The Miracle Man Of Med Tech
Alfred E. Mann was bowled over when Los Angeles' House Ear Institute bestowed its highest award on him last year. Mann's company, Advanced Bionics Corp., developed an ear implant that restores hearing for most deaf people whose impairment is caused by nerve damage. But for Mann, the high point of the evening wasn't the effusive speeches. It was the four-year-old girl who handed him the award. "She was deaf, and now she has...an implant," Mann tearfully recalled. "She came onto the stage wearing a white dress and said, `Thank you, Mr. Mann, for my implant.' It was the most moving thing you could ever imagine."
These days, tears of joy come easily to the 74-year-old entrepreneur. Mann is at the pinnacle of a successful 50-year career as an inventor. His riches from companies he has founded or invested in approach $1 billion. One of his ventures, MiniMed Inc., a maker of tiny insulin pumps for diabetics, is a huge hit with doctors and investors. Its shares have soared 130% in the past year.
So what's Mann doing to celebrate his remarkable run? Like a growing number of high-tech tycoons, he's giving his money away. In 1998, the soft-spoken Mann announced gifts of $100 million each to his alma mater, the University of California at Los Angeles, and to the University of Southern California. Already one of the top 10 philanthropists in the U.S., Mann vows to give a total of $500 million to leading universities over the next several years.
IPO PLAN. And he may have oodles more to dole out if his newest insulin pump takes off, as specialists expect. MiniMed is developing an implantable version that can be surgically placed in the abdomen. It was approved for sale in Europe in February and may get the Food & Drug Administration's O.K. next year. The hockey-puck-size pump will work in tandem with an automatic sensor that will test glucose levels so the pump can dispense the right amount of insulin throughout the day. "It would be as if [diabetics] were living a normal life," says Florida endocrinologist Dr. Michael J. Mellman.
Mann's other big medical-device play, Advanced Bionics, could also be a winner. He funded development of a cochlear ear implant after University of San Francisco researchers, in 1988, showed him a videotape of a woman, once totally deaf, who was able to hear after receiving the implant. "They told me if I didn't do this, the project would die," Mann says. The project is anything but dead. After pouring in $40 million of his and other investors' money, Mann is planning an initial public offering later this year or early in 2001.
Mann's work may enhance others' lives, but the three-time divorce is no ascetic. Five years ago, he built a multimillion-dollar, high-tech house in Beverly Hills that he shares with Claude Jirault, his girlfriend of five years, and her 25-year-old daughter. Mann delights in pointing out his extensive Asian art collection and amenities such as a koi pond that extends from the front yard through the house and a lake-like pool, complete with waterfalls that he designed himself. On windy days, the water in the pond automatically rises to seal the gap between outside and inside.
Despite his taste for the good life, Mann is determined to use the vast bulk of his wealth to speed innovative medical products from conception to market. At the institutes he is funding, graduate students will work with corporate engineers to develop devices from research that might otherwise languish in academic journals. "There needs to be a bridge between science, academia, and commerce," says Mann. "My whole estate is going toward this." He has no interest in lavishing money on his six children. Says Mann: "I don't believe in creating rich kids." In fact, his kids are sitting pretty with chunks of MiniMed stock he gave them years ago.
The insulin-pump maker and ear-implant company are just his most recent technology-based businesses. Earlier ventures include Spectrolab, a defense contractor that built missile-guidance gear; Heliotek, a maker of solar cells to power spacecraft; and Pacesetter Inc., a leading heart-pacemaker manufacturer.
FOCUS FACTOR. Mann's secret for success? Unlike many scientists, who stumble when they try to market their inventions, the affable Portland (Ore.) native is both a technologist and a driven businessman. He got the idea for an implantable insulin pump 20 years ago and stuck with it. Says venture capitalist Aaron Mendelsohn: "He stays focused, he doesn't give up."
Mann's entrepreneurial instincts were apparent early on. The son of a grocer, he hawked magazines at age seven and newspapers at 11. He once even melted down old family flatwear into silver sheets to sell to classmates in a jewelry-making class. All the while, he kept up with his studies and was high school valedictorian.
After earning a master's degree in physics from UCLA, Mann worked as a research scientist at Technicolor, the Hollywood film processor. There he developed an optical technology that he soon parlayed into his first business after Technicolor lost interest in making the optical gear. With an $11,000 contract from the military and $21,000 in savings, Mann set up Spectrolab in 1956. Heliotek, the solar power company, was spun off from Spectrolab. Mann stayed on at both as president after selling them to Textron Inc. in 1960.
A chance conversation with a tennis pal turned Mann's attention to medical technology in the 1960s. His friend needed money to fund work on a rechargeable pacemaker at Johns Hopkins University and asked Mann to put up some cash. Intrigued with the technology, Mann funded Pacesetter in 1969 and left Spectrolab three years later to head the pacemaker venture. He spearheaded development of the rechargeable gizmo and later, a long-lasting pacemaker. Sales took off, and Mann pocketed a cool $75 million when he sold Pacesetter to Siemens in 1985.
Mann stuck around as CEO, though, and in the 1980s developed the miniature insulin pump as a new application for pacemaker technology. The pager-size device, connected to a tube placed under the skin, automatically dispenses insulin that diabetics need to regulate their blood sugar. The pump eliminated the need for painful self-injections and strictly scheduled meals.
Mann spun the venture off as MiniMed in 1985, and it gradually captured 75% of the growing U.S. market. Sales jumped 53% last year, to $212.3 million, while operating income rose 55% to $30.1 million. Mann's knack for marketing helped. After Nicole Johnson, Miss America 1999, proudly displayed her MiniMed pump before a nationwide TV audience during the pageant, Mann hired her as spokeswoman.
Johnson and other co-workers marvel at Mann's energy, little diminished by age or a bout of esophageal cancer 13 years ago. "I've been on trips with him where I've left him in a hotel room late at night and the next morning he appears with 50 pages he's written up on his next project," says Mendelsohn.
Meanwhile, Mann has investments in four other medical-tech companies, including a 40% stake in Second Sight, which is developing an eye implant to restore partial sight to the blind. As he ponders how he will donate his cash, Mann is keeping a close watch on his varied medical technology ventures. The way things are going, he may have a lot more than $500 million to give away when all is said and done.