Intellectual Ventures’ Latest Big Push: Turning Med-Tech Inventions Into Cash
Nathan Myhrvold is a physicist who made his name as a software guy at Microsoft. So it’s natural to think that if his Bellevue, WA-based invention firm, Intellectual Ventures, creates anything of lasting value, it will probably come from physics or software. Maybe it will be something really offbeat (fighting infectious disease with mosquito-zapping lasers), or really big and audacious (cheap, clean nuclear power at TerraPower).
But a couple of new dealmakers that Intellectual Ventures has hired in the past six months say some of the company’s biggest inventions could come from a surprising sector—medical devices. These could be things as simple as efficient new bone screws, safer and more vivid medical imaging devices, new drug discovery technologies, diagnostics, or touchscreen interfaces embedded with technology to automatically kill viruses and bacteria circulating in the environment.
“We have thousands of inventions in the medical technology space that were conceived of by our team of inventors. Literally, thousands,” says Daniel Hawkins, the new vice president of business development at IV, responsible for medical technologies. “The medical device universe is just starting to hear from us.”
Intellectual Ventures has its share of critics, who see it as little more than a patent troll that goes around scooping up intellectual property and then forcing innovators to cough up cash or else get sued for infringement. The firm naturally bristles at this criticism, and counters by arguing that it actually creates a lot of inventions in-house (and that it hasn’t ever sued anyone). Part of this comes through brainstorming “invention sessions” where it brings in superstar scientists like MIT’s Robert Langer and Leroy Hood of the Insitute for Systems Biology to invent stuff. The value of all this inventing is hard to pin down on a spreadsheet, because no one knows what will pay off in the marketplace and what won’t in the future. But IV has grown to the point—with more than $5 billion under management and more than 700 employees worldwide—that it’s time to start showing its investors it can apply inventions to real-world problems and generate returns.
That’s where Hawkins and his colleague Paul Duesterhoft enter the picture. Hawkins, a seasoned medical device entrepreneur, previously worked in a couple of venture-backed startups incubators—one that’s now become Calibra Medical, the maker of a miniature insulin delivery pump, and another called Aspen Medtech, which closed down a year ago. Duesterhoft was formerly a vice president of marketing at Seattle-based ZymoGenetics (NASDAQ: ZGEN). They have both been hired in the past six months at IV, as the first businesspeople charged with sorting through the company’s medical tech portfolio of patent applications and potential patent applications, to see which ones may become real products. That means figuring out what’s valuable to the Johnson & Johnsons, Boston Scientifics, and Medtronics of the world, and striking some deals to license technology to them. Maybe, once in a while, this might even lead to the creation of a new company.
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