Manny Villafaña, Medical 21 - Studio Interview | LSI Europe '23

Transcription

Scott Pantel  0:15  
All right. All right. Well, here we go. Okay, I'm here with Manny Villafana, living legend of medicine, aka, just a kid from the Bronx, Puerto Rican kid from the Bronx, Manny, it's a pleasure to be sitting down with you here again today. And we're far away from, from your hometown here in Barcelona. It's great to have you here.

Manny Villafana  0:35  
Great, thank you.

Scott Pantel  0:36  
So Manny, lets, we just got off a panel and had a great response, a lot of fun in that conversation, I want to start with a sort of a similar theme. And that's let's talk a little bit about. Let's talk a little bit about Medical 21, you've got seven IPOs, in your history, hundreds of billions of dollars in shareholder value created through all those companies, millions of patients lives touched and saved. And we can get to that towards the end of this. But I want to talk first a little bit about what you're doing today with Medical 21. So can you get us current on that? 

Manny Villafana  1:07  
Okay, well, the project that we're presently working on, is the development of a artificial artery for bypass surgery. Today, there are between 800,000 and a million patients annually being operated on to solve pain in the chest, which is a result of ischemic conditions on the heart. To do that, patients have to submit their body and I literally mean submit their body to the blade of a surgeon, scalpel of the surgeon, who will have to open up your legs, who will also open have open up the breasts, the connection of the breast to arteries, okay, they will also in 23% of the patient also have to open up your arms. This results not on scarring, and infection and a lot a lot of pain. And it's got to be a way of eliminating that being approached by the University of Iowa. Some of their scientists were working on the material and they came and called me and said many Why don't you come down and take a look at what we're doing? Oh went down with a couple of people I worked with and we took a look. And they were working on material that we felt was very interesting. And I know that over the last 50 60 years, people have tried to eliminate the harvesting of these vessels and doing all of this radical surgery of harvesting these vessels. For the last 50 60 years people have tried to work on an artificial artery. I saw the material, I saw what they were going to do you know what they were doing. And I said, other people are going to be interested in this. And unfortunately, they're going to try to do it the same way as as they've been trying to do it for the last 50 60 years. I looked and I said, Can I have that material? And they said yes, of course. And we signed a little agreement with the University in which we ended up with a the use of this material, we have a license for it, etc, etc. Now, it's interesting, there were two other companies that were there trying to secure the same material. And in fact, they were there before I was there. And when they when it was assigned to me to Medical 21. The two people said, Wait a minute, we were here before Manny and the head of the research group that handles all of these patents and things like that, at the University said, Yeah, but you're not many. And they knew that if I grab on something, I will try my best. And we'll go after it. So we started with that. And we started with the approach. Can we make an artificial artery to eliminate the harvesting of vessels? Well, after a long, long time of seven years in which we've had 14 iterations, that is to say, you know, you tried why? No, good. Try it again. No, no good. And every time you do that, that's another iteration. You almost have to start from scratch. You have to start your animal work again, and you have to do a whole bunch of different things. But after 14 iterations, we finally reached the point where we're ready to go into humans. What it will mean is that we can take out of a package rather than an hour or two hour long. I'm just opening one leg. We can take out Have a package instead of taking off the breasts of a man or a woman, a vessel that causes terrific pain, okay? Or what's even the one that's amazing to me is that we can take it out of the package and eliminate for those 23% of the patients, their arm being torn open. We use our arms so much, okay. And many times the resulting not only the scarring and the pain, but they often lose the feelings in their fingertips. There was once a very major major lawsuit in which they operate like that on a world renowned a violinists who lost his career because he could no longer feel the fingertips. Anyway. Can we do this? I think we can. And I'm pleased to say that we hope that within the next three or four months, we'll be able to start our clinical trials on humans. In Switzerland.

Scott Pantel  6:09  
So Manny. You got seven IPOs, some blockbuster deals in their ATS, St. Jude, CPI, how do you how do you rank this opportunity? It's how does it fare in that class of mega deals?

Manny Villafana  6:25  
Well, I know people don't believe me on this one. But those were Cakewalks. Those were teeny weeny compared to what we're doing. How do you do that? Man? How do you counter you calculate that? Well, when we started CPI, there was about maybe 60 70,000 pacemakers per year being implanted throughout the world, with seven manufacturers, by the way. When we started, St. Jude, at that time, the world market for heart valves was 65,000 heart valves, which there was also about six or seven manufacturers pursuing that market. Well, this market, we estimate conservatively and only for the heart, is between two and a half and three and a half million grasping news, I don't know about you, I math says that that should be 50 times the size of St. Jude. Now, how it all comes out after 1015 20 years, I really don't know. But I can tell you, we're starting out from a much, much, much higher minimum level than we ever did before. Furthermore, the price of what we're selling these things are at least three or four times higher than what we were selling heart valves for. That's incredible. Yeah. Is it amazing when you when you started looking at those numbers, it really is staggering. 

Scott Pantel  7:50  
And the fact that you characterize St. Jude's acquisition by Abbott for $30 billion 30 billion or $2 billion. And you you characterize that as a cakewalk, so take what that tells me a lot about your about your attitude. So let's, let's shift gears a little bit into that. Because Manny, you've been, you've seen it all, you've built multiple companies, you've seen multiple cycles, even with your track record, it's still difficult to go out and raise money in not only the current climate, but in any climate, I think you would attest to the fact that it's it's it's difficult to raise capital. So yes, let's talk about that. What has changed what hasn't changed? And, you know, I mean, tell us about the the climate out there for raising capital for scrapping entrepreneurs. 

Manny Villafana  8:34  
Well,you know, the market, obviously, over the years, and I've been doing this for the last 4550 years, has changed completely. First and foremost, there are many, many, many more competitors, because there are many, many more products, okay? And they're all vying for the same products. Today, like I said, we did a pacemaker, okay. Today, the technology that we developed, is being used by all the manufacturers of pacemaker, the exact same technology, okay? They all make their pacemaker, basically the same. Okay? And they're all fighting for that market. And that market today's in the neighborhood of four to $5 billion. Okay, so everybody's busy doing that. We did heart valves, okay. And today, again, that heart valve market has grown with many other manufacturers of heart valves, okay. And that market is somewhere in the neighborhood of about $6 billion, but they're all fighting for that. And Kay, we have grown in which we see these companies are so big now that it's hard to put your arms around them. So when the executive and especially the chief executive, of a one of these companies has to determine Where are we going to put our resources, we're fighting tooth. And, you know, it was a tooth and nail with a variety of other competitors, that they can't even look at a new technology. Because we don't have the time. We don't have the resources, we don't have the manpower to really go after these things. So the young entrepreneur who may have the greatest thing since sliced bread, okay, is saying, How do I get the attention of the people who have to make those very, very difficult decisions, then on top of all of that, is the fact that looking at a new product, developing a new product has to encounter a most difficult regulatory environment, an environment much bigger, much more complex than ever before. You add that all up, and it makes a very, very tough road to, to go up to try to get things started. Now I've taken a different approach, which has helped me but again, I still have to go on that very tough road, I have the advantage that I can start on that road, working with individuals that have made money from some of the things we've done in the past. Okay, Manny, what are we doing now? Now we're going to do this, we're going to make an artificial graph. Okay, I have no idea what the hell that is. But let's give it a try you doing it? Yeah, I'm doing I say, Okay, fine. Let's start off with some money. And that will take us and give us a little bit of a story. Okay, it's like putting gasoline in the engine for the first tank. But if you're going to take a long road of seven years, you're gonna have many tanks of gasoline that you're going to have to get. Okay. So we do that, okay, we have the advantage that we know the doctors, what doctor is gonna do that? Are you kidding me? I walk into an O R, I walk into the office of a chief of cardiac surgery, I knock on the door, and they open the door. And they don't even say hi, Manny, how's the family? How's the girls and stuff like that? No. The first thing they say, Now, what are we doing? Okay, so I had those advantages. But yet, at the end of the day, the travel road is much longer than before. Okay, it's much more complex. And and to get anyone's attention is very difficult to top down on the fact that no one has ever, ever developed an artificial, small diameter coronary artery. And so many people have tried that when I finally get to the executive to the decision makers. They say, Manny, what are you talking about? We've all have tried to make an artificial graph, and tell us how the a little Puerto Rican kid from the Bronx is going to do it when all the major players have tried. And I have to tell them, yeah, but I'm doing it. 

Scott Pantel  13:00  
It's a great message for other entrepreneurs are out there that that are out there that may be working on their first venture. And, you know, I guess a question that comes up a lot. And I've asked you this before, but I think it's worth sharing is, you know, why? Why are you added again? Is it because you see the opportunity in this venture? Or is it just in your DNA that you have to do it? And you know, for some of those other entrepreneurs that are working on their first one, we want to see them get that success so that they can hopefully catch the bug, but tell us why you're not out golfing? Is it because the opportunity is so big? Is it because it's just, it's just who you are? Talk about that a little bit.

Manny Villafana  13:31  
Since you brought it up the golfing? I got to tell you this story. Okay. I was trying to raise some money and a young MBA individual who had just graduated from Harvard, he had his MBA, young guy and I was trying to raise some money. He turns around to me, and he says, Why aren't you playing golf? And I said to him, let me tell you something. I, I was in Spain, in fact, look that here we are in Spain, and I was in Spain, in Madrid, Spain. And I was in the, with some surgeons, and they were all talking about we're going to do a heart transplant this weekend. And, and I said, Really, guys had never been in a heart transplant. Any chance I made a 10. And they said, sure you're going to be here this weekend. I said, Yes, of course. And he said, Well, we'll do the one either Friday or Saturday. And I said, Wait a minute, how do you know you're gonna do that? So he took me to a window open up this big window overlooking a little plaza in Madrid. And there was all you see with these motorcycles, these mopeds, and no one was wearing a helmet. And they said, and if you think this is bad, you should see it on the weekends. We will have a heart transplant this weekend. So sure enough, room remember it was Friday night or Saturday night. They call me up at at my hotel. Hello. So you'll be fine. Yeah, come on down. Okay, yeah, I'll be down. So I jumped down and went to the hospital and gound up in the whole thing and went to the ER. And they told me to stand right at the head of the, of the, the table where the patient's head is and, and just stand there and watch and you could take a look over the curtain and you can see that opening the chest and, you know, working with that, and they had a little table. Right, right, right next to me with a little green towel on. All of a sudden Scott Powell comes walking in, has a face mask on. And not even wearing a face mask but a towel decided face carrying a little igloo. A little Coca Cola, Stan. Okay. And, and when, when it's not just send you notice. And he pulls out a frozen heart. It wasn't frozen. It was cold. Because it was a little igloo with ice at the bottom. It was in a plain simple sandwich bag, a little ziploc bag. I said that was a guy's heart, it's in a Ziploc bag. Okay, so they took it out and it checked some numbers over the proper number. And then they put that heart right on that little table next to me. All right, let's go. And so they start taking out the other guy's heart, click, click, click and all and they pull the other guy's heart out. And they put it on the same table right next to the new heart. And the old heart was still beating. But don't. But don't. But don't. But it was going a little bit slower. But so then they cut the labels off the new heart and they start sewing it in, but in the meantime, but doom, but doom, but to me, it was still going, the heart going a little bit slower and a little bit slower. Finally, after a few minutes, they take some clamps off, and all of a sudden blood is going into the new heart. And it starts to beat. But that very moment that it started to be the first heart the old heart stopped. And it was like life went from the old heart into the new heart. And at that very moment I said to the kid, when golfing is as exciting is that, maybe I'll take it. And it's my life. I love what we do. We create things for people that need it. Okay, we create jobs, we create a lot of different things. For some of my investors, they've had an opportunity. In fact, at this meeting, somebody said thank you for the for education, university education is that my children and two marriages, you paid for all of them. Meeting he's one of my older investors, okay. And, and we do other things, our family, we're, we're not very wealthy, we give a lot of our money away. And, you know, that's what we do. And, and like I said, no matter what you're doing, it can't be as exciting as my life. I've had an exciting life. I've been blessed with a wonderful family, wonderful wife and children. I can't complain at all.

Scott Pantel  18:27  
That's amazing. I love that. Manny, you've been to every conference in the world. You've bought every market research report, you've hired every consultant that there is, with your with everything that you've done over the last many years. Why do you come to LSI? Besides the fact that we're good friends, why do you come to LSI?

Manny Villafana  18:47  
Well, you know, it is amazing, as we're seeing it this morning's conference, I said look before anything else, guys, let's take a moment to to thank Scott and his staff for creating a possibility and an agenda that allows us entrepreneurs, to be able to present our wares and what we're doing to a group of people who are looking for the opportunity to take the money that they have from investors and put it into projects that hopefully will have a fine return. It isn't easy to get all these people together and put that together and get Scott, because he has a good program will be able to do that. And that's why we're here. All right. I hope that many of you will meet the opportunity of having met someone that has the funds and by the same token, the funds which are in the form of a capitalist, venture capital, equity capital as strategics can find opportunities amongst the high technology that's been this flight to I mean, this meeting in particular, I've sat around and listened to a lot of new new technologies. And you can't find that easily. You can't. So this is why we come to LSI. And not to mention, I don't know how he does it, but he always has the best venue. Okay. I don't know. I mean, you come here and you say, I don't have to go on vacation for another two years, five years, because his his venues are such that you working and yet you feel you're on vacation.

Scott Pantel  20:36  
You're too kind. Thank you, Manny. You know, you're known Manny as one of the legends not only just in medicine, but you're a legendary networker. In fact, I've shared with my friends that you can't walk down the streets of Minneapolis without somebody saying, hey, Manny, are going somewhere, somewhere where somebody knows who you are. I'm just curious because you are that legendary networker, what types of people have you met? While you're here? You kind of touched on it. But are you meeting with family offices strategic Who who is it that you're meeting with when you come to an LSI event? 

Manny Villafana  21:09  
Well, in our present situation at Medical 21, we're at the point now where we're taking a whole new step, we're going into a clinical trials, okay? To do a trial, it requires a fairly large sum of money, we want to raise somewhere in the neighborhood of $10 million. Well, when you're been doing this for seven years, it's hard to go keep going back to your original shareholders for more money and more money. So it's time to begin talking to big guys. Now, typically, your your strategics are companies that will probably look at a company wants it has 10 20 30 40 $50 million in sales. Well, I'm, I'm still far away from that. Okay. But on the other hand, we have what I believe is the single largest product ever developed for it to be implanted. That is a jewel, that's a big jewel. So what I'm trying to do, is get in front of some strategics, that's large companies, and they're gonna say many come back when you're 30, or 40, or 50 million. I said, Wait a minute, wait a minute, wait a minute, let's take a look at this first, before you let me throw me out the door, this is the largest bigger than anything you're handling. If I put this on the table, there's going to be several other companies looking at that same jewel that I put on the table. Now, why don't you guys just think about it and say, we have a chance to get involved with Manny on the single biggest product, are you interested? If you aren't buying, you don't have to buy us I'll just do a little bit of transforming some money that I need right now to do this study, take your time and properly evaluating what we're doing. And if you're, you know, if you're interested, you already got your, your nose under the tent, as they say, Okay, you already on this side of the fence. Okay, but if you're not interested, the little money that you put in the company will be in our stock, and I can guarantee you, we're gonna make a lot of money. So either way you're gonna gain and that's what I'm trying to do to get some strategics earlier than normal to take a look at us. Okay. That's what we're doing.

Scott Pantel  23:31  
So, we've talked a lot about the business. And we haven't talked a lot about the fun stories. We were talking earlier about, you know, that that young kid from that Puerto Rican kid from the Bronx and where it all began and some articles in the newspaper that you think fondly of why don't you share us a story about that, that article, you were talking to me about the elevator?

Manny Villafana  23:50  
The you got to understand that was born in the South Bronx, in an area that was considered the poorest congressional district of our country was born and lived in the South Bronx, was born in 1940. And around 1949 1948 1949. I started going to to a boys club. Because in the South Bronx, it was nothing. In fact, on the front page of The New York Times, nothing signed the New York Times on the front page of New York Times. They did a story about my neighborhood man Haven, district and in particular, the street, East 130/9 Street. I lived on East 130/9 Street. And they showed in that article, the street and they show where all the drug houses were. They talked about the crime rate the murder rate, the prostitution rate A variety of different things. Okay. And it was so bad that they named the article life at the bottom. That's where I came from. I unfortunately did not have the opportunity to go to finer higher education, I should say, because I was fortunate enough, however, to be living next door to a small, little Catholic grammar school. It was so overcrowded that the sisters, the nuns would have classes that were 62 children per class twice a day. Okay, that was the each nun was responsible for about 124 kids. Okay. Then I was fortunate enough that a high school I went to a Catholic high school called Cardinal Hayes High School, which in my opinion, still today is probably one of the finest high schools in the country. I had that privilege, I had that opportunity, unfortunately, couldn't go any further than that, because there was just no money in our home. Okay. My brothers and my father had left home. It was just mom and I. And she was unfortunately, a woman with a very limited Spanish education of third grade. So she was a seamstress in a sweatshop. And my father did not know how to read or write, he would sign with an axe in spite of the fact that I would grab his hand and try to teach him how to sign his name. So we, so that's where I grew up. And so I had to fend for myself, I'm, I joined a boys club, because a friend of mine do it. And I was always looking for work, I started working at nine, nine years old hanging coats, and at the Boys Club, and had little odd jobs within the club, etc, etc. And then from there, as I started, eventually going, my first real real job was joining a company called radio engineering labs, which was in Long Island City in Queens. That was my first real job. But that's where I started learning my education, and electronics and breathing in a variety of different things. And I didn't realize until years later that the good Lord gave me a brain in which I could read and it would stay in there wouldn't come out the other ear, you know, which kind of stay in there. And ended up with a pretty decent education that way, by learning on the outside,

Scott Pantel  27:47  
From life at the bottom to beating the odds and being here on the 40th floor of the hotel Arts in Barcelona. Right, I'd say it's been quite a, quite a run, right? And like we talked about, you're not done yet. Yeah, we're rooting for it. You're such an asset to our industry, man and your asset to mankind all the things that you've done, to help the world and to help our industry are just, just amazing. And it's it's a privilege and an honor to be able to share those stories with you and eager to anxious to watch you run through this next one. Let's go back to a little business stuff before we wind this thing down. You said you're raising 10 million now entering human trials. How far does the once you close the 10 million, which we're sure you'll get to? How far does it get you? Does it get you all the way through the human trials are what's next? 

Manny Villafana  28:38  
What's what's happening in our plans is that we hope to raise this money to be able to do this study. And we've already had indication from a couple of firms that say Manny, we can do an IPO Initial Public Offering with your clinicals. Okay, if you got to sign the closing of patients and you haven't success, we can do an IPO, in which case we're probably talking about somewhere between 50 or $100 million IPO. And that will take us through, but simultaneously as I said, and I'm touching base with some strategics to see if they have some early interest in it speed, trying to have two different paths from a safety point of view of getting this project done. Either way will work out for us if we go an IPO or if we ended up with a strategic our shareholders and our work would would benefit. And by the way, let me make it clear here that all the work that we're doing is a result of work of several different teams and particularly the team that I have right now doing medical 21 Which my My wife, Elizabeth said, it's the best team you've ever had Manny, and I agree. They're young group dedicated oh, we're willing to take the risk. And I can't emphasize that enough. When you're doing these projects, baby, you are taking risk. And if you're not ready to take risks, go home, okay? Because we are going to take a lot of risk, okay? Remember that greatest hazard in life is to risk nothing, he or she that risks, nothing, does nothing, and most of the time is nothing. And so that's why we really have a great team, they're willing to take a risk. And by the same stroke, if this thing works, I tell one of my guys, you can go fishing every day of the year, okay. And he's a great fisherman loves to go fishing, I said, we get this done, you go fishing. Anyway, we're having a wonderful time. And let me also add to that, that besides the team, I have a wife and family that have supported me, Elizabeth is always hanging in there with me, there are moments when the risk is so high that it's that, you know, you kind of almost hurts the risk, the pain and all that but she hangs in there. I gotta love her for that. And I appreciate that.

Scott Pantel  31:25  
You know, Manny is one of the things you've shared with me separately, privately on a couple of occasions is that you know, that you you have and you live the best life and how much you love your family. And it's a, it's a privilege to always be with you, but especially to be able to experience all this stuff with you, and your amazing wife. And on this trip, in particular one of your two amazing daughters, and you're just again, you're an incredible asset to our industry, and we're grateful for that all that you've done for us and we know that you're gonna have a bunch of success, you're gonna have tremendous success with medical 21 grateful that you choose LSI to come and find those investors and meet those strategics and share your story. And so hopefully we'll continue seeing you back and until then we'll keep plugging away. We'll keep chasing those investors and all right, Manny. 

Manny Villafana  32:15  
Thank you, sir. All right. Thank you as always, always.