It’s no wonder that Cleveland Clinic has placed an increased emphasis on commercializing medical innovations by its doctors.
Cleveland Clinic CEO Toby Cosgrove revealed in a recent interview that the $78 million sale of Clinic neurotechnology spinoff Intelect Medical to Boston Scientific Corp. (NYSE:BSX) in January returned an impressive $28 million to the health system.
“We’ve spun off about 35 companies,” Cosgrove told the online journal of the University of Pennsylvania’s Wharton School. “We just had one purchased, which returned about $28 million to the Cleveland Clinic.”
Clinic spokeswoman Eileen Sheil confirmed that Cosgrove was referring to Intelect.
That’s a big payday and a huge win not only for the Clinic, but the doctors and researchers who helped develop the company’s technology, plus executives with Cleveland Clinic Innovations, the organization’s technology transfer and commercialization arm.
It isn’t clear how much capital the Clinic invested in Intelect, a closely held company that hasn’t issued a press release since 2008. The company didn’t even publicize its move from Cleveland to Boston, believed to have happened about a year ago. Officials with the Ohio Department of Development were unaware of the move when asked about it in December by MedCity News.
Intelect is developing an implantable neuromodulation system that works by using deep brain stimulation, which involves electrically stimulating the brain to reorganize its electrical signals. The company’s GUIDE system enables doctors to visualize stimulation fields in the brain and provide more precise targeting of therapy, Boston Scientific said upon announcing the purchase.
Intelect’s stroke recovery therapy is based on the work of Dr. Andre Machado and other researchers at Cleveland Clinic’s Center for Neurological Restoration. The company’s software is based on the work of Cameron McIntyre of the Clinic’s Lerner Research Institute Department of Biomedical Engineering. Among the company’s founders is Dr. Ali Rezai, formerly one of the Clinic’s top neurosurgeons who left in 2009 to become vice chair of the Department of Neurological Surgery at Ohio State University Medical Center.
Intelect’s sale marked the third exit for a Cleveland Clinic Innovations company, but it’s by far the biggest. The first was Cleveland BioLabs (NASDAQ:CBLI), which happened through a $14 million initial public offering in 2006. A second company, ReVasc, was sold in 2007 to Micrus Endovascular Corp. (NASDAQ:MEND) in San Jose, Calif., for $1 million, with the potential of $5 million more in future milestone payments.
Early this year, Cleveland Clinic Innovations inked a deal to help Maryland health system Medstar Health to develop and commercialize medical inventions by the latter’s clinicians. At the time, officials called the deal the first of its kind between two major U.S. health systems.
It’s also worth noting that the Clinic’s innovations group has a stable of other promising young spinoff companies that could be making noise in the coming years, including cardiology testmaker Cleveland Heartlab; health IT firm Explorys; regenerative medicine companies SironRx and Juventas; and spinal device developer Axiomed.
