MEDICAL INNOVATION NEWS
Message from the Chairman
As summer is fast approaching, the Fogarty Institute is getting ready for a very busy and exciting time of the year. Soon our Lefteroff summer interns will arrive at the Institute to begin their journey. We couldn't be happier with how the program has grown, with the most applicants ever, all of them boasting impressive resumes. Both the quality and quantity of applications we attract really speak to the caliber of the internship experience we are offering.
This past month has also been full of activity, with a first-time visit by Mountain View Mayor Pat Showalter, inspiring presentations by two Stanford Biodesign teams on new medical devices that have the potential to solve critical health issues, and the continued progress by our startups.
In this edition, we profile Zebra Medical Technologies, a company that is taking skin cancer diagnosis to a whole new level; we have a Q&A with Renee Ryan, vice president of Venture Investments at Johnson & Johnson Innovation, and a dedicated Fogarty Institute mentor; and a profile of Tom Prescott, former president and CEO of Align Technology, and committed supporter of our Lefteroff Fund. We also include thoughts from Dr. Thomas Fogarty, who continues to back the strong direction of the Institute and financially supports our programs.
On a final note, we continue to be incredibly impressed by the candidates we are interviewing as part of our process to select our future CEO. We are narrowing our search and are on track to have our ideal candidate identified by this summer, with the goal of a fall starting date. I would like to thank our board who has been hyper-engaged and is playing a critical role in the selection process.
As always, we welcome your feedback and thoughts.
Thomas Krummel, MD, Chairman
"He (Tracy Lefteroff) would be thrilled to see young students and entrepreneurs flourish in the Institute's innovative environment, and would be excited to see the talent that is being fostered." – Tom Prescott, former president and CEO, and current director of Align Technology.
From the Founder
It's been nearly 10 years since we launched the Fogarty Institute, and I could not be more pleased and supportive regarding the direction of this organization. What started as a concept to foster and accelerate medical device innovation, with the vision of improving patients' lives and lowering healthcare costs, has turned into a reality.
We opened our doors in 2007 with just one medical device startup on board. Since then, we have given direct, sustained support to 20 carefully selected companies, six of which have already successfully graduated and several of which are close to following in their footsteps.
The strength of our program was further validated last year by two of our startups being among only 22 medtech companies nationwide that closed a Series A funding round of at least $2 million. Another graduate company, Niveus Medical, is in the final stages of closing its Series B round of financing.
Considering that as many as nine out 10 startups fail, we are significantly outpacing the market, focusing on longevity, relevance and a positive impact, all while keeping patients at the forefront.
I am also very proud of the strong alliances and partnerships we have forged over the years to further our mission. We now have FDA fellows coming to the Institute to improve communication, collaboration and understanding with medtech startups. That is a significant step forward and a strong sign by this organization about its intent to improve processes and once again put U.S.-led innovation first.
We have also launched a successful international education and mentorship program that is helping global companies embrace our innovative approach to advancing medical technology. I am particularly excited about our partnership with several Japanese companies and universities that embrace a bold desire to learn more about the startup and innovation culture, so they can better serve their patients. We are looking forward to strengthening these partnerships and extending our expertise to U.S. based-companies that have been expanding their footprint in healthcare.
And last, but not least, the enthusiasm, curiosity and talent of the young interns who come to the Institute each summer as part of our Lefteroff Fund, give me significant hope for a bright and healthy future of new medical innovators.
Fogarty Institute for Innovation Updates
Pat Showalter, Mayor of Mountain View, with Peter David, CEO of MedicalCue, and Dr. Fogarty, during a recent visit to the Fogarty Institute.
Mountain View Mayor and Office of Economic Development visit the Institute to learn about medtech innovation
This was Mayor Pat Showalter's first visit to the Fogarty Institute and thanks to her background as a professional engineer and years of public service, she showed a deep appreciation for the Institute's drive to develop innovations that benefit patients, and the effort, coordination and knowledge it takes to design and get products to market.
The Mayor, Alex Andrade and Tiffany Chew from the Office of Economic Development toured the Fog Shop and met with several of our startups that are driving innovation in mother and infant healthcare, including Madorra, InPress Technologies, MedicalCue and nVision, as well as Terumo, one of our Japanese corporate partners.
The City of Mountain View is home to many major technology companies, including Google, LinkedIn, Microsoft and Siemens Medical, as well as a broad range of startups. We are thrilled to be part of this dynamic environment, and look forward to forging partnerships with companies that wish to learn more about creating an innovation-driven environment and those that are just starting to get involved in the medical technology field.
Members of the Stanford Biodesign team with Fletcher Wilson, founder and CEO of Intervene, Holly Rockweiler, founder and CEO of Madorra, and Dr. Fred St Goar, Fogarty Institute Vice Chairman.
Stanford Biodesign teams share medtech innovation ideas at Fogarty Institute
The Fogarty Institute for Innovation and the Stanford Biodesign center have enjoyed a long-term partnership, with several of our board members and staff helping shape the program and acting as mentors to its fellows. Many of our own entrepreneurs are also Stanford Biodesign alumni.
Recently, two Biodesign teams came to the Institute to share their ideas on how to solve a critical health issue in the urology field, the problems of overactive and underactive bladders, which plague millions of people worldwide. The purpose of the presentation was to receive constructive feedback on all aspects of the proposed technology: the strength of the clinical idea, technical feasibility, potential application and effectiveness and likelihood of the innovation getting funded.
The Biodesign fellows received great input that they will apply toward improving their technology and perfecting their pitch to potential investors.
The Zebra Medical Technologies team: Gabriel Sanchez, founder and CEO, with Fred Landavazo, lead product engineer, and Kate Montgomery, lead R&D scientist.
Zebra Medical Technologies poised to disrupt skin cancer detection and treatment
Over the past three decades, skin cancer has become the most prevalent type of cancer, outpacing all other types of cancer combined, including of the breast, lung and prostate. Each year, more than 5.4 million skin tumors are treated in the U.S. alone, with nearly $5 billion spent on biopsies.
Until today, cutting samples from the body for biopsy has been the only way to assess whether a new growth or lesion on the skin is cancerous. Of the 14.5 million biopsies conducted each year to determine the presence of skin cancer, nearly 76 percent reveal healthy tissue, creating an alarmingly high number of unneeded and costly procedures.
Zebra Medical Technology (ZMT), a Fogarty Institute company, has found a better solution to invasive skin biopsies. The startup, led by CEO Gabriel Sanchez, is creating the next generation of medical imaging that provides a non- invasive, real-time way to examine the skin and determine the potential presence of cancer.
ZMT's patented handheld microscope, the EagleCyte, provides the immediate imaging features of an ultrasound, but with added cellular resolution and color contrast between cells and surrounding connective tissue that significantly improves pathology.
The company has built a prototype that has proven successful in viewing cells in healthy skin and seeing signs of tumors from discarded human samples. ZMT is now building a clinical version of this technology to be used for a pilot study on patients, aiming to begin clinical studies this winter.
"We are very enthusiastic about the results we have seen to date and are particularly encouraged that our technology shows strong promise to make an immediate impact on both the clinicians, who don't want to make unnecessary incisions, and the patients, who don't want to be cut," said Sanchez.
The EagleCyte is intended as an easy-to-use device that integrates seamlessly into the pathologists' current workflow. It will display the images that pathologists already know how to interpret, but provide them in a faster and non-invasive manner.
In addition to providing an effective pathological solution, ZMT aims to help clinicians map more accurate pre-surgical borders of tumors and decrease the size and number of excisions.
Detection and treatment of skin cancer is a gateway to potential progress towards other diagnostic applications, such as identifying cancerous cells in internal organs, including the mouth, colon and cervix.
ZMT's Zebrascope technology, the predecessor of the EagleCyte system that is designed to image skeletal muscle microstructure, is also being tested to assess muscle health as people age, as well as aid in diagnosing and treating neurodegenerative conditions such as amyotrophic lateral sclerosis. Clinical studies using the Zebrascope in a muscle imaging capacity are being conducted at the Fogarty Institute, Stanford University, University of Virginia, Cincinnati Children's Hospital and Northwestern University.
ZMT spun out of Stanford University in 2014. Sanchez, a Ph.D. graduate in mechanical engineering from Stanford and lead inventor of the Zebrascope, co-founded the company with Scott Delp, a James H. Clark Professor of Bioengineering, Mechanical Engineering and Orthopedic Surgery at Stanford University; and Mark Schnitzer, associate professor of Biology and Applied Physics at Stanford University and investigator at the Howard Hughes Medical Institute.
Q&A with Renee Ryan, Vice President, Venture Investments at Johnson & Johnson Innovation (JJDC)
The Fogarty Institute has been fortunate to have mentors such as Renee Ryan, vice president of Venture Investments at Johnson & Johnson Innovation (formerly Johnson & Johnson Development Corporation, JJDC) to help guide our entrepreneurs and provide insight to our Lefteroff summer interns.
Ryan's background includes over 20 years of healthcare investment banking. Most recently, she ran the medical device investment banking effort at R.W. Baird & Co. Previously, she lead the West Coast medical device group at Jefferies & Co. and was in the healthcare investment banking groups at Goldman Sachs and Credit Suisse.
Recently, we had the pleasure of catching up with Ryan to discuss her background in the industry, thoughts on the Fogarty Institute's role in the innovation ecosystem and exciting upcoming healthcare trends.
Q. How did you first become involved in healthcare and medical technology?
A. I was an economics major and my first job out of college was at a small boutique investment bank in San Francisco where I focused on technology and healthcare. I learned very quickly about the impact that the right investments could have on patients, and therefore found my calling in this field very early on.
I stayed in investment banking and had the opportunity to make an impact on the healthcare industry by helping companies such as Medtronic and Stryker build pipelines through strategic acquisitions. I saw first-hand the world of larger medtech companies and how strategic investments can help leverage innovation.
I also really liked working with smaller companies, where much of the innovation is taking place, so I joined a middle-market-focused bank, Jefferies & Co., leading the West Coast healthcare group for nearly five years. There we worked primarily with venture-backed companies on M&A and IPOs.
Q. What is J&J's current philosophy on how medical device startups fit into its ecosystem? Are there specific areas of interest for investment?
A. Medtech startups are critically important. We look at investments in a number of ways - for organizations such as Stanford Biodesign, the Fogarty Institute and other innovation centers, we will invest directly into the startups and/or seek opportunities for JJDC to actively fuel the innovation ecosystem.
The investments we make are highly strategic and important for the companies themselves as well as Johnson & Johnson.
J&J has a footprint across all medical devices; we have two very large surgical businesses, Ethicon and DePuy Synthes, and a Cardiovascular and Specialty Solutions. Our companies produce a broad range of innovative products, from those that pertain to treating the arrhythmias in the cardiovascular system, to other more consumer-facing businesses such as diabetes care. Our external equity investments line up with our business priorities.
Q. What are your thoughts on the role the Fogarty Institute plays within Silicon Valley's innovation ecosystem?
A. It is critically important. Dr. Tom Fogarty is a prolific medtech innovator and entrepreneur, having founded companies such as Fogarty Engineering and the Institute. He established the Fogarty Institute at a time when funding was incredibly difficult to obtain, and his vision to give medtech startups that type of support is really wonderful and impactful.
The Fogarty Institute startups are accomplishing so much, very creatively and efficiently, using the different types of funding that are available.
Q. You have been a valuable mentor to many of our startups. What type of advice has proven to be most valuable and effective?
A. Focus. These companies need to be very singular in their focus. They also need to have passion -- funders like to invest in people. If the leaders are focused and passionate about what they are doing, they are more likely to get an investment.
They also need to underscore the importance of the problem they are addressing. And they need to keep fighting. There are – and will be – a lot of days when they doubt themselves, and they will hear a lot of "nos" out there. But they have to stay strong.
Q. You are also a great role model and mentor to our Lefteroff summer interns. What advice would you give a young student who is considering a career in healthcare/medical technology?
A. I would give them the same advice I give the startups. If this is what you want to do, be passionate about it. There is so much to learn - you are always learning. Surround yourself with entrepreneurs who are in the space you wish to study. Embrace the challenges and always keep the bigger picture in mind, including the fact that you are solving vital healthcare issues and will have a lasting impact.
Q. What has been one of the most rewarding moments of your career?
A. In one of my first jobs in investment banking in San Francisco, I was involved in the public financing of a biotech company. Five years later, the company's drug was approved, and I got tears in my eyes. To see something, a hope and a promise, actually come to fruition was very rewarding. It was the first time that I realized that what I do as an investment banker truly matters.
Q. What emerging healthcare trends excite you the most?
A. I continue to be really excited about open procedures becoming less invasive - we are seeing tremendous opportunities in this area across all our businesses. I am also optimistic about the rise of consumer healthcare and where wearable technology is heading. We, as consumers, are paying more for our healthcare, so we are also expecting more - that's a trend that's here to stay, and one we are watching closely at J&J.
Donor Spotlight – Tom Prescott, Board of Directors, Align Technology
Tom Prescott, former president and CEO, and current director of Align Technology, has been a strong backer of the Fogarty Institute's Lefteroff Fund, which was established in honor of the late Tracy Lefteroff to support programs advancing entrepreneurship in the life sciences.
Prescott knew Tracy for two decades when he served as Global Managing Partner of PricewaterhouseCoopers, which was the audit partner for Align Technology.
"Tracy's personality and charisma were larger than life, and he was a great ambassador and contributor to life sciences," said Prescott. "That's why when I learned about the Institute's Lefteroff Fund, it was something I wanted to support. He would be thrilled to see young students and entrepreneurs flourish in the Institute's innovative environment, and would be excited to see the talent that is being fostered."
In addition to his economic support, Prescott also played a vital role in coordinating a recent visit to the Fogarty Institute by Arizona State University student-led startups that came to Silicon Valley as part of the eSeed Challenge. Prescott and his wife JoAnn provide financial support for the eSeed Challenge, which focuses on accelerating entrepreneurial learning and startup activity - principally in ASU's Fulton Schools of Engineering.
"These students are very interested in entrepreneurship and innovation as a way of life, as a way of thinking and as a skill set to be developed," said Prescott. "The Fogarty Institute entrepreneurs did a spectacular job helping motivate the ASU students when they met with them. Echopixel's real-time, interactive 3D medical visualization software was particularly fascinating to the group. The Fogarty Institute is a stop we hope to do every year."
A career in healthcare fueled his interest
Prescott started his career in factory automation but decided to seek a new career path after repeated exposure to a series of business cycles in the industrial economy. He did extensive research on healthcare and found that medtech in particular was dramatically outpacing other parts of the economy.
His research paid off when he took a management position at GE Medical Systems, where he had the opportunity to further develop management capabilities while working on technology that was central to the evolution of the practice of medicine. Later he took his talents to Nellcor Puritan Bennett and Cardiac Pathways, a Thomas Fogarty backed-company. In 2002, he became president and CEO of Align Technology, a medical device company that develops and markets Invisalign, a better alternative to wearing braces for treating malocclusion. Align Technology has been one of the real success stories over the past decade with a current market cap of over $6 billion.
Prescott said his proudest professional accomplishments are building teams that flourish in good times and bad, while overseeing the delivery of products that dramatically impact patients' quality of life.
On the future of healthcare
Prescott is most excited about the future and role of consumers in the healthcare industry and how technology can be used to enable dramatic shifts in cost, effectiveness and site of care. The future of home-based monitoring and therapeutics is very promising, whether it is pharmaceutical-based technology, nanotechnology or other innovative devices. Over time, this will create an entirely different model of how healthcare providers and patients interact, decreasing the need for hospital visits.
Making a difference
In addition to serving on several boards and promoting and supporting entrepreneurship-based programs, Prescott and his wife are active supporters of the Navy Seal Foundation, which helps provide scholarships, tragedy assistance, education and other support programs to families of active duty SEALs, especially those families who lose an elite warrior in the line of duty. The Prescotts have also been supporters of the Second Harvest Food Bank, which helps feed hungry children.
Celebrating 20 Years: Wine with Heart
One of our most popular fundraisers, Wine with Heart, is set for Friday, September 9 from 6-10 p.m. at the beautiful Thomas Fogarty Winery. For more information, please email us at email@example.com
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