For roughly a decade, the team at Emphasys Medical had been working to design, develop, and then gain regulatory approval in the U.S. to market an innovative new device therapy to treat emphysema. However, after investing millions of dollars to test the device in hundreds of patients in the U.S. and abroad, the leaders of the company were forced to close the business and sell its assets at auction when the division of the U.S. Food and Drug Administration (FDA) in charge of medical devices rejected its regulatory submission. This situation underscored the inherently challenging (and often unpredictable) nature of medical technology innovation. Yet, it also raised questions about the certainty and the extent of clinical data required to gain FDA approval and whether the agency's increasingly stringent standards ultimately would help or hinder the state of medical innovation in the U.S. Moreover, as clinical and regulatory hurdles increased, it remained to be seen if investors would be willing to bear larger funding requirements over longer periods of time to support medical device innovations, unless they had "blockbuster" market potential.
