For local medtech startups, Canada is a tough market to break into


Armen Bakirtzian, CEO and Co-Founder of Intellijoint Surgical Inc., Canada’s Fastest Growing Technology Company 2020, in Kitchener, Ontario. headquarters on March 21. With millions in international sales, Intellijoint has just landed its first Canadian customer, Humber Hospital.JP MOCZULSKI/The Globe and Mail

Intellijoint Surgical Inc. is one of Canada’s leading medical device start-up companies. The Kitchener-based company’s navigation tools are used by surgeons in 15,000 procedures a year to help improve hip and knee replacement surgery outcomes, primarily in the United States, Australia, New Zealand and the United States. Japan. And the company was named Canada’s fastest growing tech startup by Deloitte in 2020.

Yet despite developing its technology with the help of 12 Ontario orthopedic surgeons and receiving approval from Health Canada in 2015, Intellijoint has never made a sale to a public home hospital — until now.

On Tuesday, the company will reveal that it sold its flagship product, Intellijoint HIP – which includes a mini-camera, laptop computer and instruments to help with precise positioning of implants – to Toronto’s Humber River Hospital during a press conference. ready to attend.

But the circumstances behind the sale speak to a chronic problem facing domestic medtech innovators that one deal won’t solve: a lack of demand for new medtech from government-funded hospitals and health authorities. state in Canada.

Funding for the six-figure purchase of Intellijoint equipment and enough disposable items used during surgery (screws, discs, reflective markers and sterile drapes) for 1,200 procedures – worth two to three years – does not come from Humber’s operating budget. Rather, the funds were raised by his foundation at the request of Humber surgeon Dr. Sebastian Rodriguez-Elizalde.

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An agreement like this “is unique; it’s not a scalable model” to grow in Canada, said Armen Bakirtzian, CEO of Intellijoint. Years ago, he gave up trying to sell at home after hospitals turned him down despite the support of their surgeons. “A lot of people wouldn’t even care. They would pick up and move the whole business to where the customers are.

Dr. Rodriguez-Elizalde agrees. “It’s sad that this is a Canadian company that struggles to succeed in Canada and is best in class for what it does. It is incumbent on us, as physicians, lobbyists, patients and users, to demand it,” he said in an interview.

It’s a well-known problem that has emerged in numerous government reports: Canadian innovators, particularly in medical technology, often have more difficulty selling domestically than abroad, despite the reputation of country as a leader in medical research.

Provincial health systems have a reputation for being tight-fisted and risk-averse when it comes to buying new technologies, making narrowly targeted budget decisions that don’t consider benefits such as better outcomes in health care and reduce subsequent costs to the system. Many startups leave, taking jobs, intellectual property, and tax-generating economic activity elsewhere.

“From a budget perspective, we are still constrained in terms of our ability to maintain the equipment we have today,” said Mark Taylor, director of marketing at the University Health Network in Toronto. “Hospitals have relied on donor money to buy these expensive items. It is a function of our system.

Karimah Es Sabar, Chair of the Federal Health and Biosciences Strategy Table, said of medical technology: “We are late adopters, even Canadian technology, because we are risk averse and siled in our health care supplies. … We have excellent capabilities and science that Canadians do not have access to.

Former Ryerson University president Sheldon Levy, who recommended in a 2019 report to federal Small Business Minister Mary Ng that Ottawa take a “Team Canada” approach to help procure more from local innovators, said “the idea of ​​Canada buying from Canada is a serious problem – it’s acute in the medical space.

When asked why governments haven’t addressed the problem, he replied, “That’s the million dollar question. I guess you first have to realize that this is a problem.

There is recognition at the political level that things have to change. “I would absolutely recognize that any medical technology procurement has proven difficult for Canadian companies,” said Vic Fedeli, Ontario Minister of Economic Development, Job Creation and Trade. He said several recent initiatives by his government should lead to more purchases from domestic manufacturers.

Mr. Levy’s report led to the creation of the CAN Health Network, which brought together several hospitals to create an integrated market for national health technologies. The group has won contracts worth $55 million and is asking Ottawa for $100 million to expand its strategy. UHN’s Taylor, meanwhile, said Canadian hospitals have begun to foster the growth of medical technologies and biotech innovations by working to incubate startups.

As for Mr. Bakirtzian, he is more encouraged than he has ever been. At a press conference at Intellijoint headquarters in July 2020, Ford said, “we need to fix” the fact that so few Intellijoint sales come from Canadian hospitals. The company’s technology has been used in 1,000 Canadian procedures, half at private surgery centers and the rest through a federal innovation funding program at two Ontario hospitals.

This was followed by meetings between Mr. Bakirtzian and provincial government officials at Queen’s Park. “It’s not new to us. We’ve been trying to describe the challenges we’ve been facing for a long time and we’ve done that with several governments,” said Bakirtzian, whose business generates $10 million in sales. dollars per year.

Bakirtzian sees two possible outcomes that could help him and other medical technology providers. First, hospitals need to be allocated innovation dollars on top of their tight operating budgets so they can spend on new technologies, he said.

He is also encouraged by a recent request for proposals from Kitchener’s Grand River Hospital to conduct a research study on the clinical and economic benefits of using navigation tools for hip replacement surgery. Such a study would compensate for a lack of data on the profitability of such a technology, according to the Canadian Agency for Drugs and Technologies in Health. Intellijoint bid for the contract.

If this study concludes that such technology is beneficial, it could lead the Ontario Health Insurance Plan to reimburse its use, which would pave the way for its adoption by hospitals, Bakirtzian hopes. The contract should be awarded in the coming weeks. “Ultimately, that’s what will lead to widespread adoption” in Ontario, he said.

“We have a pathway here to get reimbursement, which is the holy grail of medtech.”

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