Johnson & Johnson Funds Medical-Device Business Incubator

Aug. 30–A business incubator that spun out of Duke University to turn medical-device ideas into companies has raised $5 million from health-care giant Johnson & Johnson.

SyneCor is already backed by several heavy hitters in the medical-device industry, including General Electric Medical Systems and California venture-capital firms Frazier Healthcare Ventures and Delphi Ventures.

J&J’s contribution will help SyneCor add to the three startups it has launched since 2000, said Dr. Richard Stack, the incubator’s founder and president. “It’ll allow us to start more companies and hire more people,” he said.

The incubator, which is based in Portola Valley, Calif., employs three-fourths of its work force in Research Triangle Park. It has specialized in medical devices that minimize heart surgery and surgery to treat obesity.

SyneCor screens early-stage inventions and spins off companies built around the most promising products. Once companies are launched, SyneCor helps them with engineering services.

One of its startups, Interventional Rhythm Management in RTP, has raised $35 million to develop a miniature pacemaker.

In July, IRM snagged Daniel Pelak as chief executive. Pelak had left Medtronic, a medical-device powerhouse in Minneapolis with more than $10 billion in annual revenue, and joined Closure Medical in 2002. He headed the Raleigh-based, surgical-glue maker until June, when J&J bought it for $370 million.

In California, SyneCor launched BaroSense, a company that makes a device that, when implanted, reduces the need for surgery in treating obesity, and BioStent, a company that developed stents to restore blood flow to diseased coronary arteries.

BaroSense has raised $16 million since its inception. Last year, BioStent was purchased by Guidant, an Indianapolis-based company and early backer of SyneCor, for $16 million.

SyneCor allows its corporate sponsors first dibs on new products that its startups are developing.

The incubator got started with about $13 million in investments from its backers.

Stark said SyneCor generates about $10 million in annual revenue and has been profitable for two years.

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