It’s always encouraging to hear about medtech entrepreneurs finding success. But have you ever wondered how they got there? The road, as you’d assume, is not straight, as nearly 100 FDA participants heard from successful entrepreneurs at an engaging, educational panel titled “Life of a Startup.”
Presented by Fogarty Innovation and sponsored and hosted by the FDA’s Center for Devices and Radiological Health (CDRH) Innovation Team, it featured Denise Zarins and Andrew Cleeland of Fogarty Innovation, who are veterans of a number of successful medical device startups; and Fogarty graduate Jonathan (Jon) Coe, co-founder and CEO of Prescient Surgical. The forum was part of a long-standing partnership between the regulatory agency and our organization.
The event was moderated by Danielle Fau, advisor for Technology and Innovation for CDRH Innovation and covered steps and key players involved in bringing an idea to market; the role of incubators and accelerators in helping startups; and an overview of Fogarty Innovation and the CDRH/Fogarty exchange program, presented through engaging case studies of startups navigating the medical device ecosystem.
Daunting. But worthwhile
No one would dispute that the road to success is paved with failure; in fact the majority of startups fail. However, while it’s easy to blame the regulatory process, the FDA is not the predominant cause of the mortality. Instead, companies need to make sure they have allocated a long runway and a lot of cash: The rule of thumb is to plan for eight years from concept to exit and an $80 million investment.
That’s because just having a great idea is not enough. The invention itself is not innovation, although obviously the clear first step is to have a concept and value proposition that’s well-defined and addresses an unmet clinical need.
In fact, Andrew joked that if a would-be entrepreneur knew before they started about the troubles that lay ahead, they’d never pursue it. The panelists discussed both known and unknown challenges that include raising money, forming a management team in a high-stress environment, managing technical issues on a day-to-day basis, handling clinical study enrollment issues, succeeding with regulatory agencies and warding off competition.
And yet pursuing this entrepreneurial dream is critical for innovation to happen, as startups drive most, if not all, medtech innovation.
Steps to success
Denise illustrated several case studies which, while all unique, shared many of the same milestones with other startups. Once you’ve developed a potential concept by poring over data to identify pain points within clinical care, you have to hone in on the market size and segmentation. As part of the development process, you must consider the clinical, regulatory and reimbursement pathways, along with the economics from the viewpoint of patients, physicians, providers and payors.
Intellectual property also must be a critical element of product development, starting from the early days and continuing throughout the life cycle in order to block competitors from entering the space. Last but not least is the critically important role of financing, an incredibly difficult piece of the puzzle for medical device companies, especially in the current environment.
As companies move into technology development, it’s tempting to think that there is a straight line from concept to commercialization. But that’s rarely the case; there’s typically a very complex pathway, with many switchbacks along the way, as the team builds its prototype. The process they described follows the general cadence of, “Try, fail, try, fail, try, adjust, try again, and adjust again.”
Until this point, the startup has predominantly been an engineering organization, but once moving into the stages of regulatory and compliance, it’s time to develop a marketing function and the sales model. This is also where you want to increase your emphasis on financing because, while every company faces constraints, startups typically find they are financial in nature.
And of course, the path to seeking regulatory approval can be challenging. It’s all about credibility and making the CDRH clear on the science and rigor behind the technology development. The company has to prove both the device’s efficacy and safety. At the end, the process reminds startups of the importance of engaging with and understanding the goals of a strong FDA who looks out for public health and safety.
The process is analogous to mountain climbing, and the footholds are tenuous: “You find success; then you might hit a ledge and need to establish a new base camp from where you can go up,” says Jon. “But at each stage up the mountain, the stakes get higher, and it’s a longer way down.
“However, while it’s an arduous process, full of highs and lows, in the end it’s the highs you remember. Once you’ve finally amassed the body of evidence that supports the idea you’ve been nurturing, it gives you a lot of faith in your ability to identify opportunity and invent, then solve problems and see them through.”
Of course, the ultimate goal is the desire to make a difference—and you’re not just impacting the patient who has a chronic condition, but the family, as their parents or children watch a loved one suffer.
As Jon concluded, there’s no greater joy than seeing your inventions help that patient. “I mean, that’s why we do it. And I still get goosebumps.