Medical devices businesses can sometimes be highly profitable. Here are a few people who have the medtech industry to thank for their wealth.
Everyone is familiar with the young Silicon Valley entrepreneurs who have made billions off their inventions. But the medical device business, another R&D-heavy industry, has its fair share of billionaires too.
We reviewed the Forbes 400 list of the 400 richest people in America, and found ten major medtech fortunes. While some riches were amassed through gradual company growth and when companies were acquired, one of these billionaires (hint, check out #8) made his money in a more unique way. We include Forbes’ real-time valuations for each person’s wealth.
Though these billionaires may not be as recognizable as Mark Zuckerberg or Bill Gates, their companies’ inventions impact the health of thousands of Americans everyday.
#10 Alfred Mann ($1.18B)
Alfred Mann’s long-standing contributions to the medical device industry include founding 17 companies to treat a wide swath of diseases, including blindness and diabetes. Several of Mann’s companies were acquired by large companies, including the diabetes company MiniMed Inc., the neurostimulation company Advanced Bionics Corp., and pacemaker company Pacesetter Systems Inc.. MiniMed was acquired by Medtronic in 2001, Advanced Bionics was purchased by Boston Scientific in 2004, and Pacesetter is now part of St. Jude Medical. .
Until earlier this year, Mann was chief executive officer of MannKind. He is now the company’s executive chairman. MannKind won FDA approval in 2014 for AFREZZA, a rapid-acting insulin that is inhaled by diabetic patients. The company manufactures AFREZZA and has a global licensing agreement with Sanofi. Mann also remains active in a number of other medical companies, including Bioness, Second Sight, IncuMed, and PerQFlo. Before entering the medtech industry, Mann founded two electro-optical companies that are now part of Boeing
Mann earned his B.A. and M.S. degrees in physics from the University of California, Los Angeles. He also holds honorary doctorate degrees from several universities.
#9 James Leininger ($1.34B)
While working in the emergency room, James Leininger founded Kinetic Concepts Inc. in 1976. Kinetic Concepts offers a range of advanced wound care products, including a negative pressure technology and the Graftjacket Regenerative Tissue Matrix. Kinetic Concepts was acquired in 2011 by Apax Partners, the Canada Pension Plan Investment Board, and the Public Sector Pension Investment Board in a transaction worth $6.1 billion. In September 2014, Kinetic Concepts was combined with LifeCell Corp. and Systagenix Wound Management Ltd. to form Acelity.
Leininger earned his medical degree from the Indiana University Medical School. He served in the Army Medical Corps during the Vietnam War, then became a family practice physician before working in emergency medicine and becoming director of hospital emergency departments in San Antonio, TX.
According to Leininger’s personal Web site, he has been involved with over 100 corporations as an owner, founder, or investor. He was one of the founders of the Renal Care Group, a network of outpatient dialaysis centers that was acquired by Fresenius in 2005 for $3.4 billion.
Leininger is a major school choice advocate—he and his wife, Cecelia, have donated more than $100 million to the cause. He is also a minority owner of the San Antonio Spurs NBA basketball team.
#8 Gary Michelson ($1.55B)
Gary Michelson is a prolific inventor, with more than 250 U.S. patents and over 750 worldwide issued or pending patents for devices and procedures to treat spine and orthopedic problems. It was some of these patents that led to his wealth—after years of litigation with Medtronic, he was awarded a $1.35 billion settlement.
He founded The Michelson Twenty Million Minds Foundation (20MM) to replace expensive college textbooks with an open architecture digital platform. Michelson is also passionate about stray animal causes, founding the Found Animals Foundation to care for these animals. He is also offering a $25 million prize to the inventor of a non-surgical pet sterilization procedure. In addition, he founded the Medical Research Foundation Trust and the Michelson Medical Research Foundation.
According to his biography on the 20MM Web site, Michelson was inspired to become a physician by his grandmother, who struggled with a spinal deformity. He earned his medical degree at Hahnemann Medical College and practiced for 25 years as a spine surgeon.
#7 Neal Patterson ($1.92B)
Neal Patterson co-founded Cerner Corp. in 1979 and developed the company from one system into one of the biggest names in health IT. Cerner now has annual revenue of $3.4 billion and a market value of $25 billion. According to the Cerner Web site, the company’s technology is used at more than 18,000 health care facilities across dozens of countries.
Patterson cofounded the First Hand Foundation to help needy sick children, and, drawing on his childhood growing up on a farm, is involved with the American Royal Association, an agricultural nonprofit. He is also a coowner of the Sporting Kansas City MLS soccer team. Patterson earned both his bachelor’s and master’s degrees from Oklahoma State University.
#6 Judy Faulkner ($2.8B)
Judy Faulkner founded Epic Systems Corp. in 1979 and is the company’s chief executive officer. Epic is a private company known for its electronic health record (EHR) software. The Epic EHR is used for the medical records of 180 million patients and concentrates on 315 health organization customers.
Before founding Epic, Faulkner taught computer science at the University of Wisconsin. She is a member of the Institute of Medicine (IOM) and sits on IOM’s Roundtable on Value and Science-Driven Health Care.
In early March, Modern Healthcare reported that Faulkner plans to leave her wealth to a charitable foundation. She earned her bachelor’s degree from Dickinson College and a master’s degree and honorary doctorate from the University of Wisconsin.
#5 Reinhold Schmieding ($4.1B)
Reinhold Schmieding started Arthrex in 1981, after working for an American medical device company in Germany. In an interview with the Naples, FL Chamber of Commerce, Schmieding said he passed up medical school to start Arthrex because he saw a need for surgical tools to be used in arthroscopic surgeries.
More than 8500 products have been developed at Arthrex, including orthobiologics, tools and devices for use in joint procedures. The devices are used in more than 100 countries around the world, according to the company. Forbes has reported Arthrex has estimated revenue of $1.5 billion.
#4 Elizabeth Holmes ($4.6B)
Elizabeth Holmes founded Theranos in 2003 after dropping out of Stanford University’s School of Engineering. The Theranos technology allows dozens of diagnostic tests to be run using just one drop of blood from a fingerstick. Fortune reported in 2014 that Theranos is valued at more than $9 billion.
Walgreens has partnered with Theranos; the lab testing platform is available at pharmacies in the Phoenix, AZ, and Palo Alto, CA, areas.
In an interview with TEDMED, Holmes said she believes “Theranos is a new paradigm of diagnosis, in which every person will be able to see the onset of disease in time for therapy to be effective.”
#3 Gayle and Carl Cook ($5.8B and $6.6B)
William and Gayle Cook founded Cook Group Inc. in 1963. Their son Carl became the company’s chief executive officer in 2011 upon his father’s death; Gayle sits on the company’s board of directors. Cook Medical, based in Bloomington, IN, sells a large range of medical products, including endovascular stent grafts for abdominal aortic aneurysms, bioengineered tissue grafts, OB/GYN products, and antimicrobial catheters.
Cook Group includes a number of other non-medical subsidiaries. The private company had approximately $2 billion in revenue in 2010.
#2 Hansjoerg and Amy Wyss ($6.1B and $1.85B, respectively)
Hansjoerg Wyss, a native of Switzerland, founded Synthes USA in 1974 to start selling Synthes products in the United States and Canada. Synthes osteosynthesis products were trademarked and created by a collaboration between Swiss surgeons and the Straumann Institute starting in 1960.
The company became known for orthopedic and soft tissue implants and devices. Synthes was acquired by Johnson & Johnson in 2012 in a transaction worth $19.7 billion. Wyss’s daughter Amy also made her fortune from her involvement and stock holdings as a director of the company.
One of Hansjoerg’s major philanthropy areas is land conservation. According to his biography for The Wyss Institute, this passion was fueled by his time as a student working for the Colorado Highway Department and hiking the Rocky Mountains. He is involved with several conservation non-profits and has donated more than $175 million to land conservation.
Wyss graduated from Harvard Business School. In 2009, he donated $125 million to fund the Wyss Institute for Biologically Inspired Engineering at Harvard.
#1 The Stryker Family and John Brown
Sibling heirs Ronda ($3.7B), Pat ($2.2B), and Jon Stryker ($1.93B), as well as long-time company chief executive officer John Brown ($2B), all became wealthy through Kalamazoo, MI-based Stryker Corp.
Stryker was incorporated in 1946 by Homer Stryker, an orthopedic surgeon who invented many of the company’s early products to fulfill what he saw as an unmet need for new orthopedic surgical tools. The company, known for selling hospital beds, surgical power tools, and orthopedic/spinal implants, reported approximately $9.7 billion in revenue in 2014 and has a market value of $35 billion.
Ronda, Pat, and Jon are Homer’s grandchildren. Ronda, who has been a member of Stryker’s board of directors since 1984, and her husband recently donated $100 million to create Western Michigan University’s medical school. Pat founded the Bohemian Foundation, which funds community and music programs, and also started the Stryker Sonoma Winery. Jon is board president and founder of the Arcus Foundation, which is focused on lesbian, gay, bisexual, and transgender rights as well as great ape conservation.
John Brown became Stryker’s CEO in 1977 and presided over the company until 2004. He was chairman of the board of directors until 2009 and is now the chairman emeritus.