By Pat ShermanLa Jolla resident Peter C. Farrell, founder and executive board chair of San Diego-based ResMed, was honored this month with an Entrepreneur Hall of Fame Award by CONNECT, which helps link investors with budding technology and life sciences companies in San Diego County.
A native of Australia, Farrell received the award during a luncheon Feb. 19 at Estancia La Jolla Hotel. He is the twelfth San Diego County entrepreneur to receive the honor since it was first presented to fellow La Jollan and Qualcomm co-founder Irwin Jacobs in 2005.
Previous award recipients include General Atomics vice-chair Linden Blue and La Jollan Peter Preuss, founder of Integrated Software Systems Corp.
The Entrepreneur Hall of Fame award, CONNECT’s highest honor, is given to individuals who’ve achieved distinction in the high tech or life sciences industries and have contributed to the region’s economic prosperity.
Presenting Farrell with the award, longtime colleague and fellow Australian Gary Pace noted how Farrell turned a modest investment of around $2 million into a company with nearly 3,000 employees and revenues of more than $1.5 billion.
Farrell founded ResMed in Australia in 1989, later relocating the company to San Diego. The company produces devices that help people suffering from sleep-disordered breathing, particularly obstructive sleep apnea, which occurs when the throat relaxes during sleep and partially or completely blocks a person’s airway. Over time, the condition can have deleterious effects on the body.
Farrell, who holds degrees in chemical engineering from the University of Sydney and from Massachusetts Institute of Technology, improved and commercialized a device for treating sleep apnea with continuous positive airway pressure. The technology was first developed in 1980 by Australian professor and physician, Colin Sullivan.
Farrell said his belief in the need to perfect and market the technology was cemented after watching a video of a person with obstructive sleep apnea, during which he said the heart rate drops like a stone, then skyrockets.
Farrell recalled how he first encountered Sullivan’s early technology with skepticism — comparing it to a “reverse vacuum cleaner” attached to a “Darth Vader mask” that was placed over a person’s face (which, he said, sounded like a “freight train”).
It was both difficult to put on, and cumbersome. Farrell said he was confident that within six moths he could produce a mask that was a tenth the size and easier to wear.
Farrell, at the time vice president of research and development for Baxter International and managing director of Baxter Center for Medical Research, started funneling Baxter’s money into the technology. Baxter ultimately failed to see the technology’s growth potential, leading Farrell to purchase the rights to his research and strike out on his own.
“People say to me, ‘How could Baxter have let this go?’” Farrell mused.
Added Pace: “It became one of the world’s most successful growth stories in medical device industry history.”
Farrell not only created an industry where none previously existed; he also sparked increased awareness and research of breathing-related sleep disorders. However, the maladies (which include snoring) are nothing new, and have been referred to since their appearance in classic Greek and Roman literature, Farrell said.
Charitable givingThrough the Farrell Family Foundation, Peter Farrell has used his wealth to benefit local arts organizations (including the Museum of Contemporary Art, San Diego) as well as educational opportunities for underprivileged children and local science, technology, engineering and math (STEM) programs. Serving on the foundation board are his children: Catherine Sertori, Paul Farrell, and Michael “Mick” Farrell, who is also ResMed’s chief executive officer.
“Well, what else are you going to do with the money?” said Farrell, who is known to friends for his appreciation of fine wine, cars and art. “I mean, how much stuff do you need?”
Farrell noted a talk he attended several months ago by American Enterprise Institute President Arthur Brooks, who emphasized his belief that the key to happiness is success through personal achievement.
“Happiness doesn’t correlate with money, but with earned success,” Farrell told guests at the Estancia. “I wish some of the politicians would understand that personal responsibility and accountability is the best way to save a person’s esteem. ... If you don’t like yourself, hell, do more.”
Farrell said the concept of giving back was instilled in him early on by his grandfather, Roy Harrison, an entrepreneur who owned his own electrical engineering and contracting business.
“I remember sitting beside him in church one day and the plate came around and he reached into his pocket and put in what to me was an ungodly sum of money,” Farrell said. “That influenced me. He was extremely generous.”
Peter Farrell has also been named San Diego Entrepreneur of the Year for Health Sciences (1998), Australian Entrepreneur of the Year (2001) and US National Entrepreneur of the Year for Health Sciences (2005).