Philips Healthcare investing $33M in Cleveland R&D center

Philips Healthcare is investing more than $33 million in the first phase of a medical imaging research and development center at University Hospitals Case Medical Center in Cleveland.

The investment by the Dutch imaging technology company — which could double if a second phase follows — was announced at an afternoon press conference along with the $5 million Ohio Third Frontier grant that landed it.

Ohio is putting $5.25 million toward two projects — including the Philips project — to develop healthcare and biomedical device technology organizations in Cleveland and Northeast Ohio, Gov. Ted Strickland announced during the conference.

A $250,000 grant administered by the Ohio Department of Development will support Cleveland Health-Tech Corridor partners as they attract more biomedical, healthcare services and technology companies to the area along Euclid Avenue between East 22nd Street and University Circle.


That grant was part of the Ohio Hub of Innovation and Opportunity designation, which Strickland bestowed on the corridor during the press conference.

The Ohio Hub program is aimed at helping regions attract clusters of connected businesses, landing investments and workers to create growth in Ohio’s key industries. The first hub is in Dayton, Ohio. Cleveland is the second hub.

The corridor starts at East 22nd Street and extends east, roughly following Euclid Avenue, to University Circle — near the main campuses of the Cleveland Clinic and University Hospitals. The corridor includes seven institutions, seven incubators for young companies and more than 75 biomedical and 45 technology companies.

The plan is to attract more biomedical, healthcare services and technology companies to build on nearly $3 billion in investments already made in the corridor by recycling old buildings and building new ones; providing property management, financing, industry and start-up help to companies; and offering service providers access to four hospital systems.

Strickland also announced a $5 million Third Frontier grant to Philips Healthcare to build the Philips Healthcare Global Advanced Imaging Innovation Center in renovated space at University Hospitals, as well as at newly constructed space in is emerging cancer hospital. University Hospitals is located within the health-tech corridor.

Philips is putting in $33.5 million during the first phase of its center, at which company and UH professionals would test and evaluate new imaging technologies. The center also would develop and test imaging agents, develop new imaging technologies and provide researchers access to the latest advanced technologies.

Philips, which employs 1,100 people at its facility in nearby Highland Heights, Ohio, could invest a similar amount or more in a second phase of the center, according to the company’s submission for Third Frontier grant consideration.

Philips runs its global computed tomography and nuclear medicine businesses from Highland Heights, where it also houses its North American technology refurbishing and service training businesses.

“The goals of this center will be to provide strategic research, development and clinical validation for advanced imaging technologies, further developing our presence in Northeast Ohio and building on our existing partnerships with Case Western Reserve University and University Hospitals,” said Jay Mazelsky, senior vice president and general manager for Computed Tomography and Nuclear Medicine at Philips Healthcare.

“Philips recognizes the State of Ohio’s long-standing commitment to the biomedical industry,” Mazelsky said in a written statement. “Ohio Third Frontier has spurred commercialization collaborations among industry, research institutions and clinical systems. The strength of our partners, the depth of medical imaging talent in the Cleveland region and the steadfast support from the State of Ohio made Cleveland the clear choice for this global innovation center.”

The Philips announcement, along with multi-million dollar expansions recently announced by STERIS Corp. (NYSE: STE) and US Endoscopy, both in Mentor, Ohio make Northeast Ohio easy to sell to investors and technology companies, said Baiju Shah, president and CEO of BioEnterprise, the region’s healthcare business development organization.

“Philips Healthcare’s announcement validates the emergence of Cleveland as a global center of healthcare innovation,” Shah said. The decision to locate its center “within the Cleveland Health-Tech Corridor is an example of what can happen when public entities led by the State of Ohio, private institutions, philanthropy and nonprofits collaborate.”