Essex Woodlands Partners With Lemaitre to Start White Pine

Full article reprinted from Start Up - January/February 2010

Dan Lemaitre, who steered CoreValve into a record breaking acquisition by Medtronic, has joined with venture capitalist Guido Neels to form a new device company, White Pine Medical Inc. Neels' firm Essex Woodlands Health Ventures is backing Lemaitre with $50 million. Read more...

Essex Woodlands Partners With Lemaitre to Start White Pine

Full article reprinted from Start Up - January/February 2010

The White Pine Medical Inc. storyline is familiar. CEO meets or starts company. CEO runs company until he or she guides it through a successful outcome, usually a strategic sale. CEO meets venture capitalist who provides the capital to do it all over again. In this case, the principals of our story—Dan Lemaitre, who plays the CEO, and Guido Neels in the role of the venture capitalist—have known each other for years. But the principal plot elements of White Pine's creation are true to form. Neels' firm Essex Woodlands Health Ventures is backing Lemaitre with $50 million to build a new company.

This plot isn't original. Just over the past two years, firms like Warburg Pincus and GTCR Golder Rauner have thrown their financial heft behind proven executives, charging them to build new companies. Warburg Pincus paired with two former Cytyc Corp. executives to create Constitution Medical Ventures Inc. ( See "Warburg Pincus Teams with Cytyc Duo," START-UP , July 2008.) Less than a year later, GTCR backed former Cardinal Health Inc. executive Thomas Daulton, providing $250 million to Devicor Medical Products LLC. ( See "GTCR Dips into Devices with Devicor," START-UP , February 2009.)

If the global embrace of the movie Avatar has taught us anything it's that derivative storylines can work if they're executed well, and Lemaitre may be the closest thing the medical device world has to James Cameron at the moment. Lemaitre, after all, helped direct a blockbuster of his own. As CEO of CoreValve Inc., he steered the company, which had already launched its percutaneous heart valve in Europe, into a record-breaking strategic acquisition by Medtronic Inc., which paid $700 million plus earn-outs for a start-up with no approval for clinical trials in the United States. Prior to joining CoreValve in April 2008, Lemaitre had led Medtronic's corporate strategic planning and corporate development functions since 2006. He'd previously worked on Wall Street as an analyst.

Lemaitre, after dismounting CoreValve, mulled his next move. He says he considered many CEO opportunities. "You realize pretty early on that there aren't a lot of CoreValves out there," Lemaitre says. "I was fortunate enough to be put on top of a Seabiscuit. And when a horse runs that far and that fast you want to be on another horse just like it."

Early in his search, Neels invited Lemaitre to work with Essex Woodlands Health Ventures. "I told him he didn't need to look any further than Essex," Neels says. Lemaitre quickly came around to Neels' way of thinking. Essex Woodlands put $50 million from its $900 million health care fund behind Lemaitre and told him to build a company. "We're going to take some time to see if we can create something that's like another Seabiscuit," Lemaitre says.

Lemaitre, White Pine's sole employee, says his playbook is a blank. He says he has no preconceptions as to what area he might approach, but it clearly wouldn't benefit him to state them if he did. Asked if he'd rule out any area, Lemaitre says he's never been a fan of large capital items, but he's not alone in that regard. He'll also likely stay away from the crowded heart valve space, but Neels says they're not ruling that area out. The one common requirement of any product or business White Pine acquires will be commercial readiness. White Pine isn't interested in acquiring development-stage products. Any acquisitions will follow Essex Woodlands' overall philosophy of growth-stage equity where companies must have products that have "positive EBITDA or a clear window to positive EBITDA, where the scientific risk and clinical risk are slim to none," according to Neels.

—Tom Salemi

Medical device manufacturers facing many challenges: from the rising clout of group purchasing organizations (GPOs) to payment bundling and physicians' growing allegiance with hospitals in product price negotiations. Get all the answers now in new Medtech Insight's new 24-page Special Report: Medical Device Landscape: How regulatory changes and cost control measures are reshaping the industry. Availible for purchase now!

Purchase this article online or get it FREE when you subscribe to Start Up.

Companies mentioned in this article:

Eli Lilly & Co.

Medtronic Inc.

About Start Up

No publication reviews leading edge companies and technology better than START-UP. Each issue of START-UP profiles the most important new product companies, identifies the hottest technology areas, reviews funds flowing into private companies and investment trends, and reports on university tech transfer licensing. Industries covered: pharmaceuticals, biotechnology, medical equipment & devices, and in vitro diagnostics.