MEDICAL INNOVATION NEWS
Message from the Chairman
"As we express our gratitude, we must never forget that the highest appreciation is not to utter the words, but to live by them." – John F. Kennedy
As we near a very special time of the year, I reflect on how fortunate we are to have such a strong base of high-quality startups, talented entrepreneurs and staff, a collaborative innovation ecosystem and incredibly generous donors.
We want to take this moment to thank you for entrusting us with your support as we continue our critical mission to advance medical innovation.
This is also a time to ensure we live by the words we speak. In looking back at the progress we have made in nearly 10 years, I am very proud of our accomplishments and how well they align with our mission. Just a few that come to mind, each of them in their own way helping to advance medtech innovation:
- Six of our companies have successfully graduated and received strong rounds of funding
- We have a thriving internship program
- We have established a new fund, the Ferolyn Fellowship
- We have strengthened our partnership with the FDA.
In this edition, we hear from Dr. Fogarty highlighting the importance of collaboration in ensuring our industry continues to evolve. We also share the accomplishments made by Prescient, one of our graduates; a Q&A with Carl Simpson, who shares his knowledge on what makes a startup successful and what is next for our industry; and a profile of Hank Plain, a long-time Fogarty Institute mentor and supporter.
Wishing you a Thanksgiving filled with health, joy and laughter.
Thomas Krummel, MD, Chairman
"It's a privilege to be working with these incredibly talented individuals, and I am deeply honored to give back to the medtech community as a tribute to Ferolyn." – Jonathan Coe, Prescient co-founder, president and CEO; Ferolyn Fund mentor
From the Founder
Collaboration drives innovation
Recently, I had the privilege of participating in a presentation to the Alliance for Revolution and Interventional Cardiology Advancement (ARIA), a leading conference attended by top Japanese cardiologists and healthcare experts.
I was asked to discuss how we could advance innovation and entrepreneurship in healthcare, in the U.S., Japan and globally.
My response was perhaps overly simplistic, but often the simple solutions are the most effective. What do we need more of? Collaboration.
When we first launched the Fogarty Institute nearly 10 years ago, it was our intent to create that type of collaborative environment where physicians and entrepreneurs came together to solve a critical health need.
This spirit of cooperation proved to be so effective that it has evolved into what is now an entire innovation ecosystem where government officials, corporations, interns, physicians, mentors, venture capitalists, academia and fellows work side by side and learn from one another as they build technologies that transform healthcare and benefit patients.
Part of this collaborative spirit entails implementing a multi-specialist approach to innovation: We highlight the importance of building strong teams that include engineers, physicians from many specialties and experienced leaders. These teams bring diverse viewpoints that allow startups to consider any specific issue from all sides, ultimately leading to a more useful solution.
Rather than fearing competition, we teach our entrepreneurs to learn from other approaches, realizing that in the end, the focus needs to stay on how the problem is solved, not who solved it.
To me, that is perhaps one of the most rewarding aspects of the Institute – watching this spirit of collaboration as it is passed on to future innovators. It has a multiplier effect that we see as graduates come back to the Institute to mentor others, just as they were mentored. We watch them pass on their knowledge of how to effectively tackle the obstacles typically faced by entrepreneurs and know that the cycle will continue.
Sometimes we tend to focus on what's going wrong in the industry – the daunting news regarding the state of medtech, the declining number of startups being formed and the dwindling financing environment.
However, I choose to remain optimistic that if we work together, we will find a better way to overcome these obstacles and continue our critical mission to improve patient care. But we can't do it alone; it takes a dedicated team consisting of different specialties and talents.
That's why we remain constantly appreciative of the teams that step up to support these entrepreneurs. Are you ready to join us? We invite you to contact the Institute to learn how you can get involved whether sharing your experience or participating in our fundraising efforts. Together, we all can make a difference.
Jonathan Coe, president and CEO of Prescient; with co-founders Insoo Suh, MD, (left) and Jeremy Koehler (right) at a recent conference.
Prescient Surgical makes great strides following successful graduation from Fogarty Institute
Since graduating almost a year and a half ago with a strong round of funding, Prescient Surgical has enjoyed early successes that are true testaments to the fact that the startup was ready to stand on its own.
Based in San Carlos, Calif., Prescient has developed a technology that holds the promise of reducing the incidence of surgical site infections (SSI). Studies have shown that SSI adds $3 to 10 billion to the cost of healthcare each year in the U.S. alone. Between two and five percent of patients who undergo inpatient surgery will develop SSI, but those numbers increase significantly with higher-risk abdominal surgeries such as colorectal surgery, where infection rates commonly exceed 20 percent and result in higher treatment costs and longer hospital stays.
The startup recently successfully concluded a multi-center trial in seven leading hospitals across the U.S. to evaluate wound contamination, closely tracking SSI rates to evaluate the effectiveness of its technology.
"The trials demonstrated that surgeons and nurses – and ultimately patients – will deeply benefit from our core technology, which actively combats wound contamination," said Jonathan Coe, president and CEO of Prescient. "We have demonstrated dramatic reductions in SSI rates and have amassed tremendously compelling clinical data, in what we believe to be the most comprehensive survey of surgical wound bacteriology conducted to date. We are excited to be unveiling our results during major conferences in 2017."
The Prescient team just returned from the American College of Surgeons (ACS) conference in Washington D.C., where the startup received tremendous interest from general surgeons thoroughly impressed by the efficacy of the startup's technology.
The device is particularly appealing because it seamlessly integrates into current care protocols and addresses a problem that has been specifically indentified as a critical need by the healthcare community.
A promising future
Prescient is expecting to receive 510(k) clearance shortly and is finishing development of an entire suite of products that target areas of acute need, including abdominal and laparoscopic surgeries, with pending expansion into vascular, orthopedic and endocrine surgeries.
The startup will initially focus on the U.S. market, followed by Europe and other continents as they continue to field interest from around the world.
Prescient will also continue to invest in bench tests and other scientific endeavors to showcase the validity and benefits of its technology and guide clinical implementation in true bench-to-bedside fashion.
Benefiting from the Fogarty Institute's network and giving back to the medtech community
Coe believes that the Institute was instrumental in helping the startup prepare for this next stage of technological development and market readiness. Receiving a strong fundraising round was also critical in validating and ensuring the longevity of the company.
Prescient still benefits from the Institute's extended network of mentors, investors and corporate partners, which continues to expand as the organization grows and evolves.
With extensive experience under his belt, Coe now has the opportunity to give back to the next generation of innovators by mentoring one of the first-year Ferolyn Fund fellows, Julia Fox. Ferolyn Powell was a co-founder of Prescient and had a significant influence on the early formation of the startup, including encouraging Coe to apply to the Institute's incubator program.
"It's a privilege to be working with these incredibly talented individuals, and I am deeply honored to give back to the medtech community as a tribute to Ferolyn." Coe said. "I appreciate that I can do my part to help create connections that will greatly benefit the careers of these young innovators."
Carl Simpson has had an illustrious career spanning over 56 years in the medical and medical device industries and continues to have a strong influence on these fields.
He is currently director at Amaranth, a company that has created a next-generation bioresorbable drug delivery coronary stent; founder and director of Spiritus Medical, an early-stage startup focused on creating innovative devices for the treatment of obstructive sleep apnea; and an industry advisor for the Engineering and Biomedical Engineering programs at Santa Clara University. In addition, Simpson is a managing partner for Coronis Medical Venture.
Among his many accomplishments, Simpson was co-founder of Silicon Valley's first medtech startup, Advanced Cardiovascular Systems (ACS), which was sold to Lilly, later spun off into Guidant and then sold to Boston Scientific.
In his career, Simpson has served as a director to over 30 medtech startups. He also recently joined the Fogarty Institute as a mentor to our entrepreneurs.
We had the privilege of catching up with Simpson during a recent visit at the Fogarty Institute to discuss his career, advice for-up-and-coming entrepreneurs and his thoughts on how we can reinvigorate the industry.
You have enjoyed a very successful career. What drives you to continue working with early-stage startups? My passion is understanding clinical needs in medicine – finding where there are deficiencies in medical care that would benefit from the use of better therapeutic devices or diagnosis. Identifying these clinical needs and marrying them with technology and ultimately building a company that provides an effective solution is what I love to do.
I really enjoy that very early stage of the process and that's why I get involved with entrepreneurs from the start, even when it is just an idea on a napkin. As a director and mentor to over 30 medical device startups following my career at ACS, I have been through many of the complex steps and can identify strategic errors that can kill a company.
I also appreciate the higher purpose: bringing something that is beneficial to mankind.
What are the biggest challenges faced by medtech startups today and how has it changed over the years? The challenges in medtech have vastly changed over the years. When we first launched ACS, there wasn't an infrastructure of technology that helped startups build devices, including manufacturing, laser cutting and more.
Now thanks to the vast experience of professionals who were involved with "The University of ACS," that network is now in place, allowing startups to build virtual companies, when that is the most cost-effective solution.
This was an important aspect to build the medical device business in the Valley along with a strong pool of venture capital funding that allowed these companies to succeed.
Since the market crash in 2008, early stage venture capital in the medical device has been wiped out. Only a handful of VCs now focus on the medical device industry and most don't back early-stage companies – they first want to see proof of concept, early human studies results and more. This poses a great challenge to those entrepreneurs who are just getting started.
That's why organizations like the Fogarty Institute and Stanford Biodesign are so critical to our industry as they help mentor, educate and assist in raising that early-stage money needed to advance our field.
Other challenges of course include a tough regulatory and reimbursement environment, which further alienates the investment community. This is only accentuated by a political system that is in a quagmire in health care.
What are some of the steps needed to reinvigorate our industry? To receive funding today, medtech startups must be very focused on developing therapies that lowers costs. The healthcare industry is very expensive and solutions are needed to find ways to reduce hospital stay and improve recovery times.
However, this is really an oxymoronic response. Great new technologies that change the history of therapies almost always cost the healthcare system more money, with the trade-off being an extreme improvement in treating disease. Real innovative breakthroughs are expensive. These are innovations that can open up clinical needs that we haven't even recognized.
To allow these technologies to get to market, our government needs to play a role in putting this country back into a leadership position. U.S. citizens are going to Europe and other countries for procedures that have not yet been approved in our country or are too expensive. Both China and Japan are backed by their governments to build a strong infrastructure that allows innovation to get to market faster.
We, in the U.S., are going backwards. We must reduce the time and cost that allows for these big breakthroughs to be developed and make it easier to ultimately deliver the products to patients.
What are some of the tips you most often give to entrepreneurs? I encourage entrepreneurs to be very close to the medical profession, so they can understand what a physician does and what their needs are. This is not just the needs of the physician, but also the needs of the patients.
Also, innovators must thoroughly vet their ideas, including understanding the clinical need, the target customer, who will pay for the technology and how it will be reimbursed. I like to tell my entrepreneurs: "Begin with the end in mind."
And lastly, one or more of the team members must have enough engineering background to understand whether the technology can be created and get to market in a timely manner.
There needs to be a constant interface with the medical community. In the building of ACS, we constantly put together clinical advisors with our technical staff to get immediate feedback on our device concepts. This very "tight fit" between the clinical and technical community is a must.
Again, this is where organizations like the Fogarty Institute and Stanford Biodesign are so important for our industry. Thanks to the proximity of El Camino Hospital and Stanford Hospital, interactions are encouraged and can easily take place.
CEO of a successful public medtech company. Co-founder of eight medical device companies. Board member of nine companies that have achieved significant exits. Successful venture capitalist with Lightstone Ventures and Morgenthaler Ventures.
Without question, Hank Plain has made a tremendous impact on the medtech industry.
And while pursuing a prolific career in arguably one of the toughest industries, he has also given back to the next generation of innovators.
Since Dr. Tom Fogarty launched the Fogarty Institute in 2007, Plain has been involved on a personal level by mentoring and advising young entrepreneurs and as a generous financial donor supporting the Institute, Lefteroff and Ferolyn funds.
"Both Tracy Lefteroff and Ferolyn Powell were close friends who epitomized what is best in our industry," said Plain. "Their loss had a tremendous impact on all of us and supporting their legacy has been very important to me."
Plain enjoys meeting with the startup entrepreneurs, Ferolyn fellows and the Lefteroff interns. "I am always amazed at the creativity of young entrepreneurs and energized by their enthusiasm and focus to help patients through medical device innovation." Plain often shares his expertise and advice on the industry during the Institute's informal Lunch-n-Learn sessions.
Plain first met Dr. Tom Fogarty in the early '90s, when Dr. Fogarty was an advisor to Perclose, Inc., where Plain was president and CEO. Plain eventually led the startup to $100 million in sales, a successful IPO and a $680 million acquisition in 1999 by Abbott Laboratories. And he always looked up to Dr. Fogarty as a close mentor and inspirational figure.
"Tom was the ultimate mentor to so many of us. He taught an entire generation how to serially incubate innovative medical devices. With the Fogarty Institute, he's established the right framework to support the selection, capital efficient development and mentoring for promising new projects." he says.
Plain believes the Fogarty Institute provides an unequaled public service in supporting medical device entrepreneurs and helping them shepherd their technologies through research and development to eventually reach the market, despite the dramatic cut backs in available medtech venture capital.
Thanks to the ongoing support of individuals like Plain, the Institute's internship program is thriving. More than 30 interns have benefitted from the experience of working hand-in-hand with our companies-in-residence to gain a first-hand perspective on what it takes to launch a startup.
Likewise, the Ferolyn Fellowship is off to a strong start with the recent selection of three accomplished first-year candidates who will benefit from this unique mentorship program. The Ferolyn Fund was established by her family and friends to support young entrepreneurs who show strong leadership skills and aptitude to transform the medical technology and healthcare industries.
Working with the Fogarty Institute is a natural fit for Plain, who counts among his proudest career moments the times he has seen his teams achieve success by improving patient care. Most recently, that included work with companies like Twelve, Access Closure, Ardian and Acclarent.
Plain continues to invest in medtech startups with Lightstone Ventures and remains optimistic about the outlook of the industry – thanks, in part, to the role that organizations like the Fogarty Institute play in nurturing the next generation of innovators.
In the News
Crowdfund Insider: G-Tech Medical Seeks $1.5M in Growth Capital on Investment Platform Propel (x) (G-Tech is a Fogarty Institute company)
Pharmabiz.com: HeartFlow's web-based platform, FFRct Analysis receives Japanese approval to diagnose coronary artery disease (HeartFlow is a Fogarty Institute alumni)
PRNewswire: Post-Partum Hemorrhage (PPH) Devices Market is Expected to Reach $906 million by 2022 (InPress is a Fogarty Institute company)
PRNewswire: Global Medical Holography Market is to Grow Around 34% During 2016-2022 (EchoPixel is a Fogarty Institute company)
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