Contract manufacturing 60%
OEMs that have used a contract manufacturer for a medical device project.
GlobeNewswire
have used a contract manufacturer for a medical device project. This is shadowed by growth across the industry, with the contract manufacturing market for class II devices soon expected to reach $76bn.
Eggs in two baskets
As Andrew Grande explains, these financial considerations can help explain the popularity of contract manufacturing more broadly. “There are costs associated with developing your own device,” says Grande, an associate professor in the department of neurosurgery at the University of Minnesota. “To do that requires R&D staff and
team resources.” Nor do the monetary benefits of contract manufacturing stop there. Able to build components at scale – with the expertise and focus to pump out parts at high speed – contract manufacturers are famed for getting finished products to market quickly. So many options are available, adds Grande, that this is very much a buyer’s market – with around 5,800 companies to choose from, OEMs can easily switch partners if they prefer. Even so, there is some evidence that the scales are, to a certain extent, tipping back in the direction of internal development. This time, however, contract manufacturers themselves are getting in on the action. A striking example of this is the work of Minnetronix, a Minnesotan contract manufacturer that’s recently started developing its own products. The 300-person company isn’t alone either. Staying in the Midwest, for example, Surmodics is another company that’s jumped from fulfilling orders to building original devices. More to the point, it’s clear these companies aren’t making the leap from CDMO to OEM carelessly. Minnetronix raised $20m in funding for new projects in 2016, and now boasts a 125,000ft2 manufacturing space.
engineering and
For Grande – who worked with Minnetronix to develop the company’s aneurysm-busting Neurapheresis Therapy system – this shift is perfectly understandable. With deep experience as CDMOs, why would Minnetronix and its ilk put all their ‘eggs in one basket’ and continue to twiddle their collective thumbs until new clients turned up? That’s especially true, Grande continues, given how quickly the CDMO industry is growing. “You’re relying on a marketplace where companies are coming to you, and over time there are an increased number of companies that are able to produce these products,” he says. “So, the marketplace is becoming more competitive. I think a company like Minnetronix is able to diversify a bit – and continue to produce third-party products, but then also have its own division where it trades its own devices.”
Unmet needs in the marketplace
What, then, does this brave new world look like in practice? A good place to
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www.nsmedicaldevices.com
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