Minnesota's med-tech giants have their roots in devices to treat heart troubles and have spawned plenty of startups with the same mission. In recent years, however, the Twin Cities has become home to an increasing number of startups with technology to treat a different trouble: back pain.
The market for technology to treat spinal disease is one of the fastest growing in the medical device business, with some estimates putting the growth rate in the United States at about 20 percent. Several companies here are looking to ride the trend, and have raised tens of millions in venture capital along the way.
Across the med-tech industry, startups are often born from engineers and managers from larger companies, such as Medtronic Inc. and St. Jude Medical Inc., who venture out on their own. There's no such giant here in the spinal market.
However, one local company, Spine-Tech Inc. (now known as Zimmer Spine), did help seed some startups. Michael McCormick, CEO of Anulex Technologies Inc., was president of Centerpulse Spine-Tech. He left the company after it was acquired by Zimmer Holdings Inc., and founded Anulex in 2002.
The Minnetonka-based company has developed two products to treat and repair soft tissues in and around the spine. The products are geared toward early-stage treatment. Both have received regulatory approval, and the company is now in post-clinical trials.
The firm has raised about $37 million in venture capital, and is now in a "rapid growth phase," McCormick said. Anulex has 38 employees and is building its sales staff.
McCormick said he expects to see more spinal companies rising up in the Twin Cities as the market continues to grow and as local expertise builds. The Twin Cities also is home to venture capitalists with a record of making investments in the space, which helps support the market.
Dave Stassen, a founding managing director at venture capital firm Split Rock Partners, also worked at Spine-Tech, and is an investor in Anulex and another local company, Disc Dynamics Inc.
Like Anulex, Disc Dynamics is focused on treating back pain in as minimally invasive a way as possible. The Eden Prairie company has developed a treatment that could be an alternative to spinal-fusion surgery -- a procedure doctors are increasingly not interested in performing on younger patients, said Disc Dynamics CEO Steven Healy.
"It's a very final operation. Surgeons hate to do a final operation on someone who is 32," he said. "We can relieve pain, but also preserve the anatomy."
Disc Dynamics' technique for treating the problem involves injecting a fluid into the spine through a catheter. The fluid then expands and gels inside the back to create an artificial nucleus for the disc.
Patients who receive the treatment are often in severe pain, often unable to work and heavily medicated with narcotics, Healy said. Disc Dynamics has raised $27 million in venture capital and is now conducting clinical trials.
An overall less-active lifestyle is contributing to the need for this type of procedure, said Keith Eastman, the company's chief financial officer.
"Most of us no longer physically work, and that can lead to degenerative disc disease," he said. "It could just be that you jumped out of a tree when you are 3, and now a disc no longer holds the fluid that it needs."
The Twin Cities has a lot to offer spinal startups, even though its bigger companies have been historically more focused on the cardiac market, due partly to a solid work force, Healy said.
While Disc Dynamics and Anulex are relative newcomers to the med-tech scene, some spinal companies have a longer history in the Twin Cities.
Raymedica, which is developing a nonfusion technology to replace the nucleus of the spinal disc, was founded in 1991, and has raised more than $60 million in venture capital. The company's treatment targets younger patients, who have leg and back pain, but have not had a spinal disc completely collapse.
John Viscogliosi, whose venture capital firm invested in the company, became CEO and chairman of Raymedica in 2004.
He agrees the market for spinal treatments is being fueled by the needs of younger patients.
"More people are less resistant to pain. They'd rather have a surgical procedure," he said.
Raymedica is enrolling patients in a clinical study in the United States. It already has approval to sell its device in Europe. The company is hoping its product will hit the U.S. market in 2011.
The market for medical devices to treat spinal disease is not likely to slow anytime soon, said Rick Brimacomb, a venture capital consultant.
Brimacomb is working with Disc Motion, a Florida firm started by a veteran of Medtronic. That company also is developing a device that would serve as an alternative to spinal fusion surgery.
Bigger companies are increasingly looking to acquire firms in the spinal space. The fast-growing nature of the business helps boost their own growth margains, he said.
"A lot of cardiac businesses and other more mature medical device companies are not in the same growth phase that they used to be," Brimacomb said. "They are looking to grow their business via acquisitions that have above-average growth rates. That's why the spine has become an interesting category."