Tipping the scales

Starting a business is hard. It’s why we extol founders who take a commanding lead in their respective industries, and romanticise in TV and movies the grit and determination it takes to be successful. But all the determination in the world can’t change the fact that, statistically, going from start-up to scale-up and reaching profitability is an unlikely feat. In terms of raw numbers, nine out of 10 start-ups fail within 10 years of their inception – and this figure is industry agnostic. In the medical device industry, where regulation is stringent and the burden of evidence to obtain commercial approval is high, the uphill climb can be even steeper. It’s for good reason of course; a flaw in medical equipment poses much too high a risk not to take the finetoothed comb approach. But it also contributes to the reason it costs an average of $94m to bring a medical device to market through the FDA’s pre-market approval process in the US. This drops to $34m for its 510(k) process, which has a much lower evidence burden so long as makers can demonstrate its similarity to another device already on the market.

Getting a leg up

Of course, these numbers are specific to the US regulator, but with a much more stringent regulatory framework in Europe now, courtesy of MDR (Medical Device Regulation) and IVDR (In Vitro Diagnostic Medical Devices Regulation), it’s unlikely that the expenditure required to reach an approval is much less. In fact, in December 2022, Reuters reported that medical device companies were dropping Europe as a market for certain products due to the high cost.

At Scotland’s Heriot-Watt University, Duncan Hand, professor of applied photonics, leads the Medical Device Manufacturing Centre (MDMC). It’s here that he and his colleagues assist Scottish start-ups and SMEs in accelerating their journeys from start-up to scale-up, and hopefully reducing their odds of failure along the way. “In all areas, companies struggle to go from some initial design concept and early prototype through to manufacturing something,” he says. “But in the medical device area, it’s even more difficult because you’ve got the additional regulatory hurdles. We saw that as an area we wanted to focus on, and it fit with a lot of our research activity.”

Hand’s personal expertise is in the manufacturing space, looking at the use of high-powered lasers to weld together parts with different physical properties, like optical glass and metals, often at a microscale. His Heriot-Watt colleague and a co-investigator in the MDMC, Professor Robert Thomson, is developing deep UV light technologies in collaboration with the universities of Edinburgh and Bath for a project named U-care. The project brings together engineers, physical scientists, clinicians and biomedical scientists, to investigate the potential of deep UV light to kill infection and to remove tissues with extreme precision. Look at U-care and the other medical technology research projects of Heriot-Watt staff – a laser scalpel for minimally-invasive cancer surgery and a microfluidic chip that could improve biomarker detection in liquid biopsies – and it’s not hard to see the value of an in-house manufacturing centre.

But beyond that, the MDMC exists to help companies reach the point that they have a working product that can be commercialised, and having such varied expertise can be a boon here too. This is especially true considering the pool of knowledge doesn’t end with Heriot-Watt; the MDMC also includes partners Robert Gordon University and the universities of Edinburgh and Glasgow. “We’re a group of academics with different expertise, but all of us have this interest in medical devices in one way or another,” says Hand.

A helping hand

In terms of what the MDMC provides to Scotland’s medical device SMEs, it can vary greatly between use cases, with some having a good idea of how to manufacture their product, but needing access to the advanced suite of machinery the MDMC has to offer. Others, Hand says, need help going from product concept through to initial small-batch manufacturing and testing. “It may be that a company has a prototype which they’ve 3D printed, but they need something made in the way in which it will ultimately be manufactured,” he adds.

There’s value to be unlocked earlier along this journey too, as the ability to prototype and reach proof of concept can make all the difference when courting investors. To emphasise the value in this further, the MDMC’s services come at zero cost to the companies they work with, so they don’t have to weigh the cost of reaching proof of concept against the potential investment, nor do they have to worry about the financial risk of their design concept failing at the prototype stage. Instead, they have the advice of MDMC at hand and can take another run at it.

That advice can come in handy for navigating the regulatory environment too, says Hand. “It can be very important to understand some of the basic issues before spending too much money on developing [the device], because they might find they have to go back and redo some testing because it’s not been done in accordance with what’s required in order to get the medical device certification,” he adds. The advice the MDMC provides is not exhaustive, and Hand says companies will still likely have to engage with a consultant, but the few days of focused sessions it does provide “gets them off the starting block”.

Beyond the manufacturing side of things, the MDMC also has the equipment required to test products in a variety of ways, simulating the wear and tear they’d go through with age as well as the temperatures they might reach when shipped in different climates. “Standard testing procedures they need if they’re developing something that’s going to be used in a particular environment, say a hospital or for home use,” says Hand. “We can also do more analysis type testing,” he adds, including inspecting welds and profiling the surfaces of a device, as well as a failure analysis to find out where a company went wrong with their prototype.

Although the MDMC can’t certify that a product has been tested from a regulatory point of view, having the option to run a product through these sorts of analyses gives companies greater confidence going into certified testing. “We can make sure the company gets to a stage where they’re certain the product will survive the testing and they won’t have to pay for it and then redo it,” says Hand.

Once a product reaches the stage where it can be manufactured at scale, beyond the capabilities of the MDMC’s small-batch manufacturing, they can take the knowledge gained and a detailed technical report to start the next step of finding a contract manufacturer that can produce the scale of output they need. “We’re dealing with pretty micro-sized companies that are probably not going to get the technology in-house, at least not for some time,” says Hand. “We can give them the parameters we use, details of the equipment we use, and they can go to a third party that can provide this as a service.”

Vast expertise

Although the expertise at the MDMC is vast, starting it has been a learning experience for Hand and his colleagues as well as the companies they work with, and they’ve found themselves acquiring new capabilities to meet the evolving needs of fledgling medical device companies. “Injection moulding is something that was new to us, but we’ve been developing our expertise in,” says Hand. “We can manufacture a mould initially using 3D printing to test it out, then we can manufacture one out of tool steel using our electrodischarge machine.” This can be a huge advantage for a company looking to manufacture using injection moulding, as the step of making a mould can be very expensive, Hand adds. In this case, along with the technical document explaining the manufacturing process, companies that have a product made using injection moulding get a mould they can take on to a contract manufacturer when they’re looking to scale up production.

Hand says there are several ongoing projects at the MDMC and no shortage of companies looking to join the list of successful projects, of which he says there are about 20. Among the success stories are an improved radiofrequency coil for use in MRI research and a diagnostic device for prostate cancer. “Our main challenge at the moment is getting renewed funding to go forwards,” says Hand.

The MDMC was made possible largely by a grant in 2020 from the EU’s European Regional Development Fund (ERDF), with other sources of funding being the Advanced Manufacturing Challenge Fund (managed by Scottish Enterprise), Edinburgh and South East Scotland City Region Deal, and the partner universities. With the UK’s withdrawal from the EU, the ERDF is no longer an option, and to make things worse, a caveat to obtaining that funding in the first place was that the MDMC is not allowed to charge companies for its services for a further three years after the transfer of funding finishes. “We can’t immediately go to a business model of charging companies even now that we’ve built up a reputation, that’s why we need some follow-on funding,” says Hand.

In the future, the MDMC will move towards a model of charging larger medical device companies for their services to both expand its capabilities and offset the cost of helping start-ups, but in the meantime, Hand says it’s hoping Scottish Enterprise will support its work in the interim, with a proposal already under review there. With the amount of cost savings and free expertise on offer, Scotland’s medical device start-ups should be hopeful too.