OraSure Technologies in Bethlehem got FDA approval for a rapid COVID-19 test.

OraSure scored national headlines in June when the FDA approved its COVID-19 home diagnostic test, shining a spotlight on Lehigh Valley’s strong position in the  growing life sciences sector and the corporate race to fight the pandemic.

The region, where many medical devices and diagnostics are made, also churned out improvements to catheters, infusion pumps, and other life-saving innovations during the pandemic as well as life-enhancing technology for when the pandemic passes. Those are just the latest advancements in an industry that has been building momentum for decades.

Lehigh Valley offers a front-row seat to those jockeying for position as an industry innovator and in the expanding global market. Here is why the medical device industry is good bet in Lehigh Valley:

The Medical Device Industry Shows a Bold Turn of Foot

The Global Market for Medical Devices, 11th Edition, the latest report by leading medical market research firm Kalorama Information, shows how the medical device industry grew during the pandemic. (Graphic/Liz Martin)

The already strong global market for medical devices grew by 5% to $472 billion in 2020 as demand increased in relation to the fight against COVID, according to new data in the Global Market for Medical Devices, 11^th Edition, the latest report by leading medical market research firm Kalorama Information.

That growth reflects not only the demand for personal protective equipment, infusion pumps and other devices fueled by the pandemic but also the softening in demand for scalpels, surgical implants and other devices that were not needed because of postponed elective surgeries.

And revenue of certain diagnostic devices, such as OraSure’s COVID test, was expected to reach $84.3 billion last year including a $9 billion boost from COVID impact, according to August report by Kalorama Information. Those so-called invitro-diagnostic products influence more than $8 trillion in “health care spending and treatment decisions,” according to Kalorama.

While the race for a vaccine grabbed most of the headlines, innovations in medical equipment were plentiful last year. A Lehigh Valley Economic Development Corporation (LVEDC) review of the nearly 3,000 medical devices receiving market approval in 2020 by the Food and Drug Administration showed many of the investments are in improvements to catheters, syringes and implants.

Kalorama predicts the overall demand in the medical device industry is expected cool down over the next year as the market stabilizes. The industry is expected to grow 3% annually through 2025.

The Medical Device Industry Isn’t a One-Trick Pony

Private insurance, health care spending and the senior citizen population are among the key drivers of the medical device industry, according to IBISWORLD. (Graphic/Liz Martin).

COVID-19 drove the market growth last year, but the industry had been on firm footing for years. The market has been growing as advances in knee and hip replacement, sports injury treatment, personalized medicine and other therapies become accessible to more people.

The growing senior citizen population is a key driver in the industry. Aging baby boomers – who expect to stay active long into retirement – are prime candidates for hip and other surgeries. They make up a large share of cancer diagnosis. The National Cancer Institute says half of cancer cases are diagnosed in people 66 older, fueling the need for diagnostics and other therapies.

Another driver? Sports. Johns Hopkins Medicine reports that 30 million children play sports and 3.5 million injures a year. Advances in the medical device industry have gotten many back on the field quickly.

There’s more money to spend on health care, too. Medicare and Medicaid spending is expected to increase, and the number of people with private health insurance – if not the percentage – is forecast to grow.

Lehigh Valley Has Quite a Few Horses in the Race

Lehigh Valley’s life sciences sector has been building for decades. (Graphic/Liz Martin)

In the last year, Lehigh Valley companies rolled out consequential innovations in the market despite supply chain shocks and labor challenges:

• OraSure Technologies, a diagnostic device company in south Bethlehem, received national attention for its work on a rapid COVID-19 test. The company is also behind rapid tests for Ebola and HIV.
• B. Braun delivered a life-saving advance early in the pandemic when personal protection equipment was scarce: an extension set to allow infusion pumps to be placed in the hallway outside a patient’s room, limiting contact with healthcare workers.
• Olympus in May announced the launch several new technologies including new device that allows for minimally invasive lung cancer diagnosis and staging via needle biopsy.
• Tyber Medical is rolling out a new line of foot and ankle plating systems and launched a clinical study on titanium spine implants.

The headlines were years in the making as Lehigh Valley developed a critical mass of medical device companies. A region with a proud manufacturing past and the nation’s 52^nd largest manufacturing economy in the present, Lehigh Valley’s position as a medical device destination was cemented in 1979 when the German-based B. Braun acquired local plastics maker, Burron Medical, and now has a headquarters, factory and R&D here, employing 2,000 people.

Today, Lehigh Valley’s employment concentration among manufacturers of diagnostic devices and medical equipment is more than twice the size of the typical U.S. region, according to Chmura Economics JobsEQ. And a specialized segment – surgical instrument production by companies like B. Braun – is nearly five times as large. Lehigh Valley has nearly 180 life sciences establishments and has added at least 1.3 million square feet in the last two years.

Lehigh Valley’s Trifecta

Lehigh Valley has developed a critical mass of medical device companies because of this life science trifecta: talent, location, investment.

Talent: Medical Device manufacturing companies recruit talent from Lehigh Valley’s 11 colleges and universities – including Lehigh University’s prestigious engineering college – and other top research schools within short drive. Local schools produce nearly 4,000 graduates a year skilled in advanced manufacturing.

Location: Lehigh Valley has vaulted to the top of the emerging industrial markets list. It sits amid the Northeast with access to interstates, allowing it to easily move goods quickly and affordably. It touts Lehigh Valley International Airport (and is within 100 miles of six others) and the Bethlehem intermodal facility with 9,000 feet of track for conventional intermodal and more than 14,000 for Triple Crown Services. The region, which is within a day’s drive of a third of the nation’s population, is more affordable than nearby metropolitan areas like Bergen County and Philadelphia.

Resources: Lehigh Valley has a not-so secret weapon: Ben Franklin Partners of Northeast Pennsylvania. The organization, which is headquartered at Lehigh’s mountaintop campus in Bethlehem, nurtures young technology companies. It links entrepreneurs with investment and support, including lab-quality incubator space at Techventures. It recently launched the new Ben Franklin Life Sciences Technology Network, which brings together clients and alumni, hospitals, university resources and economic development colleagues to create synergies and accelerate the sector’s growth. Regional employment is also dominated by health care providers, including St. Luke’s University and Lehigh Valley health networks.

“Ben Franklin’s investments, introductions, and links to resources are a crucial part of the support the region’s medical equipment companies receive for R&D and commercialization as they launch and continue to innovate,” said Laura Eppler, Chief Marketing Officer for the Ben Franklin Technology Partners of Northeastern Pennsylvania. 

Up and Comers to Watch

Lehigh Valley launched scores of technology startups due in large part to Ben Franklin Partners of Northeast Pennsylvania. Here are just a few innovations coming down the stretch:

• CryoConcepts in Bethlehem added three new employees last year as it rolled out the first new product in 30 years to the recently acquired Histofreezer line, popular products physicians use to freeze off “lumps and bumps.” The rollout happened even as the demand for elective procedures cooled during the pandemic.

“You had to take that risk and expect this is not going to go on forever,” CryoConcept founder Sam Neidbala said. “The pandemic gave us a pause in daily activities and refocused everybody. We put sales [employees] on the production floor. We didn’t lose a single person but repurposed them and got ready for when this finally passes.”

• Saladax BioMedical at TechVentures in Bethlehem hired eight more people over the last year as it ramped up production for its new test for Clozapine, a key medication in the treatment of schizophrenia.
• BioMed Sciences moved to a larger facility in Hanover Township, Lehigh County, and increased production of existing products and research a new second-generation burn treatment and wrinkle reduction technology.
• Thread BioSciences received $100,000 from Ben Franklin Partners to support the development of a prototype production facility and R&D laboratory for a new urinary tract infection diagnostic test.