Business / Industry Sectors
Medical Device Makers Look East

Like many in the medical-device business, Larry Jasinski built his career in Massachusetts. Now he spends much of his time in Israel. In 2012,  the former Boston Scientific (BSX) exec became chief executive officer of Argo Medical Technologies, a 42-person startup in Yokneam Illit, Israel. Argo’s main product is the ReWalk, an exoskeleton for helping paraplegics walk again. The company’s research facility is at a Yokneam industrial park, which Jasinski says has become a center for health-care innovation. “Everybody here is a medical-device company,” he says. In Israel, “we are on the cusp of a golden age of medical-device investment,” says Jonathan Medved, founder and CEO of Jerusalem-based OurCrowd, a crowdfunding site that has invested in Argo.


Startups are forming worldwide, and companies—even American ones—are thinking more about how to innovate with non-Western patients in mind. “Traditionally, people have been very focused on the U.S. market, but now making sure a device is efficient enough to be sold in places like India and China is critical,” Medved says. “If you build it for the U.S. market [only], someone will ambush with a more efficient product for emerging markets.”


Nishith Chasmawala, from the University of Massachusetts at Lowell, co-founded Consure Medical two years ago in New Delhi. The company is developing a device to help intensive-care patients and others suffering from an embarrassing and dangerous condition: fecal incontinence. “It’s not glamorous,” he says. “But it impacts about 100 million patients worldwide.” India is hardly a global center of medical technology, but engineers there earn a fraction of what their counterparts get in the U.S., and this makes it easier to create low-cost devices that locals can afford. “We were able to go from standing start to proof of concept for less than $10,000,” Chasmawala says, adding that the company would have needed 15 times that amount in the U.S.


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Big device companies in the U.S. are finding opportunities for partnerships with startups and established players. Minneapolis-based Medtronic (MDT), the world’s largest maker of heart rhythm devices, announced an alliance with India’s Apollo Hospitals. The two will collaborate on products to treat kidney damage, with Medtronic investing 1.5 billion rupees ($24 million) in research, development, and manufacturing in India.

In 2012, Argo opened a second headquarters near Boston. “In Israel it’s easy to be a startup but harder to be an operating company,” says Jasinski, citing tax breaks and other incentives from the Israeli government. “In the U.S., you have talent that’s experienced in quality, regulatory, distribution.” That talent and experience also apply on the financial side of the business. With U.S. investors “you get the best valuation,” says Shreekant Pawar, co-founder of Diabeto, a Mumbai-based startup that has developed an app that allows diabetics to collect their insulin data on their smartphones.


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Consure CEO Chasmawala is considering opening office in U.S this year. Consure will continue to develop technology That Indians can afford. “A product that works in India has much larger potential,” he says.


Source: Bloomberg Businessweek – Companies & Industries



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