When you think of the biggest centers in the world for medtech, places like Massachusetts and Minneapolis naturally come to mind. After all, that’s where many of the largest medical device companies—Boston Scientific, Medtronic, and St. Jude Medical, among them—are based.
John Power hails from a completely different cluster. A native of London, Power built his startup company, a medical device maker, Aerogen, in Galway, a city on the West Coast of Ireland with a population of about 80,000. After a variety of twists and turns, Power gained control in a management buyout in 2007. It’s now profitable, and generates $40 million or so per year in revenue selling a vibrating mesh that turns liquid drugs into particles absorbed into the lungs—a drug delivery system used in critically ill patients on ventilators. It’s a modest sum, to be sure, but Power has taken Aerogen from startup to a company with a technology that is used in intensive care units in more than 60 countries around the world.
He also isn’t the only one in Galway with a story like this. That’s because over the past 30-plus years, Galway, historically a farming city, has become home to one of the largest medical device clusters in Europe. That’s owed, in large part, to the Irish government wooing large, multinational companies to the country with grants and tax incentives to set up manufacturing plants and distribution hubs. C.R. Bard got the ball rolling when it set up a plant in Galway in 1982 to manufacture products for coronary and vascular disease. It was later joined by the likes of Boston Scientific, and Medtronic—when it acquired Arterial Vascular Engineering, the company that bought C.R. Bard’s plant. Though others like Covidien (formerly Puritan Bennett), Merit Medical, and Beckman Coulter have joined and established plants of their own, Boston Scientific and Medtronic are now the cluster’s anchors. They employ more than 5,000 people combined. Now, 80 percent of the world’s global stent production now comes out of Ireland, and Galway is a big reason why.
Other elements have come together because of those anchor tenants. Indigenous Irish startup companies began to spring up around the multinational corporations, often led by ex-employees: MedNova, for instance, was founded by a former member of C.R. Bard in 1998; it was acquired by Abbott Laboratories seven years later. A concerted effort began to try to move the industry from just a manufacturing hub to one known for research too. Government initiatives spurred the development of research centers like the Regenerative Medicine Institute and the Galway Medical Devices Centre of Excellence. The National University of Ireland, Galway (NUI Galway) started spinning out startups. Apica Cardiovascular, for instance, one of the startups incubated at NUI Galway, was just bought by Thoratec for $75 million over the summer.
Power is a product of this ecosystem. An engineer by trade, Power came to Galway, where his parents were originally from, in the early 90s to work for Puritan Bennett to develop a new life support ventilator system. That work gave Power both entrée in to the medical devices industry, and a problem to fix. Working on such systems, he saw there’d been little innovation in the delivery of drugs to patients on ventilators for decades.
“I’d always had an interest in looking around the fringes in technology, where you see little mismatches and gaps in technology spaces,” he says. “It’s like going to buy a top-of-the-range BMW and finding that when you’ve got this thing, all it has is a transistor radio.”
Rather than move to California at Puritan Bennett’s request, Power stayed in Galway. He set up a consultancy called Cerus Medical and did some work for companies like Abbott. But in the back of his mind wanted to build a business that could replace that ‘transistor radio’ in ventilators.
Power found a technology he could work with in a company out of Sunnyvale, CA, called Aerogen, which was trying to develop a way to deliver inhalable insulin. He cut a deal to license that technology and optimize it for hospital use, and merged his company with Aerogen a few years later (Power’s entity was then called Aerogen Ireland).
The combined company struggled. It went public in 2000, and the market crashed, taking a number of biotech and medtech companies down with it. The company was sold to Nektar Therapeutics in 2005 for just $32 million. Two years later, Power cut a deal with Nektar to buy out the part of the business he’d been trying to create from Galway—what’s now known as Aerogen—for $10 million. It’s got the product Power envisioned, the OnQ: a dome-shaped aperture plate that effectively filters liquid drugs into tiny, consistently sized droplets that are sprayed into the lungs. It now employs 40 or so people. And Power is eyeing more indigenous growth and thinking of a return to the Nasdaq on the back of his own technology someday.
I spoke with Power about his story, what it’s like to build a company from the western shore of Ireland, and the unique challenges facing medtech entrepreneurs these days. Here are some edited excerpts from our conversation.
Xconomy: What led you to start up a company in Galway?
John Power: I moved back here because I used to be here every year and all my family connections were here. It was really for personal reasons; it wasn’t for any other reason.
X: What was the entrepreneurial scene like when you came here?
JP: The access to funding and all those things—we didn’t have any of that really. Ireland did not have much of a history of product design of any sort. It was manufacturing. Some auto manufacturing had been in the country for a while, but really the tech side started when … Next Page »