IPEG 2021 - Technology Panel Discussion

For right now, um, I'm really excited to introduce, um, James Wall. He's gonna be, uh, introducing the rest of his speaking panel. Um, we've got this feature is entitled Technology, Entrepreneurship, and Commercial commercialization, and we've got, um, a really excellent panel here for you to talk about the subject. James, why don't you take it away? Thanks, Matt, and a big thanks to IPEG under Todd Ponsky's leadership for putting together this committee. I think you saw the brilliance of Todd in his talk speaking about how we have maybe too much information, but I would submit on the technology side, we may have the opposite problem, that we have too little. Particularly when we talk about pediatrics. I would go further and say that there is a shocking inequity in the development of devices, diagnostics, and digital health solutions for children and specifically for pediatric surgery, and I can evidence that with this information from the FDA which shows you approvals over the last decade. Overwhelmingly in the adult markets, some for adolescents, and a shockingly small amount for neonatal infants and children who make up 10%+ of our population. So with this, we, the IPEC leadership challenged us to think about how we could deliver to the membership. Both education and enablement of technology translation and development. I think as pediatric surgeons, we feel this on the front line, we're constantly using adult devices or adapting uh devices that were not indicated for children. But not all of us know how to take those ideas, to validate them, and to understand how they can be translated so that they can be used by other surgeons around the world. And so, today we've put together a panel of frontline surgeons and entrepreneurs who have done this. And I think that by learning from them, we can expand the ability of this society and this membership to contribute technologies. And follow realistic development plans to get those ideas to patient care. We're gonna start, uh, we've got a great session, we're gonna have uh a couple of quick talks by each of the panelists. We're gonna start with Doctor Rothenberg, who's gonna talk about developing a pediatric first technology. We're gonna go to Doctor Geiger who's gonna speak about seeing needs in pediatrics, but developing a device for adults first with an eye to downsizing. We're they're then gonna have Marcello and Valerie Ferro talk about how they built a business in dynamic compression from the ground up and have delivered solutions globally. Uh, and finally we're gonna have Doctor Tom Crummell talk to us about the unique challenges of trying to innovate in not only pediatric surgeon, but in orphan indication within pediatric surgery. So with that, I'm gonna hand it over to Doctor Rothenberg, and I look forward to a robust discussion after the quick, quick shots. Thanks, Steve. Thanks, James. Um, it's a great honor to be part of this, uh, panel. Uh, you're gonna hear some, uh, great insights, I think. Um, but I'm gonna give you my perspective on, um, the challenges of, of developing, uh, surgical tools specifically for the pediatric market, and I've sort of lived this experiment, um, over the last 10 years. Um, You know, and it, and it's, and it's difficult, um, and I think first you have to identify a need, and, and that's sort of what I did, uh, the, you know, working in, in pediatric and infant and neonatal MIS, it was clear to me that the instrumentation that we had just wasn't adequate. Um, and then, you know, I would go to the companies that were, um, making the MIS instrumentation, um, and talk to them about what I thought the need was, but, um, you know, I kept hitting roadblocks. Um, and so it, it sort of led to the development of, um, creating a separate company to try and develop what we need. The other thing is, is I think you need to confirm what that, that need is, um, and I'll talk a little bit about that, but that it's not just your perception. I mean, things that I think we might need as pediatric surgeons to do whatever, in my case, advanced MIS and neonates may not be what the majority of pediatric surgeons think. Um, and then if you're gonna do this, you have to have the right team. You have to have people who are, are, are not only engineers and concept thinkers, but you need to have people who know how to run a business, how do you do product development, how do you move it forward, um, and then if you are lucky enough to create what you need, how do you market it? How do you sell it? Um, and then there's a proof of concept, you know, in your mind, you might think this would be great, but can you really do it? And what's the feasibility of doing that? And that's not only of making it, but of making a financially, um, uh, reasonable instrument that, that people can use. And then there's funding, which is a huge issue, you know, to do this on a large scale requires a, a large amount of funding and how do you get that. And then how do you get surgeons to adopt this, um, and that's honestly been one of the biggest hurdles that I didn't think would be a hurdle at all. So, when we developed our pediatric instrument company, you know, we went small in terms of streamline. You know, I felt good about it because we had um strong leadership. We had two past presidents who had uh uh who had been involved with the world's 2nd largest surgical device company. But, you know, while that sounded great in some ways, that was, that was almost a little bit of a problem cause they were used to operating on a huge scale. Um, and not necessarily the small market that or small scale we were talking about. Um, we had people who were involved in marketing success and we had incredible engineering expertise. In our case, we had the engineers who had initially developed the ligature technology and we were looking at ceiling technology, um, and they had created the patents for this and, and so knew the energy space incredibly well. And then my thought was, I wanted an instrument company that collaborated with surgeons. I was tired of companies bringing me instruments that they had developed with very little surgical input, um, that suddenly someone said use, and I'd look at it and say there's no way that works in my space or or appropriate for my patients. Um, you know, the fun part was once we got the team together, we had weekly design meetings. I got to say what I thought the instruments should do and what they should look like. Not that I could develop them, but, you know, like in the case of the sealer, it was this needed to look like a 3 millimeter Maryland. It needed to work, uh, like a 3 millimeter Maryland. And then in terms of, you know, not just being my opinion, I did a survey, we did a survey at the IPEC meeting in 2010. And got about, you know, 20 of the, uh, world leaders in pediatric surgery and said, what are the minimally invasive devices? What are the two devices you think you need? And every surgeon in that room came up with the same two devices, a 3 millimeter sealer and a, and a 5 millimeter stapler. Um, and so that sort of validated what, what I had been thinking. And then we had to do, after development, we had to do animal tests, and this is quite arduous. We were able to actually, you know, piggyback onto some already FDA approved uh devices, but we did, it's quite time consuming and quite expensive, and you need to be ready for that. And this just shows the sort of milestones that we went through, but basically over a period of 4 years, we were able to go from seed money and concept to launching um both the first sealer and 1st 5 millimeter stapler. Um, and of course, these are the products that we developed. And, and what's important to note here is these are the only two products, um, that have pediatric designation and FDA approval. Um, so to me, these were, these were like game changers, right? Um, they, it should have totally changed what we did. I thought this stuff would just fly off the shelf. Um, but here are the issues, you know, it's harder and more expensive than you think to downsize instruments. So these instruments cost significantly more to make than the, the adult counterparts. Um, yeah, and so that, that is a bit of a hindrance, cause everybody always says, well, why does your instrument cost more than a ligature or a harmonic scalpel, or than the 12 millimeter stapler? Well, because it's harder to make, but you, you have to figure in those costs and, and what. The acceptance in the market will be. Um, often our market is small market and low volume procedures. Um, and now we have to deal with something we didn't anticipate 10 years ago. It's value added committees and hospital contracts. So your hospital has a huge contract with Ethicon, and if in order to bring in other products, it's very difficult. And then how do you, what, how do you have a sales force? How do you get to the pediatric surgeons to sell this? Well, we thought because there are a limited number of children's hospitals, we could do it with a small sales force, but that's certainly been a challenge. And then in pediatric surgery, you have to have a worldwide market. But how do you get there? How do you deliver to the world? And that's an extreme, um, uh, challenging thing as well. And then honestly, the thing I did not anticipate, um, I don't think any of us is it's hard to drive surgeon adoption. Honestly, there's apathy. Well, I've been using adult instruments all this time, they're good enough. Um, I don't need anything better. There's resistance to change. Uh, many pediatric surgeons don't really know how to advocate for what they need or want for their patients, and these are all real issues that affect the ability of a com a small, a com a pediatric specific instrument company, uh, to be successful and, and reach, uh, a point where, um, you're economically viable and can move on. So with that, I will, uh, turn it back to James. Thanks, Steve. Um, that's wonderfully insightful and, and I'll ask Jim to put his slides up, uh, as we transition here. Um, we thank you for your contribution. I mean, these are needed technologies for, for our patient population. Um, but I don't want, and, and as we get into the discussion following, uh, these presentations, I really wanna dig in on the challenges cause they're real, and things that we as a society really need to think about helping to overcome. So Jim, why don't you talk to us about your approach, uh, which is really in contrast to Steve, starting in the adult market and working your way back to pediatrics. So yeah, first off, I just wanted to say a couple of things. One, I know there would have been a big standing ovation for Todd's talk, and we didn't get to share that, but that was, that was awesome and really inspiring as always. And yeah, I wish we were all there to celebrate that great presentation. And, um, James, I want to thank you for putting this together. It's a great group of people and I've followed all, all of their work and, and I have great respect for what they've accomplished, and I'll, I'll follow on after Steve. I think, uh, you know what Steve has done and what his company has done is really remarkable. I mean, getting these, these devices approved with pediatric specific indications and. Uh, uh, both of us, I think, have had our learnings on the commercialization side. The, the innovation side has its challenges for sure, but the commercialization side is, uh, really where, um, the challenges get really steep. But with FlexTex, um, you know, I was one of the, you know, nuts of us that early in robotic surgery when the cardiac guys wouldn't use the robot, we got on the robot, played with it, we thought it was amazing, but. We saw all sorts of limitations and problems with it for pediatric surgery patients, so that sort of um inspiration though inspired me to work um with our engineering team here at Michigan and develop what really what we term advanced laparoscopy. So building on traditional straight sticks to have a platform of instruments that give you robotic-like functionality, which is really. Articulation and intuitive control, those are kind of the two things and that we bring to certain instruments that really can bring benefit, but keeping the surgeon at the bedside, um, making these low-cost, and, uh, getting around some of the downsides of the robotic devices, you know, lack of haptic feedback, some of the other disadvantages. So that was the, you know, the path that um we started on. This is just a cute little video to show that, you know, from an engineering standpoint, we achieved that. This is the da Vinci robot in the bottom view and Flex decks in the top doing a running suture with the, without the help of an additional instrument. And this is uh one of our leading robotic surgeons actually doing the robot here and, and a, and a flex deck surgeon, and you can see the efficiency that we can achieve. So, uh, pretty cool, but like Steve, we expected, and, you know, when we went to national meetings, we had 10 deep in our booth, we thought these things are going to fly off the shelves, but it doesn't. Never works that way, I don't think in medical device sales, but it's a, it's a tough, uh, it's a tough learning, but we have, um, achieved, you know, not, not where we wanted to from a revenue standpoint and I'll maybe get into a little bit of the details here, but we've done over 3000 procedures worldwide across multiple specialties. You can see that we primarily have been used by adult surgeons. There have been some pediatric surgeons that have used our device. Our initial device, the needle driver, goes through an 8 millimeter port, so you know we like our small incisions. So we started up with. Larger size and some of that is, as Steve hinted at, when you go down in small sizes your engineering tolerances get tighter and in the case of a needle driver, you have to achieve a certain amount of force to hold the needle and that requires, you know, certain. Cabling certain joints to withstand that force. So from a risk standpoint to try to go to the market with a 5 or even a or for sure a 3 was just going to be too much risk. So given that Intuitive had 8 millimeter instruments, we went with instruments that went down an 8 millimeter port which then limited our pediatric market for sure. But we did get, um, you know, we've gotten quite a few broad experience in the market which taught us a lot of things and it validated our core technology. We saw that we could bring some increased suturing and precision. So even though the HPB, the palebiary group, there is a small group, uh, we have two of the leading pancreatic surgeons in the world that are using our device for the reconstruction after Whipple procedure. So it really encouraged us, and we also had some surgeons go from doing, say, open partial nephrectomies to doing laparoscopic because they had. Access to our device, so we showed that we could be an enabling technology. Unfortunately, our price point was too high, we're a single instrument, some other things, we also, you know, ran into some, some barriers, um, and my plan was always to get us down, you know, get down to at least 5 millimeter and maybe even smaller to meet the needs because we have the same needs for this sort of instrumentation and pediatric surgery. And so much aligned with what Steve said, I think you know if you look at starting with an adult market, the pros are that it's a much larger market size. So there's many more opportunities for startup funding, for making a business case to funders that this is a great opportunity, you know, and I think it can make it easier to raise. Money, it does decrease these technical and engineering risks that just by going down in size you run out of real estate to run cables through all that stuff, so it really helps from that standpoint and so it decreases your risk but also decreases your time to market, things like that, all very important things when you're You know, in, in startup funding, it's like you fill an hourglass up at the top and the sand's running down, and you got to get to the next key funding point, which means put more sand in the top before it runs out. And uh it's a new type of stress that any of us entrepreneurs have had to live with that keeps you up at night, uh, much more than the surgical stress that we trained our whole lives to deal with, but Anyway, um, I think, you know, Steve did run into limitations in the pediatric surgery market, which are the same, I think, but in general, pediatric surgeons tend to be early adopters. I think what we're both seeing. There is a lot of apathy, um, and I think some of this comes from the employed physician model, I think. I think that when, I don't know, maybe people are just less competitive, but like those of us who are on the, on this panel, you know, we were, somebody brought us something new, we're always going to try it once, you know. Sure, I'll give that a try, but it's, um, it's really hard. And then of course the VAT committees getting, you still need. A surgeon champion, but then you still have to go through a process even now to trial an instrument. So there's just a lot more barriers to sales and then having a sales force is extremely expensive. You burn through a lot of cash. So getting in the market and that proof is something that I think we're going to have to work on for pediatric devices in general to increase success. Um, and you know, if I go out to my current investors or to new money, if I want to address the pediatric market, I've got to make a business case for that. I've got to show them that, um, OK, we're going to sell this many devices, you know, these are projections, um, this is what it's going to cost to build it. So, you know, and it's now it's, you know, it's not no longer your decision, it's a, it's a board's decision, it's an investor's decision, and you have to really justify it. Um, and we're working towards, you know, now we are, you know, right now in development of a suite of 5 millimeter instruments. Uh, because there's many reasons to get to that size. So anyway, um, and then I think the other thing is that gets sort of lost here, it's kind of an extreme market thing like looking at developing things for space for extreme conditions. In some ways, developing a device for a neonatal surgery, say for example, those things will secondarily find, and I think, you know, Steve is finding this with his company, will find application for adult surgeons. And so that sort of pushing to develop something for this really unique population is really positive, and we have to keep driving and convince people that it's worthwhile to adopt, you know, to invest in these markets. But yeah, I think we have a lot of parallels, but it's It's, uh, I think still a lot that can be accomplished. You've got to keep fighting hard. It takes a lot of perseverance, and, you know, when people tell you it's never going to happen, you got to just keep plodding ahead. But I look forward to the rest of the discussions with that's just a little bit of our story of Flextex. Thank you, Jim. That's a wonderfully insightful, and I think You know, the, the technical challenges are, are really not to be overlooked as we think about, um, scaling down technologies and making different size technologies and in the case of implants, how they grow with children. I mean these are all issues that, that we consistently see, um, but they're also challenges that are worth facing as we can really transform lifetimes, uh, and not focus on, on, you know, where most of the industry is on, on end of life. So I'd like to transition over to Marcello and Valerie Pero, so. Marcello and Valerie, I really wanted to bring a contrast. I think what Steve and and Jim have shared is, is frankly very US centric. It's uh, you know, developing technologies for larger markets, bringing in venture level investing. I think what Marcello and Valerie are gonna share with us is really building a technology for globally from the ground up and really excited to hear their story of the development of dynamic cactus bracing. Well, thank you very much. It's uh such a privilege to share this panel with you, uh, guys, and we, you, all of you are mentors for us and it's also and we are very, very privileged of being here. Thank you. So, um, I was, we were asked to talk about building a business around chess wall deformities from the ground up, and of course, I took the easiest part, and I'm, that's why I'm going to talk about why, the motivation, and I will leave Valerie, the, the worst part. The hardest one is the implementation, how, how to do it. So, first, why? Why the FMF dynamic compressor system? Well, around the year 2000, we were, I was working in a national public hospital, very busy, no room in the operating room for Carinatum patients. We had our excavatum surgeries, but we had nothing to offer to the Carinatum patients. And we learned that the chest wall was elastic. There were no publications, but we thought that by compressing the chest we could fix them. We had very good ideas with my partner Dr. Friday, so our motivation was to avoid using the operating room and offer something, a non-surgical solution to our pectus carinatum patients. That's how we started. We have very good ideas. But you didn't find locally nobody that would help us, and it was, you don't know, we were doctors who were working, we're very busy, and we know, we know nothing about things, how to build things or market things. So we start to try to find a company interested in developing our ideas. So at that time, no Zoom, so we had to travel. We traveled several times and all what we listened was, no, no, no, there's no market, we don't know what you're talking about. There's nothing published, nothing published. I mean, this won't work, there's not enough patients, so, OK, we went back home and we said, OK, we have to do it by our own. So, we started with our, our first products and to make a long story short, we came up with the FMF dynamic compressor system. And now today, 20 years later, there's a lot of international publications validating our experience, and we are so happy with this, with this treatment. Our patients get all cured. The bad part of this is that we barely get patients to the operating room now. We remember, we are surgeons and we like to do surgeries, and this, this system is very efficient. So, so, but we are very happy with it. Now, why the, why chest implants? Why do you block chest wall implants? OK. Same situation. We have a very busy practice here in Buenos Aires. We have a lot of Pectus patients and we have a lot of bowel removals, and we had bleeding around the year 2010. We were worried because we were having bleedings. Once we had a severe bleeding. We thought we were the only ones because we were looking for the literature and there was nothing. So, so we, we ran the survey among 100 members, chess world members around the world. They were experts and to our surprise, it happened that the bleeding, severe bleeding from the bar tunnel was experienced at least one time by 28% of the surgeons. And even deaths were reported by 12% of them, so we said, oh, this was a real problem. We're not alone. We have to do something about this. And our hypothesis was, and our motivation was to prevent surgical complications, severe bleeding. In addition, we didn't want any more complications. We didn't want any more bleeding during the pectus bowel removal procedure. Our hypothesis was that the bars that we were using had indentations and those would act as a knife. Also, when we bended the bars, all those scratches would be points of, of adhesions and probably bleeding. So we had that idea and also we wanted some bridges. Now, because we, we didn't want them to displace. So with all these good ideas, what we want is we knocked the door of the, you know, the manufacturers of the, of the. Of the implants, and at that time, they couldn't give us an answer. So, so they couldn't help us. And so we tried to bring implants from other parts of the world. It was impossible to do that in Argentina for regulatory issues. So, again, we said, OK, let's do it ourselves. We were waiting there, but one day, we had a very bad bleeding again, and we said, OK, this is it. We don't want to, I mean, it's gonna be hard, but this time we have a company, so we have a company, let's. and do it. It was hard. It was difficult, but we came up with this. The U-block chess wall system that is a blocking system with bridges, you know, it's made of, it can be made of steel or titanium. It's custom made, prevent. It's mirror polished, no indentations, blocked with bridges, and you can make multiple configurations, including crossbars that are becoming very popular now. We are using more and more crossbars. We really like these implants. Here you can see how we configure them. And we just recently published our experience in 130 patients. We love these implants. We really enjoy using them, and this is exactly what we wanted, and actually we didn't have any more bleeding, zero bleeding, and zero displacement since we started to use them. So now, when you get into innovation, you may have sometimes rejection, you may have indifference or failure, and you have two paths. If you use a rejection as an excuse to do nothing or an indifference to victimize yourself or failure to paralyze yourself, you will give up and surrender. But what about if you use rejection as an opportunity, indifference to empower you, and, and failure to mobilize you? In this case, you will stand up and fight. This is the path that we chose until today. So to end this concept, starting a business was never part of our plans, but we had nothing, no other option. But Saying that motivation and a good product are not enough to start a business. So that's why I will leave Valerie to talk about how the hardest part, the implementation. Thank you. Well, as Marcelo has just has just explained, we, we were not in our life thinking about starting a business, so, um, but there were no options, or really there were two options. One, was to give up and surrender, and the other one was to stand up and fight, and I decided that I will accept the challenge. So, Why? Why I accepted the challenge? Because I knew that the product was an excellent product. Uh, it was already successful in the local market. It was clinically proved to be efficient. Um, I will choose, I will change this here, so, that's OK. Efficient. Patients were happy and doctors were requesting the product from abroad, from other countries. And the main thing is that when you start, as also Steve said, when you love a product and you believe it's the best in the market, you, you cannot stop, no? So, you have to study also the market point. You have to study, sorry, the market and you have to understand because this will be a global market, it will be different. There are different languages, countries, different cultures, diverse regulatory processes, and multiple end users. We are dealing with patients, physicians, institutions, insurance companies, government also, and what also you need to know is what the customer needs. Um You have to learn because you have to be prepared for this new, this new challenge. You have to learn and in, in my case, it was Pus Carinatum, so I have to learn, I'm an accountant, so I have to learn what is a medical knowledge, it's difficult. You, you need to learn about the products because when you are with a doctor that know everything, you need to know about the product. And I learned also about international trade because it was, I was not doing that. I was with another job, so I had to, to learn, how So, it's very, very important regulation of medical devices, you know, FDA and all that, um, agents that are always behind on medical devices. So, when you start a company, it's very important that you state your core ide ideology and in PampaMed, when we started, we have our goals that are product excellence, outstanding service, and also constant innovation. And this will lead us, what is our purpose. Uh our purpose in PamPAMed is to work and provide excellent services and products to patients, institutions, and professionals. But I will never do this alone. It's impossible to do it alone as, it has been already explained. You need a team. You need a team of experts in medical devices that they will know all the regulatory process. You need to, to gather all these, these people from different customs agents, for warders, you have to talk with suppliers, vendors. And also, it's very important, our engineers, accountants, bioengineers, and also trade agents, and obviously a sales force that will help you to market the product. And then, OK, you have to make it work. Make it work if you have a business, that was a little bit difficult for me because I have Marcelo who is a surgeon and he wants to give everything. And giving everything is not what a, a business has. You have, the business should be profitable. So you have to be aware of your cost, your margin, you have to know very well everything, the numbers, and also the business must grow. And what we learned is the most valuable asset is our customers, the customer. And so we decided to do what is a very common in marketing, what is called cross-selling, is adding lines of products for them, for our customers that they are actually uh buying from us, they are receiving our products and that's why we added our own brands that you, Marcelo already presented the Ublog which is the chest wall implants. And also, the brand new ScanMed is the 3D external scanners. And we also became importer and distributors of very well brands and and medical products like the vacuum belt, which is for the Pectus excavatum. Also Medrum, which is the Creon andalgesia devices and last but not least, because they are the best for us, that's just right and Boulder, you know, that the specialized pediatric surgical devices. And then, well, after 11 years of working and growing, um, what we say in PampaMed that we love when customers get our products, but our aim is to gain their loyalty. That is very important for us. So this is just a small presentation and thank you for inviting us. That's wonderful and, and congratulations on, on building a a successful business, really from the ground up, being, having global impact. Uh, and then, and then I think the lesson of using that trusted brand or as you said, your customer relationship to be able to expand is a very powerful platform, um, and, and something that many of us can learn from. So I'm gonna ask uh Tom Crummel to to share his screen next. And I think we've seen in the 1st 3 talks, uh, technologies that have all generally, Gone after reasonably large markets within the small market of pediatric surgery, if that makes sense, you know. But Tom's gonna talk to us about how do you even consider tackling an orphan indication of a few 1000 patients a year. Tom. Yeah. Well, thanks and, and kudos to the society for forming the committee and doing this session. Thanks to President Ponsky for his leadership, to the panelists who have told remarkable stories, uh, uh, and to my colleague and dear friend James. Uh, uh, we've been partners in crime on a number of things. I, I, I wanna start with what I'm gonna call a provocative reality, uh, that everyone needs to understand, and that is that no drug. No compound and no device will ever, ever treat a single patient, unless it's wrapped in what I'll call an investable business. Can't be a break-even business. Eventually your investors are gonna want their money back. And I think that these kinds of stories of the surgical pathfinders are really like our original case reports of how we fixed an esophageal atresia, and we develop over time some more generalizable knowledge that I help that I think will help uh those that come after us. There's no question that uh the effort is substantial, and frankly, it can be a huge pain in the ass. But in the end, who's going to care more about our patients uh that we serve and that their families trust to us than us, and who else is able to do this? So, indeed we tried to tackle the problem of short bowel syndrome, a rare disease well known to everyone. I, I won't belabor the point, but I think the, the critical piece is that existing short bowel treatments are non-curative. They have significant side effects and are very expensive. And so while the numbers are small, the dollars are big. Our existing treatments are supportive with total perennial nutrition. How many of you know that that costs almost $225,000 a year, and is fraught with complications of liver failure, sepsis, uh metabolic problems, line failures, all of those things. Then we throw on top pharmacologic therapy that works about 20% of the time to double the cost, and for complications, we add even more uh uh cost and more difficulty. So the total might surprise you, but the total cost of short bowel syndrome care is $3.2 billion in the US. Uh, that is both adult and children, but as children surgeons, we chose to focus on, and there are actually real reasons why you might want to do that. And this represents 20 years of, of uh uh hardcore research by our colleague and friend James Dunn, using the principles of distraction. We know that mechanical forces create the growth of new tissue. The pregnant uh uh mother's abdominal wall grows, we know that we can lengthen bone with a Lizarroth technique, and so James devised a very clever intraluminal spring, which goes in in a compressed fashion, and then when it's anchored, that length of intestine is expanded by 2 to 3 times in a pretty short time period, 10 to 21 days. Most importantly, the science is rock solid. So, 20 publications over 15 years, mechanical lengthening, growth factor, growth factor expression, sustainability of the length, and the luminal design. We know that that's important to digest and absorb nutrients. It is repetitive and eventually is passed in the stool. You, you've heard several uh uh conversations, uh, uh, and I won't belabor it, but in the end, you have to have something that protects the investment of your investors, and the good news is, uh, uh, the broader your claim, the better, uh, uh, in this case, uh, uh, James and his colleagues, uh, then at UCLA, uh, uh, uh, uh. Put this together as an expandable mechanical distention for hollow organ growth. So this could be used in other hollow organs, and as you might imagine, we've been busy working on delivery mechanisms, force modeling, endoscopic fixation, and maybe a drug delivery model as well. Uh, all those are fine, but in the end, you have to focus, focus, focus, and, and critically, you've seen a couple of Gantt charts, timelines matter, but most importantly, how you're gonna spend your money matters, because in the end, this is is the way you create what we like to call value inflection points. When you need more money, there is reason to believe from your existing and new investors that you have de-risked, solved problems, and are worthy of additional trust. Team experience matters. Uh, we like to say we have 100 years of combined experience with early, uh, stage medical devices. It's good to know how to do this stuff. You've heard a lot about team members, uh, and whether it's in R&D, uh, uh, in, uh, clinical and regulatory, and, and my good friend Mark Weeks is one of the most experienced, uh, uh, attorneys in the world in early-stage med tech, uh, development, and, and, and all those guys matter. Uh, we, we, we have, uh, uh, an additional group of world leaders in short bowel syndrome, including Michael and, and Mark, well known, uh, James Wall and Paul, uh, uh, and then outside advisors. All of this matters to create the reason for your investors to believe in the dream. Milestones also matter, so we've raised money from venture partners, we secured a license, we have HUD designation. All of these things are checkmarks as you think about the tricky business of any of these stories, but even trickier when you're, you're tackling an orphan device. Multiple meetings at the FDA, uh, uh, uh, expanding the intellect. Intellectual property, uh, most importantly, and, and in membership in the, uh, Fogerty Institute, uh, uh, which is a place where we can, um, uh, work, uh, uh, unfettered. In, in summary, uh, short bowel syndrome is a huge unmet clinical need. Uh, intestinal elongation mechanism is well established. We believe we can be quick to first in human, uh, uh. Via the HDE pathway, we have a, uh, uh, a reliable, substantial team and have been able to raise non-diutive SBIR funding through NSF and, and potentially through the NIH and, and all of these things, I'd say are features of how you might approach the problem, not just of pediatric device development, but of an orphan device. Uh, let me turn it back to you, James. Thanks, Tom. So, with that, we'll go into uh a panel discussion, and we're gonna go for about 20 minutes here. We're gonna make up some time later in the IPEG program uh through breaks. So when we think about developing technologies across the board at pediatrics adult, we really think of it in three phases. We think of identification, Invention and then implementation. Uh, and I think what I'd like to hear from the panel is a, a little bit more insights on each of those phases. And I'm gonna go to Steve first, and, and Steve, you really talked a lot about The identification phase where you, you thought there was a need, but you didn't believe just yourself. And, and it sounds, you, you know, you went out to others. So talk to me about, you know, we understand it's gonna take 8 to 10 years to develop a medical device. How did you get from, I think this is a problem, to, I'm willing to commit my time, reputation, and frankly, a huge part of your life to developing this over 10 years. So it was, you know, one, obviously, I think you need to be driven by a, a personal need or mission, you know, and so mine was, I was trying to do specifically, you know, thoracoscopic lobectomies in, in babies. And all the devices I had were too, too large, and I was fortunate enough to You know, to be on some of the physician boards for some of the big companies, and I would go and talk to them about this, and everybody would say, yeah, that's, that's right. I talked to other pediatric surgeons, they'd say that's right. But, but, and all the companies said, yeah, we should do this, we're gonna do it, but they never did it. And I, I later learned that the reason they never did it is for them to undertake a new device, it had to be a billion dollar market. It, it was incredible to me that, you know, like, uh, you know, a quarter of a billion dollars wouldn't be OK, you know, it had to be a billion dollar market and so, honestly, I had just about given up and, and the thing that Pushed it was that, you know, 10 years ago, a group of people who at that time had worked for Covidian Energy and had heard me talk at their meetings and, you know, say what I needed, approached me. Um, you know, and it was a couple of the past CEOs. It was the engineers who developed the ligature and they said, you know, we've been listening to you and we think we can do this. Um, and we want to see one, if we, if we can do it. Is there really a market? Um, and so part of our mission initially was, we need to make sure that it, it wasn't just me that was thinking this. And, and part of the reason I, I was driven is, you know, everybody said, well, you can do it, but I can't do it. And And I never believed that. I mean, I, I don't believe that I own a skill set that nobody else has. You and others have proven it, but, but I did believe that I probably had more um stubbornness, and I was willing to push the, the window harder with devices that, that I really had to figure out workarounds. And I thought, OK, if we could make devices that make what you're doing, what I'm doing easier. For the, for most pediatric MIS surgeons, then the adoption will be much greater. If they're not, if they're no longer fighting to figure out how do I get these large, large jaws into that small chest, when they finally have an instrument that's the right size, then they're gonna see that this operation really isn't that difficult, and they're gonna want to do it. And so it's when this group of 6 individuals came to me and said, we think we can do this. What do you think? And I just jumped all on board. Not, I was so excited that someone wanted to make what I wanted that I didn't even really think about the other implications. I just said, OK, who do I write the check to? Um, and then what everybody should know is that I've written multiple checks. Um, and that's OK. And, and the company has not, you know, become profitable yet. Um, and we've had to go through multiple series of investment rounds and, and it's, it's a long, long journey. I wake up every morning knowing that I have the instruments I always wanted and I get to use them every day. And so that to me was the justification. Thanks, Steve. Um, Valerie, I wanna go to you next as we, as we think about identification. So, again, you, you've developed a unique customer base and you're beginning to expand. How do you think about go, no go decisions on a new product? I, I'm guessing Marcello comes to you with a lot of ideas on a regular basis. How do you make that decision, no, Marcello, this one's not good, or yes, this is the one that, that our customers are, are gonna, it's gonna be successful? Well, unlike other businesses, uh, we started with a small company and a small team. Although it was a team, it was small. So, uh, when you don't have a, a huge place where you can have hundreds of products, hundreds of sales force, you have to be very careful what you choose, very careful, why? Because uh if you don't make a good decision, every, all the revenues will go, get lost. So, you have to fix in some of the the products that will fit our customers, our loyal customers that they like. That's why it's very important to have a partner as Marcelo. Why? Because he knows what the doctors want, what they need. And sometimes, you know, we, we are taking some brands that are not really the best one in our line regarding revenues. But we know that this will help our doctors to start and to, uh, for example, using other technology or other products that, for example, some other competitors do not want to bring because there is not a huge market. We try to, to focus in niche, um, what do we say niche products that will, will help and we We are a small business and we are ourselves and the most important thing as we don't have any investors and no sponsors. We can do whatever we want and need and that is very important. We, we, we always are happy what we are doing and growing slowly as the market is asking us. That's great. And, and maybe Marcello, can you share maybe an idea that you had to. Not pursue because it didn't make commercial sense, um, or one that you still want to, but you haven't quite figured it out yet. Well, there, there are many of those and you know that they don't let me play so much as much as I can, but you know, knowing that I, I may put in risk the company, now I learned. I have to be very wise before I come. So what I do, this is my secret. There are many things I do that Valerie doesn't know. And I don't bring them to the business until I am sure that it's a good business. Now I learned that because I, I, what happened before, I would come with a lot of ideas and she would get stressed because our brains are very different, different. I would do anything for free and I will give everything for free, but she's a businesswoman. She needs revenue. So when I come with some ideas that are like crazy, she will, she will get stressed because she doesn't want to tell me no. So what I do, I have a little team of people that we are, we are working on several projects and then before taking anything to the commercial, we will try, we will make sure. That it is not a crazy idea, if it helps. But there are a lot of ideas that are, that are not going through, and usually what's very good now, because sometimes you have to take the disadvantages as an advantage. We are in Argentina, it's far away from the, from the rest of the world, you know, it's difficult from here, but at the same time, Because we are here, we can be importers, and we can decide to import excellent products like Just Right or Boulder, and you know, and, and people love those because nobody else maybe will bring them because the market is small, but we love to bring them, so we can take advantage of those things and become importers and exporters. That will make us a balance that at the end of the month will help us to, to make the company work. More or less, that would be the concept. Thank you, thank you for sharing. So, you know, we'll close off the identification phase there and I will submit to the membership, I think it's an incredibly important skill set to understand how to identify where there's opportunity and something that we're hoping to offer educational sessions and enablement sessions in the future through IPEG. So Jim, I wanna go to you now to think about the invention phase. Um, so you've identified a gap or an opportunity, in, in your case, robotic surgery offering advantages but being expensive and bulky. Um, how did you go about invention and more specifically prototyping to get to something you knew could solve this problem? Yeah, so in our experience, um, I mean, I'm fortunate, like, you know, a number of you to be in an environment where there's an amazing engineering school and a lot of activity going on and people that are interested in solving problems. So, you know, I went to, um, you know, a young mechanical engineering faculty that had arrived here that, you know, I asked around a few people. People eventually sent me to him that he had interest in these sort of, um, potentially developing this sort of device. And so he and I together worked on a vision to solve the, the need, which was to give, you know, an articulating, intuitively controlled instrument that would be low cost, would keep the surgeon at the bedside, uh, and that's really what we set out on. Now, it took, um, it was in 2007, and our company officially formed in 2014, so it took, uh, seven years to actually solve, to come up with the, uh. Uh, you know, the technology, there was, uh, 3 fundamental patents initially that came out of, uh, the University of Michigan work. So that's, uh, you know, it's a process, a lot of students involved, um, other faculty members, uh, and many different levels of prototyping. So you start out, you know, there's all different types of prototyping. I mean you can start out with, you know, basic cardboard foam models to kind of. Come up with concepts, which is really helpful and then eventually in our case we had to solve this issue of intuitive control, so that was really uh took us a while to make a big leap um to have that your, the hand controlling the instrument was actually now indirectly connected to the end of the instrument and uh there was a whole bunch of series of different prototypes that led us to the final. Uh, development really of, or solving that problem, but, uh, you know, it's an, it's an iterative process, takes lots of, uh, creative work, but it's a really, that's a really fun process and although difficult, uh, still I think it's a lot easier than the commercialization phases which I learned later, but, um, but yeah, that's, that's pretty much how I was able to do it. Yeah, well, thank you. So. I, I, I'll also submit among these three stages of, of development, if you've gotten the identification right and you know what surgeons or other providers need, invention comes relatively naturally, it's not easy, it takes prototyping and engineering. Um, so let's move on to implementation, which hugely involves commercialization cause I think, I, I, I agree with everyone on the panel who said it. Um, commercialization is the trickiest part, and as Doctor Crummell eloquently said, it is absolutely necessary. There is no way to get a device around the world without packaging it in a box, having a 1-800 number, as Dr. Fogarty likes to say, and having a quality system behind it, um, that guarantees a good product in your hands, having liability behind it, etc. So, Tom, why don't we start with you? Um, when you thought about joining forces with Doctor Dunn, he certainly had the incredible scientific background, but it was not clear that there would be a commercial opportunity here. You all thought a little bit about analogies to orphan drug pricing for the benefit you provide. So how did you think about The impact, the health economic impact of your solution. Compared to the commercial value and how you might get paid for it. Yeah, so, so we're on shaky ground here, and the, and the, the story hasn't yet been written, but everyone is familiar with the $100,000 300,000 dollars, $800,000 drug that cures a rare malignancy, uh, uh, and in the end, if the value that's produced is worth it, eventually payers may come around to it. But that's um, that's a big bet, and, and when we size up any opportunity, I, I like to think about what's the white hot risk. Making a spring ain't a problem. Putting a spring in the intestine ain't a problem. The intestine elongating is not a problem, it's gonna elongate. Uh, I, I, but, but the risk is, even when we talk to medical directors at Medicaid or at Aetna, and they say, sure, we know we're paying $225,000 a year, ad infinitum, cause you guys are so good at keeping these kids alive. Would they pay $150,000 for for a 10 cent spring? And the, the key there is, what are you buying? And, and if you're buying the biologic effect. And the solution to the problem, then the cogs, the, you know, what's it cost to get this thing to them, shouldn't matter because what you're really buying is a, a, a, a biologic effect. I once heard the medical director for technology at Kaiser. who think a lot about this, she said, I, I don't wanna buy a pill. I don't wanna buy a, a, a fundoplication. I don't wanna buy an endoscopy. I wanna buy a normal esophageal PH. Tell me how I get there, and I'll make a decision about what we use in the Kaiser system. So, taking that lesson from, shit, I, I learned that maybe 10 years ago, and then as James moved from UCLA to Stanford, it, it seemed to me like there was, you know, the investable case, the, the, the reason to believe, uh, but, but we have by no means sort of settled the issue. I, I do think that I, that your investors matter, uh, and if KKR is investing, they're gonna be right. In your butt on a weekly basis about where the sales, and so you wanna pick and choose patient investors, especially on the peed side who are what I, I will, you know, are either angels or um impact investors who care not just about the uh uh our rate of return, but also about the non-taxable, non-quantifiable, uh, improvement in the health of the next generation of children. Thanks, Tom. So, uh, we're gonna touch on one more topic, it's kind of the end of implementation, and I wanna hear, um, I want to hear feedback from both Steve and, and Jim and, and, and the, the whole panel on the idea of how you get that last mile of true value committees and, and really, the committee is simply a, a roadblock of proving your value in the last mile. Before we have that final conversation, which we're gonna wrap up in just a few minutes, I will say that implementation of course is a much broader than just uh selling your device, there's regulatory, there's IP. Um, there's a lot of things to think about, and so, again, as a committee, we're hoping to bring that in educational modules to the membership for those who are interested, uh, and more to come on that soon. So let's finish up the conversation with that last mile. Steve and Jim, I know these are, this is something that you've, you've come up against, so Steve, maybe you. I want to take, uh, start here. How do you empower surgeons to be advocates, whether it's the value committee or whoever is the person deciding, administration, etc. Whether or not they can use a new technology, justifying that it may be a little bit more expensive, but it provides real benefit to their patients. Sure. Uh, that's a great question and it's something I still struggle with. You know, my, my way of initially doing that was just through example. You know, what I did is I took the devices and I brought them to workshops. I created videos. I talked to surgeons to show them. The device and then tried to be with them in cases using the devices. We brought surgeons in for um live surgical workshops where they got to watch the surgery and see the devices used. I would go places to give talks and, and be involved in surgery. Uh, we ran labs and courses and, and all of that had some impact, but often there was just a lack of follow-up with the surgeons. You know, we got FDA, um, FDA approval and that we're the only devices that are actually um certified for use in pediatrics in terms of energy and stapling. I thought that would be a big, huge deal because now if you have an energy in your injury in a baby or a small child. You know, and you're using a device that doesn't have the same FDA approval that we do, to me, that's a lawsuit, right? You know, I thought that would be it. And then now we're trying to help surgeons um. You know, give, give them basically a packet. How do you go to the value-added committee and say, you know, this device, 1 is safer, 2, it makes me faster, you know, I'm more efficient in surgery, so we cut down on the OR time. Uh, these are the financial benefits for the hospital. And then I think there's a branding of saying that, that, you know, we're a children's hospital or children's center and we use devices that are made just for kids because it's better and safer. I think you need to do all those things, but even with all of that, um, adoption is, is still very difficult. Thanks, Steve. Um, And I think, uh, apologies to the rest of the panel. I think we could discuss value creation and, and how to get to that last mile for, you know, two more hours. Um, but we're up against time, so I'm gonna end the session. I wanna thank the panelists, uh, for really contributing an immense, um, experience and knowledge around the front line of technology development. I think it is critical to our patient population. That at least a subset of us in IPEG really understand this process and are willing to commit to great solutions. So with that, I'll hand it back over uh to Matt, and thank you very much, Matt for having this session. Thank you. Uh, you guys, this is really a phenomenal, um, service to our membership, and, um, I know this is a tremendous, um, value to them. I think people really appreciate you guys being on and sharing your thoughts. I, I think also it's worth touching on what James said earlier, which is I think this is um maybe just the tip of the iceberg and more about this should be done as part of our calendar of content committee and so it would be nice to sort of fold this in as part of our ongoing educational outreach to the um to the organization and so we'll work to sort of try to bring that to people um in the in the coming months to year.