Mergers, Acquisitions Alter Medtech R&D Landscape

Posted On November 8, 2018 By Annie Cashman

Over the past several years, mergers and acquisitions in the medical device industry have soared. Think Medtronic and Covidien, Abbott and St. Jude, Zimmer and Biomet, just to name a few. And M&As show no sign of slowing down. By mid-August, for example, Boston Scientific alone had bought seven companies, and 11 venture-backed deals had occurred.

This trend shows a decided shift in R&D strategy by medtech OEMs to purchase smaller firms, startup companies, or pre-IPO technologies that are attractive and show growth potential, versus these OEMs’ homegrown R&D processes for launching new products.

In addition, this trend has an impact downstream on medtech companies’ supply chain partners. This environment has caused a greater demand on suppliers for two key elements:

Speed, speed, and more speed: Our medtech partners large and small are speeding to market faster than ever. Recently, one of our customers told me how much he appreciated our rapid prototyping services: “You guys can provide the one thing in life that you can’t buy—time. Using Protolabs gives my R&D teams more time in their design cycles.”

One-stop shop capabilities: Our medical customers—again large and small—have been asking us to offer more services so they can use us as a one-stop shop as much as possible—again, helping them accelerate to market.

medical operating room
An important shift is occurring in R&D strategy in the medical industry. Large medtech OEMs are purchasing smaller firms, startups, or pre-IPO technologies that show growth potential, versus these OEMs’ homegrown R&D processes for launching new products. Photo Courtesy: Wall Street Journal

Along these lines, Protolabs continues to make sizeable investments and enhancements throughout our service lines that directly benefit the medical OEM community. These include advancements in injection molding, including our on-demand offering, and our expanded quality assurance systems for molding. In addition, we’ve added global capacity and secondary ops in industrial-grade 3D printing (additive manufacturing). We’ve also expanded capacity and traceability in CNC machining. Plus, last year, we added sheet metal fabrication to our suite of services.

Here are a few highlights.

Injection Molding Enhancements

We now provide two injection molding service choices. One is best suited for strictly smaller quantities, most often associated with prototyping, an option our medical industry customers know well. Plus, we now offer an on-demand option, which also fits well for medtech companies, which often require larger part quantities common in low-volume manufacturing in the medical industry.

Additionally, we’ve invested in enhanced quality-assurance systems, which play a key role in injection molding. In many industries, including the medical sector, companies will only do business with suppliers that have well-established and, in many cases, certified quality-assurance systems in place. We offer a range of inspection processes, including digital inspection reports, conventional inspection reports (which satisfy FAI requirements), and production part approval process (PPAP)—a valuable tool that documents design quality and reproducibility.

3D Printing Grows with Added Capacity, Secondary Operations

The use of industrial-grade 3D printing (additive manufacturing) in the medical industry is well documented. 3D-printed parts are in our bodies—in dental devices and patient-specific hip, skull, and other implants. Other medical products include OR equipment, handheld devices, and more.

At Protolabs, we continue to add capacity to our 3D printing plants in Raleigh, North Carolina and at our plants in Germany, in Feldkirchen, near Munich, and in Eschenlohe. Our company now deploys 150 industrial-grade 3D printing machines globally. At the same time, we have also added a number of secondary operations in 3D printing. I also want to mention, regarding 3DP, we are ISO 13485 compliant for the design and manufacture of medical devices in our metals offering in Germany. Our customers can now benefit from the high quality and resolution of our parts joined with the appropriate documentation that our medical customers would need to validate their parts. If you are looking for a validated process, you may want to consider using that capability out of our Germany location.

CNC Machining is Flourishing

We also are expanding our CNC machining capacity, as machining continues to flourish, both for Protolabs and industry-wide. We will soon open a new, 200,000-sq.-ft. machining facility in Brooklyn Park, Minn. We are on track to be fully functional in that new space by the end of 2018.

In addition, Protolabs now offers traceability in our aluminum 6061 material, which will enable our customers to potentially use our CNC-machined parts longer in their development cycles past the prototyping phase.

Sheet Metal Fabrication Added

Finally, I wanted to mention we’ve added sheet metal fabrication to our suite of manufacturing services with the purchase last year of New Hampshire-based Rapid Manufacturing. One of the key reasons for that acquisition is because sheet metal has many useful applications for medical device manufacturers. Case in point: medical robotics. Use-case examples abound: general enclosures and EMI shielding for the electronics and systems that are inside the machine, simple sheet metal brackets that may hold up the screens the doctor is using to operate the robotic arm, the robotic arm itself, generic breaker boxes, and more.

Ultimately, our goal with these service enhancements is to continue to provide that speed-to-market capability and the one-stop shop feature our medical customers are demanding, whether you are a small startup or a large OEM that just purchased a startup.

Annie Cashman is the global segment manager for the medical industry at Protolabs. Cashman’s industry expertise provides insight for Protolabs and its range of medical customers developing products and devices. She understands the entire process of manufacturing a medical device from its infancy to end use, and is passionate about driving positive outcomes for customers. Cashman previously worked for Nordson Medical, and also has held sales positions at Covidien (now Medtronic) and St. Jude Medical.