Isabella Schmitt 0:04
All right, so I'm gonna have the panelists introduce themselves. As she mentioned, I'm the director of Regulatory Affairs at Proxima. I do all things med tech regulatory, a little bit of drug regulatory as well. And we have a wonderful panel here today. So I'm going to pass it off to you, Tim first to do it.
Tim Jones 0:20
Thanks, Isabella. My name is Tim Jones. I'm CEO of Symphysis Medical. We're a medical device startup based in the west coast of Ireland in Galway. We treat a common complication of late stage cancers, which is a buildup of fluid in the chest, and we're developing a device that's specifically looking at bringing back independence to our patients.
Auriel August 0:41
Hi, I'm Arielle August I'm a senior associate at Sante Ventures, we are an early stage Life Science venture firm based out of Austin, Texas, and in my background, actually left clinical medicine in general surgery before going in the dark side and going into venture.
Jenelle Robinson 0:57
Hi, I'm Janelle Robinson, like Ariel, I went from the clinical and moved to the dark side a little bit, I have been a clinical nurse for many, many years, we're not going to say how many years many years and moved into hospital operations where I ran value analysis committees for major metropolitan teaching hospitals, and then moved over to innovation to help to help companies prepare their value propositions are true problem statements and how to sell to hospitals.
Isabella Schmitt 1:27
So today, we're going to talk a little bit about how folks pick the different markets that they go to and what investors look for what value chain analysis committed, committed these committees look for. And so with that, I will start with Tim, being the entrepreneur here. So, Tim, I know that you have picked a target market so far, you're obviously an EU based company, but you pick us as your target market. So what what caused you or what drove you to decide on the US first?
Tim Jones 2:01
Yeah, well, I mean, when we first started looking at the area, which is malignant pleural effusions, it's it's a, it's an area in the US, that's really well understood. So the market is, is very mature. And we knew that that was probably the first one to go to, but everything kept on stacking up in the same direction. So through, we came through a needs led innovation program called BioInnovate, where we created really good relationships with the Mayo Clinic, subsequently with MD Anderson. So we've got very strong connections with the top centers there. So that was another element of it. And then we look at the market. So because it's mature, it's homogenous in the US as well. So if it was the EU, we'd have to go through all of the different markets, whether it's the UK, Netherlands, Spain, Germany, it would have meant putting the work into access all of those markets separately. So there's reimbursement codes that are already in place in in the US, which meant that we can just go through that channel as well. And then we've got the 510k pathway, where we don't need human data. So we go through the preclinical evidence generation, and everything's stacked up then to make it a bit of a no brainer that the US was the first market for us.
Isabella Schmitt 3:21
Yeah, so, Arielle, I know that Sante is a US based venture month on venture capitalist, venture capital, firm and a little bit about kind of your investment thesis. Do you tend to focus on US based companies? Do you? Do you want them to be based in the US or just have that as their first market? Or do you feel agnostic about which market they go to? How do you view which market?
Auriel August 3:50
Yeah, I would say, as a US investor, unfortunately, we tend to be very US centric. And it's generally what we're comfortable with. So we understand the regulatory pathway. We understand what hospitals we understand the FDA, for the most part as much as we can. But we wouldn't say we exclude other markets. So majority of our investments are US based. But obviously there's always a global perspective, we want to know, what is the disease state across the across the globe? And what are the other markets in the UK and the EU, as well as the Asian markets, we will particularly focus because it's a lot easier to start with a US based company, US based regulatory pathway and expand outwards as opposed to actually a quick change after CE marking the MDD to MDR. Going to maybe to the EU and then coming back to the US it's much easier to expand from the US and move outwards, at least as a US based investor to think of it that way.
Isabella Schmitt 4:40
Yeah. When you look at the different obviously being an investor, you talk to lots of other investors and you know, where they invest probably along the pipeline, sante is early stage, which is you know, higher risk but potentially higher reward Do you view the risk tolerance different per region? are European investors different from US investor a different from Asian investors? How do you working with that ecosystem? What does that look like?
Auriel August 5:13
I would say each type of investor is very different. And each investment firm has an investment thesis that they work around and it's less of a venture capital investment is all risk. So everyone has just a different level of risk tolerance and where they're willing to take the risk and so, Sante being early stage, we are willing to take the risk on the technology, we really like to understand the disease state, we really like to understand the patient population. Particularly, we have a lot of former MDs, a lot of former hospital administrators that really like to understand the ecosystem, and feel that we can take really, really early stage things work with an innovator like yourself, that has an idea, maybe it's a prototype, it's sometimes it's only an animal's it's usually always preclinical where we're investing. But we want to take that opportunity and get it to the point where other investors are more comfortable. So that's where we like to play. But I would say that, but other investors, they like to take the risk on growing the market. So we say, Okay, we're going to take you from a prototype and get you into humans, where we know now it's working in a clinical area, another investment, but we don't have as much experience going to say commercialize that idea of we want to expand and build a Salesforce and really get market adoption, that is where someone else would come in. For us, that seems like a lot of risk, right? If we can prove it works clinically, we feel really good about that way, we're going to really improve the standard of care. And we will hand it off to someone to say okay, now go forth and conquer it and capture more of the market. Other investors are much more comfortable saying, make sure you prove out the mechanism for me first make sure it's going to work in humans do is it in the workflow of of different physicians and say, I know how to build a Salesforce. So they're taking a risk there of like, we can actually build a really good Salesforce really get in, put things in our bags and get our groups to sell to the different hospitals, which is a different kind of risk. So it's less of a US UK where the risk tolerance of particular markets and more Just where are you comfortable and playing in the ecosystem along of development of medical device from inception all the way through to market adoption?
Isabella Schmitt 7:10
Yeah. Tim, you have primarily EU investors right now. And I know you're looking for some US investors. How have you gone about meeting those investors, picking those investors? And what what is what do they look like for you? You're you were early stage at one point, right? So what was that process? Like?
Tim Jones 7:31
It was interesting, because we were from, like, the west coast of Ireland is a real strong hotbed of, of med tech, and is a is a real strong cluster there. So there's already people are waiting to pounce on companies when, when they see the progress, you know, and people talk around the industry a lot. So when we got to the point where we had completed our grant funding, or you know, close to it, we had a significant amount of motivated angel investors that wanted to invest in us. So we went through that process, you know, the nine month 12 month process, the due diligence, going through the data room. And we just ensured that we didn't want to lose any traction. So for us, it was the momentum and the project, and then the momentum to ensure that we kept everything moving with our clinicians, and all of the kind of usability studies, all of the engagement that we had, that we didn't have a period where we were shy on cash. So we wanted to keep moving. So it was quick for us, when we saw them, they came in, we knew they were appropriate, and we moved forward. And that was a good mix of angel investors that had med tech specific knowledge. That was high net worth that specifically had domain expertise around providing care to the home for patients with palliative care needs. And then we had a venture capitalist that wanted to come in, put a small amount in speculatively, knowing that then they'd be there to support the inevitable top up and subsequently come in, in the series A so it was and they have a lot of technical expertise in our areas well, specifically in digital health, because we've got a significant digital component to our technology. So everything kind of like kind of like moving to the US first, it all made sense. And we moved forward with with those investors, knowing that strategically down the line, we've got certain things covered as well,
Isabella Schmitt 9:30
for the investors that you did select, How involved are they in your overall process? Are they pretty hands on? Or are they a bit of a hands off approach?
Tim Jones 9:39
Yeah, so although it's for us, it's a it's a it's like a it's called the halo business, Angel Network. So it's, it's a group of people that come together and have various other high net worths that plug into it. So it should be just one group and you communicate to them but it's not. We've got more multiple groups that we communicate in different ways to so it's quite burdensome, people want to be communicated in different ways. Some people want a little bit more, some people want a bit less. High Net Worth doesn't want to know anything about what we're doing just, you know, let's see the money come back in an appropriate amount of time. So when we have, again, the inevitable stretch to our timelines, communicating that to them is a little bit more difficult because they don't understand the medtech industry so much, and that this is normal. So it's like hang on a second, didn't we agree it was going to be this amount of time. So those are the kinds of nuances that we have to deal with. As, as a management team, and as a board, we need to kind of go through that process to ensure that everyone's communicated in the most appropriate manner.
Auriel August 10:46
I can say that comes up a lot. And I think you touched on a really important point there of when you do take money, make sure that you do your vetting process of the investors as well, because it really is a partnership for a really long time and setting expectation setting around communication around timelines. As mentioned, sometimes, you know, there's always delays and when you want to make sure that no one's ever surprised when you're at board meetings, that's managing managing your board is always a really important thing. And I think particularly with Sante because we weren't go so early and working, you know, mostly with physician founders, early entrepreneurs were very, very hands on. And so we not involved with the day to day operations, but bi weekly calls, making sure we've done everything from getting our company set up with like a bank account, and like all of that to taking all the way through your pivotal trial. And so I think it's really important. When you're choosing your investors, it's one that you're you're comfortable and have a good working relationship with them. And as you're creating your strategy, I think it always should be as a two way conversation, especially those that have experience due to certain pathways that you've done, and can help navigate that. But also bringing, it's also okay to push back a little bit and say, Hey, we've thought about it this way. And I think the communication early and often is really important. And it can be often burdensome on entrepreneurs to, to try and manage the different stakeholders, they're all in place while also trying to run a business and get a startup off the ground.
Tim Jones 12:10
And sometimes it's the it's the simple things you don't even think about. So one investor that we had, I was communicating through a PAC, and then just a quick call afterwards. And it was kind of a little bit stunted. And then one day just said, Listen, let's go meet in the pub. And let's just kind of go through a lot more detail with you then. And that changed everything. So ever since then, that's the way we meet the communication is really smooth. And they get informed in the best possible manner that works for them.
Auriel August 12:39
Don't underestimate the casual conversations.
Isabella Schmitt 12:42
Yeah. And on that note, I would say that it's I have a we have a podcast, approximate sort of approximate, it's called Inventing Tomorrow, we had a conversation about investment recently. And we called it the investor dating game, because it really is like, you know, companies want the money. But you also don't want to, like get hitched to the wrong person, right? Like you don't want to marry someone just because you want to be married. Same with investment, like you need to make sure that you get along with your investor too, that you have the same vision, that the investor is not going to come and say, Hey, I have this, this totally divergent thing that I want you to do as a company. And that really wasn't what you started off with as your vision. So kind of shifting a little bit into that sort of vision and value and all of that. Janelle, Janelle has worked on value chain committees for hospitals in a past life, I guess, and still does some of that work today. So you talk a lot about value proposition and understanding that for med tech companies, and the value proposition goes with you throughout the entire life of your company. It's important for regulatory, it's important for clinical, it's important for investment, it's important for commercialization. So what would you say? Just generally, I guess about the value statement and and the weight that it has? And how to think about that?
Jenelle Robinson 14:10
Yeah I think that's a great question. Because I think if you have one value proposition throughout the lifetime of your product, you're doing it wrong. Your product product is probably not the right word. Your innovation has different value to different stakeholders, as it should, as your process evolves, your value proposition should also evolve and morph, for example. Yeah, I think when you start talking to early investors, and you're very early on in the process, your value is more about that total addressable market. It's more a quantity driven discussion correct. When you start talking to hospitals there, there's some point throughout your process where you have to start thinking and your conversation will morph from one of quantity to one of quality So it's very important, the hospital to be very frank doesn't care what your total addressable market is. They don't care what your ROI is, they don't care what that is, what they care about, is how is this going to improve the outcomes of my patient base? So number one, do I have this problem that you're proposing at my hospital? I'm going to take your global numbers, and I'm going to drill it down. And I'm going to look within my facility and find out how is this going to impact me is this a large enough problem, where I can invest in terms of kind of investing in purchasing your product to help my patients, so your conversation needs to in your thought process needs to flip from quantity to quality, but it's also parallel? I think. So when you're early in the investment process and starting to talk about your regulatory process. You also have to keep in the back your mind, what are some of these quality outcomes that I'm going to look to that can also substantiate my value proposition that can help support my problem statement. So they should all marry your problem statement should help drive your patient population that should help drive the quality metrics that you're going to seek and in your in your clinical evidence, and then circle it back to your value proposition by inputting those outcomes into improved outcomes for you for the patient population.
Tim Jones 16:31
That value analysis work sheet or workbook that's continually evolving, is really interesting, because only recently, we updated it, after going through an exercise with one of the strategics, who is one of the major players in our space. And the value that we had from working with them was astounding, we really fleshed it out to a degree that we never realized was was possible at the time
Jenelle Robinson 16:54
You get, the more succinct I think you can get in articulating your value you the better off you are. And I'm sure you can attest to something I just said like your strategic had a different different definition of value correct, then your hospital would or your direct clinician would or your investor would have. And that's okay. That's the point I'm trying to make. Is that, okay? That's okay. And you should have multiple value propositions or be prepared to articulate various value propositions to different stakeholders along the process.
Isabella Schmitt 17:30
Yeah, and I will say that I noticed with innovators, early stage ones when they're wanting to talk to FDA, for example, about breakthrough device designation. And they're wanting to put a lot of those quantitative metrics around finance in in that, and FDA doesn't really care about that, I mean, you can put that in there. They won't like fuss about it, but they're not going to care about like your total addressable market, and they're not going to care about the economic situation. Now, CMS may care a bit more about the economic situation, investors are gonna care more about the total addressable market. So you want to be thinking about all of these things, and making sure that whomever you're talking to, you're telling them the appropriate things that they care about,
Jenelle Robinson 18:17
I think there's a large emphasis and there may be a little disconnect early on in the process to when you get to the point where you're ready for primetime or you're ready to be used on a patient. I think there's a little disconnect it within the industry and the different players in the industry, on this emphasis on reimbursement. And that I've had many innovators come to me say, Well, I don't have a reimbursable product. So I don't have value. And that is absolutely not true. Hospitals buy things to use on their patients that are not reimbursable. There are plenty of things out there that are not reimbursable. It doesn't mean you don't have value, your value comes from qualitative means not quantitative means. And as an example, I was part of the I ran the value analysis committee when robotics first came out. Robotics made absolutely zero fiscal sense. It was not reimbursable you're talking about, you know, a multi million dollar investment when all is said and done. Correct. So you have this huge capital expense that is not reimbursable that doesn't have codes, we have no idea what it's going to look like in the future. You add time to my opportunity to my procedure. I have training costs associated with it. I have credentialing I have all of these operational costs. But you want me to bring this on for my hospital. What in the world are you thinking? But when but when you really sat down and talked and had frank discussion and about the proposed quality outcomes that robotics can offer to a cutting edge Medical Center. It made sense. So when my CFO came in, and he looked at the numbers plopped down the folder and said, Oh, I'm out, we can't do this. He said, No, no, no, come back, come back, come back. Let's look at these outcomes. Let's look at this, theoretically, think of what this can do for the future of medicine. Fast forward, not that many years in the in the lifespan of a, you know, technology, it's now the standard of care across multiple modalities. So just because you're not reimbursable, I'm here to tell you that it doesn't mean you don't have value and that you won't be purchased. But your value needs to be articulated very early on in terms of quality metrics, when you start talking to hospitals.
Isabella Schmitt 20:50
Yeah, so Auriel on the concept of value, and obviously having the investor hat on to some degree, how important is your is the emphasis and the articulation of that value statement to you? And do you typically, particularly because you invest or Sante invest in higher risk and longer, you know, regulatory pathways, longer development? How important is that value statement to you? And how do you prefer it to be articulated?
Auriel August 21:21
Sure, I'd say obviously, the value statement, and having a clear vision for what you're bringing to market is incredibly important if you need to be able to articulate it succinctly and directly. And we always say, what is it that you can do that no one else can do. Right? And that that should get to the core of what your value statement is. So how are you improving this for patients? How are you better than the standard of care? How are you going to really show that this, that this innovation needs to need to become to patients and so particularly when we go early stage, it's we're looking for things that are a little bit more, I would say kind of revolutionary, more than a turn of a key kind of a, something that's really going to disrupt a current market to really improve patient outcomes. And so I like to pull in that string of value, when you're when you're thinking about taking money. So when you take an investment from a VC, you want this money to get somewhere, right? And you can say, Okay, we're gonna, we're gonna, we want your $10 million, and that's gonna get us to FDA approval, which would be very capital efficient, but sure, like, we're gonna, we're gonna, we're gonna say we're gonna be really, really good with this. But that's not quite what you want to say, right? So because we go early, we tend to invest in innovations that are going to take a PMA pathway. So we're going to have to, you're going to start from scratch and really prove it out. But what that gives us is, we know that there is value in the company with human data that by itself is valuable. So it's what will I our capital get to you. And human data and a PMA pathway, an open trial, open, pivotal trial may be enough for a strategic to come in and say we want to take over this program, as opposed to looking something at a 510 K, which is a different set of values, right? If this is an established market, which is great, you have a less risk, maybe you have established reimbursement, you have codes, the patient pathway, you don't have to disrupt workflows, you have that but value if getting FDA approval is particularly valuable, valuable is showing market traction and adoption that is valuable. So that's gonna take you a little bit longer. And so there's often this hesitation of saying, Oh, no, I have to go a PMA pathway, it's going to take so much more money and time and concern, it's no, you're actually just getting to a different value driver. If you're going a 510 K pathway, you may get quicker to FDA approval, but you need to go out there and build a Salesforce and get revenue traction, those are different value milestones both valuable and may ultimately take the same amount of money. So I wouldn't necessarily shy away from a more burdensome regulatory or clinical pathway because that actually, one is maybe more valuable at the in the same amount of time or sooner and also add some barrier, right? If you do want to create some needs around what you're doing, if you set the standard of saying you need this level of clinical evidence for this new procedure, now you're setting the standard for everyone that comes after you and saying, Hey, we really want to take the opportunity to improve this out. And so each mile along the way, and with each tranche of funding with each round to raising think about what that true value creation milestone is, is it 10 patients of data? Or even for us, we're going through? Is it like getting it to a working prototype and animals? Is it going through vnv testing? Is it you know, the first five patients and showing safety data? Is it IDE approval from the FDA for your pivotal trial if you're going to DFS pathways at the open AFS isn't an OUS first inhuman trial because often we have to go outside the US for first in human. So really think in terms of these value driving milestones and how it feeds into ultimately the value you want to create in the healthcare system is a really great way to be able to articulate it to other people saying this money is going to get me to this milestone, which then shows value that this product works or that this is getting some market attraction, adoption and showing outcomes. So all of you keep value as a chair. It will feature there.
Jenelle Robinson 25:00
I think is a predecessor to that those two really have a soul searching discussion on what is the problem. And you'd be surprised at how many innovators that I help, can't articulate what the true problem is, they're still stuck on the better, faster, cheaper. And those are three words that should never ever, ever be used in healthcare and let alone a value proposition. Because we're beyond that, especially in the United States, we are beyond that. We're beyond better, faster, cheaper, that's a 50,000 foot level hospitals and I think in prep for regulatory pathways, and investors want to take it to the next level. Tell me how, what's the problem? Oh, well, it, it's not very efficient. That tells me nothing. That doesn't tell me anything that doesn't help me. Discern your value to someone like Auriel, who can give you money to get you to that next level, it doesn't discern any value to someone on a hospital on the hospital side, who will ultimately purchase your product, and it doesn't do you any favors. So you really have to have some soul searching discussions and understand your patient population, your intended patient population inside out and backwards and walk a day in the life of that patient. And I think, Tim, you can talk about this about how you've actually, by doing that have discovered a whole other set of problems that have really helped substantiate what you thought the problem was.
Tim Jones 26:33
Yeah, I mean, as I said, at the start, we went through a program called BioInnovate, which is affiliated with the Stanford Biodesign process. And we conducted four weeks of clinical immersion in the Mayo Clinic in Rochester, and four weeks in two university hospitals in Ireland. And it just gives us the opportunity to really see things that nobody else could see, because we were following the patient pathway. We were observing clinicians observing nurses observing the patients, and interviewing them all at various stages. So we were in a very privileged position, where before we were accompany, we were absolute researchers, we could put so much time towards this and ask in depth questions to really understand what the problems were. So the clinicians didn't really see what the problems the nurses were having the nurses didn't really see the problems that the patients are having. And then we were able to even get videos from patients in their home, showing what they had to go through with the current technologies and how difficult it was and how much support they needed. So when we pulled all of that together, we really understood then how underserved they were. And through that, we were able to build a product and show that value proposition that that has a real core and a real strength to it based from the bottom up. And I think, yeah, it's just a very privileged position to come from that needs led approach.
Isabella Schmitt 27:58
Yeah, I find that what I've seen too is a lot of folks will invent a technology, that, particularly if you're coming from, like a lab, or academia or engineering, you'll invent a technology, and then you'll try to fit that technology into a problem. And sometimes that works. And it's fine. It's not always an issue. But you but if you're searching for a problem, you need to make sure that it's actually a problem, customer discovery, talking to various stakeholders is so critically important, so that you don't waste a lot of time and potentially money, other people's money usually on on something that nobody actually wants. And you don't keep iterating and perfecting something on some sort of feature that nobody actually cares about. And on that note, you know, I'll often have companies as well come to us. And they, one will say, Okay, I have this investor who is telling me I have to be a 510K pathway. And I know you touched upon this a little bit earlier, Ariel, Auriel sorry. But they'll also then say, I'm gonna go to FDA and I need to be a 510 K pathway. So I'll do whatever FDA says my claims need to be to be that 510 K pathway, I'll turn off these parts of my technology to be 510 K exempt whatever it may be. And there's likely some misunderstanding going on there. From the innovators perspective on what the investor is actually telling them. Could you talk about that a little bit?
Auriel August 29:33
Sure. I do think that I will say I, I have had an experience, particularly pushing a particular regulatory pathway. But I think it's a again, around expectations of what the what the innovation is, what the technology is going to be. And, you know, as investors, it's our job to think of the entire life course of this company, right as it's moving forward. It's like yes, we're investing in this round, but in theory, it's a marriage. So we're going early stage so I expect to be a part of Your life for the next eight to 10 years. And so I want to know what those next eight to 10 years are going to look like. And if you're investing in a technology that has this established market might have a good predicate, and it should, in theory, be a 510 K, and then where the value there is showing market adoption, because the value is shorter procedure time or more cost effective to the hospital, it takes a smaller piece of the DRG, or the workflow is better you move it, you move the site of care, if that's your value, we need to get to that value driver before the company has value. And so it's not that you have to be a 510 K pathway. In order to invest it's a in order for this investment to make sense. It needs to be a 510 K pathway because a PMA pathway for this particular device in an established market where maybe there's already three or four incumbents where to show that you're going to get any piece of this market share during a PMA pathway before you can even get this in patients and prove out any of those value drivers, that becomes a sink where the capital, you know, the squeeze isn't worth the juice, the juice isn't worth the squeeze. So it's it's more of a understanding of that. And I think that just really involves a conversation. Because ultimately, if you're, if you're designing something for this indication, and it's not going to go down this pathway, where can actually make it to patients and survive and get a piece of the market share that that involves a conversation. And so, again, finding a good partner who understands the space, and there's definitely situations that arise where investors are more comfortable in certain risk areas, like we're comfortable taking regulatory risk and doing that long pathway where others will say, No, we rather take market risk, or we rather take science risk rather than regulatory risk. And so that's also around partnership. So really expectation setting around what the innovation is and to really finding the right partner that's comfortable with the risk that you're suggesting.
Isabella Schmitt 31:49
And, Tim, you, you know, have talked to plenty of investors, I'm sure. Have you found any of them particularly keen on one pathway versus another? I know you are currently going down the 510 K pathway? Have you found that any of them were averse to other pathways? Or how has that been for you
Tim Jones 32:09
No, not not adverse. But you know, when we when you look at your area, you look at the knees, you look what's what's necessary to get through and you make your judgment call on it. And when you present that to your investors, as this is the most likely path, you only have a certain amount of information at that time. And they invest because they trust that you've made the right judgment call on it at that time. As we go, there's strategy around how you manage that process on an ongoing basis? Or do you continue to have a number of pre submission meetings to perhaps try and de risk the submission overall? Or do you go straight forward and say, this is absolutely 510 K, we know what we're doing, we pull everything together, and it's strong. And there's no point in going down the pre sub route. And that's always been the way that we've communicated that to our investors, that, you know, we will do the due diligence on it as we go. But there was never an expectation from them. That if anything changed that that would change any of the dynamic with the investment. And we're still going through that, that you know that that consideration as we speak. But yeah, there's, it would be surprising if we were off that 510 K pathway, but we have to just tackle everything as it unfolds in front of us.
Isabella Schmitt 33:28
Yeah. The other thing that I'll see a lot of times, and it's kind of to your point, Ariel, about the the Pathways is that, really it has to do with the value driver. And for you know, FDA being one of those stakeholders, their their driver is safety and effectiveness public health, right? And the it's not based on a pathway like Oh, I'm 510 k, so this is all I have to do, or I am denovo. So this is all I have to do. And FDA will tell you this too, when companies will sometimes go in and really be wanting to know like, am I a 510 k or denovo and FDA will kind of push back and say, well, it doesn't really matter at this stage, particularly when they're early. Because you're we're going to have to make that decision, your market approval or clearance is going to be based on the decision based on your safety and effectiveness data. So you need the evidence that you need in order to show that the device is safe and effective. So there's a lot of focus I find with innovators on the regulatory pathway, they'll say that an investor told them Oh, it has to be 510 K. That may be for a particular reason. It may not be that Oh, from a regulatory standpoint, 510 k is easier pathway. It has to be the evidence burden is less for the specific claims that you're you're going to make and from a value standpoint. You want to make sure that if you are doing a 510 K, that you're able to make the claims to the hospital, those qualitative claims that you that you need to make in order for them to buy in or for reimbursement that you can actually be reimbursable. If you're not, you know, a DaVinci go into the hospital with, Hey, this is gonna change the standard of care overall. Anything that you would add to that Janelle?
Jenelle Robinson 35:24
No, I think it doesn't really matter what pathway you go down. But I think the less evidence just in a nutshell, the less of your own evidence that you generate, and can pass that forward, the more your innovation will be under scrutiny. And you're really going to have to rely then on that value that you bring. So why are you better than your predicate that we already have on formulary? That is $100, less expensive per case. So you really have to dig down and find your value. I mean, it's it's like the, you know, looking at the, to the rainbow for the pot of gold, you really have to search for it. And and it can't be fluff. Because we're way beyond what we're, we're we've, I don't know what comes next after need and healthcare, but we're there, whatever it is. So it's very, very important. It's okay to use other people's data, as you're presenting to hospitals to purchase and things. But your technology has to fit within that if you haven't generated your own, and you have to rise above. Otherwise, we'll just stick with what's on formulary, unfortunately.
Isabella Schmitt 36:38
Yeah. And I would say that a program like bio innovate or like NSF I Corps or something where you're going through and you're really identifying the problem, helps you communicate that value proposition A lot better to investors, to regulatory folks, to providers, to everybody. Ultimately, Auriel for early stage, an early stage investor, so companies are still kind of working out some of these things. Where do you as an early stage investor really want the company to be able to be to articulate those types of things? What's my value prop? Was my regulatory pathway, what? What evidence do I have to date to show that this isn't some sort of like, wonky idea with no market or that this is a pie in the sky thing, that's never gonna happen, you know, I cure all cancer, or whatever it might be.
Auriel August 37:30
I think it's really, I think, just the Jenelle mentioned, really understanding the problem. And programs like bio innovate and bio design, where you have the opportunity to go in the hospital and see how it really runs, what a patient really experiences, what did the operation really look like? And truly, really understanding because we will work with innovators that are saying, Hey, I have identified this problem. I've been back through history of the literature. And it shows that like, maybe this nerve has this impact on this disease state. And I want to investigate and usually they're in the you know, in a lab somewhere doing that, and then they have some some bench data. And if they can really articulate the problem, how this is going to change the standard of care. And I understand what's currently on the market, what's currently being developed in the market as well, the good competitive landscape, how much you think it's going to take to get there of like, where to really the go no go point. That's good. If you can articulate you have those things, which you can all do with pen and paper, you don't even necessarily need money to do that. We can get comfortable around it.
Tim Jones 38:26
We and the top need when we came out to BioInnovate actually was well, the solution was a healthy cigarette. Yeah. This is genuine, this is based on a proper innovation process. But we couldn't articulate any of that. So there was no way we were ever gonna get that. Yes. Fortunately, we could articulate it.
Auriel August 38:49
Right. We're SDLT, arbiters for your heart, and your diabetes, it's getting everything.
Isabella Schmitt 38:58
All right. Well, I think that any last words of advice from any of you to to any,
Tim Jones 39:05
just because you know, it's about clinical considerations. And sometimes the relationships that you build with clinicians perhaps don't get up at the forefront. Personally, I have found that to be one of the greatest things that we've done on this program so far, and the buy in that we have and the kind of belief that clinicians have in our product is all gone based on what we communicate to them, and how we interact with them. And that has been probably one of the things has driven us further forward and faster than anything else. And that means that they don't just talk to them amongst their own communities, they talk to the strategics. And, you know, they constantly that cross chatter even evolved into what I was talking about. Excuse me, when I was talking about not identifying the need of a patient at home, it turned into a paper that one of the clinicians worked on outline and they didn't understand What the burden on the patient was until now, and they have to look at it further. So it really the torque that we the influence we've had, as a small company has actually been quite considerable.
Auriel August 40:11
Yeah, I would piggyback on that of don't underestimate the ability to talk to clinicians and caregivers in the space and really take their value to heart because they're going to be the biggest champions for any thing, you're moving forward, and then to to not be too discouraged by the different regulatory pathways, because at the end of the day, you want to generate evidence that the FDA is goal was for safety, right? And safety and efficacy, if you're going to do something to people you want, you want to make sure you're doing you're doing it safely. And actually, you're getting the endpoints that you want. And there is in terms of his hesitation of a rep to run this huge trial with 300 patients and follow them out a year. But there's a reason for that. And so yes, it can be a hurdle to overcome, but it should be one if we're ultimately trying to improve patient outcomes that you that you want to prove out, you want to show that you are better in Canada improve patient outcomes, so I wouldn't, I would say don't shy away too much from a heavy regulatory burden because ultimately that means you're probably doing something really good for patients
Jenelle Robinson 41:06
to know remove better faster, cheaper from any value proposition you have better sound super plus plus Yeah, Arielle steal my thunder, so one of my little closing thoughts, but but she's absolutely right is find your KOLs find, you know, the people that are going to shepherd help you shepherd your products through, never underestimate those relationships that you build with your clinicians who can help get you to the finish line and actually get you in use in in facilities. They make all of the difference and really understand I guess my parting words are truly understand your patient population, your patient processes and the current standard of care. That will give you the answer of how you can make a difference if you truly understand the current state.
Isabella Schmitt 42:01
Yeah, and I would add that the clinicians are also immeasurably important for FDA interactions to they will always have a chief medical officer on on the calls and having a clinician be able to talk to the clinician to be able to understand the new device and how it would fit into the clinical workflow is important. They will listen to another clinician better than they listened to anybody else. So that is another reason clinicians and cables are important. All right, I think that's everything. Thank you everyone
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