Breaking into Biomedical Materials: Where to Start

Josh Haslun: Welcome to the webinar, Breaking into Biomedical Materials, Where to Start. My name is Josh Haslun, Senior Director here at Lux Research, and I’m going to be moderating today’s session. And presenting today are my colleagues, Marcian Lee, an analyst here at Lux Research and Nardev Ramanathan, Associate Research Director. Throughout the webinar, you can type any questions you have in the question box on the screen, and time permitting, we’ll answer all the questions that we can. Now, if your question doesn’t get answered, please don’t hesitate to email it to [email protected] and it will respond. If at any point you experience technical difficulties such as a frozen screen, best thing to do is simply refresh your browser and check that your internet connection is strong. Now, before we start the webinar, a word about who we are. Lux Research helps organizations make more confident innovation decisions about what matters next. As an independent research advisory firm, we work with many of the world’s leading companies to identify emerging opportunities, evaluate technologies, and make high-impact innovation decisions. Our scientists, engineers, analysts, and industry experts combine original research and methodologies with practical decision-making frameworks to help organizations separate signal from noise. Every day, we help clients answer three critical questions. Where should we focus innovation efforts? Which technologies deserve investment? And which partners can accelerate innovation? Today’s webinar, I should say, is an opportunity to share some of that thinking with you regarding the medical device industry. With that, I want to jump into the discussion. Over to you, Marcian and Nardev.

Nardev Ramanathan: All right, thank you very much, Josh. Welcome and thanks for joining. For today’s webinar, we’re going to do something the headlines in this field rarely do. We’re going to walk you through how to break into the biomedical material space, specifically where to start. Biomedical materials and composites, a mouthful there, which I’ll shorten to BMC for the rest of this session, is having a moment. Funding is at record highs, patents are climbing. The science is genuinely exciting. And yet, some of the best-funded, best-known names in this space have lost spectacularly in the last three years. So the question is, where do you start? And so stay tuned as we walk you through how. Now for an agenda, we’ll start the landscape and go to the analysis and walk you through the key takeaways. So let’s start with the landscape. Now, on the left, you’ll see this is the Lux Tech Signal for BMC. A Tech Signal is our composite index. It rolls patents, publications, funding, and other activity into a single score from 0 to 100, where 100 is the highest possible. Two lines here. The green is BMC. The gray is the average across all the technologies we track. For more than a decade, you see that BMC did nothing very interesting. From 2009 through 2022, it oscillated modestly above the average with no clear direction. Then look at 2023. The signal breaks from that pattern and climbs steeply, pulling well clear of the average and reaching the low 60s by 2025. Now a steep line on the Lux Tech Signal is not necessarily a buy signal. And I want to be clear about that because this is exactly the kind of chart that gets people potentially excited for the wrong reasons. What the inflection tells you is that attention, money and invention are converging on this space right now. It tells you the field is heating up. It does not tell you which parts of it will make money. And that distinction between activity and returns is the whole point of today. When a signal moves like this, two things happen at once. Real opportunities open up. And so does the window for expensive mistakes. And the next two slides show both sides of that point. But first, underneath that signal, here is what is actually moving, two charts. On the left, patent publications per year. Just under 40,000 filings in total across the period, applications and grants worldwide, including our estimates for the most recent year. Volume roughly tripled from the late 1990s to the mid-2000s, then settled into pretty much a steady growth. The story also is in the color. China, the pink band, goes from almost nothing to the single largest contributor by 2024 and 2025. The United States, in dark green, holds a substantial base, but it’s no longer the center of gravity by volume. Hold that thought because volume and defensibility are not the same thing, and we will come back to that. On the right, investment funding worldwide in U.S. dollars. For 15 years, this was a quiet sub-half-billion-dollar field. Then 2022 happens. Funding jumps past $1.5 billion and the mix shifts. The purple band is post-IPO money. So public market capital is now flowing alongside venture capital. 2024 and 2025 stay elevated. This is no longer a niche that only specialist investors care about. So both the signs and the capital suggest things are rosy. Filings stay strong and steady. Money is coming in at record levels. Public investors are arriving. But here’s where I push back on the obvious read. A reasonable person might look at these two charts and conclude that the field has been sufficiently de-risked. It has not. Record funding and record patents tell you the field is crowded and expensive. They tell you nothing about who clears regulation, who gets reimbursed, and who builds a durable business. For that, you look at who has already failed, which we will talk about in the next slide. Now this is the part that these funding charts tend to leave out. Beneath the surge, large and sophisticated organizations have repeatedly misjudged biological risks. Three recent examples, all material failures, not market failures. Philips, the foam inside its sleep apnea breathing machine, the CPAP, CPAP being continuous positive airway pressure was a sound-abatement material, it degraded. It could crumble and send particles and fumes into the patient’s airway. And the recall started in June 2021 and ran to millions of devices and ended in a personal injury settlement for about $1.1 billion in 2024. The material chosen to quiet a machine nearly took down a respiratory franchise. In the middle, Exactech, which is an orthopedic implant developer. Now, some of the orthopedic implants were packaged in defective bags that let oxygen degrade the polyethylene liners. Implants meant to last 15 to 20 years were failing in three to eight years. Hundreds of thousands of devices recalled, more than 2,600 lawsuits and Chapter 11 bankruptcy filed in October 2024. Last but not least on this slide, Zosano, a microneedle patch developer, that developed patches for migraine. The science was elegant. The FDA rejected it over inconsistent drug exposure across manufacturing lots twice. And the company ended up filing for bankruptcy in June 2022. Now, three different materials, three different failure modes, one pattern. In every case, the science was credible, but the commercialization discipline was not. Durability, manufacturing control, regulatory exposure, these are not footnotes. These are where value potentially gets destroyed. And that is the problem we build the rest of the analysis in this webinar to solve. Which leaves this question on this slide. How do you navigate a space this crowded, is well-funded, and is prone to expensive failure? You do not navigate in on enthusiasm. You navigate it with a screen, something that forces every promising technology to the same set of commercial questions before you commit a dollar or commit to a partnership. That screen is what we’re going to talk about today. So here we’ll discuss our analysis and our approach to addressing this challenge. We segment biomedical materials and composites, BMC, into five categories. Now, they’re not just marketing buckets. Each one behaves differently on the commercial questions that matter. First up, functional glass and ceramics, a mature defensive segment that includes ceramic bearings, bioactive glass, with the deepest long-term safety record in the field. Next, structural and regenerative composites. These are the load-bearing and tissue repair workhorses, which includes orthopedic implants, scaffolds, meshes, and dental composites. Third here is biocompatible electronics and surfaces. This is where electrical function meets the body with technology such as neural interfaces, wearable sensors, and even conformable electrodes. Fourth, we have tissue engineering and organ support. This is a frontier area with technologies such as engineered tissue, organoids, bioprinting, and artificial organs. Last but not least, we have advanced polymers and nanomaterials. The broadest category by far includes technologies such as biodegradable polymers, hydrogels, nanoparticles, and even drug-delivery materials. Now in the interest of time, we will only cover two of the five categories here today, the structural and regenerative composites and advanced polymers and nanomaterials. We do have an upcoming report that will cover all five categories, so definitely get in touch if you’d like to access the full report. Now, before the deep dives, let’s first talk about the six metrics we developed to assess these categories. Metric one, biocompatibility. Is it safe in the body and is it still performing years later? We fold durability and real-world evidence into this one. A material with limited long-term data scores low here, no matter how good the early results look. Metric two, ease of integration. How much a producer has to change and requalify to make the material at scale. A plug-and-play on existing lines scores high, but something that needs an entirely new biomanufacturing process scores low. This is where most materials stall, and I mean that literally. More good materials die on integration than safety. Metric three, cost-effectiveness. It is about the full cost of care to the end user, the patient, the hospital, the health system, weighted against the health outcomes it buys. If the cost is clearly justified by the outcome, and the therapy lowers the total cost of care through fewer revisions and fewer admissions, then it scores high. High gross cost with weak or unproven benefit scores low. The question is not, can you make it cheaply? It is, does it earn its keep in the system that pays for it? In a way, this metric has close links to the first metric, biocompatibility. They are linking the life cycle of any medical device or biomedical material in providing value to the patient. Metric four is intellectual property or IP defensibility. Once you’re on the market, can your position actually keep rivals out? Note the word defensibility, not patent volume. A crowded patent estate that anyone can engineer around can score low, even if it is enormous. A field still thin enough that a well-placed patent confers real exclusivity would score high. And Marcian will walk you through a category in a moment that holds nearly half the patents in the field and still scores low here. Metric five is partnership density, the distribution, reimbursement, and manufacturing partners that actually pull the material through to a paying customer. Dense established channels score high, sparse channels with no route to a buyer would score low. This metric also links to the second metric, ease of integration, as the right partnerships can help support complex manufacturing and regulatory processes. And metric six, stage of development. How much of the path is already clear? This one is different from the other five. It is the risk discount on everything above it. A category can score well on safety, cost, and defensibility, and still be a decade from the market. Commercially mature scores high. Emerging with mostly early-feasibility products would score low. And now I’ll hand it over to my colleague Marcian to walk you through the two categories with a case study for each to bring this to life. Over to you, Marcian.

Marcian Lee: Thanks, Nardev. And today we’ll first look at structural and regenerative composites. This combines a matrix, a polymer, hydrogel, ceramic, collagen or metal with reinforcements or bioactive fillers to make everything from dense load-bearing implants to porous scaffolds and dental composites. Overall, this is a solid commercially real category. It is strong in value, but has one dominant barrier, which is the incumbent’s own channel. I want to highlight where structural and regenerative composites scored strongly. Firstly, cost-effectiveness. The orthopedic procedures these materials carry are among the most cost-effective interventions in all of medicine. And the bioresorbable subset cuts further costs by eliminating the need for a second surgery to take the hardware out. Then, partnership density. Incumbents control distribution, surgeon training, and instrument ecosystems in the operating room. Finally, stage of development. This segment is mature, incumbent-controlled, and innovation is typically incremental. One notable category that structural and regenerative composites didn’t do so well in is biocompatibility. There are decades of registry evidence for legacy implants, but this is also the category that owns the most recent aging failure, which is Exactech. Now, we mentioned competition with incumbents being the dominant barrier for this category, and that makes Kuros Biosciences particularly interesting because it got through that channel. Kuros Biosciences developed MagnetOs, a synthetic calcium phosphate bone graft. The clever part here is a surface texture they call NeedleGrip, which drives bone formation without using any human tissue or growth factors. It is cleared by the U.S. Food and Drug Administration throughout the spine, including the interbody space, which is the hardest place to win clearance. And it scaled. MagnetOs grew into a roughly $146 million revenue business in 2025, up 72% year-on-year, and Medtronic signed on as the exclusive U.S. spine distributor in the same year. Now, here’s what I want you to take from it. It is not the chemistry, right, because Kuros did not win on a novel molecule. Instead, it won three things: surface engineering, Level I clinical evidence from a randomized trial, and distribution reach through a partner who already owns the operating room. So, the lesson for everyone in this room is direct. For structural and regenerative composites, clinical evidence generation and distribution access are the real competitive moats, not the formula. Treat them that way when you evaluate anyone in this category. The second category that we’ll dive into today is advanced polymers and nanomaterials. It is a very broad and commercially mature category. It encompasses biodegradable polymers, hydrogels, nanoparticles, peptides, antimicrobials, and even sensors. These materials present high surface areas, tunable chemistry, and the ability to interact directly with cells and macromolecules. In general, technologies in this space are cheap, accessible, cost-effective, but they are notoriously hard to protect. So the question is not whether you can invent something here, it’s whether you can win without the patent moat. In areas where advanced composites—sorry, advanced polymers and nanomaterials—do well, we most notably have high integration and cost-effectiveness. Integration is high because chemistry is well characterized and widely accessible, so producers can reformulate on existing lines. In terms of cost-effectiveness, these materials are inexpensive to the health system and they underpin routine proven care, while functional grades like antimicrobial coatings actively cut infections and the costs that follow. However, these materials tend not to score as well for biocompatibility, with a medium rating. Workhorse polymers like polyether ether ketone and silicone have strong records, but the headline failures here are degradation stories, like the case of the Philips foam that Nardev mentioned earlier. And finally, IP defensibility is low. And this is the category that holds about 45% of all patent filings, and yet you still cannot buy exclusivity. That is because positions are crowded and are easy to design around. So how can a company win in this space? For that, I want us all to look at Foldax. Foldax makes the Tria heart valve out of a proprietary material they call LifePolymer. And it targets a specific well-known problem. Today’s heart valves force a bad trade. On the one hand, tissue valves made from animal tissue calcify and wear out. On the other hand, mechanical valves last longer but require lifelong blood thinners. And Foldax is trying to engineer past both issues with LifePolymer. The evidence is early, but it is real. In the first multicenter human study of Foldax’s valve, 67 mitral patients across eight sites in India had no valve-related deaths or reinterventions at the one-year mark. Those results were published in the Journal of the American College of Cardiology in 2025. So this is where polymers now win, and it’s worth saying that plainly. Foldax did not invent a new molecule. It engineered a known class of materials around a specific clinical failure mode, then generated the trial data to prove it. In a category with a low IP defensibility score, that is the playbook. Pick a failure mode the competition cannot fix, solve it with accessible chemistry, then let the clinical data be your moat. With that, I’ll hand it over to you, Nardev, to wrap the webinar up for us.

Nardev Ramanathan: Thanks, Marcian. Now, when you put the two category scores side by side, you get an interesting picture. Structural and regenerative composites, mostly medium, but high on cost-effectiveness, partnership density, and scale. Our call is engage. It is real, it is large, and there is white space if you can get through the channel the way Kuros Biosciences did. For those who are developing bioactive calcium-based restorative chemistries, they could supply, excuse me, resorbable bone graft composites to an orthobiologics partner who owns the surgical channel. Advanced polymers and nanomaterials, high on integration, cost-effectiveness, and partnerships, but low on IP defensibility and scale. Our call is also to engage. You will not win this one with patents. You win it with integration speed, the strongest value case in the field, and a clinical failure mode to aim at the way Foldax did. For those with capabilities in biostable elastomer platforms, for example, they can identify and work with innovative startups here focused on durability and integration speed for medical use cases to tap into the right clinical channels. So these are the two categories in biomedical materials you should certainly get started with. As we wrap up, there are three key takeaways that I want to leave you with today. First, funding surged, but judgment did not. Record money and record patents do not mean the field has been de-risked. The same three years that produced this funding boom also produced Philips, Exactech, and Zosano. The discipline has to come from you when it comes to running every opportunity through a real screen, not from the size of the round. Second, the moats in this field are clinical and commercial, not chemical. Across both categories, we looked at the biocompatibility score, which was medium, and the cost-effectiveness score, which was high. So neither the science nor the value case is what separated the winners. What separated them was evidence generation, distribution, and reimbursement. Kuros won on a trial and a distributor. Foldax is winning on trial data aimed at a clinical failure. Third, where to act? Engage advanced polymers and nanomaterials and structural and regenerative composites now. This is where you start. Polymers give you the best economics and the fastest integration. Composites give you dense channels and real white space. If you take nothing else from today, remember, in biomedical materials, the lab result is the beginning of the question, not the answer. You have to separate commercial reality from research promise every time, and you’ll avoid the pitfalls we spoke about earlier with companies like Philips, Exactech, and Zosano. Thanks a lot for joining us and tuning in, and I’ll stop here and we’ll be more than happy to take your questions.

Josh Haslun: Yeah, thanks, Nardev and Marcian as well. So let me see. We’ll take some questions now. I think we have a few minutes here available for that. As a reminder, you can type any questions into the questions box. And so if we don’t get to you on your questions this call, again, someone at Lux will be in touch after the webinar. So let me see what we have here. Let’s start with this one here. So there’s been opportunities that startups are addressing, right? But is there anything that makes more sense for a chemical or materials corporate, and let’s say specifically that maybe either has a single existing business unit targeting med device and they want to scale in there or maybe doesn’t, but is looking for new opportunities to actually grow into the medical device industry. So what roles can these types of companies really play and drive forward beyond what we’ve already said today?

Marcian Lee: Yeah, I can take that question. Thanks, Josh. So I think I want to take this from the perspective of a chemical materials company and throughout the webinar, I’ve been stressing that normal formulations of chemistries are often not the main factors of success. But unfortunately for these players, these chemical companies, this is exactly where you excel at. So if we want to carve out the image out of this very tight space, then one of the recurring challenges we often saw, ironically, is in biocompatibility. And by extension, the durability of the material, especially for internal implants. So for any material company that’s looking to break into the space, I think you don’t necessarily need to develop a new material that exceeds the incumbent in terms of the medical therapeutic value, right? But if you have something that can prove it’s more durable and safer to use while delivering the same therapeutic effects, then I think we have a good shot at taking away some of that market share.

Josh Haslun: So you’re saying that safety in this case trumps all else because of the challenges of moving that product to market?

Marcian Lee: Correct. That is exactly right.

Josh Haslun: Okay. Great. Let me do, I think we have time for one more. So let me see if we have one more here. Let’s go with. Let’s go with this one here. For companies that already sell medical-grade polymers, ceramics, but do so right at commodity input, commodity margins, right? This is the classic story, right? You’re thinking about a new type of industry and perhaps it doesn’t fit the mold of what you always do, right? You’re thinking commodity and now you’re in a high-value market. If that moat is moved to sort of clinical evidence and distribution, does that not trap material suppliers permanently at the bottom of the value chain? How do we capture more of what Kuros or Foldax captured in order to be able to move forward when you’re focused perhaps on commodity input and commodity margins? How do you kind of shift that paradigm?

Nardev Ramanathan: Yeah, a great question, Josh. I’ll take this one. It’s a great question. Now, it only traps you if you keep selling the material as a commodity. Our webinar’s case studies show the way out. So let me actually use them. Now, Kuros did not win with new chemistry. Calcium phosphate bone graft is decades old, and no one can patent their way to a monopoly on it. It won on a specific surface texture, on Level I evidence from a randomized controlled trial, and on distribution through Medtronic. And it scaled MagnetOs to about $146 million in 2025. Looking at Foldax, Foldax’s LifePolymer is not a brand-new molecular class either. It is a polymer engineered around two named failure modes of existing heart valves, backed by the first one-year multicenter data on a polymer valve. In both cases, the value did not move away from the material. It moved from generic material to material engineered around a clinical problem and proven with evidence. That is the distinction that you really want to act on. So that’s definitely how I would say that.

Josh Haslun: Yeah, so really focus. You have the capabilities that might be able to move things toward commodity margins or perhaps make them cheaper than how others are playing out there. But you have to remember that as you move that product toward this medical device market, you’re going to have to make some changes to it. And those changes are going to be very important to solving key safety issues or reproducibility issues in whatever thing you want to achieve. And that in itself may increase the cost a little bit. But again, you have the ability to continue to also manufacture it at a high-quality, high level to beat out some others out there. So it makes a lot of sense, Nardev. So with that, I think that’s all the time we have for today. We’re right at the 30-minute mark here. So with that, thanks, Marcian, and thanks, Nardev. It’s going to conclude our webinar for today. The slide presentation and recording from the webinar will be sent to everyone who actually tuned in today, and you’ll get it via an email. As always, after leaving the webinar, we prompt you to complete a survey on today’s presentation. We always appreciate any feedback you may have, and it really helps us inform our webinars in the future, make them more valuable to you. So with that, also take a moment and check out any upcoming webinars we have. They’re all on our website. And with that, thanks for joining us today, and have a great day.