Transcript Starting a Medical Device Company: A Case Study Gerard L. Cote’, Ph.D. Department of Biomedical Engineering Texas A&M University.

Starting a Medical Device
Company: A Case Study
Gerard L. Cote’, Ph.D.
Department of Biomedical Engineering
Texas A&M University
Introduction- Where do you start?
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Money
Personal
Type of company
Location of company
NO!!!
IDEA!
(I started with a patent that my advisor & I wrote
when I was a grad student that we pitched to two
companies and one funded it as a grant to the Univ.)
What are the ways to fund a company?
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Venture Capital
Angel Investors
Bank Loans
Friends and Family
Personal Savings
Federal/State Grants (SBIR/STTR)
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How I started my first company as a faculty member
with my Ph.D. students
Regardless of the path, writing requests for
support are common, if not integral to getting the
money.
What are the Pro’s and Con’s of the
various funding mechanisms?
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Risk versus reward.
Who owns the
company?
How much are you
personally liable for?
How long are you
willing to wait?
Who do you need or want to start
this company with you?
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Board of Directors?
Scientific Advisory Board?
Employees
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Engineers
Scientists
Business people
Marketing
Secretarial
How much experience is required of each and how
much education?
Where do you want to be located and
why?
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Big City
Small Town (started here for convenience)
East Coast, West Coast,
Mid West, South, International?
Where is the money?
What is your family status/values?
Do you need to travel a lot?
What resources does the company need (personnel
& goods)? (Ended here for resources/travel)
What type of industry do you want
to become?
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Manufacturing, R&D, consulting?
Large company or small company?
Bioelectronics based, biomechanics,
biocomputers/software, biochemical,
consulting-think tank?
Getting Started- Requests for
Support
How do I request
support from the
government, private
foundation, or
VC’s?
Know your audience:
High Tech versus
Mostly Business?
The Case Study: BioTex/Visualase
http://www.biotexmedical.com
The Case Study: BioTex, Inc.
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Formed in 1997: The mission of BioTex is to explore,
develop, and commercialize novel optical
technologies for medical, biomedical, and
environmental applications.
Founders (G. Cote’, A. Gowda, R. McNichols, S.
Rastegar)
Currently roughly 15 employees (4 Ph.D.’s)
Focus – Early Stage Product Development using
Biomedical Optics including Diagnostics,
Therapeutics, Biosensing, and Imaging
Funding – Over $20M, primarily through SBIR funds
Where BioTex started
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Mailing address – P.O. Box at Mailboxes etc. in College
Station, TX
Working address listed as my home address; garage +
office space in the house.
After our first funded grant in the glucose area we rented
space in an old Bank building above the Subway in Bryan
Drs. McNichols and Gowda finally got paid but not well
for Ph.D.’s
We quickly got more funding and more Space in that
Building with more pay too!!
We hired our first BME UG student part time while he was
finishing his B.S. and also hired other part time technical
help UG’s in BME and my wife to keep the books.
The first Big Move for BioTex
BioTex was working very collaboratively
initially with the TAMU Vet School and
then with M.D. Anderson Cancer Center
and UTMB in Houston, TX
 In about 2000 the studies in Houston and
Galveston became more time intensive and
so we decided to relocate to Houston by the
medical center
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Current Facilities of BioTex, Inc.
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BioTex currently maintains a 4300 sq.ft. research and
development facility located at 8058 El Rio St. within
the Plaza Del Oro Business Center in Houston, TX.
The space includes a full array of engineering and
fabrication tools including dedicated areas for optics,
lasers, chemistry, spectroscopy, electronics, and
machining capabilities.
The facility is minutes away from the Houston Hobby
Airport and The MD Anderson Cancer Center with
convenient access to collaborators at other
surrounding institutions including Texas A&M
University and The University of Texas Medical
Branch at Galveston.
The Technology
Laser Therapeutics –
Heart/Brain/Spine/Prostate/Liver
 Laser Diagnostics – OCT Fluorescence
 Biosensing – Glucose
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The first spin-off: Visualase
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Visualase, Inc. was founded in 2005 as a spin-off from
BioTex, Inc., the original developer and current
manufacturer of the Visualase technology. Visualase, Inc.
is currently a privately held VC funded company located in
Houston, Texas.
MRI guided Laser
Therapy
The Companies Future
The Plan
 More Spin Off Companies – with VC or
Angels for the more mature technologies
 Maintain the primary company to continue
multiple early stage product developments
Potential Problems
 Personal issues for the spin offs
 All assets regarding spin offs
THANK YOU