The Circuitous Path from Concept to Product: Experts Share Insights for Surgeon Entrepreneurs

Orthopaedic surgeons often innovate new ways to improve care, developing subtle procedural refinements that benefit their patients. But sometimes they brainstorm new approaches that could have widespread commercial potential. The challenge then becomes how to transform that raw idea into a fully realized product.

On Tuesday morning, Symposium K, “From Garage to Market: A Stepwise Approach to Creating an Orthopaedic Device,” dove into this complex topic. Moderated by Derek Amanatullah, MD, PhD, FAAOS, associate professor at Stanford University and serial entrepreneur, and Daniel B. F. Saris, MD, PhD, professor at Mayo Clinic and inventor of RECLAIM, a cell therapy that helps repair damaged cartilage, the session tapped into experts in intellectual property, financing, entrepreneurship, regulation, and other topics to outline the process.

Protecting IP
On the path from invention to commercialization, one of the earliest steps is protecting the intellectual property (IP). Patents grant an inventor exclusive rights to commercialize the product for up to 20 years, though that period can be extended under certain circumstances. The inventor does not need a working prototype, but rather a concrete idea that can be thoroughly described in the patent application.

“You can protect new devices, such as new spinal plates for example, or instruments for delivering the spinal plate during surgery, surgical methods, or methods of manufacturing the product,” said Josue Martens, MS, JD, IP attorney and partner at Knobbe Martens. “And you can also protect software.”

Mr. Martens recommended consulting a patent attorney early in the process to help determine what can and cannot be patented. Experience matters, so choose an attorney with a track record in orthopaedic devices.

However, protection begins long before the patent application. Keep detailed lab notes to establish a paper trail, and do not be afraid of non-disclosure agreements, which prevent public disclosures that could restrict patent protection. Be sure to deal with any ownership issues early on, when they are more easily resolved.

Developing the infrastructure
Gregory Horner, MD, FAAOS, general partner at Untethered Ventures, discussed building a company around the product, including choosing a corporate structure (he often recommends a C corporation) and procuring financing.

Not surprisingly, financing options are complicated. Angel investors and early-stage venture capitalists bring industry experience and connections but dilute ownership and expect significant returns. Accelerators provide mentorship, regulatory guidance, and network access, but also result in dilution. Government grants are non-dilutive but are also intensely competitive, and applications are time-consuming. Crowdfunding can help entrepreneurs gauge the market but likely will not provide a large amount of money.

“If you get further along and there’s enough data to establish valuation, then equity financing is the way to go,” Dr. Horner said. “The benefits are that you align interests, attract talent and capital, and create a stable ownership structure. The cons are that, once again, it can be quite dilutive and there’s potential for loss of control.”

Team up with trusted colleagues
Serial entrepreneur Daniel L. Martin, MD, FAAOS, has leveraged his surgical experience to innovate new devices for 50 years. “I have succeeded, and I have failed, and I have been in the belly of this beast my whole career,” Dr. Martin shared. “So, I bring the perspective of a practicing surgeon and the limits of what can be done in that role.”

To create a cohesive team, he suggested drawing on established relationships with colleagues, business contacts, mentors, and old friends from residency—people who know the discipline and will provide honest opinions. These connections can provide insight into whether colleagues would use the proposed device, an early proxy for marketability.

“The barriers are much higher without peer group interest and buy-in, even if it’s a great idea,” he said. “You really have to have that buy-in from your peer group.”

Working with industry
Daryll C. Dykes, MD, PhD, JD, FAAOS, vice president of Global Medical Affairs for Johnson & Johnson MedTech, weighed in with the industry perspective. He noted that licensing IP can be a win-win for both the inventor and the company making the purchase.

“In terms of strategic licensing options, these are cutting-edge technologies that we employ from other companies and find these to be efficient and flexible ways for medical device companies to reduce our [research and development] costs and bring products to market quickly,” Dr. Dykes explained. “Ultimately, this [approach] expands our portfolios and improves competitiveness through technology transfers.”

Dr. Dykes noted that device companies can lower some of the barriers to entry. These organizations often have significant market access to give the innovation a wider reach. These collaborators can also share development costs, reduce capital expenditures, and increase revenue potential.

“Joint ventures can foster a culture of innovation, driving the development of novel medical devices that meet unmet needs,” Dr. Dykes said. “By exploring joint ventures, medical device companies can tap into new growth opportunities and improve the bottom line, making a meaningful impact on patient care. That’s really what drives us.”

Bringing it home
The session closed with two panelists with extensive experience in product and company development. Emmanuel Gibon, MD, PhD, is an assistant professor at Penn Medicine and founded Debogy Molecular. Brian C. de Beaubien, MD, FAAOS, is an orthopaedic surgeon and founder of Osteal Therapeutics. The two had personally experienced nearly all the aspects of entrepreneurship that had been discussed in the previous hour and answered questions from innovators trying to gain traction in a crowded field.

“You need to start with a good idea and very quickly, you’re going to need money, because you’re going to need a lab, and you’re going to need someone who knows how to manage money,” Dr. Gibon said. “You may need to employ a few people to run the lab, to reach out to manufacturers and business partners. I think it all starts with an exceptional and unique idea that you believe in. Then you have to sell it.”

Josh Baxt is a freelance writer for AAOS Now.