Posts Tagged Stanford Biodesign Program
Medical Device industry has been facing enormous and unprecedented challenges during the last several years. Only now it is emerging from the dark tunnel of funding dryout, layoffs, and lackluster job scenario. The 2014 Wilson Sonsini Medical Device Conference reflected some cautious optimism based on recent uptik in the industry. The challenges are not gone but companies have learned to work with the complexities. The conference this year focused on understanding the challenges still facing the Medtech startups and the new strategies that are emerging as response to these challenges. The conference was a sold out event with 600+ attendees that included CEOs, venture capitalists, investment bankers, market analysts, and industry strategists. Below are the highlights from one of the panels.
Funding Strategies for Entrepreneurs
Dried up funding continues to be a challenges for medtech start-ups. This panel was moderated by Casey McGlynn, Partner, Wilson Sonsini Goodrich & Rosati. McGlynn said he is increasingly seeing companies getting funded, even PMA projects are getting funding. One of the strategies for PMA is to have a believable path to an existing market in Europe that will adopt the product. Building product is not the challenge, but for these, the regulatory approval process in the US, becomes a big hurdle. For bite size consumer facing, wearable type, or health IT projects, crowdsourcing could be a good strategy, said McGlynn.
The panelists included CEOs who shared their experiences in search for capital. The panelists also discussed how interests of the investors are changing.
Laura Dietch, President and CEO, BioTrace Medical, shared about the technology that emerged from the Stanford BioDesign program. BioTrace is developing a temporary cardiac pacing device to treat reversible symptomatic bradycardia, during general surgery for percutaneous valve procedures. This is a 510K device. BioTrace raised $3.5M from 5 investors. Dietch’s advice to the entrepreneurs? “You have to be tenacious, have good target partners, be willing to take a lot of rejections, be organized, and be creative. She also advised entrepreneurs to stay lean, whenever possible, have a physician on the team, and be clear from the beginning regarding the exit strategy.
Qool Therapeutics offers patented cooling technology to induce therapeutic hypothermia. This minimally invasive technology has applications in stroke, cardiac arrest, traumatic brain injury, sports injuries and so on. President and CEO, Beverly Huss shared how the company raised $1.5M from small investors that included COO at American Airlines, General Counsel at EBay, an executive at Dish Network and so on. She said these relationships were developed over the years. “Early stage investing is a labor of love and can come from people who believe in your ability to deliver on a technology they like”, said Huss. She also advised that entrepreneurs be relentless and follow every path and see where it takes them, and be open to learning the lessons from each path they pursue. What has changed is how we are bringing therapeutics devices to a consumer market, said Huss.
Dr. Daniel Burnett, President and CEO at TheraNova also talked about how the climate has changed. With his first company, they raised funding without any animal or human data; next company required huge clinical data and since then most companies need some human data, before money can be raised. TheraNova turned to corporations and also had 4 SBIR grants. Since 2006, Burnett raised or helped raise, over $95M for six venture-backed TheraNova spinouts, BAROnova, Novashunt, Velomedix, EMKinetics, Channel Medsystems, and Potrero Medical. For Channel MedSystems, he partnered with Mir Imran’s Venture Health Crowdsourcing platform. His advice to entrepreneurs was to be lean and mean and to focus on both cost saving and improved outcome. Burnett said he avoids PMAs. Angel investors have been beaten up badly and still recovering but he advised that entrepreneurs can go to crowdsourcing platforms like Venture Health or DealLabs.
Doug Wall, Managing Director, Volcano Capital talked about some of their portfolio companies. All in all, market for early stage investors is pretty lonely, said Wall. There was virtually no competition from 2009 to 2011 but that is now changing. There are some VC funds now taking an interest in early stage deals. Most successful companies are the ones that think outside the box. Answering the question regarding what would be more important market or people, Wall said, “we are flexible on market size, but most important thing to us is the management team, and then we look to see if the milestones are thoughtful, and if the team shares the strategy to be capital efficient”. He said, they avoid PMS entirely to mitigate the regulatory risk factors.
Stanford Biodesign Project taking the Lead in High Impact Low Cost Innovation for Quality Healthcare
Posted by Darshana V. Nadkarni, Ph.D. in Biotech - Medical Device - Life Science - Healthcare on April 16, 2013
Dr. Paul Yock spoke at www.bio2devicegroup.org event, earmarking 10th anniversary celebration of the Bio2Device Group.
Dr. Yock is Professor of Medicine and Mechanical Engineering and Founding Co-Chair of Stanford’s new Department of Bioengineering. He also holds a courtesy appointment on Operations, Information and Technology in the Stanford School of Business. Dr. Yock is internationally recognized name in the field of medical devices. His number of contributions to field of devices include, the Rapid Exchange balloon angioplasty system, which is now the primary system in use worldwide. He also invented a Doppler-guided access system known as the Smart Needle and PD-Access. The main focus of Dr. Yock’s research program has been in the field of intravascular ultrasound. He authored the fundamental patents for mechanical intravascular ultrasound imaging and helped conduct the initial clinical trials. In 1986 he founded Cardiovascular Imaging Systems, which was acquired by Boston Scientific in 1994. Dr. Yock has cofounded several other medical technology companies, and has authored over 300 peer-reviewed publications.
Dr. Yock talked about the changing world of medical technology innovation, where the developing world will increasingly play a major role. Thus far, medical technology world has been dominated by US followed by Europe, followed by Japan. Total market has been about $350 billion. These developed countries dominated the industry because they were willing to spend large amounts of money. But collective impact of three major issues brewing in the US, will dynamically shift this landscape. Looming uncertainly with regard to FDA issues, reimbursement pressures, and dried out VC funding, will lead to declining rate of device approvals, with increasing pressure to contain costs. Concurrently, there is an emergence of new generation of global medtech innovators, coming from countries like India, China, and Brazil. They are coming with different cultural mindset and thinking about technology with a global focus.
Dr. Yock discussed the Stanford Biodesign Program that focuses on innovation and entrepreneurship, with 3 pronged foundation, identify, invent, and implement. Innovation begins with a cross-cultural, multi disciplinary team of entrepreneurial students, working together to identify a need. They practically live in the hospitals, until they come up with a list of about 200 needs. Gradually, through rigorous process of need screening, that includes consideration of clinical impact, stakeholder impact, treatment options, and market characteristics, a few needs go forward, which further go through rigorous tests, and through the final process of elimination the team arrives at a handful of needs. For each need, the team comes up with several concepts, which are taken through prototyping, and finally one concept is selected.
The Stanford Biodesign program is 12 years old. During this period, 26 companies have emerged and have been funded, and so far over 150,000 patients have been treated by technologies, coming from the program. Graduates of the program are working in top notch jobs, bringing the same rigor and discipline into their current careers. Dr. Yock gave several examples. Highly successful companies like iRhythm have emerged from this program. He then talked about the changing world, with a rapidly growing middle class, in countries like India and China. These upwardly mobile societies are demanding quality care, while at the same time, dealing with a rise in obesity, chronic heart disease, and diabetes. Stanford Biodesign program’s mission is also to find and help train innovators in these countries. These innovators come for short duration and work in multidisciplinary settings at Stanford. After returning to their home countries, many of them have done some amazing things and have often come up with low cost, high impact, innovative technologies. These innovations not only have an impact on quality and delivery of care in their home countries, but in a likely trend dubbed as “reverse innovation”, some of these low cost technologies may be adapted for use in the US, where increasing cost pressures continue to make a push for effective, low cost technologies.
The presentation generated enthusiastic response and an animated Q&A session.