Intermed Labs and Mon Health combine for startup studio in life sciences

A relatively new startup studio based in Morgantown, West Virginia, and aligned with a health system there is providing an avenue for physicians and others with good ideas to turn them into reality.

Intermed Labs is the brainchild of Dr. W. Thomas McClellan, a Mon Health plastic surgeon who is also a successful entrepreneur and inventor. He holds patents for medical devices, and he has co-founded several companies, including Figure 8 Surgical, which produces an FDA-approved Figure 8 FlatWire used to close the sternum after open heart surgery, and AlloX2, which helps women who are going through breast reconstruction after cancer surgery.

He knows exactly how challenging it can be for physicians with good ideas to not only develop them, but also make them better and, eventually, bring them to market. So, along with his co-founders, McClellan has launched a multidisciplinary team of engineers, product developers, financial experts and others that takes good ideas from clinicians and others and creates medical devices that serve specific needs.

McClellan found an enthusiastic and innovative supporter in Mon Health President and CEO David Goldberg, a former Allegheny Health Network SVP who saw a unique opportunity to seed the next level of innovation in the health system as well as boost the West Virginia economy. Goldberg and Mon Health committed $500,000 over two years, as well as 3,000 square feet of space for the studio in a Mon Health office building in Morgantown.

Intermed Labs at Mon Health, which opened last October, has gotten off to a fast start. It has at least nine products in development, many developed in the Morgantown region, but at least one from out of state. It has gotten significant support from a well-known venture capital firm, Mountain State Capital, that gives it a boost in the Pittsburgh region, and in late September forged an agreement to collaborate with Country Roads Angel Network, an angel investment network that serves entrepreneurs in all of West Virginia’s 55 counties.

“What David has allowed us to set up at Mon Health, which we will create in other places, allows regional doctors and others in northcentral West Virginia” space for innovation, McClellan said.

‘The real opportunity’

For Goldberg, funding and working with Intermed makes sense: Not only does it help clinicians with good ideas, but the health system can be used as the clinical proving ground for medical devices and innovations developed at Intermed.

Goldberg said Mon Health and Intermed have reached out to health care providers, academic and otherwise, about how the startup studio can connect with their innovators. He believes the multidisciplinary approach provides opportunities for health care clinicians, inventors, engineers and others to develop ideas and become more innovative, with the end result of a product that can either improve health care at the clinic level or someone’s quality of life.

Goldberg said the strategy is, at its heart, simple: Provide as much support to Intermed and its team as possible — including but not limited to financial investment and physical space — and then let the entrepreneurs do what they do best: Innovate.

“That’s the real opportunity,” Goldberg said.

One of the Intermed startups, Fingy3D, is an example of the approach: Fingy3D is a prosthetic finger made from a 3D printer that is dramatically decreasing the cost for the nearly 50,000 amputations a year. Instead of thousands of dollars and weeks to order and construct, Fingy3D does it all quickly and cheaply — a 3D-printed finger costs about $50 — by uploading a photo to its website.

“Without Intermed Labs, I don’t think Fingy would be in existence,” said McClellan, who developed it along with engineers, designers and a patient who had lost a fingertip that he had treated. “It took time, money and engineering prowess from both the mechanical and digital realms to get off the ground.”

Building up life sciences innovation in West Virginia

Goldberg also believes the Intermed-Mon Health collaboration will improve the region’s economy.

“We’re a private entity, with the sole focus of creating value, not necessarily creating jobs,” McClellan said. “But I hope that success, jobs, are a byproduct.”

So does McClellan. He sees medical and health care innovation as the next big thing for the Mountain State as the coal mines continue their decline.

Matt Harbaugh, co-founder and managing director of Mountain State Capital, which has become a key resource for Intermed and its startups given its heavy involvement in the West Virginia and Pittsburgh region ecosystem, sees Intermed as building up Morgantown and West Virginia as a center for life sciences innovation, different from Pittsburgh with its two big health system powerhouses and other life sciences infrastructure.

“What you’re seeing is a fortuitous intersection of David, who used to work at AHN, and Tom McClelland, who works at Mon Health and happens to be a very successful and innovative physician,” Harbaugh said. “Between the two of them, they had the vision and the ability to create something like this. That is a special combination.”

Plans for expansion

McClellan and Goldberg have high hopes for expansion of Intermed, and have been reaching out to companies and policymakers about the program, its potential and how it can help West Virginia’s economy. During an August visit to Intermed Labs’ studio space in Morgantown, U.S. Sen. Shelley Moore Capito, R-West Virginia, marveled at the innovation.

Harbaugh said most cities in the United States with medical centers and hospitals have innovation happening in and out of their walls, “but most smaller towns are lacking the support system to first recognize how to commercialize an idea, product or company, and depending on whether it’s a product or company, how to take it from concept to licensing or startup. What they’re doing in Morgantown really has applicability across the United States, and I believe that is their plan. They want to create an asset that can be utilized by physicians anywhere in the United States.”

McClellan and Goldberg say they’re working to grow Intermed and aren’t judging success completely by spinning out the next big medical device company. The goals are to either sell devices or create companies to make devices, but they both know it’s a tough business, full of ups and downs.

Intermed also has had talks with academic institutions to house their own labs and startup studios, and it’s working with at least one Pittsburgh company on a health care product that McClellan said could be a game changer if it comes to fruition. They’ve also met with others in Pittsburgh, including AlphaLab Health, a health care incubator that is a collaboration between Allegheny Health Network and Innovation Works.

Dr. Jeffrey Cohen, an entrepreneur and the driving force behind Allegheny Health Network’s AlphaLab Health, said he’s a fan of what Intermed is trying to do. Cohen worked with Goldberg when the latter was at AHN. He said he’s impressed by what they’re doing and also the integration of the startup studio with a health system. And he said there’s room for Intermed and Mon Health to work with AHN, but that it’s also finely tuned for the opportunities in West Virginia.

“They’re going to adapt to their market, to the problems they see in their environment and how to solve them,” Cohen said. “Their market may be a little different than Pittsburgh’s. It may be akin more to Little Rock or Peoria. But the market they serve, they have (health) problems, and they have people who want to solve those problems.”

Intermed and AlphaLab serve different parts of the life sciences continuum.

“This group (Intermed) is not going to have the next Covid vaccine or the next artificial heart,” McClellan said. “But there are a lots of (opportunities) down the chain that don’t have an avenue (to market), and that’s where we fit in.”