Business and Science Intersect at Fourth Annual Musculoskeletal Conference

BY KAREN OTT MAYER

For the fourth year, Memphis hosted the Annual Musculoskeletal New Ventures Conference, which was held Oct. 10-11 at the FedEx Institute of Technology located on the University of Memphis campus.

Organized and hosted by MB Venture Partners, the conference was intended to connect minds with money to further investment in developing biotechnologies.

"This group is comprised of one-third entrepreneurs, one-third venture capitalists, and one-third large company scientists," said Gary Stevenson, managing partner of MB Venture Partners.

Stevenson said the conference represented an opportunity to expose new technologies and expand the opportunity for development.

Of the approximately 20 companies who presented during the two-day conference, six are now part of MB Ventures' portfolio. Those companies include AxioMed Spine Corporation, Anulex Technologies, BioMimetic Therapeutics, KFx Medical and BioSET.

"Our first fund raised $22.4 million with over half in musculoskeletal ventures," said Stevenson.

With local Memphians like Pitt Hyde and Bob Compton ever present with viable ideas, the biotech community in Memphis remains vibrant and growing. Stevenson reported that it's not uncommon for 2,000 surgeons to train at the Medical Education & Research Institute (MERI) during one month alone.

Venture capitalists seeking to invest had the chance to learn more as each company presented during 30-minute sessions.

More than 200 biotech professionals attended the conference, including at least one international participant. Attendees included leaders from major orthopedic companies in Memphis such as Medtronic, Smith & Nephew, and Wright Medical, as well as engineers and scientists who are both interested in growing their own companies and those working with large organizations.

Featured speakers included Mark Augusti, president of the Memphis Smith & Nephew division; Shawn McCormick, vice president of finance for Medtronic's Spinal and Navigation division in Memphis; and Gary Henley, president and CEO of Wright Medical Technology, Inc. Each day, participants also listened to surgeon and venture capital roundtable discussions.

Joseph O. Rolwing, executive director for the Tennessee Biotechnology Association in Nashville, attended the conference for the first time. "While we have Vanderbilt, Nashville's biotech community isn't as large as the one in Memphis and someone suggested I come to see how Memphis was doing things," said Rolwing.

James R. Gorman, PhD, president of the newly formed BioAssets Development Corporation located in Natick, Mass., attended the conference for two main reasons. "I came to see the other emerging technologies. We also have an active fundraising campaign going on. My expectation of this conference is simply to be able to cultivate one or two key relationships," he explained.

If one trend is increasingly clear for this industry, it is that the orthopedic and medical device industry is maturing.

"When you look at the pharmaceutical industry, there is very little true innovation. The medical device industry is still consolidating with the trend being towards more end licensing and acquisitions," said Stevenson.

With that said, companies such as Medtronic and Smith & Nephew want to cultivate partnerships that fit their overall strategies. "Twenty-five percent of our revenue comes from new products. We define new products as anything that has been available 24 months or less," said Augusti.

Augusti predicted growth areas would focus on bone healing and repair, solutions for younger patients, orthobiologics and joint fluid therapies. "We have to be constantly partnering and maintaining the internal expertise to evaluate opportunities," said Augusti.

Like Augusti, McCormick said that Medtronic's vision drives their partnering decisions. "If they're not strategically aligned, we're not interested in investing," said McCormick.

With Medtronic maintaining either the first or second place in all market positions, the $11 billion company must discover ways to continue to grow. "Good technology and products aren't enough to penetrate the market any longer. It has become more about patient access. Our biggest challenge is deciding what our priorities are," said McCormick.

In keeping with the whole idea of the conference, BioMimetic presented an opposite view, detailing its current journey to becoming a public company. President and CEO Dr. Samuel Lynch joined a panel discussion about the company's initial public offering (IPO) process, the challenges faced and lessons learned. Raising $50 million in three private fundraising rounds, the company currently has 15.6 million shares outstanding.

Memphis continues to support and invest in the growing biotechnology market, and as the two-day conference wrapped up, the words of Shirley Raines, president of the University of Memphis, best characterized the intent of the organizers and the spirit of the conference itself: "It is a place where business and science intersect."




November 2006