Galway's shortcut to global success with its med-tech startups
The city's med tech cluster has been the springboard for a start-up which, armed with almost €30m in funding, is on the cusp of a global breakthrough. Ian Campbell reports
With eight of the world's 10 largest medical device companies employing 8,000 people in Galway, the city has earned a global reputation as a life science cluster. But it's about much more than multinationals.
A wider ecosystem of startup activity attracts serious talent and investment from all over the world as English med-tech entrepreneur Chas Taylor can testify.
"If you're in med tech, establishing a facility in Galway is a strong choice," he says.
"We raised money for our first company in the UK but had the idea that we could do things quicker and better in Galway."
He was right. Abbott acquired his firm, carotid stent specialist MedNova, in 2005. At the time, it was one of Ireland's biggest med tech success stories.
Today, Taylor is on the verge of commercialising his new venture, Veryan Medical, which is another cardiovascular device company that makes innovative stent treatments for the lesions that block blood flow to the lower part of the leg. It's the latest step in a journey that started over a decade ago.
Taylor and MedNova co-founder Paul Gilson were asked by the technology transfer office of Imperial College London to take a university spin-off company to the next level. Based on research by Colin Caro, professor of bioengineering at Imperial, the patented technology needed commercial and regulatory expertise to manage its transition from laboratory to marketplace.
Taylor would become chief executive at Veryan, and Gilson chief scientific officer, but only after the company founders had agreed to a fundamental strategy change.
"We thought the technology was fascinating but we didn't think their application was right," recalls Taylor. "We said we'd participate if we could change the strategy to focus on stents in a more commercial marketplace. The board agreed and we joined in 2006."
Identifying a commercial opportunity and realising it quickly in a highly regulated field has become a core skill for Taylor - one that inevitably attracts investor interest.
Seroba Kernel, a Dublin-based life sciences venture capital firm, liked the opportunity and invested in Veryan.
Partner Alan O'Connell explains why. "We knew Chas and Paul as solid entrepreneurs we could work with. The other attraction was the novel stent technology they were focused on for peripheral vascular disease, a large market with limited innovation," he says. "It's worth in excess of $1bn and growing fast, largely because of increasing levels of obesity and diabetes."
The Veryan headquarters is located just outside London, but all the R&D activity takes place in Galway. Taylor and Gilson had been aware of the emerging tech cluster since the mid-1990s when they both worked for US healthcare company Bard. Bard was one of the first to leverage the tax breaks that initially made Galway attractive. Subsequent government initiatives enhanced its appeal.
"Enterprise Ireland was very helpful to the early companies that came and the Irish government did an incredible job putting together university programmes to support biomedical engineering. The rest is history," says Taylor.
Veryan has 15 of its 20 staff working out of its office in the Parkmore business and technology campus, recruited at all levels, from graduates to senior management.
It shows that the ecosystem is working, according to Alan O'Connell. But it's not just about providing a pipeline of talent: it's about keeping close to companies that may be suitors when it comes to acquisition.
"From day one when we get involved with a startup we have to be cognisant of the exit strategy and the vision for the company," says O'Connell.
"The most likely option for Veryan is a trade sale to a larger med tech corporate. There are around eight potential companies. We know them all and are constantly interacting with them."
O'Connell describes the process as building value with "intelligent capital", making a business more valuable to ensure a return for investors at the point of exit. He describes three distinct stages on the journey: developing the technology, putting it to test, and commercialisation.
Seroba Kernel had been tracking Veryan's progress for some time and got involved in the second phase, leading a syndicate investment of stg£3.6m in 2010 when the firm was looking to fund human trials after animal tests had been successfully completed.
"A company comes to us with an interesting technology; we look at it closely, talk to clinicians, corporate executives and try to confirm if there is a real clinical need and commercial market for it," says O'Connell, who took a place on the board when funding was committed.
The "first-in-man" studies followed and delivered compelling data.
"Veryan took the unusual and brave decision of comparing themselves to the existing gold standard treatment," says O'Connell. "It was risky but the right thing to do because it proved we had something really unique. We had stellar results."
This was a major step towards getting the CE mark, the stamp of European regulatory approval that is a vital milestone on the path to commercialisation. In January, a further stg£18m was raised to launch the product in Europe and Asia and to continue studies towards US FDA approval.
The endgame may be in sight but all concerned are too experienced to take their eye off the ball.
"Investing in innovation is high risk with potential high rewards," says O'Connell. "The relationship you build with a CEO and senior management is critically important because all of these companies will have their ups and downs. How the management team and board respond is key to success."
Chas Taylor is pleased with his firm's progress and fully expects to double his workforce in Galway, recruiting marketing and management people as the product takes off. The firm will also focus on FDA approval, the regulatory requirement for selling into the US, still the biggest market for medical devices.
There is no risk, however, that market forces will compromise Veryan's commitment to Ireland.
"This country is a great base for launching a global company," he says. "I expect our development and manufacturing operations to continue to be successfully run out of Galway."