Carl Simpson has had an illustrious career spanning over 56 years in the medical and medical device industries and continues to have a strong influence on these fields.
He is currently director at Amaranth, a company that has created a next-generation bioresorbable drug delivery coronary stent; founder and director of Spiritus Medical, an early-stage startup focused on creating innovative devices for the treatment of obstructive sleep apnea; and an industry advisor for the Engineering and Biomedical Engineering programs at Santa Clara University. In addition, Simpson is a managing partner for Coronis Medical Venture.
Among his many accomplishments, Simpson was co-founder of Silicon Valley’s first medtech startup, Advanced Cardiovascular Systems (ACS), which was sold to Lilly, later spun off into Guidant and then sold to Boston Scientific.
In his career, Simpson has served as a director to over 30 medtech startups. He also recently joined the Fogarty Institute as a mentor to our entrepreneurs.
We had the privilege of catching up with Simpson during a recent visit at the Fogarty Institute to discuss his career, advice for-up-and-coming entrepreneurs and his thoughts on how we can reinvigorate the industry.
You have enjoyed a very successful career. What drives you to continue working with early-stage startups?
My passion is understanding clinical needs in medicine – finding where there are deficiencies in medical care that would benefit from the use of better therapeutic devices or diagnosis. Identifying these clinical needs and marrying them with technology and ultimately building a company that provides an effective solution is what I love to do.
I really enjoy that very early stage of the process and that’s why I get involved with entrepreneurs from the start, even when it is just an idea on a napkin. As a director and mentor to over 30 medical device startups following my career at ACS, I have been through many of the complex steps and can identify strategic errors that can kill a company.
I also appreciate the higher purpose: bringing something that is beneficial to mankind.
What are the biggest challenges faced by medtech startups today and how has it changed over the years?
The challenges in medtech have vastly changed over the years. When we first launched ACS, there wasn’t an infrastructure of technology that helped startups build devices, including manufacturing, laser cutting and more.
Now thanks to the vast experience of professionals who were involved with “The University of ACS,” that network is now in place, allowing startups to build virtual companies, when that is the most cost-effective solution.
This was an important aspect to build the medical device business in the Valley along with a strong pool of venture capital funding that allowed these companies to succeed.
Since the market crash in 2008, early stage venture capital in the medical device has been wiped out. Only a handful of VCs now focus on the medical device industry and most don’t back early-stage companies – they first want to see proof of concept, early human studies results and more. This poses a great challenge to those entrepreneurs who are just getting started.
That’s why organizations like the Fogarty Institute and Stanford Biodesign are so critical to our industry as they help mentor, educate and assist in raising that early-stage money needed to advance our field.
Other challenges of course include a tough regulatory and reimbursement environment, which further alienates the investment community. This is only accentuated by a political system that is in a quagmire in health care.
What are some of the steps needed to reinvigorate our industry?
To receive funding today, medtech startups must be very focused on developing therapies that lowers costs. The healthcare industry is very expensive and solutions are needed to find ways to reduce hospital stay and improve recovery times.
However, this is really an oxymoronic response. Great new technologies that change the history of therapies almost always cost the healthcare system more money, with the trade-off being an extreme improvement in treating disease. Real innovative breakthroughs are expensive. These are innovations that can open up clinical needs that we haven’t even recognized.
To allow these technologies to get to market, our government needs to play a role in putting this country back into a leadership position. U.S. citizens are going to Europe and other countries for procedures that have not yet been approved in our country or are too expensive. Both China and Japan are backed by their governments to build a strong infrastructure that allows innovation to get to market faster.
We, in the U.S., are going backwards. We must reduce the time and cost that allows for these big breakthroughs to be developed and make it easier to ultimately deliver the products to patients.
What are some of the tips you most often give to entrepreneurs?
I encourage entrepreneurs to be very close to the medical profession, so they can understand what a physician does and what their needs are. This is not just the needs of the physician, but also the needs of the patients.
Also, innovators must thoroughly vet their ideas, including understanding the clinical need, the target customer, who will pay for the technology and how it will be reimbursed. I like to tell my entrepreneurs: “Begin with the end in mind.”
And lastly, one or more of the team members must have enough engineering background to understand whether the technology can be created and get to market in a timely manner.
There needs to be a constant interface with the medical community. In the building of ACS, we constantly put together clinical advisors with our technical staff to get immediate feedback on our device concepts. This very “tight fit” between the clinical and technical community is a must.
Again, this is where organizations like the Fogarty Institute and Stanford Biodesign are so important for our industry. Thanks to the proximity of El Camino Hospital and Stanford Hospital, interactions are encouraged and can easily take place.