The Sunday Business Post – Investing in longer lifespans

Pharma has been a real boon to the Irish economy over the last two decades. Leman Solicitors is banking on medical devices replicating this success, helping to guide investment strategies in the burgeoning sector, writes Jason Walsh.

The introduction of digital technologies into the medical device sector is likely to prove transformative:  personalised healthcare, at least in pharmaceutical terms, is not quite here yet, but medical devices are already personalising both diagnosis and drug delivery. This is a real boon for patients, medical staff and, in economic terms, the country as a whole, according to Mark Roberts, Partner at Leman Solicitors.

“We’re seeing a lot of startups and research. Diabetes is a particularly big area, for example, and there’s a move to put that monitoring in the patient’s hands,” he said.

Roberts leads the firm’s life sciences section, with a focus on delivering and guiding investment in both pharma and the emerging area of digital medical devices. Leman does work in the patent area, liaising with patent agents, for example, but this is not its main focus, Roberts said.

“Primarily, we help with raising investment and acquiring intellectual property. We work around the investment and set-up of their business, both in medical devices and pharmaceuticals.”

Investment strategies in the sector are, as with all investment decisions, a case of horses for courses.

“Different investors have different strategies,” said Roberts. “Some like to see multiple projects with a risk spread, whereas others will invest in specific things.”

The pharma sector differs from medical devices in that, in Ireland, pharma has fundamentally been about the arrival of large multinationals seeking a foothold in the EU, often attracted by the IDA.

“With medical devices, there’s a much more early-stage investment in Ireland,” Roberts said. “Ireland is seen as a good place for investment and research in that area.”

Typically, investment is used to complete practical research on a device that is already proven in the theoretical world of lab conditions, and then bring it to market. This means, of course, getting regulatory approval.

“Normally it’s investment first, and then to use that to get regulatory approval,” said Roberts.

Regulatory approval

One question that start-ups and investors need guidance on is where to begin the process for regulatory approval: in the United States or in the European Union. The preferred initial choice was often to go with the EU, but this has started to change, said Roberts. Although the US is a bigger market, EU approval has typically been easier to obtain with the US Food and Drug Administration (FDA) seen as one of the strictest in the world.

“The initial investment is [often] to fund the clinical development and get a CE [European Conformity] mark to market it in the EU, and that’s typically been seen as the quicker, less expensive route,” Roberts said.

Now, however, as the EU regime has tightened, the value of the US market has become irresistible.

“What’s happening is that the EU has tightened up, from 2017 — partly because there have been cases of medical devices getting clearances to go ahead and then issues arise. There’s a three-year transition period on that, so it comes into force in May 2020. It introduces a lot more scrutiny.”

Leman has seen clients now going to the US FDA first, said Roberts.

“The US is the biggest market, and also the most lucrative. If you can get your product, either pharmaceutical or medical device, on the reimbursement list, that’s the ‘golden egg’.”

The seemingly endless Brexit process has had an impact, but the country remains in a strong position, said Roberts.

“Brexit has caused a lot of uncertainty. Large multinationals will be already quite a way advanced in their thinking, but if your marketing authorisation holder is solely British-based, you won’t be selling into the EU, and vice versa.”

Despite this, Ireland remains a natural home for the sector. “Given the hub that exists in Ireland, already it’s a known quantity, which makes it easier to invest here rather than set up somewhere else. The legal regime is common law, and would be [broadly] similar to what a British company is used to, but also there is a recruitment base,” he said.