On July 15, 2014, MassDevice.com brought together 4 senior medtech leaders to discuss the future of the medical device industry at our DeviceTalks Boston event.
In this podcast you’ll hear from a panel that included Dr. Charles Carignan, CEO, BiOM (formerly known as iWalk), Duane DeSisto, CEO, Insulet (NSDQ:PODD), serial entrepreneur and North Bridge Venture Partners general partner Carmichael Roberts, who is also the founder of several medtech companies including 480 Biomedical, Arsenal Medical and MC10 among others.
In addition, our bonus Q&A (audio below) features Haemonetics (NYSE:HAE) CEO Brian Concannon and Kips Bay Medical (NSDQ:KIPS) founder and CEO Manny Villafaña, a serial entrepreneur and inventor who also founded St. Jude Medical (NYSE:STJ), Guidant and a string of other companies. We ask the panel to describe their worst mistake in business.
Highlights from the podcast:
Dr. Charles Carignan on leaving NinePoint Medical for BIOM:
"It was really about the mission of the company. At NinePoint, we were doing great. We had really charged hard to develop a product very quickly and then I had the opportunity of going to a company that’s been around for a few years that has a truly innovative way to give mobility back to patients who have lost mobility for various reasons, diabetes being a significant contributor to that. [BIOM] was a chance to come in and say, ‘This is a great company with a great product.’ It’s had a few challenges but I think that there are things that with my experience and background, particularly in reimbursement, et cetera, to really come in and help make a difference with that company. It’s a great team that’s there. We just need to come in and refocus back on the patients and I think part of it is that the company lost its focus on the patient and it’s something that I’ve come in in a matter of two and a half weeks really refocused on.
I was in the field last week and I’m heading to the field tomorrow. I’ll be back out there next week and people are a little bit shocked and say ‘Uh-oh, this new CEO is already in the field.’ They don’t know what to make of it. I told them I’m not trying to check up to make sure that you’re busy. I really want to meet the patients. I want to meet the prosthetists that we work with and understand that.
Already after one visit in the field I have my own stories of seeing just how and I showed some people a video earlier tonight of a patient that we put the ankle on last Thursday and he was walking really on what’s the next best thing that’s out there. He put this on and he was just walking so fast and the prosthetists were shocked to see this guy walking so quickly.
We went outside and he wanted to walk down the block and we ended up walking a mile which for most of us here probably doesn’t seem like a lot but for somebody with a prosthetic leg walking a mile is a huge effort and this guy did it in 45 minutes and would have kept going except that we had to leave
Carmichael Roberts on having strategic investors such as Medtronic in his startups:
"I think part of it is what you allow them to do and how big of a “risk” you want to take in integrating them into your company. If you make it really clear that they’re making an investment, they’re an observer, show up every two to three months and call us every once in a while. I think they got better things to do most of the time unless it’s something that they really, really want to access to.
In my companies, I get them very involved. If I find that there’s somebody that I can identify in the company who I can trust quite a bit I actually will have them on the board and then we just have to do the appropriate things at certain segments of the board meetings to have them excuse themselves and as long as we’re open and have a good relationship they get that.
I won’t say what it is specifically, but I think in a couple of my companies the large company was somewhere between helpful to critical in the design of the clinical trials including which sites you use, which doctors you use and how you segment out the patients and how you interpret the data, which could be a dangerous thing to do as well if they’re also potential acquirer."
Duane DeSisto on competing against corporate giants
"If you look at the kind of technology they had they really didn’t innovate all that much. What they did is they had a product, they had a need…When we came in if you look at a traditional insulin pump you couldn’t help but scratch your head and say with all the stuff that’s going on ‘there’s got to be a better way of doing this’ and so we went through this process. We created a products disposable, wears around your body, it’s completely discrete for diabetes patients and I think we have two real big advantages.
Obviously, they have more resources. We were completely and totally focused. In the time I’ve been Insulet now, 13 years, I’m on my now fifth CEO with [Medtronic’s] diabetes division so we got to be doing something right but it’s a weigh station at a lot of these big companies. As big as this space is I think the advantage all small companies have with an incredible amount of focus, you’re hell of a lot more efficient then.
We were able to create something that they really … they couldn’t even dream of it. I mean they spent a lot of time telling the world we were going to fail, they went out. We have five salespeople so they went out to the rest of the country, told people this was a size of a cantaloupe that you’re going to put on your body and it was all the typical stuff that a big company can do because they have resources. They just kept pounding away and pounding away and pounding away.
But we stayed on it. We were persistent about it. We created a product that we believe is by far best in the class and today we’re pushing $300 million in revenue."
Manny Villafaña on pricing pressures for medical device companies"
"It drives me crazy when I go to certain hospitals or certain countries and they say ‘no matter what you say we want half of that price,’ or ‘we wanted a third of the price’ and all that. No matter what you say. ‘Well, I’m selling it to you for a penny.’ ‘Well, I want it for a third of a penny.’ Come on, give me a break, will you?
We cannot continue to do that. I admire how some companies have taken all of their resources and have said ‘look, we’re going to develop this product and it’s going to be costly and everything and we can’t get away from that and we’re going to try to make a certain amount of profit.’
I’m always amazed at the success that Medtronic and others have had with percutaneous valves. I remember when we started with St. Jude Medical I sold a valve for 3 to 4 times what the top two valves in the world were at that time and I came along at double or quadruple the price depending on which of the valves were. I remember a doctor actually grabbing my arm like this. He said ‘let me show you where the door is young man.’
But we came back and hit them again and said ‘look, but this is going to be better and it’s going to eventually save cost because you’re not going to have to replace the valve in your patient.’
It takes a lot of effort but we just cannot walk away and say well, you can’t sell it because everybody is going to say it’s too expensive and all that. You can’t do that. If you do that we might as well go home and just close our doors and I don’t know.
I’m a champagne drinker not a beer drinker. It’s as simple as that."