Ardian is a Minnesota device firm that’s not based in Minnesota
Ardian Inc. is a startup based in Mountain View, California.
Yet its technology, a catheter-based treatment for hypertension, was created by Minnesota entrepreneurs, funded by a Minnesota venture capital firm, tested by a Minnesota hospital, and recently bought by a Minnesota medical device company for at least $800 million.
So why in the name of Earl Baaken’s Hawaiian shirts is Ardian not headquartered in Minnesota?
First, let’s review Ardian’s Minnesota connections:
- Dr. Howard Levin, a cardiologist, and Mark Gelfand, a biomedical engineer, founded Ardian in 2003. Levin and Gelfand both help start CHS Solutions in Brooklyn Park, Minnesota, which was acquired by Gambro earlier this year; and Cardiac Concepts Inc. in Minnetonka, Minnesota, which recently raised $27 million from the sale of equity.
- Split Rock Partners, based in Eden Prairie, Minnesota, is a major investor behind Ardian.
- Hennepin County Medical Center in Minneapolis was the first hospital in North America to treat patients with Ardian’s technology, a catheter-based system that uses radio-frequency energy to “deactivate” nerves in the kidneys, lowering blood pressure.
- Medtronic Inc. (NYSE:MDT), based in Fridley, Minnesota, said earlier this week that it acquired the company for at least $800 million.
Anyone with a passing interest in Minnesota’s innovation ecosystem should be slightly disturbed. People brag that Minnesota is home to all of this medical device talent and expertise.
Yet Silicon Valley is emerging as the destination for medical device startups with big-bang technologies and exits. Cameron Health, based in San Clemente, California, is another example. The startup, led by Minnesota medical device veterans, is attracting national attention to its leadless implantable cardioverter defibrillator.
California’s risk-taking culture, backed by a robust venture capital community, are two major assets that Minnesota lacks.
For example, Ardian was hatched in The Foundry, a well respected incubator in Menlo Park, California that develops promising startups, mentors young entrepreneurs and finds investors for its companies. You will not find such a thing in Minnesota, at least not with the degree of success The Foundry enjoys.
That’s not to say Minnesota isn’t creating worthy medical device startups. But when is the last time you heard a local startup selling itself for nearly a $1 billion?
You may ask, what’s the big deal? Medtronic is buying the company anyway. For starters, we should be creating our own innovations, not buying them from outside companies.
More importantly, an $800 million exit attracts attention and people who want to replicate it. That’s why entrepreneurs and investors flock to Silicon Valley.
Could you imagine what an $800 million exit would do for Minnesota’s entrepreneurial community?
In 1995, Boston Scientific Corp. (NYSE:BSX) acquired SciMed Life Systems, a local device firm, for $850 million. SciMed alumni Mike Berman, Dale Spencer and Dan Sullivan used their riches to launch dozens of companies in Minnesota and invest in countless others.
We should look at Ardian not simply as another Medtronic acquisition but rather one more reason why Minnesota’s innovation culture is falling further and further behind those in other parts of the country.
Categories: MedCity News eNewsletter, SYN, Top Story
Doesn’t AGA count? AGA was a MN-based startup that just sold for $1.4 billion.
by Cindy on Nov 28, 2010 at 12:38 pm
I would not count AGA as a startup. The company went public and was already generating revenues and profits before it sold itself to St. Jude. I’m referring to early stage startups still developing their products. That someone would pay $800 million for a company that has yet to sell anything reflects confidence in a high risk startup, something you won’t find in Minnesota.
by Thomas Lee on Nov 28, 2010 at 2:58 pm
Tom,
I would count AGA. And also ATS and Arizant (good time for the letter ‘A.’). Scimed had revenue when it was sold, so your own logic makes them acceptable. And don’t forget ev3. Plus CSI is public and growing rapid. There are some good ones in town.
AGA started in Minnesota in 1995. When the company went public and now with the sale to St. Jude a number of locals made good money, which has been put to use in Minnesota. The most visible is the new children’s hospital. There are also startups that have received investment from the people who made money on AGA.
Arizant started in Minnesota and Scott Augustine is now working on a new startup and had a successful design firm. Also, if you visit TCF Bank Stadium you’ll his name and also the Sundet name on the stadium (Sundet owns Clarus Medical).
ATS was started in Minnesota and grew here. Chances are good many of the executives there will land with new startups.
Considering that Dr. Levin and Mark Gelfend have started 4 or so companies and 2 of them are here, that is not so bad. CHF solutions (one of Gelfend’s companies) was also acquired and many of the executives involved with CHF have other firms in town now (John Erb for example).
I wouldn’t say things are super awesome in Minnesota but comparing Minnesota and California this way is like comparing apples and blue whales.
Have we had a company go from startup to big exit that quickly? Not in a while. But going from startup to big exit I suspect is rather uncommon.
Plus, and maybe most importantly: Medtronic was very clear that they changed M&A strategies recently. Given the challenges with the FDA and the capital markets Medtronic publically stated (at our investor conference in May of this year) that they planned on purchasing companies or technologies earlier on then they would have in the past because they have the resources to see clinical and regulatory through for new devices that the capital markets cannot support on their own.
This is consistent with that change. Don’t be surprised if that happens to someone in town (I don’t know that there are any talks going on, but it would certainly seem probable).
by Frank Jaskulke on Nov 29, 2010 at 1:28 pm
Frank, there is a difference between looking at the bright side of things and aspiring to be something more. I don’t think anyone would say they wouldn’t want Ardian to be based in Minnesota. As for comparing apples to blue whales, I think we should be more whalish. We never may never be Silicon Valley but that doesn’t mean we shouldn’t want or try to be.
As for the other companies you mentioned…Ardian was founded in 2003. Those AGA, ATS, and Arizant all took a while to be sold. I used the SciMed example to show what big exits can do for local entrepreneurs.
by Thomas Lee on Nov 29, 2010 at 2:56 pm
In reverse order:
SciMed is a great example of what local exists can do. AGA and Arizant have certainly followed in that trend, as have the people from ev3, CHF and other recent exits.
Again, I would argue that Ardian is a rare occurance in any environment and given Medtronc’s stated preference for now investing in earlier stage companies, we may see more of them.
We certainly should be more whalish but demography matters. Given the size of our population, we have done quite well. If Minnesota had as many people as California and was as successful, proportionaly, we would make California look backwater. Consider we have 1/8 the population of California but still have about 1/4 the number of medical device jobs.
If Ardian was based in Minnesota, would that be good? yes. But not every successful startup can be based here. Should Minnesota have more? yes. But to use one successful exit with connections to Minnesota as an example of the state’s failing is poor argumentation.
I would also like Google and Apple to be based in Minnesota. And I bet California wouldn’t mind if 3M we’re HQ’ed in Sunnyvale.
Let’s not forget that Aridan has benefited Minnesota:
clinical trial at HCMC, Split Rock, a local fund gets some money back for investors, Medtronic will have to add staff to grow the firm, some of may end up here as the company has AF product lines in Mounds View.
Aspirations should be based on reasoned analysis of the situation, not asserstions that are skin deep.
by Frank Jaskulke on Nov 29, 2010 at 9:28 pm