of this nice innovation and it may be very irritating to enter a health-care group and never see these improvements…

– Laurie Lafleur, Waterloo MedTech

Consequently, Canadian medtechs are sometimes compelled to look to worldwide markets to make their first gross sales and set up their first income streams. Not solely is that this a problem for fledgling Canadian companies, it additionally signifies that Canadian clinicians and sufferers miss out on a few of the finest health-care services obtainable.

“We’re creating all of this nice innovation and it may be very irritating to enter a health-care group and never see these improvements – to know that they exist, to see them exist in different health-care organizations exterior of our area, usually south of the border, and to not be capable to profit from it in our personal health-care organizations,” says Lafleur.

The expertise of Intellijoint Surgical is without doubt one of the finest examples of this peculiarly Canadian downside.

Intellijoint’s surgical-navigational expertise, permitted by Well being Canada in 2015, is utilized in about 15,000 hip-replacement procedures internationally annually. But it wasn’t till earlier this yr that Intellijoint made its first sale to a Canadian hospital. And that buyer, Toronto’s Humber River Hospital, used one-off cash from its basis reasonably than from its working price range to purchase the Intellijoint product.

“The problem is, disruptive innovation doesn’t have current (authorities) reimbursements, and if you happen to don’t have reimbursements, then it’s inconceivable to get adopted and have your product paid for by any provincial system,” says Bakirtzian.

In March, the Ontario authorities gave Kitchener’s Grand River Hospital $1 million to run a trial examine involving Intellijoint’s hip-surgery expertise. The one-time grant was welcome information however not a long-term resolution to the basic downside.

“The one method that our merchandise are going to get adopted in a significant method is by eradicating the barrier of lack of reimbursement,” says Bakirtzian. “In my opinion, that’s the answer that every one of us want – a pathway to achieve reimbursement.”

Elliot Fung, a former VP of Innovation and Strategic Partnerships at Ontario Well being who now serves because the Government Director of the Medical Innovation Xchange, says there is not any lack of modern medical expertise in Canada, simply an lack of ability to obtain it.

“What we actually want, in Ontario particularly, is innovation budgets in our well being system, the place health-system suppliers are empowered with an innovation price range to exit and procure and check out and first-project these concepts,” he says.

Lafleur agrees.

As a professor of well being data sciences and a director of Waterloo MedTech, Lafleur has checked out how different nations fund health-care innovation.

The scenario within the U.S., with its emphasis on non-public well being care, is kind of completely different than the Canadian system, the place we rely virtually completely on publicly funded hospitals and well being providers.

“The USA seems at (well being care) innovation as a differentiator and a core enterprise driver,” says Lafleur. “If they don’t innovate, they won’t appeal to the large payers and they won’t get the large numbers of sufferers, and their (health-care) companies is not going to survive, similar to some other enterprise.”

But some nations which have publicly-funded health-care programs – Australia and the U.Okay., for example – have discovered methods to fund home-grown innovation.

“I believe the federal government of Australia has really achieved a extremely good job,” says Lafleur. “Not solely do they help these modern procurement fashions, however additionally they embody ‘set asides’ for small- to medium-size enterprises. So there’s really incentives or necessities for health-care organizations to buy at the very least some options from smaller organizations. We don’t have that right here in Canada.”

Fung says provincial well being budgeting fashions must incentivize optimistic outcomes reasonably than sticking to a inflexible system that solely pays for applied sciences that have already got a billing code.

“If we shifted in Canada to have the ability to compensate and reward well being programs for outcomes, then you definitely would see much more uptake of a few of these Canadian medical applied sciences which are enhancing outcomes and making life simpler for sufferers and clinicians,” he says.

Funding health-care innovation is on the coronary heart of the partnership between CAN Well being and Communitech. The 2 organizations are working to increase an “built-in markets” procurement community throughout Canada. This strategy removes a few of the threat aversion that always shapes health-care buying selections by permitting new, modern applied sciences to be examined and verified by one member of the community so that every one members should purchase the product with confidence.

“Along with Communitech, we’re centered on connecting made-in-Canada modern options to the real-world points going through our nation’s well being care system,” Dr. Dante Morra, Chair of CAN Well being, mentioned in April when Ottawa awarded $30 million for growth of the company’s procurement networks.

Regional partnerships

Though there’s been speak about constructing a educating and analysis hospital in Waterloo Area, partnerships exist already with the health-science experience and lab providers related to McMaster College in Hamilton and Western College in London, each simply an hour away.

Quite a few Waterloo Area medtechs make use of medical experience, lab amenities and associated providers situated throughout Southern Ontario.

The founders of Intellijoint, who wished to maintain their firm primarily based in Waterloo Area, labored with surgeons in a number of communities to assist develop and enhance their hip-surgery navigational product.“We had 12 surgeons (assist) design our product,” says Bakirtzian. “They got here from London, Hamilton, Toronto and Waterloo. I’ve been beating that drum for a decade: we don’t have to be in Toronto, we don’t have to be in Hamilton, we don’t have to be in London – we’re an hour away from all of them. How a lot nearer do it’s worthwhile to be?”

We have quite a lot of very collaborative, optimistic, forward-looking people throughout the 2 communities who’re making the journeys down Freeway 6 and who’re creating these relationships.

– Alex Muggah, Synapse Life Science Consortium

NERv Expertise is one other instance. The Kitchener-based scale-up has had a lot of collaborations with health-science assets in Hamilton. In 2019, NERv positioned second within the Synapse Pitch Competitors, incomes it $10,000 in money, plus $5,000 in in-kind providers and a three-month mentoring program. Earlier this yr, the Hamilton-based Synapse Life Science Consortium helped fund a NERv medical trial involving Hamilton Well being Sciences and the College Well being Community.

“We’ve obtained quite a lot of very collaborative, optimistic, forward-looking people throughout the 2 communities who’re making the journeys down Freeway 6 and who’re creating these relationships,” says Synapse Director Alex Muggah, who collaborates repeatedly with colleagues at Communitech, Velocity and the Medical Innovation Xchange.

Hamilton’s famend experience in well being analysis and medical trials is a wonderful match with Waterloo Area’s tech creation, entrepreneurship and commercialization expertise, he says.

“What’s very nice about Hamilton-KW is that they’re complementary communities, which is sweet as a result of neither one is even a fraction of the dimensions of a Toronto or a Montreal or Vancouver,” says Muggah.

The opposite regional partnership that is taking form is the Southwestern Ontario health-tech innovation hub, which is being led by UW with a $10 million funding from FedDev Ontario.

“Due to the help we have had from the federal authorities, we had been in a position to usher in further companions like MIX and like Western College, which has a preeminent medical college and a medical innovation program,” says Sandra Banks, UW’s Vice-President, College Relations. “They had been very eager to collaborate and be a part of this, which not simply extends the geography however extends the capability and the entry to what Western College has in its toolkit that Waterloo would not.”

Medtech founders

Why would a younger entrepreneur select medtech, given the prices, hurdles and size of time it takes to construct a health-innovation firm?

Many medtech founders have a private connection to well being care and a ardour to make a optimistic influence on folks’s lives.

Salutech CEO Shuhe Li discovered inspiration near residence.

After incomes an MBA and a regulation diploma, Li started working along with her father – a cardiovascular scientist – to commercialize a biomaterial he developed to mitigate the erratic electrical exercise behind irregular heartbeats.


Shuhe Li, CEO, Salutech

“If I succeed, it’s not about me exiting or being this super-successful particular person,” says Li. “It’s really figuring out that I may make folks’s lives so a lot better.”

NERv co-founder Youssef Helwa has the same story.

His mom, a surgeon, would usually speak about her work experiences. These tales impressed Helwa, who, as an aspiring engineer, started to assume that sooner or later he may use expertise to make peoples’ lives just a little bit higher.

Years later, he co-founded NERv whereas incomes an undergraduate diploma in nanotechnology and a grasp’s in electrical engineering on the College of Waterloo.

“Simply figuring out that there’s a chance to create options that would change the life of 1 particular person is admittedly motivating,” says Helwa. “And an engineer serving docs can doubtlessly influence the lives of thousands and thousands of individuals. That’s wonderful – that’s actually unbelievable.”

Armen Bakirtzian additionally discovered inspiration at residence.

Whereas looking for a capstone challenge for his engineering program on the College of Waterloo, Bakirtzian requested his father, an orthopedic surgeon, if there was something that may enhance affected person outcomes. His father mentioned one of many largest challenges throughout hip-replacement surgical procedure is orienting the synthetic hip as exactly as doable. From that dialog, Bakirtzian and two classmates started creating what’s now Intellijoint’s flagship product, the Intellijoint HIP, which gives surgeons with intraoperative measurements to make sure the right positioning of orthopedic implants throughout joint replacements.

“You form of get conditioned in the direction of well being care by way of your childhood,” Bakirtzian says of his curiosity in medtech. “It was a mixture that this can be a actual downside to resolve and that it advantages folks.”

Adrien Côté, Government Director of UW’s famend Velocity program, says he is seeing extra college students involved in healthtech as a result of they wish to make a distinction on the planet.

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Adrien Côté, Government Director of Velocity (Communitech picture: Anthony Reinhart)

“We work with 2,400 college students yearly and we’re seeing an actual shift (the place) many of those college students are aspiring to construct an organization as a result of they wish to create a change, and most of the modifications they wish to create on the planet relate to human well being,” he says.

Wanting ahead

So what is the present state of medtech in Waterloo Area?

The ecosystem does a very good job of nurturing startups observers say however there’s nonetheless work to be achieved domestically to help medtech scale-ups. And looking out Canada-wide there’s nonetheless a urgent want to beat innovation procurement obstacles.

“Now we have a transparent understanding of the problem, which is lack of reimbursement, and I believe there’s additionally an acknowledgement from the province to say, ‘Hey, we are able to do that higher,’” says Bakirtzian. “And that’s the avenue that our innovators want the province to enhance on with a purpose to unlock the house marketplace for our residence innovators.”

Laurie Lafleur says one other problem is getting well being improvements which are being created proper right here in Waterloo Area into the arms of clinicians to enhance affected person care.

“Now we have such a powerful ecosystem,” she says. “Now we have lots of people which are rallying round to help it. I believe as soon as we crack that nut when it comes to how we diffuse extra of it domestically, it’s going to be for the good thing about everyone.”

The final phrase goes to Elliot Fung Government Director of the Medical Innovation Xchange in Kitchener:

“Our imaginative and prescient is when folks take into consideration medtech internationally, they consider Austin, they consider Boston, they consider Waterloo Area,” says Fung. “We wish to create an internationally acknowledged hub for medtech right here. We strongly consider that’s attainable. The pandemic has proved that medtech is a really secure business – it is going to all the time be wanted – and we’ve obtained just about every part we want on this area to have the ability to construct and develop these corporations.”

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