Commentary - Sir Christopher O’Donnell

In a global medical devices business

Smith & Nephew is a global medical devices business. We manufacture, sell and deliver medical devices to 33 countries around the world. And our mission? We help to heal and repair the human body – so that people regain their lives. We specialise in the fields of orthopaedics – replacement hips and knees; endoscopy – surgical instruments and devices for keyhole surgery; and advanced wound management – dressings for serious and hard-to-heal wounds and ulcers. We employ around 8,500 people and 650 of those, or about 8%, are engaged in research and development. Our global research centre is in York, on the York University Science Park. Research and development are processes where we have extensive collaborations and we have many partnership arrangements with universities, institutes and medical experts.

Last year we grew our revenues by 11.5%. Twenty percent of sales were new products developed in the last three years. We place a very high value on new products, as these are the lifeblood of our business’s future. We take research and development very seriously, so seriously that we invested £66m in it last year, about 5% of our revenues. This investment is critical to the development of new products to help us deliver our mission of excellent outcomes for patients, medical professionals and hospital administrators.

R&D in medical technology

Research and development in medical technology is different to that of the pharmaceutical industry. Major research breakthroughs tend to be rare, so that outcomes and new products are characterised more by evolution than revolution. Big changes such as the development of OXINIUMTM, our patented material for use in orthopaedic implants, generally occur about once each decade.

Consequently we spend about 80% of our total budget on development and 20 % on research. Throughout the world there is increasing pressure on healthcare budgets so we use integrated teams from both our research centre and our three businesses to design and build-in total economic benefits for all our customers from the beginning. This means we look for clinically effective products which help patients heal more quickly, whilst at the same time reducing healthcare costs.

Innovative products

This year we launched PERI-LOCTM, a locking plate for healing broken bones. This product took about two years to develop from our existing plating technology. Our central and business teams worked closely together on the design for this product.

The research needed included the study of over 250 leg bones in The Cleveland Museum of Natural History in Cleveland, Ohio USA. The key to the design was to create a plate shape which is optimal to fit and promotes healing.

Another innovative product in our portfolio is EXOGENTM, an ultrasound product which promotes healing of bone fractures. About 30% of bone fractures do not heal easily or at all. This year our team in orthopaedics, together with our central research team based in York, have identified in detail the mode of action of EXOGENTM. We are now conducting research to determine if ultrasound can be used for the healing of soft tissues as well as bone.

The key drivers of our research and development are:

  • excellent results for patients

  • products which bring benefits to healthcare professionals, particularly in the areas of ease and speed of use

  • economic benefits for the patient and the healthcare system or insurance company

We view economic benefits from a holistic viewpoint. This means that our research and development team considers the complete clinical procedure from the time a patient first enters the healthcare system to full recovery.

R&D project management

One of the most difficult decisions to make in any research activity is when to stop a project or research area and when to invest heavily. In common with many medical technology businesses, we use a combination of regular stage gate reviews, when projects have to pass milestones in order to continue, and an over-arching technical review. Regulatory and licensing considerations are part of the decision- making process, as all our products require regulatory approval in multiple jurisdictions. One of the current constraints for all businesses who are researching in the area of biologics is the absence of an EU framework for the licensing of such products. We play an active role in trying to develop appropriate regulations.

Currently our research focuses on biomaterials and cell-based repair, indicating our commitment to less invasive treatments which have faster recovery times. This, in combination with our determination to provide only the best quality products, ensures that the lives of both patients and medical staff are made significantly easier and the treatment process significantly quicker, thus delivering on our central goal of helping people regain their lives.