Connecticut medical device makers continue to find success
WOLCOTT, Conn. (AP) — Seventy-four years after inventor Frank DeBisschop opened a tool and die shop in Thomaston, his grandson is still running a spinoff of his manufacturing business, mass-producing medical devices and honing prototypes in Wolcott.
With 20,000 square feet of manufacturing space, including two clean rooms for assembly, Sequel Medical is one of several Connecticut companies to outlast the state’s earlier days of industry and the Great Recession, which hit manufacturing jobs harder than any other industry.
Now, companies like Sequel make up a thriving medical device industry that fans out from central Connecticut and its cities built on rubber and brass, stamping and springs. Vice president and owner Mark DeBisschop thinks the region rivals Boston and Minneapolis.
“There’s not much from a medical device you can’t get from a supplier right here in Connecticut,” he said. “That’s one of the benefits we have over other parts of the country.”
Most of the state’s manufacturers that serve the medical field also cater to other commercial and high-tech industries, like aerospace and automotive. The business of making devices like catheters and laparoscopic filters is smaller, scrappier business and less automated — for now — but just as critical, and growing steadily.
There’s 79-year-old Connecticut Spring and Stamping in Farmington, making parts for handheld surgical tools, medical clips, staple guns and catheters.
Marion Manufacturing in Cheshire remains a die stamper after 72 years while expanding into custom and high-volume parts for monitoring and surgical devices.
In Bridgeport, PEP Lacey has been making parts for the medical device industry for more than half of its 100-year history.
Even Medtronic’s research and development and manufacturing division in North Haven has been working in Connecticut for 54 years, first as U.S. Surgical Corp., then Covidien. The medical technology giant spends $200 million a year on Connecticut-based suppliers and vendors, spokesman John Jordan said.
In Connecticut, the medical device manufacturing industry had more than $2 billion in sales and more than $1.4 billion in exports in 2013, with a workforce of about 6,500 people in 2015, according to the state.
Nationally, the market was worth $140 billion in 2015 and spending twice as much on research and development as the average U.S. manufacturer, according to a 2016 report by the International Trade Administration.
In 2011, the country spent $7.3 billion on research and development of medical devices; and from 2013 to 2020, the small companies that make up the bulk of the industry are expected to up that investment by 5 percent, the report said.
For Sequel, the innovation started in 1944 with a small machining shop called Thomaston Special Tool. The Torrington Company bought Frank DeBisschop’s family business in 1967 and devoted a bit of its funds to a medical device group, which won contracts with major companies like U.S. Surgical Corp., now part of Medtronic.
“They were a billion dollar bearings company and had a $7 million medical business,” said Mark DeBisschop, whose uncle Scott managed the small operation of 20 employees and spun it off into his own company, Sequel, in 1994.
The younger DeBisschop helped run Sequel and eventually took over. A few years ago, he relocated the facility from Waterbury to a 23,500-square-foot facility in Wolcott, on 37 acres of land — room to grow.
Sequel employs 110 people and works with 70 other Connecticut-based suppliers for everything from raw materials to packaging.
And like several companies of their size, Sequel churns out medical instruments — more than 1 million per year — while working with entrepreneurs and physicians on new devices.
Sequel is developing 14 early-stage products, and working to court more, including startups from Israel.
Among the current projects is Menorrx, which makes devices for abnormal uterine bleeding. CEO and founder Oleg Shikhman says he makes full use of Sequel.
He walks through the assembly room and asks the workers what slows them down. And he brings their feedback upstairs to the offices of designers and engineers, who help make his prototype simpler and cheaper to build, bringing down costs once the device goes into mass production.
Shikhman said he appreciates having those resources after 25 years in product development — two companies he helped lead were bought by Medtronic, and a third by Starkey Hearing Technologies; and on a recent Wednesday, his Greenwich business Mederi Therapeutics was bought by Houston-based Respiratory Technology Corp.
But long before that latest exit, Shikhman has been working to grow the medical device field in Connecticut.
In 2007, he founded Bridge Innovations, a business incubator where startups can rent office and lab space and work with legal advisers, mentors and investors to bring their prototypes to market. Established businesses also use Bridge to develop prototypes without holding up their own production lines.
“It’s almost like the next logical step from what I’ve done for the last 10-plus year,” he said. “Essentially I’m just expanding this model to other startups.”
Bridge is now part of the effort to create a new health hub in New Haven, which he and his partners hope to open by this spring at 195 Church Street — collaborative space for students and startups to develop new medical devices and digital health technologies.
Shikhman and his partner, Sri Muthu, are trying to fill what they see as a gap in the state’s support of health-related industries. Drug discovery is time-consuming and costly, but well funded in the state, and digital health startups can get by with less support because they’re cheaper and faster to turn a profit.
But medical device companies sit squarely in the middle in terms of the workers, money and time needed to bring a product to market. And they provide jobs the others don’t — skilled labor.
“This is the Goldilocks,” Muthu said.
“If we want to make sure we cover the entire socio-economic class in jobs in Connecticut, it’s critical,” he added. “If we don’t have the medical devices, we just hollow out the manufacturing base, and that’s a very challenging thing to deal with.”
DeBisschop agreed that the industry’s lower-paying jobs may make it less attractive to the state.
At Sequel, about 85 percent of the workforce is paid hourly, and new employees typically start at minimum wage and as temporary workers, he said. That’s also the case at many of the medical device companies Sequel works with, he added.
Still, Connecticut can’t afford to lose any jobs, and needs to make the state friendlier to small businesses and manufacturers to attract new companies, DeBisschop said.
“I think the only reason people are here is because we started here,” he said. “We grew up here, so this is where we know, where we live. It’s not necessarily the best place to do it.”
The worst thing lawmakers can do for manufacturing is tack additional costs on to businesses, said Pete Gioia, vice president and economist of the Connecticut Business and Industry Association.
And despite a growing number of technical education programs at public high schools and state colleges, there isn’t a statewide, coordinated effort to attract more workers, he said.
“We probably have 10,000 manufacturing jobs in Connecticut right now where if 10,000 skilled workers parachuted into the state, they’d get hired tomorrow,” Gioia said. “So that’s an area the state could do a lot more on.”
DeBisschop likes to talk about the low taxes and business incentives available in southern states and overseas, the money that Sequel could save. But he has no plans to leave Wolcott.
“We’re going to stay right where we are,” he said. “We have the Yankee ingenuity right here under this roof, plus all our suppliers — that is not found other places in the country.”
Information from: Hartford Courant, http://www.courant.com