Beehive State Is Abuzz with Medical Device Manufacturing

Author: 
Bob Michaels
With more than 100 biotech firms, Utah is becoming a big blip on the country's medtech radar
From its stunning red sandstone deserts and rugged mountains to its world-famous national parks, Utah is quite a looker. Add to this a dash of culture—most famously the Sundance Film Festival—and you already have several reasons for paying a visit to the Beehive State. But if you’re a medical device manufacturer, you have even more reason for keeping an eye on Utah—its rapidly expanding medtech industry.

Totaling 116 companies, the state’s medical device sector encompasses establishments that are primarily engaged in manufacturing medical equipment and supplies. The majority of the state’s manufacturers produce a host of medical devices, including MRI equipment, ultrasound equipment, pacemakers, hearing aids, ECGs, electromedical endoscopic equipment, laboratory equipment and furniture, and surgical instruments, appliances, and supplies.

Mountain-State Hub
Salt Lake City–based company Nelson Laboratories offers microbiological testing.
Although Utah’s medical device sector may appear modest in comparison with such high-tech hubs as California and Massachusetts, appearances can be deceiving. “We’ve had some great companies here for a long time,” says Jeff Nelson, president and CEO of Nelson Laboratories (Salt Lake City; www.nelsonlabs.com). A provider of quality assurance testing, Nelson Labs offers more than 400 different tests for customers in the medical device, pharmaceutical, dietary-supplement, and tissue industries. But its specialty is microbiological testing, which aids customers in determining their products’ bioburden and in deciding upon the parameters required to achieve effective sterilization.

Utah boasts many well-established medical device manufacturing companies, and more are on the way, Nelson emphasizes. “We were recently rated as one of the most dynamic economies in the country for getting business started and for having good local governmental support and programs to encourage business.”

Ron Wortley, president of Medron Inc. (Salt Lake City; www.medroninc.com), agrees with Nelson that Utah is no slacker when it comes to medical device manufacturing. “I moved to Salt Lake City in 1973. At that time, the area was known to have more medical companies per population base than most states. Salt Lake City provides a good source of educated and motivated workers.” Medron develops and manufactures disposable medical products, specializing in vascular-access products and ancillary items for catheter placement. The company, according to Wortley, has developed or codeveloped several of the leading vascular-access products currently on the market.

Schools Sweeten the Pot

“Surprisingly, there are a number of very mature device manufacturers in the state,” remarks Matt Lowe, vice president of medical devices at software solutions provider MasterControl (Salt Lake City; www.mastercontrol.com). In addition to Myriad Genetics Inc. (Salt Lake City; www.myriad.com) and Moog Medical (formerly Zevex; Salt Lake City; www.moog.com), for example, the state is home to divisions of C.R. Bard (Salt Lake City; www.crbard.com), Becton Dickinson Medical (Sandy, UT; www.bd.com), and Fresenius (Ogden, UT; www.fmcna.com). There are a number of smaller companies and start-ups in the area as well, Lowe adds. “I think medtech companies are attracted to Salt Lake and Utah for a number of reasons. Utah has a well-educated, stable workforce that is relatively low cost compared with regions on the Eastern and Western seaboards.”

Indeed, several colleges and universities in Utah offer programs to prepare students for a future in the medtech sector. “The University of Utah (Salt Lake City; www.utah.edu) has the most-renowned program in the area,” Lowe says. “Its associated hospital and medical school are also well known for innovation in the device arena, particularly in the areas of orthopedics and cardiovascular devices.” The university, he adds, has a program to encourage collaboration with industry and commercialize innovations developed by students and faculty.

Established in 1974, the University of Utah’s bioengineering department is well known for conducting interdisciplinary basic and applied medical-related research, concentrating on the study of artificial organs such as the heart-lung machine, the intra-aortic balloon-pump heart-assist device, the artificial eye, the artificial heart, and the dialysis machine. The department has also contributed to the development of biomaterials and drug-delivery technologies. Currently, the department’s research activities are focused on biobased engineering, biosensors, medical imaging, biomaterials, biomechanics, computation and modeling, drug and gene delivery, neural interfaces, computational bioengineering, and tissue engineering.

Medron’s Wortley also underscores the importance of Utah’s educational institutions for the state’s present and future medical device industry. “The University of Utah,” he says, “is well known for creating and spinning off many very successful medical discoveries and corporations. Also of importance for educating students to play future roles in the medtech industry is Brigham Young University (Provo, UT; www.byu.edu).”

Planning for the Future

“Many of the medical device initiatives in Utah are early-stage companies—spinouts from the university or from other companies,” echoes Michael Feldman, life science executive-in-residence at the Utah Technology Council (UTC; Salt Lake City; www.utahtechcouncil.org). For example, WorldHeart (Salt Lake City; www.worldheart.com) acquired a University of Utah spinoff called Medquest, which developed an LVAD. “World Heart was so impressed with the resources in Utah that it established its headquarters here,” Feldman notes.

UTC supports medical device companies by focusing on their common needs: a quality workforce, advocacy, and funding to help them develop and grow. Its role is to serve as an advocate to ensure that the state establishes programs through either venture or seed funding to be able to support both mature companies as well as start-ups. UTC also tries to make local companies aware of different funding alternatives—including those from the federal government.

A primary state source of funding is the Governor’s Office of Economic Development (GOED; www.business.utah.gov). In 2008, GOED, for example, offered Nelson Labs $2 million in tax credits for a 10-year period, enabling the company to open an expanded facility in the Salt Lake City suburb of Taylorsville in January. In addition, Nelson hopes to add 75 to 100 jobs—including technicians, client-services managers, and microbiologists—to its existing staff of 320.

Nelson Labs is not alone. In August 2009, GOED offered Edwards Lifesciences Corp. (Irvine, CA; www.edwards.com) an incentive of up to $11.5 million over 15 years in exchange for the heart-valve manufacturer’s pledge to create at least 1000 new jobs and retain 228 positions in Utah. In response, the company has announced that it will move into a 280,000-sq-ft space in Draper, UT, nearly quadrupling the size of its facilities in the state and adding manufacturing and R&D positions. And not to be left behind, Merit Medical Systems Inc. (South Jordan, UT; www.merit.com), a manufacturer of disposable medical products, has accepted an incentive package from the state worth up to $4.4 million.

Another source of financial support is the U.S. Department of Labor’s Workforce Incentive and Regional Economic Development (WIRED) grant, which is facilitated through GOED’s state science advisor’s office. “Our state has qualified for a WIRED grant,” Nelson states. “This money is basically designed to promote programs where there’s going to be a partnership between education and life sciences workforce development.” Associated with the WIRED program is an incubator called the BioInnovations Gateway, which partners with Utah Science, Technology, and Research (USTAR; Salt Lake City; www.innovationutah.com) to recruit professors that focus on research with high potential for commercialization.

USTAR, the WIRED initiative, the BioInnovations Gateway, and UTC represent what Nelson describes as a long-term plan for how to grow the life science industry in Utah. “UTC is forward-thinking enough to try to bring industry together to develop a plan focusing on the state’s strengths and understand where the gaps are and how they can be filled,” he says. “This bodes really well for our future.”.