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Entrepreneurship is increasingly important in medical research

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Most people aren't good at difficult tasks on their first attempt.

That's why Penn State College of Medicine's Office of Technology Development has an Entrepreneur-in-Residence program featuring people like Eric Sugalski.

Sugalski, founder and CEO of Boston Device Development, has spent his career helping projects — particularly medical devices — on the path from idea to reality. He knows the process and enjoys coaching others through it.

Assisting researchers in starting successful companies is the obvious point of the program, says Keith Marmer, director of the Office of Technology Development and associate dean for research innovation. And with the research environment changing, those skills are becoming increasingly vital.

"The reality is, with reductions in federal funding and reductions in even the sort of funding that comes from foundations for research, the researchers have had to look for alternative strategies," Marmer says. "One of those strategies that has risen up is to spin out a company to attract early-stage investment to continue the research."

Tom Lytle agrees. He was the program's inaugural entrepreneur-in-residence, and he now serves as president and CEO of Melanovus Oncology, a company based on the research of Dr. Gavin Robertson, a professor of pharmacology and dermatology at Penn State College of Medicine and director of the Penn State Hershey Melanoma Center.

"If you went back five or six years, there was lots of grant money, and private funding for biotechs was pretty easy," Lytle says. "Now it's far more competitive. There's less money going around, people are looking for less risk, and the pharmaceutical companies have said, 'We're putting the risk on the early-stage companies.'"

Lytle says the Melanovus research is in late preclinical stage, and the company is trying to raise $1 million for its seed round.

"Many investors say once you've raised your seed round, $1 million or more, then investors will say, 'Now you're for real, we'll come in on your next round.' It's getting that seed money that we've found is very difficult," Lytle says.

Sugalski describes getting a medical device to market as "a pretty expensive process and a long process." The field has a fair amount of mentorship and training, he says, because it has to. And while researchers are usually well aware of the rigors of clinical testing, they're often less acquainted with the technical side of making a prototype and figuring out how to position a device to succeed in the market.

"Inventing is closely baked into the development process. A lot of times companies or inventors will come to us with a kernel of an idea, and they'll need a creative group to morph that idea into something more appropriate for a market, that can provide a competitive advantage," Sugalski says. "In medical devices, it's extremely important to understand the user issues and the human factor issues."

As for the funding angle, Marmer says the program may help budding entrepreneurs there, too. His office got a $425,000 grant for the program early in 2012, but that will run out in June and is not renewable. That dynamic, Marmer says, is partially why the Entrepreneur-in-Residence program has become one that is process based instead of individually based.

"We're not necessarily bringing entrepreneurs in residence in and paying them a salary or a consulting fee," Marmer says. In providing mentorship, guidance and support, the entrepreneurs in residence may well discover projects that they're interested in joining as investors or management — and that connection is also a form of compensation.

Sugalski's company is billed as "an engineering company that collaborates with entrepreneurial businesses to develop first-generation devices." Sugalski did some mentoring for MIT, and the company was born in 2009 from relationships with MIT spinoffs. Some of the projects the company has worked on include a pill-dispensing device for hospitals, which is designed to address the error rates associated with the process, and an ear canal scanning device, which is designed to update a process that traditionally centers around a silicone mold.

"If we find there are possibilities for us to help bring a device or new technology to market that we think has a good impact, then we're absolutely interested in that," Sugalski says.

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