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Robotics Innovation & Investment Trends | LSI Europe '22

Speakers

Joe Mullings

Joe Mullings

CEO & Founder, The Mullings Group
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Fernando Pacheco

Fernando Pacheco

Investment Director, Endeavour Vision
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Todd Usen

Todd Usen

President & CEO, Activ Surgical
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Edvardas Satkauskas

Edvardas Satkauskas

Sentante/Inovatyvi Medicina, CEO
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Jeffery Alvarez

Jeffery Alvarez

Chief Strategy Officer, Moon Surgical
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A discussion about innovation, investment and how the market is playing out. Hear from CEOs leading the way and investors who are in active deals.

Transcription

Joe Mullings  0:04  

So I'm excited today. The title that I had wanted for this was "You got the bot now What?' because the number of robotic platforms that are being developed and we need them all, but it's become a crazy landscape. So I've got a great panel here that's going to give their unedited insights on everything, which is why I feel fortunate to help facilitate this. So let's start down the line here. Fernando Pacheco is an investment director at Endeavor vision, or growth stage med tech venture based firm in Switzerland in the US. He's an engineer by training and he spent time in med tech and r&d, and strategy consulting before joining venture so that means you actually know what you're talking about. He leads endeavors work in robotics having co led their investment in Virtual Incision last year, where he's currently a board observer. Next up, if you follow robotics, you'll know who he is. So Jeff Alvarez, also known to have the best hair in medtech. Jeff is the Chief Strategy Officer at Moon surgical. He led product at Oris. In fact, he was hired number one at Oris. Fred actually coaxed him to come over, where he defined their end Illumina robotics platform, Hanson medical their vascular robotics platform, and dozens of other medical devices. Jeff believes the future of healthcare is in efficiency, where the effective therapy can be delivered in less time with less training and fewer resources. And Edvardas Satkauskas that caucus has spent 15 years as an engineer and an entrepreneur creating medical devices from lab to market. Currently, he is the co founder and CEO of a company which develops robotics and taunting for endovascular interventions. And all the way on the end, there is Todd Usen. So this is off script. So Todd is proof that previously sitting CEOs, and large strategic med device companies can walk into a startup and crush it. Okay, so as a headhunter for 30 years, whenever I used to present presidents and CEOs or executives and you send them to VCs, VCs going, they're not going to be able to do it without the resources. So Todd is President and CEO at Activ Surgical, where he's overseeing the FDA clearance of its active site technology. And he's led four series fundraising rounds for over 86 million, previously president of Medical Systems Group at Olympus, as well as president of orthopedics at Smith and Nephew. So gentlemen, thanks for joining us today. So let's first start out Todd toss it to you. What's your definition of a med tech robot these days?

 

Todd Usen  2:42  

A med tech robot is intuitive and everybody else. And I don't mean it with disrespect to everybody else, because we're rooting for everybody's robot to be good. But the landscape has been one company that's that's been out there. And is is paving the way for others. And we're excited to watch the others join. But I also think a med tech robot is originally it's hardware. It's a you said bot now what it's it's it's this big robot, but what are you getting from the robot other than unbelievable degrees of freedom and arms and all these cool things that you can do. But I think it's coming to the point that it's what's going to be added, that's going to make a difference. But that's the way I think of robotics right now, of orders.

 

Edvardas Satkauskas  3:26  

So that's a big name robots. Everybody likes it, everybody uses it. Initially, probably most robots started off as of just being a good manipulators at something. But as you add some features, some more autonomy, you can do more things and more degrees of freedom, as Steve just mentioned, then you are getting too close to a name robot, which you could usually well, us by definition. So I I think we a lot of robots, those 200 and developing who mentioned moving closely to that direction, getting more autonomy and actually becoming robots instead of being like, assistants. And in this way, Jeff?

 

Jeffery Alvarez  4:16  

Yeah, I think of robots as meeting three criteria. The first is, they have to be able to sense and understand the environment around them, you know, ambient environment or forces or things that are being acted upon it. And then they need to be able to compute so take that information, digest it, to understand it and draw conclusions from it. And the third is to then be able to act so that they can react and influence the world around them. And I think under those three principles, the last thing that's important for a robot is that it helps us and and take some burden off of humans in some way. And that's how I think about a robot.

 

Joe Mullings  5:02  

So I want to stay on that because Fernando will get to you take the burden of humans, however, most of the robotic platforms I look at and a cognitive load that the surgeon has never had to deal with before. So we'll revisit that Fernando, your definition of robot?

 

Fernando Pacheco  5:16  

I mean, I was gonna build on that. It's just I think it's the kind of ultimate enabling technology, right, in terms of enabling a broader variety of physicians, different trainings, et cetera, et cetera, to do things that only, you know, the top of the top could do. And something that hasn't really happened, I think, at least in soft tissue surgery up until now, it's, it's getting there on the orthopedic side. I'm not sure. quite sure if it's there yet. But that's how I see it. And yeah,

 

Joe Mullings  5:46  

So let's talk about soft tissue robots. Right now, I mentioned in my last panel, that there were over 220 robotic platforms being developed right now in r&d. And 100 of them, I believe, are soft tissue, meaning thoracic and abdominal in nature. And to date, what do we've got? We've got two have included in the US Census and Intuitive. And we've got CMR here. And if I'm missing any, please let me know. Why is it so much harder? Jeff, I'll start with you to develop a soft tissue robot than it is an orthopedic robot.

 

Jeffery Alvarez  6:23  

It's a great question. And it's a crunchy one. The soft tissue is a very dynamic procedure. It's very fluid, you get in you open, you get into the abdomen, and everything's there, and it can be moved around and, and you have to lift up tissue, interact with things. And because of that, it requires very different performance criteria than traditional robotics, right, a lot of robots are serial chain manipulators that have been designed to precisely repeat steps over and over and over hundreds of 1000s, if not millions of times. And that's because it all comes from manufacturing, those don't translate well into soft tissue surgery. And, you know, in in getting a fast pathway to market, a lot of companies have looked at how do we just leverage these manufacturing types of farms to do these procedures. That creates a lot of unique technical hurdles. And so then you say, well, maybe we need to develop these arms on our own. That is a incredible technical hurdle, as well. And so the the the development burden to bring a commercial robot to the market is substantial. And there's a lot of things that can go wrong along the way.

 

Joe Mullings  7:49  

Edvardas you're developing a platform right now.

 

Edvardas Satkauskas  7:52  

Yeah. For endovascular? And yeah, I agree with Jeff is meant that, well, in general, when do you need robots? So either it's a hazardous environment environment that you want to take human out of it? Or is it repetitive tasks that robot can do? Or Or? Or is it a task that humans struggles to do and robots can do it better, more precise, faster, or whatever. So yeah, we are developing the platform, which actually addresses all of those things, all of we are taking surgeon out of X ray, we are doing some parts of procedure automatic, which are routine and easy. And we are giving surgery surgeon ways to perform operation, which he previously had none. So basically, he can use the features of the robot that makes the procedure easier for him. And basically coming back to your previous title, you get robots now what, from surgeons perspective, life is good, then you have a really, really nice system, which helps you in many different ways in aspects. And coming back to soft tissue. I think that is the challenge. Because there you don't have that many repetitive tasks, you kind of get away from hazardous environment. But the things you need to do there requires really special skill and experience and it's hard to make a good robot for that.

 

Joe Mullings  9:26  

Todd, you and I were at SRS down in that Vic Patel puts on down in Orlando and one of the in front of you were there too. And one of the things that kept on coming out was the robot doesn't matter that much anymore. Remember that narrative? Take us through some of that narrative share with the audience here and with your background and visualization, why that seems to have come to the forefront in the robotics world.

 

Todd Usen  9:47  

Yeah, it was very interesting and I come from still our foundational patent our first patent in our company we are founder completed the world's first fully autonomous robotic surgery. So we have that and we're not going to let that go. But the thought process when we're sitting there is the question. First, there was an investor panel, and surgeons and investors. And no one mentioned the word robot other than the companies that might, it's time for them to catch up that they should. And the question was, well, what would make you switch robot? And what is a robot need? Advanced Visualization, I need to see the following doctors, if I could see this, every time I do a case, this would be real AI, computer vision, strong compute all the things you said, because good strong sensors and strong data lead to strong compute, I get all that but it was. And then VIP made the comment, because So we're first panel was on robotics. And we really didn't talk too much about a robot. And we talked about all the things the robots need to do, that they're not doing. And it was, I think we're at that point, because, you know, big, big players out there, and they've done an amazing job. And I know they have all this stuff ready to go when they need it. You know, I'm pretty sure it because that's what a big company does. But the everyone else now is going to have to prove clinical, only one company doesn't have to really prove clinical outcomes. And that was the company that's out there. And now that seems to be something that resonates, it seems when I talk to investors and communicate is what's the outcome difference of using everyone else's robot versus this big one that's in there? Is modularity going to be enough to change a robot or this or no, it's data and what they can see, will this robot in a VIP said to me VIP happens to be, you know, one of our advisors, and he said to me, Todd, when a robot can see something that a human can't see Amen. And that's why I want to work with you. But that's, this isn't about me. To me, he said that three years ago to us, right now, I still tell the robot what to do. And then it can do this magic thing. So robots are great. I really am. I'm a big believer in it. It makes people better. And I absolutely agree with everybody. But when the robot still is directed by a surgeon, when a robot can give information to a surgeon that a surgeon doesn't have, that's when the game changes. And that's where we're not

 

Joe Mullings  12:04  

Fernando, I saw you shaking your head, when we said, what is the next robot have to look like outside of an intuitive and modularity, you were like this, right? So so that I want to explore that with the whole panel. And then maybe you can answer this for for me, how come j&j and Medtronic have failed miserably in getting a robot to market? As an investor, how do you look at that? So is modularity important? is low profile important? Is mobility important? Is the form factor of being overhead or bedside important as an investor when you look at it? And obviously, you've your bias with virtualization,

 

Fernando Pacheco  12:43  

We have a thesis, right? Let's see if it proves out or not. But I think on the modularity side, and it ties into what you're saying, Todd, right. Why are people asking for Advanced Visualization is one because the robot that they have, from a mechanical perspective is fine. Right? That just shows you that how everyone else is playing catch up, right? It shows you how that's the standard of care in robotics, it's DaVinci. Right? And I, I don't believe that just, you know, making instead of putting one you know, for the forearms or whatnot, attached the one boom, putting them each on a on a different set of rollers will, is enough of a difference. Right? The Vinci is an incredible system, I think is going to be here to stay, I think, to cause a dent, you have to go where the VINCI can't go, and you have to be really, really different. Right? I mean, you ran us through with Moon as well, that's very, very different from what anything that's being done today, right? Virtual Incision, very, very different from anything that's being done today. And I think unless you're going that direction, it's probably not worth it. Right, at least from my bar investor dollars, per se, right? Because it you're not opening up necessarily sites of care. You're not opening up necessarily procedures, both from a science perspective, or from an economics perspective. Right. You really have to burst those doors open. And I think that that requires something very, very different.

 

Joe Mullings  14:05  

Jeff, your opinion, and I do want to get back to the Medtronic j&j Because everybody wants to know, including the FDA. So Intuitive spends $750 million last year in r&d alone, yet they still own only 5% of a market. They've had a monopoly on for 20 years. What are your perspectives on why that's occurring? Why can you only get 5% of a market?

 

Jeffery Alvarez  14:34  

So I think a lot of it has to do with how that market has changed over time. You know, when the initial Da Vinci platform was launched in the early 2000s, there was about 7 million ambulatory surgery procedures going on. Today. There's well over 20 million every year. Things like calling suspect dummies hernia repairs. These are extremely high volume procedures that you know intuitive has not been able to get much penetration into. And the reason is, the locations that these procedures are being performed. They thrive on efficiency, and they are surgical factories. Patients come in, they're prepped, they go under their, through their procedure, they are discharged within a few hours later. And to get more adoption in those, you need a system that that fits that environment. And, you know, it takes a lot for for you to take a large platform like DaVinci or CMR or Hugo, and get it to work in that environment. So I think that's been one of the biggest challenges for for adoption.

 

Todd Usen  15:51  

May I?

 

Joe Mullings  15:51  

Yes, please.

 

Todd Usen  15:52  

Just one thing on the percentage of the market. When you look at a hospital from the governance of a hospital, it's cardio, thoracic, it's neurosurgery. It's orthopedics, it's OB GYN, OB. And now because of COVID, it was family medicine, those are the top five moneymakers in the hospital. None of those are on the robot, I mean, this particular robot, so those doctors aren't screaming when those when those doctors scream for a technology, they're gonna get it. And that's now intuitive, built a unbelievable market cap on the backs of neurologists, because they found a real good niche, and it's made a difference, a huge difference. But again, you know, neurology GYN with no disrespect to the doctors that do those procedures, colorectal bare, general surgeons, they're don't they're not on, they don't get to just say I want this and it comes in, the others do.

 

Joe Mullings  16:42  

But that's in the large tier one, tier two, tier one hospitals that have the money to drop a mil five, and then another 2 million a year. And cost because it's always a crack up is your walk outside these hospitals where you donate $5 for the robot. And that's like owning a boat or a plane, it's not the purchase price of the robot of the plane or the boat that kills you. It's the ongoing maintenance that will crush you. Yeah. Right. And so is it as we look at these platforms, when does the economics make sense to these hospital administrators at the Jeff's point, and Novartis? I'd like your thought on this and also Fernando, these changing centers of care, how is it as a venture capitalist? Do you look at them? And how is a startup CEO and endovascular? Do you look at these? Are you looking at hospitals, or you're looking at these changing centers of care.

 

Edvardas Satkauskas  17:32  

So that basically two points, what we're trying to do is not to change the clinical workflow. That is accepted. And that works. Because if you disrupt the entire process, how it's done, then you really have to work hard to fit technology. And that's completely to Todd's and Jeffrey's point that you do not. If you do things very much differently, and you have hard time proving that this new way is better and different. So if you fit within existing flow, and with existing setting, and with that particular hospital, and you bring valid, so then it's a kind of different story. But you're totally right, that Foley the like large academic hospitals have scientific budgets, they have clinical trials going on, they have KOLs, who can spend that that amount of money and if they want to Robert, they will get rolling. But when does it start to be standard of care? When you kind of create a system or not system, but the market that if you don't have a robot, you're kind of has have less value, your hospital is not that good enough, and basically are forced to get the robot otherwise you will lose the competition. And that that what happened with with DaVinci if within a small country, we don't have huge amounts of patients and still hospitals wants to buy DaVinci even though they cannot afford it, but they kind of have the money because they want to be the hospital with robotic system installed, otherwise you're not keeping pace with others. And I think that fear of missing out is very important factor especially in Da Vinci's case.

 

Joe Mullings  19:31  

Venture capitalists work on FOMO all the time. So what's your opinion?

 

Fernando Pacheco  19:39  

That's probably true by the way on VC. Because there is no right answer. I mean, for example, inguinal hernia, right. There's a lot of inguinal hernias that are staying in the hospital because the docs want to do them on a robot. Right, that shouldn't be happening. Right. And so, you know, it's it's a trend which goes beyond robotics around shifting sites of service going downstream away from from expensive hospital settings. And, and robotics is kind of holding it back a little bit. Right. And I think it could accelerate it. So, you know, I think there's an opportunity, there's a clear opportunity there, right. Let's see where it all pans out, of course, right. But just going back to your comment on, you know, Medtronic, and j&j and so on. 

 

Joe Mullings  20:32  

So it was my next question. 

 

Fernando Pacheco  20:33  

Yeah, it started. Yeah. It's really, really hard. Right? It the you talk about this, right, this the V and V part is more complex, I believe, than anything else in med tech. Right. I mean, you've done this for a number of times, right? It's probably the hardest verification validation thing. You can imagine that that right. Bye, bye, probably a couple

 

Joe Mullings  20:57  

of orders of magnitude as the FDA moved the goalposts to since Intuitive got their remote.

 

Fernando Pacheco  21:00  

Yes, yes. And those trials are hard to do. They're hard to design. The centers aren't really set up for them, right. I mean, there is an industry and cardiovascular device, clinical trials, right, the centers themselves, the academic centers are set up for them, they have the research coordinators, etc, etc. We're running a trial right now with Virtual Incision, and the centers aren't ready for that, right. They're not set up. They don't have the research coordinator, staff. It's it's, it's, it's a, you got to create that. That kind of momentum in the center's and there's a I believe there's only a handful of ideas happening right now for robots, right? There's we're not talking 15 or 20, there's probably four or five, maybe, right? There's been one approved so

 

Joe Mullings  21:44  

far. So so your, your thesis is saying that money is not the problem. Because if money was the problem, j&j, and Medtronic would have a robot on the market.

 

Fernando Pacheco  21:55  

I mean, they're also trying to develop robots that are very complex, right there that are, you know, capable of doing many, many different things at the same time.

 

Joe Mullings  22:06  

Which if you sell Doris to j&j and verb to j&j and tighten that of Medtronic, so none of them are commercial. So what's the challenge?

 

Jeffery Alvarez  22:16  

It's. So I think the first thing is, these are extremely cash rich companies, right? And all of them have had the experience now where they say, Okay, wow, this is not like a handheld medical instrument, we can't think of it like that anymore. Because as you said, You guys said, as you go along, and you get further in your design process, things get really ingrained, and the cost of change becomes so much higher, it's almost exponential. And so it's, it's really important that you're flushing out things and, and designing things for simplicity and ease of use very early on. Because once you have locked in designs, and then try to address that stuff, it's it's too late. And that's today, why we have you know, systems coming on the market that have such incredible training requirements and learning curves. I mean, when you when you go to the conferences and hear about the these other companies like that's all they are talking about are these training tools and how they're going to help you know, your teams, be successful with these systems, how they're always going to have a rep in the room to guide, you know, the cost of serving that customer to success for these companies is substantial. And that just gets passed along to the hospital.

 

Joe Mullings  23:45  

Todd, so running to major corporations, big strategics. How do you think mahogany row is thinking about this? And let me just put a tail on the end of this. There's only really two digital natives right now and soft tissue robotics, meaning that their core competency started at the Digital starting line, right, intuitive and CMR. And you could say trends and Terex slash a census as well in fairness. How does that culture that is an analog organization that is playing defense and managing stock price, navigate bringing a digital platform culturally and economically to the market and still keep shareholders happy?

 

Todd Usen  24:29  

Yeah, it's a very good question. The shareholders are way more important at j&j and Medtronic than any other medical companies. And here's So just think about the cost of a robot, a successful selling robot. The gross margin and the profit margins of both those companies who have made boatloads of money on widgets, you start to decreasing your overall gross margin. Shareholders don't give a crap that you have robots they care about. We got we have earnings reports every single quarter and that, and we have more shareholder with j&j and more shareholders and anybody Medtronic, so number one medical company in the world. So not only do they have to develop a robot, they have to figure out how to develop a cost effective robot because their profit margins, because the way that everyone says they're going to be successful is they can afford to just give the robot away and do upcharges and product placement of their other stuff. Their shareholders are not going to sit down really smiling. So pardon me if I was being the cynic. I'm not sure they're in as much of a rush as everyone thinks until they really nail something. I think they have to keep it going until the other one puts it out. That's totally cynical. And nobody has told me that. That's my dumb opinion. I like that. But, Martin, thank you. So what's our opinion now? So but but the point is to be honest with you that patient care j&j And Medtronic know about patient care. But the shareholders and unfortunately the jobs that those CEOs and Jeff's job is very different than than even Gary's job, Gary started this way. And he was able to develop it from scratch. And you could take those chances. So other than Kevin bringing in Mako no one's been able to buy one and make it work.

 

Joe Mullings  26:23  

And that was an orthopedic robot. And that was an orthopedic totally different challenge format, FDA pathway success,

 

Todd Usen  26:29  

Right? And so it's just one person's opinion.

 

Joe Mullings  26:33  

Yeah. Let's, let's stay on the subject of the line that I think Hunnic, Scott Hunnickens coined it back in the day is the democratization of surgery with verbs surgical, and do robots really democratize health care in the near term, seeing as the only people who can afford those are the big tier one, hospitals in the major, most of the time, metro cities have oodles of cash. And then I'm challenging all of us on this, and then the disparity and break away from the rural hospitals. And the lower income and the underrepresented, people who don't get those don't benefit for those now romantically would say, yeah, we'll meet them around the bend when the economics come back and play. So who wants to take that one?

 

Jeffery Alvarez  27:33  

I'll jump into that. When I think about what it takes to be successful in soft tissue surgery, I think it's it starts with three things. One is understanding. So the doctor is understanding of the patient, the anatomy, pathology, and technique, visualization, being able to visualize the tools in the operative space. And out of the OPERS tip space as well, what is going on the situational awareness of, hey, this is what is going on around the patient. And the operating room. The third is tools, having access to the tools that sufficiently translate their intent to the tissue, what they want to achieve in the procedure. And the last I think is, is workflow, so having an efficient workflow in the operating room and team that can support that. And so when we talk about democratization, you need to make sure that you address all of those, right? And the moment that you don't, you're leaving people behind. And that's when we look at can robotics do that? Yes, I think they could. But it's got to be, it's got to address all these four points. It's got to be, you know, cost effective. It's got to help people understand that anatomy, whether it's like hyperspectral imaging or AI guidance. And it's got to be effective tools. And it's got to fit into the environments that we're doing those procedures.

 

Joe Mullings  29:09  

So Fernando is somebody who's early into a category on the other luminal, the robotic side versus soft, soft tissue or robotics. What are you thinking about, as Jeffrey mentions all those items? Sure. You've got a robot? Sure. You'll make it through V and V. Again, title of this panel is now what. So I don't think you can be less than a billion dollar player and being robotics these days based on that thesis.

 

Edvardas Satkauskas  29:37  

If you're referring to me mentioned Fernando bracelet, yeah. So it says I think that that it's still a step by step approach. So democratization of the procedure that can kind of lower the bar, for example, for surgeon to do a procedure with like, not Being one out of million, but being one out of, you know, 5000 expert who can use the robot and do procedure as good every time as anyone else, then that expands access to, to quality care. And as next step, if you would see this evolving to telesurgery, when those centers or three centers, you mentioned, can serve region and can kind of be more accessible for patients in those rural areas. Yes, maybe that rural hospital would not buy, like a bunch of different robots. But if in particular cases, they can be served from a center, then from patients perspective, the Access to care is increased, even though if the while center, the center of the region spends that money. So probably it is also good to turn around that question is that democratization and going the direction that not everyone can afford a robot and therefore best care? But what if now, democratization happens, how then the access of care for patients would be there? Would it be better? Or would it be worse?

 

Fernando Pacheco  31:32  

I think if you depending on how how wide the aperture is, right? I mean, it has democratized prostatectomy, right? The standard of care for selecting these now millimeter based surgery in the US, right? As an example. But that's 150,000 procedures, right? So there's a lot left to be done. I think one of the requirements is just going to be these cat cost a million bucks, that we have to move away from, right, they have to start costing the price of cars, not the price of several houses. And that's going to take a while. But I think that's kind of a fundamental thing, both in terms of the upfront costs for facilities to get access to it, right? These are cash expenses, they got to somehow run that NPV on them, right? If you started 2 million on your DCF, that's very different than if you started, you know, 50,000 or 100,000, or whatnot. So I think that's part of it too, right? And then then it enables different types of care, and so on and so forth. But there's, there's a lot of, we're like, here, there's so

 

Joe Mullings  32:35  

what I want to challenge I want to challenge will get the cost down. Right. So I was at stts in Houston, Eric Olson Wilson's show. And there was a stat that was put out in the audience, that medical devices have gone the way of Moore's law, the inverse. And those of us who have been in med tech for 30 plus years, the price the cost of these have not gone down. And the thesis on well, you can manufacture robot at scale? No, you can't. Just because of the way it's developed, and the cost of parts are going to come down. No, you can't. In fact, the cost of surgical devices has gone up dramatically algorithmically over years. So I'm not sure I'm following that.

 

Fernando Pacheco  33:17  

I'm not talking about 5% year on year decreases. Yeah, I'm talking about in one go complete different form factors. I think the the form factors need to change from finding, okay, that's what I mean, I'm talking about 80%. Lower.

 

Joe Mullings  33:29  

So not factors we're talking about today, Jeff, you guys,

 

Jeffery Alvarez  33:32  

I'm gonna say I'm just saying the I mean, these these platforms, the cost of ownership of a DaVinci is almost $8 million, over seven years, in between instruments and service contracts, maintenance and in just buying it. So like the 2.5 million that we're talking about. That's the startup cost, right? And then when you look at utilization of these things, it's last year, they did 1.2 million procedures, they have 6000 systems. That's one procedure every other day. That's that's not a lot of utilization. And so we need to think about how do we get more utilization of systems while also reducing the cost. And to do that, it has to be a form factor change, you cannot go out with large platforms and expect to do the 700,000 calls a second, he's out there that, you know, 101.2 million hernia repairs. It's a radical change that's needed. Got it.

 

Joe Mullings  34:26  

Okay, we're four minutes left in this panel. And we've got a bunch of emerging tech startup, innovators, investors here. We just came through an accelerant in certain parts of med tech and a lot of digital in the last two or three years, because of COVID. It did become an accelerant. And now that we're on whatever it is, the other side of that is people are going okay, hold on a second. We're watching costs go up dramatically in hospitals on labor costs, watching capex be evaluated tremendously. We're watching the sales cycle change tremendously in the med tech. industry people who are in their A, B and C round who just maybe got in 1015 20 million or 80 million over the next two or three years in digital. Med, does med tech really understand digital? Or is it a word they're tossing around irresponsibly, right now. And all these med tech companies have come out, especially in telehealth, especially in robotics, 200 under r&d Right now, as a CEO, and we've got three sitting on here. And you said his chair, I believe in when it was organization, as a CEO, the next two years, is going to be a knife fight for financing, and adoption utilization. Because analog healthcare is still deciding how to bring in all these technologies. What do you as a CEO think? And what's your guidance? Because we've got two super tenured CEOs on here. What would you tell audience members right now? And do you worry about what it looks like to the outside world when you start to conserve cash, because you want to stay in the fight? Right, we worry about those optics. And then, is the same as the sales process, we thought about three years ago still hold true in the current market? So Todd, I'll start with you on that.

 

Todd Usen  36:15  

Thanks. You know, I, when you sit down and you think about the market now it's first of all, it's a lot of these digital technologies have a solution looking for a problem. And that's not a way that's not an even a little bit of a business plan. You have to there has to be the true unmet needs and problems out there that technology can solve and make a difference. And not just because it's going to make my operating room more efficient. Every we've been saying that for 100 years. And if I can save you five minutes per procedure, you can do another procedure every day. And, and every, or supervisor just say, Yeah, thanks, everyone. I did the last guy just told me the same thing. And I get there's math involved, and I get all that, but no one really cares. The end of the day, it still has to be outcomes. And the only thing if, if AI. What does that mean? Right now we're still computer vision. And sensing is not necessarily AI. You know, we almost talk inside, there's little T and there's big T, big T is going to be really hard to get true. Ai through the FDA, first of all, and proven and clinical, what's the, you know, what's the confidence interval that someone's going to have to believe? If you say, well, 97% were confident. So you're telling me I should take a 3% chance to say that's not cancer? You know what I mean? So what is you know, before you start trusting those things, it's it's not that easy. But I do think when you're talking to in our investors in groups, yeah, the the thought process, even coming out, now we've run evaluations in hospitals very successfully, doctors are screaming, they like it, they like it. What's the process it's going through? It's you know, they're working on 2019 budgets, a lot of the hospitals, their value analysis, companies are changing thoughts of how they bring in new technology. It's not the same game. So it's but it's not up to them to change to adapt to Well, it's, it's new, you got to look at, it's up to the companies to adapt to make sure we have a plan. So the number one thing, I'm not smart enough to go difficult, you know, it's but I really do think, do you have a problem? Is there a problem that the hospital has, whether it's monetary, whether it's Clinical, whether it's get patients out the door faster, because readmission rates are the number one thing that hospital administrators look at. It's, that's what Medicare is, that's the number one thing they're looking at. And they're only looking at it and in six procedures, but accounts to everybody and they lose reimbursement? End of the day, do I have a solution to a problem that we have? And this makes a difference? If you have that I don't care if it's data digital, or what have you. Sorry, for the long answer.

 

Joe Mullings  38:47  

No, it's a good answer. And thank you. So last response to a Jeff, I'm gonna give it to you. What do you tell the CEOs out here right now that are going to be cash crunched. It's going to be tight the next two years, they have a digital solution. And the solution is great, but as the market ready for it?

 

Jeffery Alvarez  39:02  

Great question. So one, capital conservation is important. So don't do not be afraid of that. Make sure that you're looking at ways of extending your runway while still creating the appropriate value with your technology. The second is, understand the value not just to the surgeon, but every stakeholder in that value assessment committee, because there's a number of people that will throw up a flag and block the adoption of your technology that you might not have considered. And so make sure you do that analysis.

 

Joe Mullings  39:31  

All right, gentlemen, thank you so much for your time. Let's hear it for them

 

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