Courtesy of NASA

Considered as a whole, Ireland ranks among the top half-dozen medical devices clusters in the world with around €6 billion ($9.4 billion US) in annual exports and around 25,000 employees. "You will not find an equivalent cluster in Europe that big," says Richard Hendron of IDA Ireland. If Ireland is the cluster, Galway is its beating heart. About 40% of the country's workforce in the medical devices sector is located either in the city or within a couple hours' drive. Paradoxically, the closure of a computer plant played an important role in its emergence.

Back in 1993, when Digital Equipment (now Hewlett-Packard) decided to relocate computer manufacturing from Galway to Ayr in Scotland, many predicted economic collapse in the west of Ireland. The facility employed 1,300 directly, and it supported a similar number of jobs in subsuppliers scattered throughout the region, but the doomsday predictions that accompanied the shutdown were wrong.

What actually happened has become part of the folklore of Ireland's information technology industry. It led to the formation of more than a dozen startups engaged in integrated-circuit design and software development, while the facility that remained took on a variety of software-related functions and continues to thrive today. Less visibly, but no less importantly, it also played a significant role in stimulating the emergence of an important medical devices cluster in the region, comprising large-scale multinational manufacturing facilities with significant levels of product development and R&D responsibilities, a clutch of homegrown startups, and even a handful of overseas startups that have relocated to take advantage of the region's skills base.

The National University of Ireland, Galway, has become an increasingly important pull factor because of its investments in biomedical engineering and biomedical science over the past decade. The National Center for Biomedical Engineering Science houses around 400 researchers in total, drawn from materials science right through to clinical research. It includes the Regenerative Medicine Institute (REMEDI), a stem cell research facility that has entered large-scale partnerships in cardiovascular disease with Medtronic and in osteoarthritis with Smith & Nephew.

The shutdown of Digital Equipment helped seed all this activity by setting loose a clutch of executives who had learned how to function in demanding multinational environments, and by leaving behind a supply chain that, with a little retooling, was able to tap into opportunities offered within the then fledgling medical devices sector. "They really did create a vendor subculture, which is exactly what the medical technology sector needed," says Hendron, who manages IDA Ireland's interaction with the medical devices sector.

Creganna Medical Devices is the paradigmatic exemplar. The company's roots lie in providing metal plating services to Digital. Since 2000, however, its sole focus has been medical devices. The privately held firm, which now employs around 500 people in Galway and in a newly opened facility in Marlborough, Mass., has evolved into a designer and developer of components and subassemblies used in catheters and specialty needles. It is part of an increasingly sophisticated supply chain that has developed in tandem with the big multinational players.

The timing of the plant's closure was also fortunate. Just as Digital Equipment was moving out, some of the big guns of interventional cardiology, including Boston Scientific, were settling in the region. "The majority of the whole Galway cluster lifted off around 1992 or '93," says Hendron, although CR Bard, the forerunner of Medtronic, had arrived in the previous decade. The region would become an important front in the "stent wars," in which companies such as Boston Scientific, Medtronic, and Guidant competed for supremacy.

The tax breaks available in Ireland were the initial attraction for overseas device manufacturers, recalls Chas Taylor, a 15-year veteran of CR Bard, who is now one of Galway's most high-profile serial entrepreneurs. "From that they developed R&D, because the regulatory environment was less onerous in Europe than in the US at the time."

Taylor is one of a slew of innovators who emerged from these multinationals. Along with two other CR Bard colleagues, Paul Gilson and John O'Shaughnessy, he founded MedNova in 1996, Galway's most eye-catching homegrown success to date. MedNova pioneered carotid artery stenting, and in 2005 Abbott acquired the company for around $100 million (US). Taylor and Gilson are now involved in two new startups: Novate Medical, which is developing next-generation inferior vena cava filters for preventing pulmonary emboli, and Veryan Medical, a spinoff from Imperial College London, which has relocated to Galway. Based on Colin Caro's research into the physics of blood flow at Imperial, Veryan is developing a novel stenting device that mimics the natural helical shape of blood vessels. "We believe it will significantly reduce restenosis," says Taylor. The inflammatory scarring process is a major problem in stenting procedures.

Raising venture capital funding the second time round was a far easier task, says Gilson. "At the time we came out of CR Bard there wasn't a developed venture capital structure in Ireland," he recalls. "We raised our money in London and Boston."

O'Shaughnessy is chairperson of another repeat startup, Crospon, which CEO John O'Dea founded in 2006 to develop products for monitoring and treating diabetes and gastroesophageal reflux disease. O'Dea's previous venture was Caradyne, a ventilation equipment maker that Murrysville, Pa.-based Respironics acquired in 2004. O'Dea's career includes earlier stints at Nellcor Puritan Bennett and, inevitably, Digital Equipment. He has reassembled some of his previous team at Crospon, which, although only two years old, has already filed for its first product approval. The pace has 'hotted up' this time around. "The guys know the recipe. It's just a case of cooking it faster," says O'Dea.

The company's lead product, EndoFlip, is a probe that assesses the function of the gastroesophageal junction, a valve between the esophagus and stomach, and it is designed as an aid to diagnosing gastroesophageal reflux disease. The company has also licensed intellectual property from Hewlett-Packard, derived from the latter's inkjet technology. Instead of firing ink, the transdermal patch system will deliver biologic drugs such as insulin via an array of exquisitely controlled microneedles.

Over time, O'Dea says, the medical devices cluster in Galway will migrate towards biotechnology, with an increasing emphasis on merging devices with gene therapy and biologic drugs. "The REMEDI center is going to be the focus of a lot of startups," he says. For Hendron, its development will be marked by a further intensification of the linkages between academia and industry. "Research, research, research is the direction it has to go."

Ireland's Medical Devices Sector

Number of companies: 130

Number employed: 25,000

Annual Exports: €6 billion ($9.4 billion US)

Annual Growth: about 16%