A community hospital’s on-site incubator is fostering greater understanding between startup entrepreneurs and the government officials who review and regulate their innovations.
One of the greatest advances to come out of the Fogarty Institute for Innovation may not be a product but rather a partnership. Since 2015, the institute has been home to a pilot training program with the U.S. Food and Drug Administration (FDA) that helps medical device entrepreneurs and government regulators better understand how the other side thinks.
Innovating at a Community Hospital
The not-for-profit incubator was established 10 years ago on the campus of El Camino Hospital by Thomas J. Fogarty, MD, a cardiovascular surgeon who invented the balloon catheter and founded more than 45 medical device companies. Currently, 10 startups are in residence at the institute, where they have access to a lab, offices, conference rooms, and an engineering space. The startups receive full-time mentoring from the organization’s internal team, as well as robust external advice from seasoned entrepreneurs, lawyers, venture capitalists, and other experts on topics such as intellectual property, fundraising, employment agreements, and organizational development.
The institute’s presence on the El Camino Hospital campus allows innovators and physicians to collaborate on potential solutions to key clinical challenges in women’s health, cardiac care, and diagnostics, among other areas.
“We give startups the opportunity to participate in a real-world medical environment, which is something they truly need,” says Andrew Cleeland, the institute’s CEO. “The startups are able to interact with the nursing and medical staff at El Camino, so they not only get expert advice, but they also have the opportunity to observe them in practice. If these companies can gain the attention of community hospital clinicians who tend to be more focused on direct patient care, they’ve gained some real-world buy in.”
Frederick St. Goar, MD, FACC, director and vice chairman of the institute’s board of directors, agrees that being located at a community hospital gives startups in residence a feel for how clinicians practice away from the ivory towers of some academic medical centers. “Innovators get to see what bread-and-butter health care is, which helps them understand their broader market,” says St. Goar, who is also a board-certified interventional cardiologist on staff at El Camino Hospital.
The hospital benefits as well, particularly in the areas of physician recruitment and philanthropy, St. Goar says. Having an innovation center on campus demonstrates the hospital’s commitment to new technology, which helps attract high-quality physicians. It also provides a vehicle for tech philanthropists who may want to make a gift to the hospital that goes beyond bricks and mortar. “The institute expands our philanthropic community and helps us tap into resources that we might not otherwise have access to,” says St. Goar, who also serves on El Camino Hospital Foundation’s board of directors.
Providing Insight Into the Approval Process
Several times a year, the Fogarty Institute hosts a 10-day training program that introduces FDA staffers to the challenges that early-stage startups face in bringing their devices to market. The FDA staff are embedded with the companies in residence and for two weeks live the life of a startup. They also receive information on topics such as fundraising, intellectual property, clinical trials, and reimbursement.
“For our companies in residence, we are humanizing the FDA and providing them an interaction with FDA staff members that they wouldn’t get anywhere else,” Cleeland says. “We also get to humanize early-stage innovation to the FDA. The FDA is used to dealing with the Medtronics, Abbotts, and Boston Scientifics of the world, but not necessarily these small companies that face a different set of challenges. We think that the more the FDA understands early-stage innovation and invention, the better it will be for the ecosystem.”
The training program helps regulators and innovators understand the value that the other side brings, St. Goar says, as well as the challenges they face. For example, both reviewers and entrepreneurs may struggle with understaffing issues that affect their workloads.
Their overall objective is often similar as well. “When both groups are together in the same room, they find out that, at the end of the day, they have the same goal: to provide effective care to our patients,” says St. Goar, an experienced entrepreneur in the device industry. “Beyond creating understanding, the program empowers innovators because they have a much clearer perspective of what they need to do to deliver a product that is deemed safe and effective by the FDA.”
Gabriel Sanchez, cofounder and CEO of one of the institute’s companies in residence, Zebra Medical Technologies, says the training has given him a greater understanding of how the FDA thinks. “It has helped me reflect on my responsibilities in running the company and creating a product that will positively impact patients’ well-being in the most efficient and safest way,” says Sanchez, whose company is developing a noninvasive imaging system to visualize skin cancer in real time.
“The program also gives the FDA a rare glimpse into Silicon Valley startups,” Sanchez says. “They have been surprised by some of the challenges we face, particularly when it comes to fundraising. That has opened up an interesting dialogue.”
Murray Sheldon, MD, associate director of technology and innovation at the FDA, expressed similar sentiments during a 2016 interview with the Fogarty Institute’s online newsletter.
FDA staff were “surprised by how little they understood about many of the challenges faced by startups,” Sheldon said, “including raising capital, establishing a supply chain of materials they need, setting up animal labs, conducting clinical trials, and putting all the pieces together. Our staff went in with their eyes wide open and came out as a different kind of reviewer.”
Currently, eight FDA staff members from the Office of Device Evaluation (ODE) and other offices participate in four training sessions per year at the institute. The FDA ensures that none of the participating staff are the same reviewers who would interact with the startups during the regulatory approval process.
In the short term, the partnership could help the FDA create new policies to help streamline approvals, such as guidance documents for companies that conduct early feasibility studies. The broader benefit could be improved transparency between regulators and the medical device industry. “We’re creating an environment of open communication and collaboration,” Sanchez says. “This will result in higher-quality submissions and more innovative devices making it to patients.”
From Promise to Product
Cleeland says the institute is exploring how to replicate the FDA partnership with global regulatory agencies.
Last year, of 44 companies that applied for residency in the institute, only four were accepted. Typically, companies will stay in residence for about two to three years until they complete the first or second round of financing through private-equity investors and venture capitalists.
Among the companies that have graduated from the residency program at the Fogarty Institute are:
- HeartFlow, which created a noninvasive test for coronary artery disease
- InterVene, which offers a treatment for chronic venous insufficiency
- PQ Bypass, which developed a percutaneous approach to bypass the femoral artery that delivers results comparable to traditional bypass surgery
- Niveus Medical, which created an electrical muscle stimulation device to prevent muscle deterioration during extended care
- Prescient Surgical, which develops products to reduce surgical site infections
- nVision Medical, which is developing devices for women’s health
- InPress Technologies, which offers a device to stop postpartum hemorrhage
“As an educational incubator, our goal is to cultivate tomorrow’s innovators, accelerate the development of new therapies, and elevate the global ecosystem,” Cleeland says.
Laura Ramos Hegwer is a freelance writer and editor based in Lake Bluff, Ill.
Interviewed for this article: Andrew Cleeland, CEO, Fogarty Institute for Innovation, Mountain View, Calif.; Frederick St. Goar, MD, FACC, vice chairman, board of directors, Fogarty Institute for Innovation; Gabriel Sanchez, PhD, co-founder and CEO, Zebra Medical Technologies, Mountain View, Calif.