Interview With Linda Chamberlain
Announcer: Welcome to Grand Rapids Insight, a weekly show featuring interviews with community leaders, business leaders, and individuals who are committed to building a stronger future. And now, here is your host for Grand Rapids Insight, Catherine Ettinger.
Catherine Ettinger: Welcome to Grand Rapids Insight. This week we are joined in the Foxbright Podcast Studio by Linda Chamberlain. Linda is the Executive Director of the West Michigan Science & Technology Initiative, an organization dedicated to creating an environment that inspires innovation and supports the commercialization of science and technology. Welcome Linda, it's a pleasure to have you on our show.
Linda Chamberlain: Hi Catherine, it's pleasure to be here.
Catherine Ettinger: Can you give us a brief history of the Initiative, when it was started, how it was formed?
Linda Chamberlain: Well the Initiative was actually started back in 2003. It was driven by a legislation from the Engler Administration, which created regions within urban communities called 'smart zones' and the smart zones themselves were dedicated for high technology activities and there is a certain tax recovery process that helps fund those activities in the region. Partners in our community came together and those would be the right place, Grand Valley State University, the Van Andel Institute, Grand Rapids Community College, and said let's form an incubator that we could fill with high-tech activity and so that's where it was birthed from those partners coming together, looking at some key legislation which drove a funding mechanism to create an incubator within our community for Life Sciences activity specifically.
Catherine Ettinger: There is a significant amount of investment taking place up on Michigan Street, The "Medical Mile" is that the preferred name now or --?
Linda Chamberlain: That is the preferred name.
Catherine Ettinger: Okay, and there is quite a bit of discussion about healthcare, Health Sciences, Life Sciences, Medical Devices. When people talk about life sciences what do they mean, how is it different from health sciences or medical devices?
Linda Chamberlain: Well truly life sciences enables the health sciences and if we think about what islife sciences? Life sciences is the study of life, it's the biology of life and that could be in the plant world, in the plant biology. It could be animals and veterinary medicine or it can be in human. If we look at what's happening in our community, we're primarily focused around human life sciences and that's the product and technologies that come from those early basic life studies. So the basic research will birth sort of the hypothesis and theories and from that births the products and technologies.
The health sciences, on the other hand, is actually patient care. So it's the clinical experience. You need both in order to develop product most certainly. If you're going to have a new product or technology in the life sciences which will enable better patient care, you are going to need to have a strong health sciences community; so we are absolutely in a key position in the Grand Rapids as we look at building our health sciences capability to have a compliment of building the life sciences capability.
Catherine Ettinger: Can you describe a bit more the landscape in West Michigan? How does everything fit together, the various hospitals that are growing?
Linda Chamberlain: We're busy, yeah we're really busy. If you look at it from a product perspective and really that's sort of my take on this because I'm a product gal. So if I look at trying to recruit companies to the region who want to develop life science product and technology, I can talk to them about what's happening geographically as well as what's happening in terms of the health of care and clinical side of things.
The first space that we're in, in a market sense is Oncology and the Van Andel Institute laid this groundwork for us by becoming a core basic research organization primarily in cancer research initially here and then to back that up from the health sciences and in the clinical and we have the Lex Cancer Center and of course the Lemmon-Holton Cancer Center of spectrum which will open here in 2009. So we have a good health sciences component and a good life sciences component in Oncology.
The next level is Neurology and the Van Andel expansion is about neurology. They are going to look at Parkinson's and Alzheimer's. We have the Howenstein (ph) Neurological Center opening up. So, again, compliments to be able to commercialize and develop life science product into health science or clinical practice. The next level is this this called Metabolic Syndrome and it's a --
Catherine Ettinger: It sounds scary.
Linda Chamberlain: It is kind of scary but this is one of those cases where, again, we can say Michigan is number one probably with not much envy in the sense that it's about metabolic disorders. It's diabetes, obesity, hypertension. It's those things that ail us due to environmental conditions or other genetic factors. We're number one, two, three, four, in and almost all of those ailments in the nation and with that if you want to flip that though from a product development perspective we have a wonderful patient base and a clinical practice opportunity to try out new products and technologies. So as a recruiting arm of it, it is not all negative.
The next area we're moving that we have predominance in is cardiovascular, and that is from the device side in particular, DLP with here and brought out by Medtronic in the late '90s as a great cardiovascular surgical disposal company, the spillout of those executives created other businesses since that acquisition, they are still in the region; strong, strong device capability for cardiovascular and then on the health sciences side we have West Michigan Heart and we have the MIRA (ph) Heart Center. And so again, good balance to be able to develop those products and put them in the market and then last but not least is OBGYN and that's where MHU is coming in strong and hence the creation of the Women's Health Institute which the initiative was a part of as well as Green Valley in Michigan State. So that's going to be their most predominant or their initial venture into clinical research and health sciences.
Catherine Ettinger: The medical school as well or --?
Linda Chamberlain: Medical schools is more or an overall residency training. From the research component we're goingto be looking at them taking a lead in OBGYN and the region here initially.
Catherine Ettinger: Okay. And then how does the initiative fit in?
Linda Chamberlain: Well, the Initiative if I've talked product is because that's what we talk at the Initiative. If you look back to our mission statement even we are predominantly about trying to create an innovative environment but more importantly making sure that we provide the services and the tools that help companies commercialize their products in that space.
We look at it as the means to the ends, with the ends being job creation and wealth creation in our community. The economic development organizations worry about that and have those as key metrics. We try to back one step behind that and say well, the companies that are coming into our region, how do we effectively help them manage the product development process which means all of the capabilities and capacities in the region. How do we plug and play all of the major or minor companies together to be able to help a product commercialization be realized.
Catherine Ettinger: The product ideas, does that come out of the health sciences, the patient care side of it, or out of the research in the life sciences area?
Linda Chamberlain: Yeah, either one of those. If you put say life sciences on the left hand and health sciences on the right, between those two hands I'd call it the translational bridge. The media would call that frequently the translational research bridge; that is the commercialization bridge and you can come from either direction. They're absolutely interdependent to develop the product that has patient care implications. You have to do clinical research if you are going to have something actually affect patient care in the long run.
So you can have healthcare ideas come back across the bridge and find opportunity to move back into commercialization --
Catherine Ettinger: To commercialize or something like that.
Linda Chamberlain: Yeah it could be a device; we probably see three to four doctors a week that have different product ideas as well as nurses, as well as folks in the community that have product ideas that would better serve a patient base. Or it can come from basic research in the life sciences or new technologies being translated into life science. In any case, we want to get it on that bridge so that it can be commercialized and into better patient care.
Catherine Ettinger: Then how do you help people do that and what's services does the Initiative provide?
Linda Chamberlain: Yeah when companies come in to see us and our typical client is -- well, our client can range from a startup, so we're looking at somebody who is not funded and has a very early stage in their product development. So an idea, maybe an early stage concept and they really don't have an appreciation for the journey they are going to walk on here. It takes a lot to develop a product. Yeah, the funding, those of you who are listening, who have started businesses, understand sort of the sweat equity that's going to be involved here and the passion and how you are going to have to champion, so we try to give them appreciation for the journey with always commercialization road map with them which is basically walking them through the mental exercise of this is the commercialization pathway.
Here is your detours, here is your road map, here is your possible detours, here is some different routes you may want to consider and we do that through looking at technical feasibility, financial feasibility, commercial feasibility, and then sort of strategic - can you get it done in the region. Is this the great product you develop at this time in this region, do we have the capability to be successful? So we really focus heavily on the commercialization side.
Catherine Ettinger: Okay, what do you have coming up? What's sort of the next adventure for the Initiative?
Linda Chamberlain: Adventure is a good word. Well, we have decided to take stock of where we are in five years. So this is our fifth year. We think we've done some wonderful work around both commercialization and helping small companies as they come in. Also around collaboration in the community which is building infrastructure to help commercialize product.
So whether it was something like a (Inaudible) which is really a collaborative organization of health care providers and educators that focuses on early stage clinical trial and actually revolutionizing early stage clinical trial or whether it's our Biotech Commercialization Project which is focused on, again with the healthcare providers and educators, pulling together the key ideas within their employee base and then driving those to market.
So we can look at startup commercialization and we can look at major corporations that are finding avenues to generate commercial ideas or other key community collaborations. We're involved on both sides of that. So I think we effectively can help participate and lead collaborations that help create capability that we have to have but it all backs into commercialization of product. What we would like to make sure we're positioning continually are community to be good at - is if you come here, here is the capabilities we have, here is how we're going to help you develop your product.
Ultimately will that create jobs in our community, yes; will it create wealth in our community, you bet. But what we're focusing on again is that translational bridge of taking people on that walk. The key focus for us as we go forward here for the next few years is going to be around med device.
Catherine Ettinger: Okay. So what are medical devices?
Linda Chamberlain: Well, medical device, we can call it medical product to be able to broaden that a little bit. Medical device primarily could be anything from an industrial commodity side and product breakthroughs that may change what is going on in the commodity side all the way through to hand held diagnostics at point of care.
So any and all of those; if we took a step back and took stock of where we were in terms of development of the Initiative in developing our community and we felt we were missing the shortest term opportunity for return on all this investment we are making around medical device.
So as we look forward in medical device from the West Michigan Medical Device Consortium and we are 24 company strong now since December 5th; we're real proud of that. Our goal is 50 by July. There are about 70 in the region that actually turn revenue in medical device, add them up there almost about $700 million in revenue, maybe north of that.
Catherine Ettinger: In this area --
Linda Chamberlain: In this area, between here and --
Catherine Ettinger: What's the national scope for medical devices?
Linda Chamberlain: Well, national scopes the total market is $114 billion I believe growing at 11-15% CAGR. It's a nice market to be in. However, it as well as other industries is changing. The purchasing model is changing, the structure by which product will be provided is changing. I can absolutely parallel it with Automotive where I spent six years of my career and it's moving in that direction, it's group purchasing, the group purchasing agencies are really beginning to take over.
Catherine Ettinger: Done through insurance then or it's more that --?
Linda Chamberlain: It's reimbursed through insurance; some product are reimbursed through insurance but commodity product is not. A lot of it's moving offshore. Margins are starting to be squeezed and we are crying our soup about that but as the consortium discussed just yesterday we probably better than most other device companies in the nation would appreciate how to position ourselves relative to that onslaught of change. We know how to play this game and so I think we should lead it versus trying tofigure out how to deal with it. Let's go ahead and lead supplier constriction, let's lead changing the value proposition and the supplier chain management. We can do this for these key OEMs and actually probably come out way ahead --
Catherine Ettinger: In terms of financing, that's always -- you hear quite a bit of noise that there is no money in Grand Rapids or you can't get capitalization and you need to leave the area to follow the money;, is that something that you guys help companies with?
Linda Chamberlain: We work very closely with the Angel Groups which are little earlier stage in funding and mostly our companies are earlier stage in their need for funding so we probably work most closely with the Angel Groups. As we move upstream and the commercialization efforts we run into the Venture Capital Groups and work with them. I actually hear the opposite story from the Venture Capital Groups, where are the deals? And so I don't know who is right.
Is it the company that wants the funding that it can't figure out how to get it or is it the Venture Capitalist that can't figure out the value of the company. I think we need to do a lot better. We need to approach this a little differently and really start having the dialogs about us and saying there are a core group of companies that have good ideas.
I would say to the inventors and the entrepreneurs get used to giving up a piece of your company, that's part of the deal and particularly in West Michigan we run across companies that just aren't and don't want to do.
Catherine Ettinger: It's hard to do.
Linda Chamberlain: We try to always tell them again and again and again is not the size of your slice, it's the size of your pie. So let's go back and think a little bit bigger than trying to figure out what's the size of my slice, let's think about how big we make the pie.
Catherine Ettinger: Excellent! How do you see Grand Rapids in the region evolving over the next several years. Yeah there are obviously -- it's a long-term life sciences and health sciences is all long-term, some short-term, long-term, what are --?
Linda Chamberlain: We're trying to balance the short and the long. If we look at the short-term through medical device, good medical device development is a two to three year return on your investment to market.
The long-term, the therapeutics looking at rolling key technology and discoveries out of the Van Andel and into drug development, that's a 15-20 year prospect. I think we need to balance all of that and work in partnership with other regions such as Kalamazoo which has such a strong therapeutic capability; how do we balance it across the region so that we look at playing to our strengths. Let's all just play to our strengths on this one.
I wish I had a crystal ball and could say in five years what is it going to look like. I think if we go back five years, none of us would believe most of what we see today and so I am excited because every day is an innovator at heart, what is tomorrow going to bring and what opportunities will present themselves that we didn't anticipate, that we can take advantage of?
So I am absolutely eager to see what happens and recently James Watson published his biography, one of the recipients of the Nobel Prize for the discovery of DNA and the name of his book was 'Avoid Boring People and other such things' which, I thought was kind of interesting; but he was really clear and said, "You need to set your sights on a goal that's attainable but at least three to five years ahead of everybody else. You need to surround yourself with people that are smarter than you," and so as a region are we doing that, are we looking three to five years ahead of where other regions are in the United States that are trying to do life sciences? Are we strategically positioning ourselves in certain core areas and saying that's where we're going to go. Are we stretching ourselves? Are we listening to people that are new to the community; we are recruiting a lot of top talent from the nation we will be?
These folks are coming in. They need to be leaders. We've got to make room for them. We've got to let them lead in these positions so a lot is going to change. It's all opportunity though.
Catherine Ettinger: Anything else that you want to touch on?
Linda Chamberlain: Other than to thank the community, I think we have had a good five years and a lot of that has to do with key partners. The healthcare providers in theeducators spectrum help Saint Mary's. Mary Free Bed, MMPC.
These have been organizations that have come in and supported us and have allowed us to work with them very closely and that's extremely rewarding but it helps all of us accomplish some goals.
Beyond that are core partners that are still there, we have Green Valley to thank immensely. They help fund us operationally as well as continue to subsidize the incubator space, our tenants subsidize us; I would like to thank our tenants for sticking with us and for us trying to help them, we are very proud. Recently Avalon Labs received a $66 million private equity investment.
So that's called a huge success in our book for an incubator company. We also like to thank the LDFA which is our Local Development Finance Authority, which is the City and the County, other players in our community for continued support of the Initiative as well. It's been a great five years.
Catherine Ettinger: That's outstanding. Linda I want to thank you for taking the time to be with us today and for sharing more information about the West Michigan Science & Technology Initiative and life sciences activity in the region.
If you would like to contact Linda Chamberlain she can be reached by telephone at (616) 331-5859. Or you can find more information on the Initiative's website at www.wmsti.org.
Until next week, this is Catherine Ettinger, for Grand Rapids Insight.
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