The 2002 Globe 100
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Medical device firms invigorate state
As one of the top US hubs, Mass. sees 36% rise in venture funding
By Naomi Aoki, Globe Staff, 5/21/2002
he state's medical device industry is nearly 300 companies strong, employs 21,000 people, and manufactures more than $4 billion worth of products within Massachusetts's borders, making it the second- or third-largest hub for the industry in the nation.
Venture investment in the region's medical device industry grew 36 percent to $196 million last year, according to a recent report by the authors of the Index of the Massachusetts Innovation Economy.
More than 10 percent of the state's patent applications from 1996 to 2000 were related to medical devices, and nearly one in nine publicly traded high-growth companies in 2000 was in the medical device field, the report stated.These and other findings, released last month, underscore the importance of the industry to the Massachusetts economy and its potential to help lead the state out of the economic slowdown, said Thomas J. Sommer, president of MassMEDIC, a trade organization for the industry.
"The market for medical devices and new medical technologies is strong," Sommer said. "Baby boomers want access to new medical technologies to maintain an active lifestyle. The growth of the industry has been strong and steady over a sustained period of time, and it will continue to grow."
Ryan Rauch, an analyst at Adams, Harkness & Hill in San Francisco, said the Boston area is widely recognized as having among the nation's strongest medical device industries, behind Minnesota and California. He said the state has a mix of established firms, emerging companies, and start-ups working on medical problems.
Medical devices have helped reduce the invasiveness of surgeries, shorten recovery times, and lower medical costs. Pacemakers jump-start faulty hearts, pumps deliver life-saving insulin to diabetics, and stents prop open once-clogged hearts.
The state's largest medical device maker, Natick's Boston Scientific, is a leader in devices for minimally invasive surgeries. Today, the company is in a heated race to market the first drug-coated stent, a device to prop open and prevent the reclogging of cleared arteries and a technology that Rauch believes could inspire a new surge of investment.
The state is home to many companies, large and small with innovative technologies, he said. Those include Abiomed, a Danvers company developing an artificial heart; Aspect Medical Systems and Physiometrix, two companies with systems that monitor patients during anesthesia; Zoll Medical, a Burlington company making automatic heart defibrillators; and Cytyc, a Boxborough company with tests to screen for cervical and breast cancers.
"It's an eclectic industry," Rauch said. "There's no one space in devices that is the Holy Grail."
A University of Massachusetts analysis of 1997 economic census data, released last year, showed that the medical device sector is also closely tied to the state's other high-tech industries, such as electronics, telecommunications, software, and biotechnology. For every $1 million of medical devices, $88,900 was invested in electronic components -- nearly $24,000 of which were purchased from Massachusetts suppliers. And the relationship is reciprocal, said Alan Clayton-Matthews, the report's author: Electronics help spur advances in medical technology, which in turn spurs innovation in electronics. "All these different sectors are supplying and buying from each other and supporting each other," he said.
Naomi Aoki can be reached at email@example.com.