How hot is the medical device industry in NH? When then Maryland-based Vapotherm, a developer and manufacturer of advanced respiratory care technology, needed a turnaround, the company recruited Joseph Army.
Among the first steps he took was relocating Vapotherm to the Granite State. Unlike Maryland, NH has a strong cluster of medical technology companies. “There’s a deep pool of med-tech talentand a high quality of life,” Army says.
Vapotherm moved its operations to Exeter more than two years ago, and the gambit seems to be paying off. In March, Vapotherm closed on $20 million in equity financing to build out its direct sales organization in the U.S. and develop its next generation of technology.
In April, Vapotherm signed contracts with HealthTrust Purchasing Group, L.P., Ascension Health Resource and Supply Management Group, LLC, and KP Select LLC, allowing hospitals that subscribe to these organizations to purchase Vapotherm High Flow Therapy products at a contracted rate. More than 700,000 patients have been treated with Vapotherm High Flow Therapy, according to the company.
Vapotherm is just one of many medical device manufacturers thriving in NH. Army’s former employer, Medtronic Advanced Energy in Portsmouth, is another. A division of Medtronic, which claims to be the largest medical device company in the world, the NH operations grew revenue by 70 percent between 2011 and 2014, and employs 406, of whom 164 work in NH. (The Portsmouth division develops electrosurgical devices used in surgery to stop bleeding and provide precise tissue dissection.)
Clustering Success
So why are medical device manufacturers hot? In part, because the practice of medicine is changing and becoming more efficient. As the cost of health care procedures becomes more transparent, demand for cost effective and efficient alternatives to expensive medical procedures is helping to spur growth in the medical device industry, says Eric Soederberg, president of Sunrise Labs in Auburn, a firm that designs, develops and manufactures medical devices. More medical professionals are turning to medical devices to do everything from remotely monitoring a patient’s blood pressure and heart condition to catching diseases sooner. Medical devices are valuable tools in hospitals and medical facilities, where cutting costs and preventative medicine are increasingly important, Soederberg says.
A person with sleep apnea, for example, can get a lightweight mask that alleviates the problem, such as those made by Sleepnet Corp. in Hampton.
And these are just a few of the NH companies reaping the benefits of this trend. In 2012, NH employed nearly 5,000 people in the bioscience industry across 256 businesses, according to the most recent statistics available from the Bioscience Industry Association (BIO). Of those, 2,239 people were employed by 60 medical device and equipment businesses.
Soederberg says Sunrise has experienced 20 percent compound growth over the past four years. He attributes this to the demand caused by an aging population who are better treated by remote monitoring and noninvasive procedures than surgery or constant nursing care.
While Michael Rubin, the COO of Sleepnet Corp., would not divulge sales figures because Sleepnet is privately held, he says the company also experienced “significant growth” during the past few years. “The market is enormous and growing,” says Rubin of those in need of sleep apnea masks. “Sleep apnea is becoming a more common diagnosis and accepted in the medical community.”
Atrium, which manufactures devices used in cardiac surgery and airway management, is also growing. Philip Freed, the senior vice president of marketing and the North American Regional company officer for Maquet Medical Systems, the parent company of Atrium in Merrimack, says the company is posting sales between $180 million and $250 million annually. Atrium has been growing so much it ran out of space at its Hudson plant and had to move its 700-plus employees into a new 215,000-square-foot building in Merrimack.
Precision manufacturing of Atrium’s hernia mesh products. Photo courtesy of Maquet Medical Systems.
Biotech Magnet
New Hampshire is making a name for itself as a significant medical device manufacturing hub.
“When I look at analyst reports, they used to just refer to the Boston and Metro Boston area,” Freed says. “[The medical device sector] has grown enough that now you see it listed as New Hampshire through Boston and the Boston Metro Area.”
And it’s precisely the proximity to Boston and the myriad medical facilities in that area that is helping NH attract and grow medical device companies. The number of medical device companies in NH grew 5.3 percent between 2007 and 2012, according to BIO. While impressive, it is still well below the national growth rate of 12 percent.
But being a neighbor of Massachusetts, the third largest hub in the country for medical manufacturing, helps to spur growth in NH, says Adam Prime, president of Phase 2 Medical, a contract device manufacturer of single use medical devices in Rochester.
Phase 2 Medical employees perform tests on surgical devices. Photo by John Hession
Proximity to Massachusetts means Prime and his 150-person team are close enough to respond quickly to any issues that arise with a product, but being located in NH means Phase 2 Medical can be more affordable, he says.
“We are close enough to the hub and ideas coming out of Boston to properly support our customers,” he says. “But it’s far less expensive to do it in New Hampshire.”
Soederberg of Sunrise Labs agrees Boston is an important component in his company’s success. “Being close to Boston is enormously valuable to us,” he says. “Most of our clients come out of Boston and the fact that we can be there in less than an hour is very important to us. Plus the Manchester area is a very affordable area compared to going to, say, the Bay Area or something.”
Another factor drawing medical device manufacturers to NH is the highly educated workforce, Freed says. “Historically, you would look predominantly in certain regions that you knew attracted the right workforce who understands how to work in either the medical device or pharmaceutical sectors,” Freed says. “Traditionally, that was the region from Connecticut to Pennsylvania that you would find that. But as time has gone on, business has gone north. New Hampshire has a very educated workforce that allows us to find the right people we need. And honestly, it’s not hard to convince people to move to New Hampshire.”
And they are being paid well to do so. Salaries for medical device jobs average $61,604 and went up 2.8 percent between 2007 and 2012. That compares to mean salary for all NH jobs of $47,050 in 2013.
Soederberg echoes Freed’s sentiment saying he’s able to attract and retain not only more experienced workers but also those just out of college because of the quality of life in NH. “They love the mountains and the access to outdoor activities they enjoy,” Soederberg says. “Our business depends on having top notch talent. Attracting and retaining our engineers is really paramount."
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