A new partnership by Johnson & Johnson Innovation could bring more medical device investment to Houston, helping spur the local tech community and reverse a decade long trend of low venture capital funding in early stage medical device companies.
“So much of modern medicine is device-based,” said Dr. Bruce Rosengard, vice president of Medical Devices at Johnson & Johnson Innovation. “We need to keep the pipeline flowing to help patients.”
Johnson & Johnson Innovation announced this week that it has invested in the Irvine, Calif.-based NXT Biomedical Therapeutic Device Incubator, which plans to invest up to $25 million in new technologies over the next five years. One of the incubator’s founders and financial backers, Deerfield Management, has likewise allocated up to $250 million for the development of five to eight startup companies that emerge from the incubator.
Led by Stanton Rowe, who helped create the coronary stent and transcatheter heart valve, the incubator and its partners are creating a list of ideas to tackle. NXT Biomedical plans to develop many of these in the Center for Device Innovation at the Texas Medical Center, a collaboration between TMC and Johnson & Johnson Innovation.
Such backing is the type of investment that Houston’s broader tech ecosystem is eager to receive. Gaby Rowe, CEO of startup hub Station Houston, expects similar announcements in industrial tech, where some entrepreneurs are already moving to Houston to be near the city’s big industrial corporations.
“These are the kinds of serious deals that I think we’re going to see more and more of in Houston,” said Rowe, of no relation to Stanton Rowe. “And they’re going to be moving out beyond the medical devices, the health care areas that TMCx and Johnson & Johnson have been doing great work in.”
The Center for Device Innovation got up and running in February 2018. Johnson & Johnson provides the research and development staff and a host of engineering equipment, including a machine shop, 3D printing lab and virtual reality demonstration area. The Texas Medical Center provides scientific and clinical expertise.
Together, the organizations are equipped to help devices at any stage of development — from just an idea through trials and commercialization.
And with the NXT Biomedical partnership, the Center for Device Innovation could potentially access more capital and accelerate development.
The last decade has seen a roughly 85 percent drop in venture capital funding of early stage medical device companies nationwide, Rosengard said. The drop could be caused by a host of reasons, such as venture capitalists wanting the quicker results found through investing in consumer technologies or wanting the more attractive returns pharmaceuticals provide.
“The primary goal is to bring medical devices to patients worldwide,” Rosengard said. “… You can’t help patients, you can’t develop devices without capitalization.”
This mission to help patients is aligned with the NXT Biomedical incubator, which brands itself differently from typical incubators that focus on already existing startups.
“We take crazy, disruptive ideas and make them into companies,” said Stanton Rowe, the NXT Biomedical CEO.
He and co-founder Dr. Robert Schwartz, a renowned cardiologist who founded the Minnesota Cardiovascular Research Institute, are both prolific inventors. They have more than 200 patents that have been issued or are pending.
Rowe’s inventions helped revolutionize cardiovascular surgeries. The coronary stent is used to prop open a clogged artery and keep blood flowing to the heart. He later augmented that development by creating a drug-eluting stent that slowly releases medicine to prevent tissues from growing and reclosing that artery.