What Do Strategics Want?

Lisa Carmel  0:03  
Thank you. Thanks, Nick. Appreciate it. We do have a rockstar panel here today and the topic is What do strategics want? And I think that's a question that a lot of people are very interested to hear in the audience, hearing more from this esteemed panel of rabble rouser rabble rousers. So let's say you want to introduce yourself. And

Noam Krantz  0:31  
sure, so I'll start. I'm Noam Krantz. I do venture investing for Johnson and Johnson, med tech specific, prior to that ran business development for Ethicon part of j&j for about 10 years and led the transaction committee for deal approvals and all that for the med tech sector, for about the same amount of time. So great to meet y'all.

Chris Cleary  0:56  
Hi, I'm Chris Cleary, I run corporate development for Medtronic.

Finn Haley  1:01  
I'm Finn Haley. I lead corporate development for Edwards Lifesciences. I've been there for a couple years prior to that I was at 3M healthcare for quite a while in corporate and corporate development roles, strategy, business development roles. Then prior to that, I had the honor of working for a while with this man next to me at Piper Jaffray. So a

Erich Wolf  1:23  
A lot of us go back. Yeah. Great to meet everybody. Erich Wolf, I head up strategy and corporate development for Becton Dickinson. I've been in that role now for about eight or nine months. Prior to that I spent between 11 and 12 years at Medtronic in the corporate development team working for that guy over there.

Chris Cleary  1:43  
You left.

Unknown Speaker  1:47  
I emailed you, I texted you, it never got back to me. Every nine months, Chris, and you didn't show up for the panel pro you're in your office. You got to check your email. So yeah, he and I've worked together for many years, I've ran strategy, Business Development for various segments within Medtronic and kind of hop back and forth into the corporate development team as well. And then as Finn mentioned, started my career at Piper Jaffray.

Lisa Carmel  2:14  
Great. As you can see, I told you, I had a group of rabble rousers up here. So buckle up, everybody. So you want to start talking about the industry trends? Do you want to look into your crystal ball? Take a look at m&a activity. The first half of this year, the second half, what do you think? Yeah.

Noam Krantz  2:42  
Well, you know, I think that the it continues on, right. I mean, at the end of the day, it's been a big, kind of last five to 10 years of, you know, an amazing amount of activity, there's still a ton of probably divestiture activity that's going to happen, I think that there's a ton of availability of capital, as all these companies have have come together and consolidated. So everybody's got the ability to write large checks. And as we go into what seems to be a downturn, but a little bit of a little bit of a bear market in ways. I think all the companies that are on this panel, you know, are ready to move and, and so I'd be surprised if you didn't see maybe even a little bit of an increase in activity.

Erich Wolf  3:29  
Yeah, I would. I would agree with that. I mean, we're seeing some softness, I think coming out of a very active 2021 In the first half, but we aren't anticipating that picking up here in the back half. And so like, No, I'm saying I think it's a good point. And we're ready to go. We're just looking for the right, the right assets, and you know, realistic valuation expectation.

Finn Haley  3:50  
Oh, the realistic valuation? Yeah, I mean, then that and that one takes a little bit of time to adjust, doesn't it? I mean, it's the reality of it. We've been very busy looking at a lot of things. I'd still say we're pretty busy. One point I kind of I've just noticed, as I've been looking around the market is negotiating time is stretched out a little bit. And I don't know if you've seen the same kind of thing. But you know, some of that is valuation. Some of that is just everyone kind of taking a pause and seeing where the markets going. But I we also expect it to be a busy year. In general.

Chris Cleary  4:28  
Yeah, look, I think when when COVID hit, right, the market dipped and  stayed down for about 15 heartbeats. And then it rose up to record highs through the decline in procedural volume through COVID. You know, valuations are down now because of inflation, which investors view is a much bigger headwind than then COVID. So I do think that there's a lot of companies that are out there that have a 52 week high, that's north of where they're trading now. And I don't think people know completely how to process that, you know, the FED has thrown a party for the past couple of decades that, you know, people have, there's no one here is used to inflation in a business cycle. I think so it's gonna, it'll be an interesting year, I think strategics are certainly there's no lack of money in the market. Strategics want to buy growth and, you know, big TAMs and stuff like that none of that has changed. But I do think, you know, reconciling valuations will be a big part of the market for the next 12 months.

Noam Krantz  5:39  
I think I've seen on the venture side that that the capital raising has definitely been a little bit slower. You know, so I think you'll see some of these companies that are attractive, you know, that are earlier stage. To late stage really will be, again, coming back to look at you know, where's prior, they're looking to IPOs are very expensive, late stage rounds is now there'll be putting themselves up for sale a little bit more at more reasonable valuations. And that's probably in the last, you know, like two months, you can see that change. of okay, we thought we're gonna raise 100. Now we're gonna raise 80, because we just want to get it done.

Lisa Carmel  6:15  
Yeah. What about challenges you guys want to talk about? We were talking about maybe challenges that you're facing? Diligence integration. Just there's an arms race going on for early stage technology?

Erich Wolf  6:34  
Yeah, I can touch on that one. You know, I think from from a Becton Dickinson perspective, you know, I'm really pushing our business development leaders, right, which are hunters and gatherers, who are out, you know, surveying the market landscape to start thinking, call it 3, 5, 7 years old, and looking at ways of engaging with targets in immediate way earlier, right. So be it a a venture investment, be it a structured acquisition, right, where we say, Listen, we will fully fund the operations of your business over the next two to three years. But in exchange for that, you know, we have the exclusive right to acquire you as means of getting at that, to your point, you know, the arms race for earlier stage technologies sooner. So we're growing that muscle, I'd say right now at BD, but but if you know, effectively deployed, I think it's a really good way of kind of locking up, you know, assets, 5, 6, 7 years down the road, and, you know, fixing, if you will, the risk return profile, right, and aligning them between the two organizations.

Finn Haley  7:38  
You know, I think one of the one of the interesting points about it, it was interesting characterization, and in some ways an arms race, right. That was we said, it's kind of how early How early do you engage with strategics? It's a question we get very frequently. And I think generally, we say, engage, engage, whenever you feel ready to have a conversation with us, there's no perfect time to do it. And I think most of us out here, have teams that totally geek out on the science and love to dive deep and tell us when you know, we want to form a relationship early. I think the question then becomes because Erich alluded to some of the structure deals, and do you go and raise money? Do you look for a long term partner with an option? Those are trickier conversations? And I think there's, there's no easy answer on that. But I was, you know, it was striking me earlier, and we're talking about this that it's a little bit like I'm a big basketball fan, it reminds me when people used to get drafted straight from high school into the pros, and you say, and remember, Kevin Garnett did this in the 90s. And everyone said, Well, how much conviction do you have to pick someone? Yeah, right, and what stage and and so it's thing where it used to be, there was a certain amount of clinical evidence, you felt comfortable that someone had to be able to see, and now it feels like sometimes strategics are getting comfortable earlier and earlier in the clinical journey of companies. And I think that, you know, probably stretching that metaphor too a little bit too far, I think all of us have sort of realized you have to get it depends a little bit on the technology, a little bit on the space, and a little bit in the company too. Those of us who kind of get deep in areas tend to move a little faster, but I think we just have to be cautious about some some of those things, there are pros and cons to moving that early in partnering with one with.

Chris Cleary  9:25  
I mean, one of my challenges would appear is I've got to backfill Erich wasn't really expecting

Erich Wolf  9:35  
a big challenge.

Chris Cleary  9:38  
The early How early do you go is kind of like, you know, it's fun to talk about the I participated in the winter I call it the summer of mitral love, right? So we all got to figure out like which mitral replacement company we were gonna go by because there was kind of a run on the bank and, you know, everybody went really early and you know, everyone's since spent hundreds of millions of dollars to bring the technology through, and in that that's a unique circumstance, I think in the industry, it's happened certainly happened with TAVR. And now it's happened with mitral and but it's uncommon, the more common thing is venture investing in structured deals at a later stage after you've got some conviction about where the technology set and, you know, you've got some early, early studies that are hopefully predictive of the larger studies that follow. So I don't know, I don't see a lot of things that suggest to me that strategics will become more aggressive going earlier, to kind of load up their p&l with the development expenses, when there's a market out here that's fully financed, you know, there again, there's no lack of money to bring products to market at a, you know, a risk reward paradigm that makes sense for strategics. I, I don't think that's part of the new dynamic in the market, at least so far.

Noam Krantz  11:01  
Yeah, I agree. If anything the other way, maybe, I mean, it's not really advantageous for anybody to go get super aggressive on the early stage, you know, because you slow the companies down, you know, we take companies and bring them in, we slow them down quite a bit. So definitely advantageous to work with them earlier, keep them independent, to the best that you can keep the communication alive, and then maybe buy them later. Of course, you're at risk for losing it. But you know, these guys aren't too hard to beat so ever been there?

Lisa Carmel  11:35  
What about what about deal structures, anything new, interesting, different they trends, anything that you want to share?

Erich Wolf  11:48  
Once ago, you've gone first, every time I know I gotta share the love somebody else go.

Noam Krantz  11:57  
You're all trained in the same place? So yeah.

Chris Cleary  12:01  
Yeah, I mean, you know, look, we're we're trying to fund more stuff. Early off our books, right, we've got a relationship with Fogarty, where we, we contribute IP for deals that are under the line for funding and get them outside the company and, you know, form a cap table, be a minority, you know, have some early stage call rights that, you know, we either will or won't exercise, and, you know, we get to bring technology to market that might otherwise kind of get stuck up on the shelf. In a while. And, you know, we've also done some things, actually, you know, Erich, and I worked on this when he was running corp dev for diabetes, you know, to bring third party funding, you know, r&d dollars in from, in this case, Blackstone, which had done a lot of that before, when they were called Clarus in the pharma industry, for a decade. So, you know, a big part of what we do outside of ordinary course, you know, venture structured deal, m&a, is mostly focused on increasing the effective spend in r&d using the balance sheet as opposed to the income statement. And, you know, no offense to accountants, but we wind up, you know, becoming way too nerdy with respect to, you know, accounting rules and regs, because there's a lot of that involved, but, you know, it's worth it, we've got 8-900 million dollars of funding lined up against these things that are not going through our p&l, which we think ought to have a good effect long term.

Erich Wolf  13:34  
Yeah. And it's having ripple effects, I think in the market. I mean, we're seeing, you know, we did that Blackstone deal, which is a pure r&d offset relationship with them, where they committed substantial capital to fund multiple organic in house programs, and PE guys are all and gals are all getting wind of these types of structures. And so I don't know, Chris, if you're getting your door, knocked down by names that you didn't think would traditionally do this. But there's a lot of PE firms now that are that are looking to partner with strategics and can go beyond. It can go beyond just r&d offset, right, you can acquire a dilutive technology, bringing a PE partner to go do one of those types of transactions, you can club up, right so if it's a inexpensive asset, you can do a joint venture, you can figure out ways to to keep the consolidation and the earnings dilution off of your books. So there's there's a lot of really, really creative opportunities out there and you know, no one said it well, you know, there's a lot of cash sitting around looking to put the work into into in the opportunities like this

Lisa Carmel  14:39  
Club up. Is that a thing?

Erich Wolf  14:41  
Yes, it is.

Chris Cleary  14:43  
It is. What I was dealing with. Yeah. A lot of business speak a lot of business. Yeah,

Erich Wolf  14:50  
sorry. Yeah. Can you partner with Yeah, I think there's faces in this room. I noticed too, who have helped us get those types of transactions done. So

Noam Krantz  15:01  
I was gonna say creative deal structures equals p&l optimization in a lot of ways. And I spent so much time looking at different structures, and I've never found one that's replicable, you know, to be able to do a ton of early stage funding where you still get to really own the asset, but not really own it. I mean, it's just complicated. But I think they've had more success than we have probably.

Lisa Carmel  15:29  
Well, what about? What do you think are the biggest changes that you've seen, like pre pre to post COVID? Post COVID? Let's just assume we're at post COVID Right now, but pre to post it just in the deals that you're doing and the cadence?

Finn Haley  15:49  
Yeah, maybe I'll comment on that one. I think I agree with the other panelists. I feel like we're still very, very busy. So I haven't seen a reduction in the deal flow at all. So I it has been interesting even. I mean, there was a brief pause. I remember when COVID hit in '20. And then and then all of us were trying to figure out how we were going to work in the new environment. And I felt like we learned pretty quickly that you could still do due diligence remotely, that that wasn't as hard of a challenge as I'd maybe thought it was going to be we figure that out. But what I did notice was again, and I don't know what causes it exactly. I have theories, the deal timelines seem to stretch and and I talked to enough people that said they experienced something similar. I don't think I'm making this up, it seemed like it was happening. I don't have a great answer. I do think in a lot of deals, they hit this point where you've kind of you've negotiated, and eventually you got to get in the same room to hammer things out. It's that point, we always reach where it stalemates with lawyers, and everyone's got to get together and suddenly the whole dynamic changes, and everyone's willing to compromise. We all know that spot. We couldn't do that physically. That was that was one of the that was one of the things I think made a difference. So it's been nice now that we can get back together again and remove log jams. But that was that's just one thing I've noticed. But in terms of like, deal flow, still very busy integration more challenging, I think, but getting through diligence, it wasn't slowed

Erich Wolf  17:13  
down now. Yeah, I mean, same, same, same sort of musings that we had BD, we did 16 deals since FY 20. Right deployed 1.3 billion in capital, against m&a. So that's, you know, roughly a deal a month. So extremely busy, pipelines very active. So not, you know, to echo Fin's point, not a massive disruption from our side.

Chris Cleary  17:36  
I was shocked. We could, like, buy companies outside the US during COVID, when you couldn't fly anybody in there and figure out how to create subject matter experts on the ground from, you know, we did that with Medicrea, we're kind of like, you know, how many people in the whole company understand, you know, like that technology, you know, seven, and none of them would go to France, and you got to figure out, like, you know, what the operations look like, but we, you know, people did figure it out. And, you know, it was that was really interesting. The integrations it's a really good point. It's hard we, we brought based integrations where nobody met each other in person for like, you know, 18 months. And that's, like, weird. Or been to a plant for a plant tour. Yeah. Well, you know, are you are you outsourced it right? People that couldn't get on planes? But yeah, I agree having, dealing with lawyers who bill by the hour from their bedroom in their pajamas? Not good?

Lisa Carmel  18:36  
Did you there was a lot less compromising? Did you ever do a complete like virtual act, you know, deal, or complete virtual diligence where you never, you didn't really ever meet face to face? Or did you always then outsource it so that someone was physically always going to meet? At some point,

you can't replace bodies on the quality manufacturing portions of the operation? So you have to show up for that. But I think other portions, you know, management meetings where you're, you know, meeting face to face and putting an eye on each other and all that kind of stuff that went by the wayside. And that really was zoom meetings. And, you know, everyone was uncomfortable with it, but it helped that there was no alternative to it.

Erich Wolf  19:25  
Yeah, I mean, we're global firms. Right. So I mean, we put local you know, in person where we could as well.

Lisa Carmel  19:32  
Okay, so we said we're going to talk about deal horror stories.

Unknown Speaker  19:38  
We're actually not Yeah, some people may be in this room. Yeah.

Chris Cleary  19:45  
Mine were all perfect. So yeah.

I got a really good one. But it's not med tech. It was when I was at GE. There we go. I bought Deutsche financial services on Halloween night in, I forget what year had to be like, '04, '05. And my treasury department got the wires wrong instead of putting money into Bankers Trust, they took money out. It was a $7 billion deal. I was 4 billion short. And I'm kind of looking at the guy and like, Well, you're a bank, right? Why can I just borrow the money from you? And they lent me the money to buy their own company from their own bank at the Fed overnight rate.

Lisa Carmel  20:27  
I think that's a backhanded compliment to yourself. I mean, kudos

Erich Wolf  20:31  
They always are.

Lisa Carmel  20:37  
I mean, how would you pull that one off? There

Chris Cleary  20:40  
They were a bank that literally they exist to lend money for God's sakes.

Noam Krantz  20:46  
I think all all deals have some level of horror in them. And we look at our deals quarterly for seven years after we do them. So hold it, all the words come out.

Lisa Carmel  20:57  
Well, what about? Okay, so what do strategics really want? I mean, what what does BD, Edwards, j&j Medtronic, what do you really want? What are you looking for?

Erich Wolf  21:12  
Well, right now a beer that would be beer is kind of St. Patrick's Day. That'd be kind of high on the list. No, I'm kidding. You know, so kinda. So suddenly, he's Becton Dickinson, we really have three pillars, that that are very nicely sort of drive our strategic roadmap, focusing on smart connected care, right. So AI, robotics, informatics, etc. It's sort of bucket one. So if anybody has, you know, assets, technologies, that that sort of fit that that silo that's attractive to us. The second bucket is, is alternative settings, right. So bringing, you know, technology into the home into lower acuity settings. And then three is just improving outcomes for patients with chronic diseases. So we kind of look at our business as a transformative solutions segment of our business, we have the traditional Becton Dickinson that people know and love the syringes and all that. But on the transformative solution side, I'd say that those are the three. Those are the three pillars that we're looking for. Primarily.

Finn Haley  22:16  
Maybe we'll just run down the road. So at Edwards, I don't know if this is pro or con. But we're very focused, right? And we think of that as a pro for us, I guess. So you know, we have, we have a focus on cardiovascular, so primarily structural heart disease. We also help monitor critically ill patients. So we have a hemodynamic monitoring, business, surgical monitoring business. And so we're interested in applications that fit or build out from that core. The nice thing is, we get to go very, very deep in those areas, the challenges some of the times we have conversation with people that want us to move to a totally new adjacency. And I have to give the speech that, you know, we really are pretty disciplined about about where we stay and where we play. The good thing is, we love to have conversations about those areas. So we've got a whole team of people, many of them are here at the conference this week, who were just trying to scour the conference, scour the globe to find the next technologies. I was pleased, as Chris referred to the summer of mitral love, we look a lot into those areas, tricuspid and mitral valve disease, heart failure those areas, so come talk to us, we'd love to have a conversation at any point of your development cycle. And we have, you know, we have pretty good networks in those areas. And we and we'll do, we'll do corporate VC work. So we'll do might take minority positions out of our group. We'll do bill to buy deals, like Erich talked about that, given the stage of a lot of these companies, that's something we have a natural affinity for. So we do a lot of those. But we'll do traditional m&a, as well or even partnerships in licensing deals. So we do a broad array of things, but just in a very focused area. So definitely seek us out and come find us and talk.

Chris Cleary  24:03  
But we're all large cap device companies. So our, our PE multiples driven by revenue growth. You know, the when you when you say what drives your PE multiple expansion, the revenue growth is correlated, you know, r squared 92. If you do it on cash flow or stuff like that, it's down on the 50. So, you know, that's what shareholders want. They want to see revenue growth. When we look at new companies, we're looking for large markets. So we care about the TAM, what the WAMGR is, you know what revenue CAGR we can derive from the combination of those two things. It's got to be you know, so ideally, we're looking at companies that are addressing a large market saw the big unmet need, and, you know, are early not late to the technology cycle for innovation. And, you know, that's, we can everyone here is prepared to look at companies in the early stage, and project, all of those kind of derivatives forward, you know, 5-10 years because we all kind of get that it's a decade to develop a product. But those are the constituent parts that make it increasingly attractive, if it's a big market with high projected growth, you know, which is you go back to 2016. For, for mitral valves, that's what everybody, everyone looked at TAVR, they said mitral is going to be bigger, it'll have a bigger, it's the next piggyback curve on top of a really attractive curve anyway. And you know, you'll will will value those in, you know, depending on where it is for strategic fit, we'll put a lot of money into it, after we buy it, or, you know, we'll pay a lot of money after you burn down all the risk. So that's, that's what kind of, you know, we got 200 people between ventures BD and corporate development out looking in the market for opportunities like that, that fit our strategic framework. And that's kind of how we think about life.

Noam Krantz  26:01  
Ditto. It's basically a reality of, of large company m&a is, you know, you want the large market, you want to be able to roll it in easily. And that's the only thing I would add is that, you know, we want to be able to really get as much of a finished company as we can, or late in the day, something that's, you know, maybe even commercialized. With reimbursement, you can check off all of those things and make it easy for us to roll it in and plug into the p&l and plug it into a, you know, international sales for sales and marketing r&d team. And then it's easier and better for us, and we can afford to pay more and you can, you know, realize the benefit of making more money that way.

Lisa Carmel  26:46  
What are what are some of the, you know, we have a lot of startups that are dialing in that are not dialing that are streaming in and, and a lot of startups in the audience, what advice do you have for them, as they go to approach you?

Chris Cleary  27:07  
My number one thing is I think you've got to be ambitious with your clinical trial design. Right? You know, you're, you're, you're looking to validate a product that, you know, you want to get reimbursement for, and, you know, making it equivalent to existing forms of treatment, you know, isn't automatically going to do that. And, you know, it's, it takes longer cost more money, and you got to raise more money, and there's a lot of, it's riskier, but, you know, the payback is better for it. So, you know, our number one thing, where we're looking at early stage companies is that's what we're looking for, whether the trial design is up to the genuine market opportunity for the unmet need. And it's the biggest area of mismatch that we see.

Noam Krantz  27:59  
Yeah, definitely, definitely a huge area of mismatch. I mean, to the extent that you can be open minded and listen, you know, when a clinical regulatory team gives you an opinion from us. That's one area, I think, what we're all particularly strong, and, and the startups are particularly weak. And the ones that listen, I think, really, they get a lot of value for listening and implementing the changes. So on the venture side, I see that pretty much all day long, you know, they want to do smaller studies, you know, not enough control all those types of issues, but to the extent that they listen and actually fix it, they get paid back in the end.

Erich Wolf  28:37  
Yeah, I mean, I would just add to that a couple things. One is, you know, approaches early, right, you don't have to be completely baked, but start to get the dialogue going, so that, you know, you're on our radar, you're showing up in our portfolio reviews, I think, you know, make it hard for us to say no, right? I mean, if you do some of the heavier lifting up front, and thinking through sort of where does your technology fit? You know, all of our strategy stuff is all public right? I mean, it's a lot of it is it's you know, JP Morgan you know, website. It's we have analyst days and all that. Go do that research. I think it makes it hard for us to say no to Chris's point, big TAMs, accreted short growth rates, non dilutive as much as as possible, all of that kind of doing some of that earlier thinking. And making it hard for us to say no would be would be some of my advice.

Finn Haley  29:27  
Yeah, I mean, I just got the same points. But, Chris, when you said that, firstly, that was surprising, but then I thought about it. I said, actually, that is kind of the greatest mismatch. I see. I think, I think all of us know, be crisp on your TAM. How do you have a pathway to leadership? That's something we all look forward to I think a lot of us say, you know, we're not interested in necessarily and being third or fourth to market with the technology, we want a path to leadership. That's being said, we don't mind competing in markets, like we do today where there's a huge patient need and we feel like there's place for us to compete in fact, we're doing we're benefiting patients by the the solutions we both have and in structural heart. Sorry, you know, I

Chris Cleary  30:04  
agree, you know, look, you got to be able to get paid. You know, so the, the clinical data is the path to reimbursement. Yeah, and, you know, there's a lot of companies that did everything, right. But their, their trial just didn't, you know, kick in, in your timeline gets kind of punted down the road a lot when, you know, you've got to do a bunch of, you know, post market studies to kind of round out, you know, how you can go from filing one claim at a time. And those those are, you know, it's, it's not just value, it's time. So you wind up paying less, and you wind up, you know, your revenue curve gets kicked out for any kind of inflection point where it grows fast by a couple of years while you're running, you know, the, you know, the RCTs, or stuff like that after the fact. So that's, you know, ambitious trial design is riskier, but it it, it's a shortcut to the inflection point that, you know, the value lies in.

Lisa Carmel  31:06  
Do you ever do you guys ever see where startups coming to you and you're like, that's wrong, indication, the TAMs not right, there's issues in your bid, you're interested in the technology, and you're like, if you go back and you fix all of these things, then come back to me later, does that happen often, where they actually tick the box, they do everything come back? And then you're, you're interested?

Noam Krantz  31:31  
Yeah, happens all the time. I mean, it's yeah, I can think of I bumped into somebody here, who I ran into maybe three years ago at a different conference. And we sat down and discussed how to, he was basically at a great technology, but he's going after the wrong indication, he changed the indication, and I was raised a ton of money in doing really well. That's, that's another area where it's just worth listening to what we have to say, because we're hunting for certain areas, and a lot of times, entrepreneurs are coming at from from a tech perspective, rather than from a market perspective. And a small change, you know, to, you're gonna put in all that energy and all that money, go after the, you know, the big, the big market.

Lisa Carmel  32:13  
So, so what's the biggest mistake or that you see a lot of these entrepreneurs, or watch outs that you're saying?

Finn Haley  32:22  
Yeah, maybe it was me a couple comments. Same point before, there's, there's, as we're saying this and talking here, I'm realizing there's a tension that exists between speed to market and sort of building a business, that's gonna be that's gonna capture the value, like Chris said, I mean, I think we ended up ending a lot of conversations about the regulatory and clinical strategies, companies are taking very early on, which is somewhat surprising, because I think one lot of cases, like you said, there's a ton of capital that's out there, you could adopt one of those, hopefully, you're thinking about efficient strategies. But I think a lot of companies just want to get pumped or want to get want to get to the commercial event, the first sale, whatever it is. And so we spend a lot of time on that. The other thing I would say, is, think a lot about the strategy you have around manufacturing, quality, things like that. I mean, I think what's interesting is that a lot of these build device structures, they do feel more like a partnership in the interim period. And companies can benefit from the expertise that all of us have. And I think a lot of times you don't use that. And also think about the actually being able to make the product scale, the product design for manufacturing, all those things, are things that probably could have us to think a little earlier about in the process.

Erich Wolf  33:33  
And that's great. You saw where I was going, I mean, so just for folks streaming in and hear in the room, these, these, you know, build devides that we're talking about, you know, they typically come with a meaningful tranched like somebody's you know, milestone driven investment coming from the strategic, usually there's a joint steering committee, or there's ways in which that we can interact. And there's usually acquisition triggers, right, and and to Finn's point, you know, cost of goods can be one of those triggers, right? So they're thinking early and often around, how do I, you know, once you know, BD acquires these guys, you know, this is I'm stepping right into a gross profit accretive technology they want and not having to do bunch of rework and not having to spend a bunch of time or meeting quality systems, on and on. And so there is there is a lot of value in that the the flip to that is, if the technology doesn't work, or you don't hit the milestones, you have a bit of a different conversation. So, you know, a lot of it is kind of putting, you know, the that type of structure into a very, very competent management teams hands.

Chris Cleary  34:41  
Knowing what I know now, if I were a startup CEO, there's a lot of free advice you can get from the strategics. And you know, you can get a penalty free you don't have to be in a bill to buy to get it. You know, we can help with trial design, we can help with regulatory, you know, discussions about, you know, reimbursement, and engage actively in pattern recognition about what's worked and what hasn't with, you know, reasonable comparative companies and stuff like that. And, you know, we're not rooting against a company to succeed, you know, generally a strategic is rooting for a company to burn down risk, to the point where an acquisition makes sense. And, you know, the quicker that we can help the company to get there is better for us. So, you know, the biggest thing I tell people is don't be shy will give the stuff away. In terms of our like, functional expertise around these areas. Well said,

Noam Krantz  35:43  
it's really a communication thing, the way I see it is that, to the extent that much with the strategics you're partnered with, that's where I see the success comes from, that I've seen in the last couple of years on the venture side, that the companies that engage with us, where there's a ton of communication back and forth, and they do take advantage of this stuff that Chris is talking about, really, really pays off, and they get a positive reward but but it really is a personal connection between the r&d team and the company or whoever is kind of leading that relationship, I think is really critical.

Lisa Carmel  36:24  
Well, I think I that was about all the questions I had. Do you have want to say anything else? Any other comments?

Chris Cleary  36:32  
Once you leave?

Erich Wolf  36:33  
I mean software I was trying to explain to you over the phone. You never called me back. It's not you though. It's me. Pretty good stick.

Chris Cleary  36:46  
Was it the compensation what was?

Lisa Carmel  36:51  
Well, look, we know we are the only thing between you and green beer. So I just want to let's give a warm round of applause for our amazing panelists. And and thank you, LSI Thank you, Scott Pantel, it's been a great meeting. Thanks.