Connecticut is Home to a Robust Medical Device Startup Scene.
65 vibrant Medical Device Companies (MedTech), 11 Medical sub-verticals, $200M plus in disclosed financing raised across its 4 leading functional verticals, 6 core disease focus areas and nearly 30 young MedTech startups founded in just the last six years! The days of operating in stealth mode may well be over for the MedTech scene in the Greater New Haven Hub! It continues to rise in leaps and bounds and can no longer fly under the radar. The number of new active investors in the ecosystem continues to rise, as does the geographical size of the hub. The New Haven-Farmington-Guilford axis (from here on referred to as the NFG axis of Greater New Haven Biotech) accounts for more than one third of all MedTech companies founded. This innovation engine which is largely powered by intellectual property and managerial talent from frontier labs at Yale University & the University of Connecticut just may be getting the rocket fuel it needs for takeoff.
Figure 1: The New Haven-Farmington-Guilford axis (from here on referred to as the NFG axis of Greater New Haven Biotech) accounts for more than one third of all medtech companies founded. Unlabeled fields reflect Connecticut cities that have one Medtech Startup & whose names could not fit in the bubble. They include: East Windsor, Old Saybrook, Canterbury, Southbury, Wallingford, Torrington, Wilton, CT Bridgeport,Rocky Hill, Brookfield, Manchester, Mansfield.
General Surgery & Oncology Dominate the MedTech Scene in Greater New Haven
Oncology attracted the most funding, harvesting $62M in the most recent financing rounds. These startups cover types of cancer from breast, lung to colorectal and pancreatic cancer.
Cytoveris, a home-grown oncology device startup in Farmington, CT, develops an optical-based guided surgical tool that allows oncologists to monitor and remove tumor tissues in real time. They raised $3.7M in 2020 from Connecticut Innovations and University of Connecticut Technology Incubation Program for supporting their pilot with Yale Smilow Cancer Center, as well as expanding partnership with University of Connecticut Health and Hartford Healthcare.
The diagnostics category harvested a total of $30M in recent financing. These startups employ a wide range of methods, from single cell isolation, ionizing radiation detection, to rapid isothermal nucleic acid detection, to more effectively diagnose cancer. In the face of the pandemic, some startups have also expanded to COVID-19 testing. Tagen Biosciences, for example, raised $9M in their Series A financing. They use PCR (pulmonary chain reaction) to detect targeted RNAs and DNAs, starting with Anthrax diagnostics, and expanding rapidly to COVID-19 testing. They most recently landed a BARDA contract to develop Point-of-Care COVID-19 molecule diagnostic test (link).
On the other hand, although with only $8M in latest financing, General Surgery attracted the most startups comprising 60% seed stage and 40% later stage. More than half of these startups design and manufacture devices used in the surgical operation room, such as rotator cuff repair devices, surgical pencils, implants, emergency oxygen delivery devices, and surgical staplers. The rest design devices used in pre / post-surgical procedures, such as personalized wheelchairs, therapy mattresses, and epinephrine injectors.
Figure 2: Break down of the Greater New Haven Hub by Medical Sub-verticals and Therapeutic areas.
Yale University & University of Connecticut Breed Most MedTech Rising Stars
Yale and UConn have produced over 30% of medical device startups in the Greater New Haven Hub through programs like the Technology Incubation Program (TIP), Yale Entrepreneurship Institute (in collaboration with Yale Office of Cooperative Research). 11 Yale startups and 12 UConn startups have raised over $40M in their latest financing rounds. In addition to capital access, these two institutions have also provided lab real estate resources at UConn’s Jackson Laboratory in Farmington (Yale is also planning to build a new lab space in New Haven).
Azitra, a microbiome-based dermatology company, came out of Yale in 2014 and has worked closely with Yale’s Smilow Cancer Center and UConn’s TIP. GestVision, a rapid diagnostic test for preeclampsia who have raised $19M, spun out of Yale in 2014 and subsequently developed their GestAssured tests with a license from Yale. Ikonysis, a platform cancer diagnostics startup has raised $48M to date. Ikonysis was born when Dr Kilpatrick, entered a collaboration with Dr. Upendra Hegde of UConn, who’s lab validated the clinical efficacy of their platform.
Greater New Haven MedTech Startups Integrate with Digital Patient Trackers
As Marc Andressen predicted that software has eaten the world, software is now eating the biotech world with the rise of digital therapeutics and health-enabled technology. Omada, among other digital care startups, has proven efficacy through their digital therapeutics platform in treating diabetes and other chronic illnesses.
In this hub, roughly 50% of the device startups have a digital component to the physical equipment. The ability to track and collect additional data with sensors and connected devices enables startups to better detail their clinical efficacy, quantify patient engagement and estimate ROI. Wellinks, a New Haven based startup, is pivoting from an asthma inhaler company to a respiratory care platform. With $20M raised to date, they are planning to help patients track and manage their own treatment in a community setting through their Bluetooth-enabled device and software system, hoping to better assess clinical efficacy and patient engagement through digital channels.
The rise in digitization calls for active compliance to data privacy regulations within the Health Insurance Portability and Accountability Act (HIPPA). The FDA has also issued guidance on digital health and compliance policy, acknowledging and legitimizing that software-as-a-medical-device is a trend to stay.
Closing Thoughts
Having explored the landscape of MedTech within the Greater New Haven Hub, we see a consistent and surprising theme; a story of a hub emerging out of stealth mode to claim its place as a haven of hardware innovation for patients. Can it attract the talent away from larger crowded hubs like New York, Massachusetts and Silicon Valley? Does it have commercial real estate for industry labs? Does it have the right mix of incentives to keep its cutting edge MedTech startups from fleeing to larger ecosystems? Financing will certainly play a key role in answering these questions and the NFG axis will undoubtedly have to do much more.
Appendix
1.1 Definition of device category:
General surgery: devices developed to assist in common surgical techniques and procedures such as suturing;
Cardiovascular: devices developed as medical or surgical solutions to diseases affecting the heart / vascular system;
Ophthalmology: devices developed as medical / surgical solutions to diseases affecting the eye
Musculoskeletal/ Orthopedic: devices that address conditions affecting the skeletal system
Neurology: devices that address conditions affecting the nervous system
Oncology: focused on the diagnosis, monitoring, prevention or treatment of cancer;
Diagnostics: developing tools for the diagnosis of conditions caused by bacterial, viral, genomic, immunological, and others.
Imaging: improving or replacing traditional medical visualization platforms;
Patient monitoring: improve bedside and remote monitoring of medical conditions;
Female technology: devices focused on women’s health
About the authors
Samuel Kitara & Jun Chen were classmates at the MBA program at the Yale School of Management. Samuel works in the CFO organization at Gilead Sciences. Prior to business school, he was a bench researcher in the lab at Dana-Farber Cancer Institute, Harvard Medical School and the Broad Institute of MIT and Harvard. Jun is an Associate at Connecticut Innovations, Biosciences/ Digital Health. Prior to business school, she was a Solutions specialist at Thomson Reuters and started her own venture to help young professionals develop meaningful mentorship. The views expressed here solely belong to the authors and do not represent the views of any employers or affiliates past or present.
