Dr. John Simpson. Even if you’re a medical device newbie, you’ve probably heard of him. He’s credited with inventing and commercializing the first over-the-wire balloon catheter used for percutaneous transluminal coronary angioplasty (PTCA). This single idea created the field of interventional cardiology as we know it today.
Over the course of his renowned medtech career, Dr. Simpson has founded and successfully exited companies like ACS and DVI (both acquired by Eli Lilly (NYSE:LLY)), CVIS (acquired by Boston Scientific (NYSE:BSX)), Perclose (sold to Abbott (NYSE:ABT)), Lumend (acquired by Cordis), Fox Hollow (acquired by ev3 which now part of Medtronic (NYSE:MDT)). It’s borderline exhausting just thinking about all of these companies, let alone starting them!
Plain and simple, Dr. Simpson is a legend in the space and he isn’t done yet. He currently serves as the Executive Chairman of Avinger (NSDQ:AVGR), where he and his team are developing a portfolio of unique cardiovascular products aimed at solving the challenging space of peripheral artery disease.
In this interview with Dr. Simpson, we learn about the key lessons he’s learned throughout his historic medtech career and why he’s still fired up about medical device innovation after all these years.
Here are some of the topics we cover:
- How Dr. Simpson’s infamous encounter with Jack Nicklaus (yes, that Jack Nicklaus) led to his firing as a bank teller, which forced him down a new career path.
- What initially attracted Dr. Simpson to the field of cardiology and how treating vascular disease has been a consistent theme throughout all of the companies he’s started.
- The reasons why Dr. Simpson decided to pursue Andreas Gruentzig’s balloon catheter technologies and how it led to his own inventions.
- As a medtech entrepreneur, why knowing your strengths and limitations is key to making a difference in the lives of others.
- Discover Dr. Simpson’s approach to building a team, and how surrounding himself with people that have a broad group of skill sets has enabled his success throughout the years.
- The key challenges Dr. Simpson has faced with his new company, Avinger, and the important lessons he’s learned.
- Simpson reveals his approach to raising capital in the medtech industry, and how persevering through challenges has been crucial for Avinger’s success.
- The advice Dr. Simpson would give to his 30-year-old self, and how endurance through criticism is what ultimately leads to revolution within the medical field.
The following interview is based on an audio interview with Scott Nelson and Dr. John Simpson. It has been edited for enhanced readability.
Scott Nelson: Hello Dr. Simpson, thanks for joining the Medsider program.
John Simpson: Thanks for this opportunity. I’m definitely looking forward to it.
SN: When looking at your vast and storied medtech career, most people would assume — and rightfully so — that you’ve consistently had these sort of top-of-the-mountain experiences, time and time again. Especially hen looking at all of your successful medtech exits as well as all of the medical devices you’ve develop over the years.
But it hasn’t always been easy. Even dating back to when you initially applied for medical school and didn’t get in. So let’s start there. Can you take us back to the late 60’s and your infamous encounter with Jack Nicholas when you were working as a bank teller in Columbus, Ohio?
JS: This predates my getting ready to go to medical school, of course. I had just graduated from Ohio State University and I was looking for a job. Was recently married and had a new baby on the way and so I applied for a bank teller training job at the Arlington National Bank in Columbus, Ohio. As my luck would have it, Jack Nicholas showed up to my teller window to deposit his winnings from the U.S. Open.
The winnings were $30,000, if you can imagine that. I’ve looked it up on the internet, I can’t believe it. But still, $30,000 is more money than I could ever have imagined, and as the new teller in training, I took the check all around the Ohio National Bank, showed it to everyone until I got to the branch manager and he took a view of me doing that and said I had to get back to the teller cage, which I did. I put the check in the wrong stack, no computers and they couldn’t find it for about a month. My teller cage every morning was off balance by $30,000, which was a little bit more than was acceptable.
Eventually the manager came to me and he said, “You know John, I have to be honest with you, I don’t think you’re cut out to be a banker.” So I quickly got fired over losing this check.
30 years later I got a letter from Jack Nicholas and said he’d heard this story and it was unfortunate that my interaction with golf had led to a big change in my career path but he hoped it worked out okay.
SN: Such a great story on a number of different fronts. I thought we’d start out with that sort of funny anecdote because I think it tells a lot about you and your background. But let’s use that to transition to your general interest in cardiology, because correct me if I’m wrong, before going to medical school at Duke, you pursued a PhD in immunology. And then later went on to pursue medical school at Duke and then went to train at Stanford in cardiology.
Treating cardiovascular disease, especially peripheral vascular disease, seems like it’s always been sort of a consistent theme throughout all of the medical device companies you’ve started and really throughout your career in medicine and healthcare. Tell us a little bit more about this disease and maybe why you’ve always been interested in it.
JS: Vascular disease is the plague of our society and it results in an enormous amount of mortality and morbidity and so I’ve always been interested in it. I trained at Stanford as a cardiologist and all of my early work was treating coronary artery disease. But over time, I gravitated a little bit more toward peripheral artery disease.
There is this fascinating observation that when I fix somebody’s heart vessels, they say, “Okay great, I don’t have chest pain when I exercise anymore. Doc, do you want to have a beer?” You save somebody from an amputation and it’s totally different. They’re expecting to lose their leg and when they don’t, it creates a more rewarding experience, a culturally more rewarding experience for the physician, for the hospital and for the nursing staff.
You hear stories all the time about the nurses that are like emotionally overwhelmed, along with patients, when we’re able to avoid amputation. I think that’s the thing that has created the allure of treating patients with PAD from a physician’s perspective. But PAD is grossly under diagnosed in this country and I think I look at it as an opportunity to make something that’s profoundly impactful. There are maldistributions, let’s say, of patient care or accessibility in the United States and if you’re African American and you show up in the emergency room with a closed blood vessel in your leg, there’s two and a half times the chance that you’ll have your leg amputated as if you’re white.
There has to be — it’s not all racism, but there has to be some racial component to that. There’s some socioeconomic drivers to that as well but it’s just so disturbing in a way and I have always felt like it’s a very exciting, challenging and really important area to work in. And I think it hasn’t really received the attention that it should have. Most of the attention goes to the coronary arteries, which are obviously very important too. But anyway, that’s kind of my overview of PAD and why I think it’s so appealing.
SN: Sure, I completely relate. I remember, this is back during my days at Covidien before Medtronic acquired Covidien, but I do recall a presentation from an interventional cardiologist. His name is escaping me right now, but I think he was at the University of Oklahoma. But he made that exact analogy that you just referenced and he was comparing his treatment of peripheral arterial disease to coronary arterial disease and he made a comment that after he treats someone’s left main and goes and sees them the next day they don’t really necessarily feel any different. Or there’s not really much of an emotional response.
But when he saves someone’s limb and treats them from a peripheral vascular standpoint, they’ll often times give him a hug the next day. He said it’s just that much more rewarding. So it’s interesting that you made the same comparison between treating coronary and peripheral arterial disease.
So, let’s transition to your time at Stanford before you initially started developing angioplasty balloons. In doing some research and preparation for this interview, it looked like you were almost ready to head to Jackson, Mississippi for additional training in cardiology until you sat in on the presentation from Andreas Grüntzig. Can you kind of take us back in time and tell us a little bit more about that experience and how that changed your career path at that point in time?
JS: I was a cardiology fellow at Stanford at the time and as a fellow, you’re always looking for a free meal. And I saw that there was a noon lecture and you get a free sandwich for attending the presentation by this guy named Andreas Grüntzig. He was going to talk about putting a balloon into a patient’s coronary arteries, blowing it up, and they were going to get better. And I thought, “Right. That’s a stretch, but I need a free sandwich.” So I went to the noon conference. Andreas was there and he gave the talk about balloon angioplasty to treat human coronary artery disease.
I thought, “Wow, I don’t know, this seems totally crazy.” I told my wife that same day, “You know, he’s either going to revolutionize the treatment of vascular disease or he’s going to go to jail.” And I sort of favored jail as kind of the most likely end point for Andreas.
I didn’t think too much more about Andreas’ technology for probably another say four or five months, maybe. But I had a complication with a patient at Stanford six months later. And I thought, “Gee, if I had that little balloon catheter that Andreas was talking about, maybe I could have pushed the stuff that was in the artery that I had dislodged, maybe I could push it back into the wall.” So I ultimately convinced the chairman of the department, the chief of cardiology at Stanford, Don Harrison, to give me some time off to go to to Zurich and to see Andreas use some of his early balloon catheters. I just thought it was just so magical.
And I came back to Stanford, and ordered the catheters. But I couldn’t get the balloons. So I ended up starting to work with Ned Robert, another cardiology fellow at Stanford, and we developed an over-the-wire balloon angioplasty system that we evaluated in animals first and then eventually in patients.
And that was only out of desperation. It wasn’t like I had any experience in developing balloon catheters or, you know, even had any good thoughts about how to do it. But I thought I could surround myself with people that did know how to do it and by working together, we could figure it out and we could end up making something good.
SN: I definitely want to get to that last part of your answer there in regards to surrounding yourself with people that sort of allowed you to experience the many successes that you’ve had over the course of your career. But just as a follow up question to your experience sitting in on that presentation from Andreas Grüntzig. As I read about that story and thought about it, I think it would be easy for most people to look at your career and think, “Yes, Dr. Simpson, he’s an entrepreneur, of course that makes sense. He saw a need in the market place and developed a balloon catheter.”
But I tried to put myself in your shoes at that time. I mean, you’re still a fellow. This technology that Andreas Grüntzig was presenting, as you mentioned, a lot of people were pretty skeptical of it. But you went ahead and delved right into it when most people probably would have thought it was interesting, but would have pursued a more traditional career path. But you clearnly took a different approach.
What do you attribute that to? Do you consider yourself a natural tinkerer or naturally curious, and what caused you to take those initial steps to go deeper from a technology standpoint?
JS: My brain is probably all messed up, so that’s the best explanation for it! You know, I’ve had this question posed to me before. I to really — you know, I don’t have a very good answer. To me, it you’re presented with a problem, I don’t know, it just seems natural to try to seek out a solution that’s better than what we’re currently doing. I don’t know if that comes from some of my graduate school training, getting a PhD, or just part of my basic nature, I really wish I could come up with a better answer to the question, but unfortunately, I think my answers are always a little bit weak.
But there is something about my nature that is persevering, if you will. If I do find a problem, and if I can come up with a what I think is a good solution, I tend to ask myself the question, “What if we could do this? Wouldn’t that be helpful?” I usually work on just trying to find a way to do it and that’s really the thing that probably separates me some of the other physician entrepreneurs. I just keep just hanging in there until we figure it out.
SN: On that note, let’s transition to some of your business accomplishments over the years. I want to get to Avinger. But before we go there, I’d like to set the stage for the audience that may be loosely familiar with your work.
Advance Cardiovascular Systems, or ACS, that was your first company that you started back in the late 70’s, which you eventually sold to Eli Lily in the early 80’s. That’s right?
JS: I think that’s correct, yeah.
SN: DVI, or Devices for Vascular Intervention. That was a company where you initially started developing atherectomy devicesto remove plaque out of someone’s blood vessels. Again, you sold that company to Eli Lily in ’90 and that eventually formed the foundation for Guidant, which Abbott eventually acquired in the mid-2000’s.
JS: The important thing to observe there is that when we formed Advanced Cardiovascular Systems, ACS, we were able to put these little balloons in arteries to treat coronary artery disease. We’d inflate the balloons and sometimes the problem would be solved instantly. But in some cases, we’d make the problem worse, which would require stenting.
So I thought, “Instead of trying to just push the plaque around with the balloon, what if you could actually clean it out?” So it was a sort of a natural transition to want a device that actually cleaned out the arteries.
SN: That speaks to what you mentioned earlier. You saw problem, you saw a need, and you said, “I don’t want to just simply inflate this balloon and squish the disease up against the vessel. I want to try to remove that. Why not try to get it out of there?”
On that note, you experienced successful exits with both DVI and FoxHollow. And now you’re developing some really compelling atherectomy devices with Avinger. Why don’t you think atherectomy took off with DVI back in the mid to late 80’s?
JS: Well it was very difficult to use. The devices were long in their housing and the way they were configured. Once you got them in place, they worked beautifully. But getting them in place was very difficult. These devices were also competing with simpler and easier-to-use technologies like balloons and stents. And I think the ease of use was sort of the biggest problem for DVI. But the concept was solid. In fact, we still see a lot of patients that are like 20 years out from being treated with a DVI device and their arteries look good!
So when it worked well, it worked really well, a little bit like balloon angioplasty. But it was also very difficult to use.
SN: The concept was there, maybe it was just the device itself needed some iteration, which we’ll get to with Avinger and the portfolio you’re building out to treat peripheral vascular disease.
Let’s continue with the list of the companies you’ve been involved with over the years. Cardiovascular Imaging Systems, which was acquired by Boston Scientific. Perclose, which you sold to Abbott in ’98 and then LuMend, which was acquired by Cordis in the mid-90’s. And then in the late 90’s, you helped start FoxHollow, which focused on atherectomy and was acquired by ev3 in 2007. Covidien acquired ev3 and then Medtronic acquired Covidien. A lot of M&A activity over the past few years.
And then lastly, that leads us to Avinger, which is the company you’re at now, which you formed in the mid to late 2000’s. It seems like your portfolio of products at Avinger is almost a culmination of the products you’ve developed over the years. From crossing devices to atherectomy devices to imaging devices. It’s almost like everything that you’ve learned along the way, you’ve been able to make iterations and are now developing at Avinger.
JS: Yeah, I think that’s probably the advantage that I’ve had. It’s one of the advantages of being a little bit older, unfortunately, but you’ve seen a lot of things happen. You almost always want to make it better.
Paul Yak and I tried to add intravascular imaging to catheters at Cardiovascular Imaging Systems, but it was too hard to do at that time because the technology just did not exist. In that era, we were putting in some early stents, and we ended up with bleeding problems in the groin because these patients were anti-coagulated. And so we started Perclose to close the holes for arterial access sites.
With FoxHollow, we really had a great device. But we were limited, because once again, back to the DVI era, you cannot really rely as much as you would like to on the X-ray images to tell you where to cut. Paul Yak pointed this out to us in the early days. He said, “You would like for these deposits to be really concentric, and they’re not. Using intravascular ultrasound, you can see they’re not concentric and you can tell which side to aim your devices out.”
So FoxHollow had that limitation, and although the devices worked well, sometimes you would cut too deeply into the artery wall. It led to back to the idea that if we could visually see removing just the right amount of plaque in the right spot, then that could be the answer. And I think that’s what Avinger has embarked on.
We’ve developed a lot of technology around imaging and we use optical coherence tomography as the imaging system, which is a laser based system that allows us to look at the artery while we’re working on it. It really creates a remarkable safety profile as well as efficacy profile. It also saves physicians form excess radiation. So I think that in a way, it’s a combination of many efforts over the yerars. Maybe not so much a culmination, because that sounds like the end!
SN: I want to ask you a few more questions with respect to Avinger, but let’s go back to all of these companies that you’ve started in the past. You’ve always been able to surround yourself with a great team and you even pointed it out earlier in the conversation. People like Ray Williams and Bob Reese at ACS, Alan Will at DVI, Hank Plain at Perclose, I’m just mentioning a few names that most people will probably be familiar with. But the list certainly goes on and on.
For those people that are listening to this right now, that would consider themselves medtech entrepreneurs, whether they’re physicians themselves or just entrepreneurial in nature, what’s been your approach to building out that team? Has it always come naturally or has it been by intention that you sought after people that bring different skill sets to the table?
JS: I would say there’s sort of a harsh reality that all of the people that you’ve just identified were introduced to me by someone else. And Ray Williams is the best example. I met Ray when he was a parking lot attendant for the circus club.
He said to me that he had heard about what we were doing with angioplasty, he was interested in it and he said I should give him a call because he was involved in venture capital. I had never heard of the term venture capital before, so I had no idea what that was and so I never called him. Then finally one day, he called me and said, “Gosh, you know, I thought maybe you should have called me back. A lot of people are looking to me for funding. But it didn’t sound like you needed it.”
And I said, “Well, we always need it but I don’t know how to do it.”
And he said, “Well, I’ll do it.” And he did.
He was the one who hired Bob Reese at ACS and there’s just a litany of wonderful people that I’ve been involved with and I don’t have any idea how that all kind of took place. A lot of times, just by being introduced to somebody who knows somebody. I don’t think I’ve ever done a real search and found somebody that I wanted for a position. I’ll usually ask a friend, “Do you know anybody who could do this?” And they say, “Oh yeah, why don’t you ask so and so?” That’s been a better system for me. Now that I have enough friends and acquaintances, I can cheat a little bit.
SN: Let’s circle back to Avinger. Considering all of the previous accomplishments that you’ve had, most people would have said, “Dr. Simpson, it’s easy for you to go ride off into the sunset.” They’d clap their hands and give you an ovation and say, “Wow, what an amazing career.”
But you haven’t stopped. You went on to form Avinger. Having said that, is there something that drives you to start these companies? What’s the burning challenge that you’re trying to solve for at Avinger?
JS: I think I do have the additional advantage of being able to see the patients and see the misery that different diseases cause. I don’t think I’ve ever lost sight of that and how miserable these diseases are. When you see patients that are about to lose their leg or the patient in the acute MI setting within the coronary care unit, you just want to help them.
It’s very motivating. It’s very real. If you work hard at it, then you can make a difference for the patient. And that’s always the way I sort of approached it. My strength is not business and I definitely surround myself with people that are really good at it. But my strength is the clinical arena and I guess you could call me a “tinkerer”.
SN: I think that’s a good lessonfor any medtech entrepreneur. Be cognizant and acutely aware of where your wheelhouse is and what your limitations are. And don’t be afraid to ask for help where it makes sense.
JS: That is one of the things that I feel like I am pretty good at. I understand what I’m good at and I know what I’m really bad at. And unfortunately, the list of what I’m really bad at is pretty long and what I’m good at is actually pretty short. But I’ve told a lot of people that if you let me get inside a blood vessel, then I’ve got you. It’s going to be really hard for you to beat me inside a blood vessel. You give me a P&L or a balance sheet, or something like that, I will be clueless and that’s why I have to hire somebody else to do that.
SN: That’s a really good lesson. It sounds so simple, but when you’re in the trenches and knee-deep in the work, sometimes it’s hard to let go. It’s hard to discern when to hand something off. So, maybe it comes easier for you, but I think it’s challenging for a lot of people.
The other thing that I thought was interesting that you pointed out there too is just, and granted you’re a physician, you’re a cardiologist, but also just that natural bias to towards the patient and I think that’s one of the unique benefits of or advantages of being involved in medtech or health care is that unlike other tech companies there in Northern California and now Facebook, Apple, Google et cetera. Not that those aren’t great companies but there’s always sort of the benefit to being involved in medtech is that you’re working on devices that are being used on a daily basis to treat patients. So I think that’s always kind of a nice aspect, especially when you appreciate it and it sounds like obviously you have over the years.
JS: I’m a little bit like the quarterback on a football team when the team is really great. But it’s only because of the lineman, the receivers and running backs. It’s not because of the quarterback. And yet the quarterback gets way too much credit. I sort of feel like I’m in that situation. I get the credit for all the work the engineers do. And the assemblers. I mean, the assemblers are putting together stuff that’s just miraculous and yet I get the credit, which is totally wrong.
SN: I think you’re being humble, but I think most leaders would agree that it takes a strong team and a strong quarterback to move the team forward.
When thinking about Avinger and what you’ve experienced over the past three decades, are there certain challenges that have come up at Avinger that have surprised you? In that same vein, as you’ve approached some of those challenges, are there some key lessons that have helped you?
JS: The challenges that have surprised me with at Avinger are a little bit different than some of the previous challenges. One of the biggest is trying to raise capital. It seems like always used to be easier — maybe we should ask Ray Williams to do it for us. He was always really good at it. But I don’t think I’m speaking just for Avinger, I think across the board, people are investing a lot less now in innovation, especially in the early stage. Now, they want to invest in a large revenue stream. Investors want to invest in profitable companies, which is almost never the case with early stage companies.
That being said, some physicians are under such enormous pressure from their hospitals to do more cases, increased patient volume, that they may not be interested in learning a really new and innovative technology. They probably can realize better results, but it’s going to take more time, which leads to a resistance to adopt new technology.
Regulatory affairs are still hard, but the lesson there is just persevere. With the FDA, you have to just provide the right data and once you do, then eventually everything will be approved. Perseverance is really important in raising money because everybody you talk to almost always will say no. You have to kind of keep working at it.
At Avinger, we’re doing something that’s never been done before. We’re adding a camera to a cutter and you can actually see what you’re doing. Never been done before. That means that it’s hard. That also means that people are suspicious. I hear comments all the time like, “Oh, that’s never going to work. Simpsons tried to do that forever and that just hasn’t happened.”
So I think you have these prejudices and biases that are in the physician and investor communities . You just have to overcome them. But perseverance is the key and raising capital is a current impediment in my mind.
SN: I can really appreciate your answer. Sometimes, it’s very easy to under appreciate something like that. I liked how you put it. Just know that it’s going to be hard. It’s going to be difficult. Just like you mentioned with Avinger, you’re trying to put a camera on a therapeutic device that allows physicians to see what they’re treating. In today’s climant, so many people would lament and complain about how hard it is to raise money. But I like your approach. Just know that it’s going to be difficult and know that there’s going to be times that you’re going to have to persevere through those challenges.
Easy to understand, yet hard to implement. On that note, before we wrap up with the last three rapid fire questions, anything else that you think that would be good for the audience to know?
JS: I think we’ve covered it in a good detail. The only thing I would like to add is in regards to the importance of raising awareness about how serious peripheral artery disease is and how important it is to get an early diagnosis and treatment. It really is a huge problem.
SN: Let’s transition to the last 3 rapid-fire questions. What’s your favorite business book?
JS: I think it would be Malcolm Gladwell’s Outliers. He talks a lot about the fact that it takes 10,000 hours to be good at anything. I think that’s probably an understatement. I think it takes more than 10,000 hours. The theme there is perseverance, which probably fits my basic nature.
SN: Second question, is there a business leader that you’re either following right now or one that’s inspired you in the past?
JS: You may not consider him a business leader, but to me he is. He’s also a really good surgeon. His name is Tom Fogarty and without Tom, I would have never been able to do anything because he was the surgeon that supported me at Sequoia Hospital. He’s just an amazing guy. He is the ultimate inventor. I don’t think I am. I’m kind of the worker bee that just keeps plugging away until we get it right.
SN: Lastly, when thinking about your medtech career, is there one piece of advice that you would tell your 30 year old self if we had the opportunity to rewind the clock?
JS: I think that you have to be willing to endure. You have to be willing to persevere. Sometimes I think about this pathologist at Duck University, who is kind of a philosopher too, who wrote that anytime you develop an incremental improvement in medicine, there’s a huge applause and everybody congratulates you.
If you do something that is really transformational in medicine, then you’ll have a lot of criticism. Everybody will find fault with it if it’s revolutionary. So I think I’d focus more of my attention on things that are revolutionary and just expect there will be a lot of criticism. But know that these are signs of a revolution. I suppose that would be my goal.
SN: Thanks so much for your time, Dr. Simpson. It’s greatly appreciated.
JS: Thank you.