Mark Tauscher joined PLC Medical Systems Inc. in January 2000 after more than 20 years in medical product sales, marketing and management. When he spoke with MassDevice, the company had just announced strong sales and narrowed losses for the first quarter, largely due to strong international sales.
Tauscher told us about the rocky road PLC traveled in getting FDA approval for its first device, a transmyocardial laser revascularization system, how it decided the RenalGuard device would be its follow-up and why he sees the global credit crunch as the industry’s biggest challenge.
MassDevice: Why did you get involved with the medical devices field? What made it a good fit for you?
Mark Tauscher: I’m a physiologist by training. I did my graduate and undergraduate work in physiology and I love the medical field. I had worked with a lot of medical devices in my graduate studies. Then I got connected with Hewlett Packard in the ’70s and spent 22 years in their medical business. Now that division is owned by Phillips, but back then it was the leader in medical electronics, patient monitors, ultrasounds, EKGs, et cetera.
I was lucky because I got a real education at HP. They had great training and it was a great company to work for.
MassDevice: What’s your value proposition and how do you differentiate your products from your competitors’?
MT: We have a singular focus on advancing our technology. We can knock down and run around every hurdle that gets put in our place and we passionately believe that what we have are the best products. We have the “get it done” mindset. As a small company, we can just be totally focused on advancing our products and technology.
Actually, our company is a great story about Boston-area medical device companies. PLC Medical Systems went public in the mid-90s around its CO2 Heart Laser technology, which is a laser used in heart surgery, and we were a high-flying medical tech company.
Everyone was watching us and had great hope for the company. But we hit a bump in the road with the Food & Drug Administration. The first time we went to the FDA, we didn’t get approval. They told us to gather more data and come back.
We re-grouped and recovered and got FDA approval, but by the time we hit the market we didn’t have any cash to commercialize the technology. Our stock in a period of a couple of years fell from about $30 to $2.
Then transmyocardial laser revascularization became a controversial procedure. In 2000, I was brought in to try to make it successful. We had a major partnership with Edwards Life Sciences, which became the selling channel for TMR. They sold the product for almost seven years. But the TMR procedure never really took off. It’s still helping people and being used today, but it never really achieved commercial success.
Its lack of success became the impetus for the re-invention of our company and our RenalGuard product. We wanted to get a new product in the marketplace that could be successful and increase shareholder value.
We started with a clean slate when we looked for new technologies. The catheterization laboratory, which is used to get images that guide a surgeon during heart surgery, was a fast-growing market and had an unmet clinical need.
A surgeon uses an X-ray and a contrast agent, which is a big, heavy iodine compound, to get images of the arteries. They inject this contrast agent into the blood to help them see where a stent should go, for example.
But when this contrast agent gets to the kidneys, it can damage them, especially in people who have compromised kidney use. This acute renal failure is known as contrast-induced nephropathy.
There wasn’t a solution for CIN. We believed the answer was RenalGuard, which uses sterile saline to rapidly eliminate this contrast agent from the body.
The product first started in clinical trials in 2006. Its first FDA safety study is completed, we have a CE Mark and we’re selling the product in Europe and the rest of the world.
We were ready for a major U.S. clinical trial for RenalGuard when this little problem with the banks failing and the recession came along.
MassDevice: What strategies and tactics have you adopted to deal with the economic downturn?
MT: We didn’t feel like we could raise money for the RenalGuard U.S. trials, so we decided to wait for a turnaround in the economy.
In the meantime, we’ve put our focus and efforts toward Europe and rest of the world. We’ve had to contract and let some people go, and we had to conserve capital to last a little longer. This way, when the equity markets return and economy gets better, we’ll be able to go back and try to raise money.
What we hope is that people will already be using the product and we’ll have good clinical data, which will raise the product’s efficacy. This should make the company more attractive to investors or to a partner.
MassDevice: What long-term effects will the recession have on your business?
MT: The long-term hinges on the marketplace becoming more conducive to raising money. If it continues like it is, we’re not a profitable company. We need to raise money to continue operations, especially for the U.S. clinical trials, which are very expensive. We might be able to be profitable just by European sales, but we’re not sure we’ll have enough money to run U.S. trials.
MassDevice: What’s on the horizon for PLC?
MT: The horizon hinges on RenalGuard’s Europe success. There are clinical studies being done in Italy. We have to make sure that the data from this study gets to the marketplace at the right time and then start U.S. trials to get U.S. approval.
MassDevice: What’s the biggest leadership lesson you’ve learned and how did you learn it?
MT: To truly make sure the company vision is always present. I learned this at HP first and it was re-enforced at PLC. You have to make sure every employee understands it and knows they’re a part of it.
It’s also important that there is a measure of success related to creating and completing that vision and that it’s clear to people. Employees should be both motivated by and rewarded for completing this vision. Leadership is a combination of vision and close monitoring and measuring progress. It’s about creation, communication and vision.
MassDevice: We’re in a period of great flux in the medical industry. What do you think the medical device business will look like in 20 years?
MT: I was in the medical device industry 20 years ago and started in it almost 40 years ago.
{IMAGELEFT:http://www.massdevice.com/sites/default/wp-content/uploads/headshots/Tauscher_Mark_100x100.jpg}Twenty years from now, the technology will have advanced but the business model that exists today will be the same model. We’ll have small companies that bring ideas to market, because it’s small companies that can focus on one thing.
There will always be a place for small companies to bring ideas to market. That existed 20 and 40 years ago, too. Some of the biggest companies today started out as small companies. The small ones will get acquired and that model will continue.
One of the interesting things about healthcare is that ideas, and the need for ideas, are generated out of healthcare institutions. These institutions will continue to partner with entrepreneurs and the entrepreneurs will need their patients and their doctors. We’ll also see more doctors becoming medical entrepreneurs.
It’s an interesting industry. People who typically design medical stuff aren’t doctors, but a lot of doctors do design medical devices. So we’ll see more doctors who have a business mind advance a little more in 20 years.
MassDevice: What’s the biggest challenge confronting the devices industry and how should it respond?
MT: This industry needs investment capital. Not every idea ends up being a multi-million-dollar idea, but you’ve got to have lots of ideas in the works to find that multi-million-dollar idea.
Besides that, we need an atmosphere and environment of entrepreneurialism. This recession will have a dampening effect on this, but I’m hoping it doesn’t. I’m sure there’s a lot of good ideas that won’t be seeing the light of day because funding is not available.
So you do what you can. You find angels, you take your idea as far as you can, using your own resources and your own dollars. Otherwise, just put it on the shelf.
MassDevice: Medical device sales are still very reliant on reps visiting doctors. As these opportunities become more difficult with the rising prevalence of gift bans, how will companies adapt their sales processes?
MT: I started my career as a sales rep. I believe that selling is a very honorable profession. Most medical sales people are highly trained and very intelligent and they work in a complicated industry. To represent a product, you have to spend time learning. It’s not easy to understand, so you’ll always need the sales rep.
They serve as a consultant to the users of the product. The product solves a problem and to understand how to use it, it makes sense that you need someone who’s well-trained in the industry and knows how to speak the language of the customer.
Giving gifts didn’t influence anyone and not giving gifts isn’t going to impact anything. Physicians were not influenced by being taken to dinner or given a pencil.
MassDevice: How is training a sales force different today compared to 10 years ago?
MT: I think it’s tougher. The customer expects sales reps to speak to evidence-based data and understand the data that represent their product. If you take a look at drug-eluting stents, for example, there are very big companies selling them, but they all see something a little different.
Why is their product better than the other product? Doctors are using evidenced-based data to make these decisions. This drives a whole organization to have more intelligent sales reps.
MassDevice: When you’re building a team today, what areas do you put the most energy into? R&D, regulatory, sales and marketing, operations?
MT: It depends on the stage of your company. The early stage should focus on the development process and clinical research. If you’re selling your product, you’ve gone through approvals and clinical research and you want to make sure you have a well trained and motivated sales force who can take that research and explain it effectively.
MassDevice: Where do you see the next innovations in med device electronics?
MT: I always think there are two ends of the spectrum. One has to do with information and information management. We will see more innovation in this area. A lot of advancements still need to be made in data sharing and in electronic medical records.
On the other side there’s a whole different set of technologies that are very complex but will still see innovation. Robotic surgery is very complicated and continues to be innovative. A drug-eluting stent, although a small piece of metal, is an innovative device. We’ll see small sensors being more imbedded, and there will be advances in fundamental technologies too.
