Medsider: Learn from MedTech and HealthTech Experts

How to Go from Physician to Medtech Entrepreneur: Interview with Dr. Bob Smouse, CEO of BrightWater Medical

February 09, 2017 Scott Nelson
Medsider: Learn from MedTech and HealthTech Experts
How to Go from Physician to Medtech Entrepreneur: Interview with Dr. Bob Smouse, CEO of BrightWater Medical
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Medsider: Learn from MedTech and HealthTech Experts
How to Go from Physician to Medtech Entrepreneur: Interview with Dr. Bob Smouse, CEO of BrightWater Medical
Feb 09, 2017
Scott Nelson

Dr. Bob Smouse has over 20 years of experience in interventional radiology, endovascular surgery and clinical research. In addition to acting as CEO and CMO of BrightWater Medical and teaching at the University of Illinois College of Medicine, he provides interventional medical services to local hospitals through Central Illinois Radiology Associates. Dr. Smouse is a...[read more]

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Show Notes Transcript

Dr. Bob Smouse has over 20 years of experience in interventional radiology, endovascular surgery and clinical research. In addition to acting as CEO and CMO of BrightWater Medical and teaching at the University of Illinois College of Medicine, he provides interventional medical services to local hospitals through Central Illinois Radiology Associates. Dr. Smouse is a...[read more]

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Scott Nelson:   0:08
Welcome to Med Cider, where you can learn from experienced medical device and med tech experts through uncut and unedited interviews. Now here's your host, Scott Nelson. Hey there, ladies and gents, welcome to another edition of Med Cider Radio brought you from the W. C. G studios here in Minneapolis. If you're new to the program, Med Side of radio is where we learn from med Tech and other health care thought leaders through uncut and unedited interviews. Just a few quick messages before we get started. First, I sent out a free email newsletter about once per month, highlighting my favorite med tech and or health care related stories, the one that I personally get a lot of value from. I don't send the newsletter out very often, but when I do, I really try to make sure it's valuable. So if you're interested, head on over to met cider dot com and enter your email address as a bonus, I'll send you a free e book on the strategies I personally used to make connections at conferences. I think you'll find the book pretty useful. And while you're online, head on over to iTunes and radar show a five star rating would really help us out. Second, for those of you that subscribe to the email newsletter, you're probably aware of this. But I recently joined the MedTech practice of W. C. G, a fully integrated marketing agency. So if you're looking for some marketing help, there's a few reasons you should consider our firm first were entirely focused on Med tech. Second, our wheelhouse is analytics, which drives all of our recommendations. And third, we're fully integrated, which means you don't have to source capabilities from another shop. So if you have a project in mind that you'd like to discuss, hit me up at Scott at med cider dot com again that Scott at med cider dot com. And lastly, speaking of marketing to generate more awareness for some of these interviews, I've recently started using a pretty unique system called pan optic stacking from the team over. Reach fire digital. I know Pan optic stacking. It sounds sophisticated, right? Well, to be honest, it sort of is. But let me try and explain. First, they validated some of my messaging in real time and developed an automated customer pathway based on my audience. Your bedside, then utilizing something called eco marketing. They're using behavioral targeting to move that same audience through a customized online journey. After executing my personalized pan optics back, I'm already seeing a really nice impact, and I'll share some of those results in future episodes. So if you're interested in learning more about the system, the team over reach fire. Digital has agreed to build a custom pan optic stacking blueprint for the 1st 15 men cider listeners that respond to this message. They normally charge 2500 bucks to build one blueprint, but because they're big fans of med cider, they're giving it to our 1st 15 listeners for free. So go to reach fire. Digital dot com Ford slash med cider again us. Reach fire digital dot com Ford Flash Med cider Grab that blueprint okay onto the upset Today's program We have Dr Bob's Mouse, who has over 20 years of experience in interventional radiology in the vascular surgery and clinical research. In addition to acting a CEO and CMO of bright water medical and teaching at the University of Illinois College of Medicine, he provides interventional medical service is to local hospitals through central Illinois, Radiology Associates. Dr Smells is a medical consultant in scientific advisory board member for a host of medical device companies, including Boston Scientific Cook Medical, Indo Tronics, Nove eight Medical Crux Biomedical Indo Shaped The Medicines Company in Varian Medical. Doctor Smiles has been involved in more than 30 international and national clinical research trials as global national and local principal investigator and is the author of nearly 150 scientific publications and presentations. Here are a few of the things we're gonna learn in this conversation with Dr Smouse the time when Doctor Smiles and his team first believed they had a winner on their hands with the Convert X system. How Dr Smells and his team built out there first prototype. His approach to raising money for Bright Water Medical, which involved a partnership with the venture arm of OSF Ah large hospital system in the Midwest. The regulatory pathway that Dr Smells followed for the Convert X system and what he learned through that process. How Dr Smells and his team are approaching value based health care with respect to the Convert X system, Dr Smells, his favorite business book, the CEO he most admires and the advice he'd give to his 30 year old self. So without further ado, let's get to the conversation. What? Dr Smells All right, Dr. Bob Smiles. Welcome to the program. Appreciate you. Coming on.

Dr. Bob Smouse:   4:11
Hey, Scott, I appreciate the invitation. I've been listening to your program for quite a while now.

Scott Nelson:   4:15
I know this is a little bit of a unique experience for me because, you know, I know of you. Maybe not on a personal note, but I'm certainly thankful to have this have this conversation, especially in light of the recent news with bright water and convert X so excited. Get into that story and, you know, and how it's come to life. But let's start with convert. XO. You know, now that it's FDA cleared, you're at a point now where you're probably ready to commercialize. Do you remember if you kind of think back to how it started? You remember that time when you thought Wow, You know, I think I think this device really works. We've, you know, we've got We've got a winner here.

Dr. Bob Smouse:   4:46
Yeah, you know, it's funny. There were quite a few things that we did to released. I did to figure out if we had something that was exciting. And I would say the real while moment came when we started our pre clinical testing of the device. And, you know, we had a drawn out and it was on the back of a napkin and to develop into cad drawings. We even had some prototypes. But, you know, you just don't know until you know, And we started doing the pre clinical testing and it went in slick. It went on easy, and then it formed. You have to shape it into a position inside the body. And then we tested the disconnect transform herbal component of it where it went from device say, in a device be and wow, it worked immediately. You know, within minutes of insertion, we had no issue. And then we extended the time further and further and eventually went out to a month and transformed it after I've been beat up quite a bit. And it worked. And that was the wild time that it's like while this technology works, the team is stoked about it looks like we do have a winner and I must say, even before that time, we pinned a lot of people, right?

Scott Nelson:   5:49
I asked

Dr. Bob Smouse:   5:49
a lot of interventional radiologists what they thought about the concept and got really a lot of enthusiasm. We talked to the typical corporation strategic CE in the space age. You know, this is what we have, What do you think? And we're getting positive feedback from that. But the wild moment came when we actually used the device and it worked.

Scott Nelson:   6:07
Yeah, that's great. And I certainly want to kind of disco. We're gonna spend a least amount of time discussing You know that that process, you know, of development coming out of your incubator, Ildiko. But before we go there, let's sort of level set things for the audience. And I mentioned this in the intro to this interview to a certain extent. But can you kind of give us an overview of what convert X is what it treats and how it's different than you know, the current devices on the market or current procedures and how you're sort of, you know, disrupting that the current process right now?

Dr. Bob Smouse:   6:34
Yeah, I'd be happy to, you know, I'm going to step back just for a second and and, as you know, Scott and I think a lot of the listeners probably know, too. That interventional radiologist work side by side, multiple positions, groups, you know, medical docks of pediatrics, interventional oncology or oncologist surgeons, urologists, nephrologist, et cetera. And every so often, we're called to push the ball across the line. As it were. That is, there's a really tough case, and perhaps it can be completed in the traditional fashion. So we get the phone call, and with R angiography suite and our imaging equipment, we can thread the needle and get, you know, really tough case is done. Well. The convert ex applies to those tough cases. That is when there's a blockage in the ureter. That's the muscular tube that connects the kidney to the bladder that drains the urine into the bladder. The majority of cases are treated by urologists, and the standard treatment is to use a scope, go through the bladder and put a plastic tube up in a retrograde fashion from the bladder into the kidney. And that's a minimally invasive method, and that's called a Yuri Toral stent, and they're very successful in about 85 to 90% of the time. But in the really tough cases cancer, large impact of stones, we get the call. They either can't go up from below or they feel they won't be successful going up from below. So we take over the case and the way we do this, Scott, is we do a more invasive procedure, but our mechanical advantage is greater. So our success rate in crossing the really tough blockages of the ureter to put this stenton is really around 99% of the time. I think the number is 98.6% but it comes at the cost of a more invasive procedure. That is, we have to work directly through the kidney itself. And when we do that, we go through blood vessels. So we have a stage procedure to put this internal. Toobin called a U readable step that as we bring the patient in, they're under sedation. They're on their stomach and re directly work through the flank of the patient through the kidney into the the urine collecting system. We get a guide wire into that area, and we know that we can't put that internal stent in on day one because we have a hole in the kidney. That is, if we don't have something blocking up that access, there's going to be internal bleeding, or at least the high risk

Scott Nelson:   8:54
of

Dr. Bob Smouse:   8:54
internal bleeding. So on day one, and we've done this for 40 years, we simply put a drainage. Catherine the kidney called in a frost. Me, too. We leave it in from 3 to 14 days until the blood vessels have had a chance to heal up that we bring the patient back and we swapped that tube out for the internal stent. And now we don't need anything blocking up that hole in the kidney because they're not going to bleed. And that's worked great. Don't get me wrong. It's worked great. But it's two separate, invasive, one hour long procedures in the room that requires sedation a time off from work radiation from the floor. Oh, and you know the risk and pain associated with.

Scott Nelson:   9:33
So

Dr. Bob Smouse:   9:34
about about 15 years ago, I thought, Well, it'd be nice if we could combine two devices with one and converted from an internal external drain into a simple internal drain. And that's what the comm Vertex does. So on Day one, the position accesses the kidney like we normally would. The eye are through the flank. We put the convert X, and that extends all the way to the bladder. It looks like the Yuri Toral stent with an external component attached to it. Now, the interesting thing about the convert exes that this external component can be detached at the bedside or in the doctor's office in 3 to 14 days whenever the physician fills its time, So you put it in, takes about an hour to put it in the patient. The patient is discharged either that day or the next day. And instead of returning to the hospital, have the internal Yuri Toral stent swapped out for the drainage catheter. The patient simply comes back to the office. The device is inspected in under 30 seconds. The external parties detached, leaving the internal double. J pigtail in place eliminated that second procedure.

Scott Nelson:   10:36
Got it. That's a great overview, and I know everything that you mentioned resonates with me. It is because of my past experience, sort of in the in the interventional and vascular space, but for those that are listening that want to learn a little bit more about the device and what Dr Smells is talking about, we'll definitely link up to bright water. And in the show notes You wanna watch the animation one a little bit more about the procedure. So if I have this right, you're taking to procedures that a patient have to come to the hospital to the i r suite toe have done to, you know, roughly one hour procedures. And I think everyone knows, you know, when you go to a hospital, it's definitely more than just one hour. It's the, you know, getting there a few hours in advance. You know, the post work up all that stuff. So you're you're basically combining two procedures into one where that patient for the second time around doesn't have to come back to the hospital per se. They could just go to the office to have that drainage device attached. Correct?

Dr. Bob Smouse:   11:23
Yeah, that's

Scott Nelson:   11:24
right. You

Dr. Bob Smouse:   11:24
know it. You are right about that. You know, when I

Scott Nelson:   11:26
talk

Dr. Bob Smouse:   11:26
to patients, it is never one hour procedure. They

Scott Nelson:   11:29
have to go through

Dr. Bob Smouse:   11:30
admitting they have to come and get the I V set up and every one of those patients for the second procedure that convert ex eliminates. Every one of those patients has to bring a caregiver with them because we're going to be under I V sedation so they can't drive that day. They can't drive for 24 hours. If they're on any blood thinners, war friend or any others. They have to stop that for five days before they come in. You know they have to be in p O after midnight the

Scott Nelson:   11:54
day

Dr. Bob Smouse:   11:55
before. All of that is eliminated with the convert X. So when they come into the doctor's office tohave that external catheter detached, they don't have to stop there. Annika. Regulation. They don't have to. You have any type of anesthesia, local or general or I v. Sedation. They don't have to bring a care giver with them. They could just stop in for a 15 minute office, visit a 32nd detachment and boom, they're done. They're ready to go back.

Scott Nelson:   12:17
Yeah, it almost seems so straightforward. It's like, Why? Why wasn't this invented? You know, years ago? No, that's a great overview. So, on that note, before, we kind of learned a little bit more about how this came to life. Your 5 10 k cleared right now. You mentioned earlier in our conversation some clinical work that went into that clearance. Can you speak to that a little bit more in detail? Yeah.

Dr. Bob Smouse:   12:35
You know, there was no human clinical work. This is a traditional 5 10 K device

Scott Nelson:   12:40
that are

Dr. Bob Smouse:   12:40
predicated devices, Yes. So the FDA, they certainly had a lot of testing that we had to go through like any other medical device. And we clear those quite nicely. But no human clinical trials were required. Now, having said that, a typical Yuri Toral stent does not require animal studies. But, you

Scott Nelson:   12:57
know, has

Dr. Bob Smouse:   12:57
a position. You know, I wanted that pre clinical testing,

Scott Nelson:   13:00
so

Dr. Bob Smouse:   13:01
I discussed that with the FDA ahead of time. Even though the form and function of the device is very similar, I knew there was a detachment mechanism. I just really, you know, as a doctor, I wanted to make sure that there was no internal harm during the detachment period. I wanted to make sure that the internal stint did not shift. Remove not even a millimeter when I'd attach the device. And in the event that, you know, I did not want it attach the internal stent, and I wanted to take the whole thing out. I wanted to make sure in a actual, you know, model that I could take the device out without causing harm or without the device falling apart. So, yeah, human, clinical, not done. But a lot of pre clinical testing was performed.

Scott Nelson:   13:40
Yeah, that's interesting. I didn't realise you Redl Standing tradition Original stents are fast track to the five K process without human human clinical work. That's good to know. You know, it speaks to probably your diligence and obviously your experience as an interventional radiologist wanted to make sure that, you know, even though maybe it's not required per se for the FDA guidelines that, you know, you sort of feel good about you check that box twice sort of thing, you know what I mean? So that's interesting. So let's kind of use this opportunity to go back in time. We'll learn a little bit more about you know how Convert Ex came to life. I mentioned in the intro to this this conversation that you're practicing interventional radiologists in central Illinois. You're really even if anyone looked at your background, your sort of an adviser to the who's who within the med tech space, you know, name your company that plays in the interventional radiology space. I'm sure you've done some advising to those companies in the past, and now you're CEO also of e l. Geico with the incubator that convert X, I think, you know was was born out of. So can you speak to us or tell us a little bit more about you know, how convergex came to life and maybe take us back to the time when you were evaluating other technologies and why you decided to really go down the path that led you to verdicts?

Dr. Bob Smouse:   14:43
Yeah, it's gonna be happy to, You know, physicians are tinkers by by design. I mean, we like better mousetraps, especially interventional radiologists are always thinking about, you know, how can we improve something? How can we make something better? And that's no different for me. And I remember I had these different ideas and thoughts about different devices that may or may not have an impact. And you know what I should do with that? So you kind of keep them organized and you get a formal process in place I started in an incubator called LG Toe with an investor, put all the ideas in there and started a little bit more of a methodical process to determine you know which rabbit hold. We would go down. And, you know, even though a device may be cool, I can tell you that the first device I ever designed and I got a patent on it at 28 moving parts so was absolutely complex and challenging.

Scott Nelson:   15:37
So

Dr. Bob Smouse:   15:37
early on, I realized after reaching out and talking to friends who were CEOs that, you know, docks are good at coming up with new mouse traps, and we tend to spend a lot of time and effort and even money. Trying to build these new mouse traps without looking at the market, you know, is their interest. Is there an unmet clinical need? Well, there'll be physician adoption. Do corporations perhaps like it? Will hospitals like, you know, what's the reimbursement pathway? What's the regulatory pathway? So with E. L. G. Coat was nice. We were actually studying three different devices, two of which we have Pattinson, and we started this really rudimentary market analysis and we looked at the the market potential of what's the unmet clinical need. And listen, I'm a novice, right? I'm not a serial entrepreneur. At this point, I haven't done multiple companies, so I needed to restrict my plane filled. I didn't want to get into too deep of water, so I set some boundaries. Early on, I said, Let's look at those devices that are 5 10 que non clinical, right? Because PM a device that requires a 300 man clinical trial is probably beyond my ability as a new CEO to do that. So,

Scott Nelson:   16:49
sure, I

Dr. Bob Smouse:   16:49
wanted something that was restricted to the five in case space and this

Scott Nelson:   16:53
all goes in the

Dr. Bob Smouse:   16:53
eel Geico. Also, I wanted something that was transformational, you know, disruptive that is really highly differentiated and at the same time had a but nine regulatory pathway, relatively speaking, had a reimbursement pathway. You know, I looked into the CMS pathway to go for additional coating, and that's incredibly challenging. I didn't want to go that way, and when we did that and we kind of myself and Dan Heilbrunn, whose might be opium market in VD and then Qin Stalker came in and he is by BP of manufacturing and are indeed these guys have really a lot of depth in the space. So we looked at that, and the device that really kind of rose to the top that had the best play was the ConvergEx. So it was a very thoughtful process going after the Convert X device. It it just to me it it kicked all the boxes. And then we spent quite a bit of time getting that validation, talking to companies, talking to positions, doing surveys, me, talking to my own partners and then talking to the Value Assessment Committee

Scott Nelson:   17:51
kind

Dr. Bob Smouse:   17:52
of getting a handle on this. And that's what we've been doing for the last 2.5 3 years.

Scott Nelson:   17:56
Yeah, that's a great overview. And I love the fact that a couple things that really stood out to me as you described sort of that early thought process is just I think it's easy, and this is probably more specific to early stage. You know, entrepreneurs that are out there. I was going to say physician entrepreneurs, but it really doesn't apply just to physicians alone. But just the idea of like following too much in love with an idea or a device that, you know, as you mentioned, that maybe overly complex, and it won't ever be adopted in the healthcare environment. So I love the fact that you sort of evaluated sort of all of those downstream issues to the regulatory pathways. You know how much clinical data is gonna be needed? You know, Is there an existing path toe to reimburse me? You know? Well, someone get paid to use the device. I guess you know, seems like a relatively simple questions. But I love the fact that, you know, you evaluated, you know, considered a lot of different things early on. It probably speaks to, you know, obviously your experience in the in the health care of you as a physician, but also just, you know, your experience in dealing with large strategic sa's. Well, so anyway, good stuff there. On that note, it's interesting that you said that you were evaluating couple different. You know, I think three or so different technologies at the same time. And remember a conversation I had recently with Ted Lambs. And and he was speaking to his experience before neo track came to life. And when he was in the Stanford, you know, bio design program. Actually, I think was at that time is part of Explorer, man, but I think he mentioned the same thing that they were actually evaluating, you know, two or three different technologies at the same time, that evaluation process may extend, you know, 269 12 months before they narrowed down to one particular opportunity. So seems like that's sort of like, you know, a best practice when it comes to some of these early stage technologies.

Dr. Bob Smouse:   19:29
See, I agree. I agree completely. I mean, I've seen it too often, and I've done it myself and, you know, get enthusiastic about something and then just try to start checking off the boxes you you really want. Ignore the fact that you know something's not quite fitting, but, you know, it's it's important to listen of those things and look for the red flags and to make the internal Tibbets. And one thing we did with bright water in general, and we think we have a little bit of a platform technology we can apply to other devices as well, but we're early on and consistently reached out to our position advisors and even on the position. And I advise other companies. I know I think, that blinders on, right? So

Scott Nelson:   20:07
it's

Dr. Bob Smouse:   20:07
always good to hear from other physicians. And as a matter of fact, I called a couple of them yesterday getting their opinion on some, you know, modifications, perhaps going forward some second gen modifications and third generation modifications. And, you know, internal pivots are common. They're appropriate. It's good to do it when you haven't invested the entire farm in it, you know?

Scott Nelson:   20:28
Sure, Yeah,

Dr. Bob Smouse:   20:28
So it's kind of been a very fluid, you know, process. And I can tell you, you know, we reached out to corporations early

Scott Nelson:   20:36
and

Dr. Bob Smouse:   20:37
continually over the last 2.5 3 years to get there input, paying them to find out what's in their strategic wheelhouse. What isn't. We actually engaged other experts early in the process to help steer us in the right direction,

Scott Nelson:   20:49
and

Dr. Bob Smouse:   20:50
I wish I could say it was all me. It wasn't it was

Scott Nelson:   20:51
a group

Dr. Bob Smouse:   20:52
effort. It was a really having a really good team. And I can tell you this, and I tell this to other friends and colleagues that have a similar bent and interest and taking their device to market. And I could tell you, really the least expensive help you can get is really the most expensive. And I found out very early on trying to cut corners and and not get the appropriate management team or workers. You know behind your device is

Scott Nelson:   21:17
really

Dr. Bob Smouse:   21:18
a very expensive way to do it.

Scott Nelson:   21:20
And so

Dr. Bob Smouse:   21:20
bright water Early on, Scott, I got people I've known for years who had really been in the business for at least 15 years and many times 25 30 years. And you know, my director of manufacturing is 22 years with Abbott. My process engineers 20 years with Abbott. My finance officer is more than 20 years with Abbott and other my director of manufacturing an R and D is, you know, he like 15 years with Guidant and additional 10 years elsewhere with a C S. And just having a really season pool of, you know, management team and even physicians who have domain expertise is invaluable.

Scott Nelson:   22:00
Yeah, and I mean, that's a great anecdote, but I think it would be easy. It seems like for most people to look at your background especially the fact that you know, you're still a practicing interventional radiologist, your relationship in the med tech arena and say, You know, Dr Smells probably he didn't need to build out a team for this. You know, you can, you know, answer most of the questions or make most of the decisions with relative ease along the way. But it's interesting that you say, you know, that's that's the definitely the more expensive way to go about it and that you instead, you know, built out a solid team early on to help guide the direction of right water and see convert X come to life. And on that note, speaking of that team, you know, you've got, as you mentioned a lot of a lot of people with really, really great background as well. As, you know, look at your clinical advisers. Dr Barry Katz and Dr Alan Matsumoto. Dr Rod Raby. Let's spend a little bit of time discussing that. So how are you able to sort of coalesce a group of sort of high powered individuals, you know, to join the You know what you were doing with bright water?

Dr. Bob Smouse:   22:55
You know those positions I have known for many years and, you know, you know, we would interface that meetings. You know, I talk a few meetings here and there and just got to know them and really respected their opinion. And, for example, berry Cats And, you know, he has a lot of depth and healthcare economics, and the ConvergEx really has a nice you know, a nice niche in that space with the Affordable Care act and the change in the healthcare economics landscape as it were and the fact that we can eliminate an entire procedure. And, you know, they say it's certainly a lot of health care dollars. So yeah, Barry was just a natural choice to bring on early as a medical adviser. And so, you know, it was one of those things where I'd reach out to these different positions, the ones you mentioned. We also have Brett Whitman and Lindsay McCann, you know, out of Vancouver, and every one of them saw the vision. I mean,

Scott Nelson:   23:44
they got

Dr. Bob Smouse:   23:44
it. I mean, it was one of those things where I would start to go down the convergex pathway and they would stop me after just a few minutes and say Hey, Bob, you had me at hello. I mean, this

Scott Nelson:   23:54
makes

Dr. Bob Smouse:   23:55
sense. It's something that eliminates, say, you know, kind of a cumbersome procedure. And I can tell you it really rang solid with them, even for a simple thing like the insertion of the normal Yuri Toral stent that we insert. And this is something I don't really talk about to corporations or hospitals. But you know, when we take a urology stint that's made to go from the bladder up to the kidney and we put it in backwards, we have to actually turn it upside down and put it in. That's a very challenging procedure. It's it's rare that I'll let my fellow, for example, or any of my fellows do this solo on their own. I'll be next to them in the no, I are sweet because it's a challenging procedure into a man to a person

Scott Nelson:   24:37
on the

Dr. Bob Smouse:   24:37
M. Maybe when I told him about the ConvergEx, they go, Wow, you

Scott Nelson:   24:41
know

Dr. Bob Smouse:   24:41
that's

Scott Nelson:   24:41
gonna make

Dr. Bob Smouse:   24:42
the you Redl stent so much easier to put in. And it's better for patient care. So you know what's in the big sales pitch? I had to give them I mean, they got it. They understood it. They thought it would be a nice bolt on technology to what they have already on their cells that they can use. So, yeah, I think it was just reaching out, explaining what the concept was and what we're planning on doing. And they jumped on board this simple.

Scott Nelson:   25:04
It probably speaks to the You're probably familiar with this paraphrase that you know, there's a quote. The best marketing starts with the product, right? And so you can't. It's hard to do really good, really good marketing or have a really good commercialization strategy if your product is sort of mediocre Xev standards. So listening to you explain that it sounds like you're able to hit you solve a lot of pain points in the traditional, this traditional process. And so it made it, you know, kind of easy for a lot of those well known folks people without a lot of experience in health care and and met tack to join the team. So good to know. So what's gonna go back to the early thought process of a convert? X and you know you've got at that point you've got you know, the idea narrowed down, and at some point, you're gonna You're gonna have to raise money to take this to the next step. And I noticed that you raised around with OSF Ventures. I think was part of that syndicate. So can you help us understand a little bit more about your approach to raising money and how you went about that?

Dr. Bob Smouse:   25:54
Yeah, you know, and there were some stumbling. There's no doubt you know, when When you're doing this for the first time, you kind of learn by trial and error what works and doesn't work. And, you know, male Schatz is on my board, and he's a serial entrepreneur and CEO with Tom Fogarty, and he was a lot of help. Remember Male early on in the process, saying, Bob, you gotta put the story together, that simple PowerPoint deck put it together, make sure it says what the need is and how you're gonna solve the problem out there and really make a nice story. So early on. Yeah, I kind of put the pieces of this story together. What the convert X means I did a lot of Google short seeing a lot of literature searching wanted to understand. You know what type of an impact the Convert X may have for your reader blockages? That am I in a super niche area or is a more significant area? Talked with a lot of physicians, and once I had what I thought was a pretty good story together, that's when Dan Halperin he's my BP of beady and marketing, and I've known Dan for many years. When I consulted for guidance, Dan was the marketing beady expert guidance. So we interfaced in once we have the, you know, a nice kind of rounded out our presentation. Then we went to friends and family. Very typical of most startups. I called, you know, a physician, friends and position colleagues that I knew. I talked to a local angel investor group, high net worth individuals and also some other physicians And then, you know, through dance connection and mine industry insiders, you know, other NBA's that do consulting for med tech startups. Other CEOs that actually have run and they're presently running med tech startups really liked the idea and they, you know, invested And we didn't get a lot of money, Scott, right?

Scott Nelson:   27:37
But we got

Dr. Bob Smouse:   27:38
enough to keep us moving forward to developing the product and what was nice on Day one when we started the company. This was in March of 2014. Not too long ago, we had our I p issued our foundational. Patton was already issued, which is really nice.

Scott Nelson:   27:52
And

Dr. Bob Smouse:   27:52
then we could be kind of build out the story in the market validation. The position Adoption sent out a survey and by putting those pieces together when we started giving hate to say it. But it's the pitch,

Scott Nelson:   28:05
you know. Given

Dr. Bob Smouse:   28:05
the pitch to two different groups, it became more and more refined. We eliminated unnecessary slides and augmented areas that we would have questions in and and had backup slides. And so it was a friends and family push, and with that, we were able to raise about $2.2 million that was almost like a seed funding. Now I'd put in money. In the beginning, I had a silent investor who also was an intellectual radiologist, Carl Weingarten, who also put in some money, and we were able to get the ball rolling, and then ST Francis really came into the into the mix later on, after we had developed prototypes, we've done some bench working we had used up, to be honest, most of the 2.2 million. Then we went and we said, Well, to get this to the point where we can get regulatory submission and approval, it's probably gonna take another three million or so. And and that's when I reached out to OSF Ventures, which is a B C health care BC group that's actually affiliated with my hospital system, and that took about four months of diligence. But they ended up becoming our lead investor, and

Scott Nelson:   29:09
they've

Dr. Bob Smouse:   29:09
been really good to be a good investor. And then, you know, I just for other, you know, early entrepreneurs that once we had that cornerstone, that lead investor, it's amazing how people just followed on

Scott Nelson:   29:20
very quickly. That's great. I'm jotting down notes as you kind of are telling that story. And you know what really rang true for me personally, it's just know that effort that went into building this story and I think you mentioned that the device, you know, came from male shots. It probably was intuitive to you, but nonetheless, you know that focus on building the story and what ConvergEx could become, you know, with with adoption in the healthcare space I think you know is really important. Reminds me of a conversation I had, You know, By the time this goes live, the other interview with Dr Marie Johnson will be live. She's the founder of Home Cardiovascular, and she was sort of explaining similar thoughts or similar approaches. How you just explain your approach to raising money and, you know, building out that story and really, you know, it sounds silly, but really kind of, you know, it's a little bit of a sales game, you know, in pitching your story and building that out and, you know, and building enthusiasm. So sometimes it was like this mystique with early stage, you know, raising money for early stage companies. But it really comes down to, like, really honing in on your your story and being able to convince others that that it makes sense and that there's there's a lot of opportunity so cool, none, lest it Can. I hear it from you for sure. So let's talk a little bit about before we kind of to discuss you know what's next for bright water and and what future plans are. I'm gonna read a quote from Dr James Donati's The Pretty Well Known Again, an interventional space down really worldwide. But he practiced out at the University of South Florida's, as you know, but he said, the ConvergEx system is the kind of technology of ants that we required to meet the dual goals of improving patient care and reducing the financial burden to the health care system. So I think that was maybe showed up in one of your recent press releases, and you sort of hinted at this already. But I'm just curious to get your thoughts and how you know, once you begin, you know, to build out sort of the commercialization strategy for convert X. How are you gonna tell that story to hospitals and other health care providers that maybe a little bit skeptical at first?

Dr. Bob Smouse:   31:02
Yeah, that's really a good question. And you know, it's something that we've certainly chewed on for a long time. I mean, probably a year and 1/2 now, we've been looking at that and doing a lot of analyses, reimbursement and hospital expenses, et cetera. It's really getting your ducks in order and, you know, as a position I know this. The mandates that we're having there are several. One is that we've gone from a patient outcomes basis to include a patient satisfaction. So that's important. And that place significantly in the, you know, medical value proposition of the ConvergEx. I think we certainly will improve patient satisfaction. But then, from a more of a corporate level hospital, you know, economic level. We're really test with two things Scott, And that's to improve patient care while at the same time decreasing the healthcare expenditures. That's where the whole thing with the Affordable Care act comes in. And so there are processes set up within the hospital. And certainly 20 years ago, there wasn't, for the most part, Value assessment committees. They just didn't exist. As a physician, I wanted something, And even though I have perhaps to other brands on the shelf, I could ask my purchasing department to bring it in, and we could do that. But those days are, you know, they're long past and the majority of hospital practices, and so you know, the device has to go through the Value Assessment Committee and nowadays, we know we need a couple things. We we need to be able to show the clinical value proposition. That's number one, and and, you know, I kind of paying my own be a committee. And I said, Hey, you know, I've heard of this device that does X, Y and Z Identity identified as my company,

Scott Nelson:   32:37
and

Dr. Bob Smouse:   32:38
they were really taken by the fact that we were eliminated entire procedure. So that resonated clearly with, um, But usually the following question is what? What is it cost in? You know, what products are they going to eliminate? And you know what? You're healthcare economic message. So it's really a duel when it's I think, what? The physicians, they don't get into the economics too much, and they really shouldn't they understand the clinical value proposition. So, you know, I think finding a physician champion to get behind this device is going to be very simple. And getting that position champion is incredibly important. Anytime you have a medical device that comes into a hospital system,

Scott Nelson:   33:13
you

Dr. Bob Smouse:   33:14
need somebody to back it because you know a vendor, which I'm not. But you know, if my sales guy came in to show that he's not going to sit in the V a committee,

Scott Nelson:   33:22
you won't

Dr. Bob Smouse:   33:22
be there. He's gonna need to have a you know, somebody who believes in the product. So get in that position. Champion will be really important for us and that has really, you know, shown not to be an issue. I mean, physicians get it. They understand that they like it. They want it. The next thing is to show them what type of economics improvements there will be at the hospital level by eliminating that procedure, and we're certainly still sorting through those numbers. But, you know, sometimes you know when you have to get that ball across the line and you have to use a very expensive angiography suite. Reimbursements may not cover expenditures, and we're kind of sorting that out. But

Scott Nelson:   33:56
there

Dr. Bob Smouse:   33:56
certainly is a very strong they call it HC E message or healthcare economic message by eliminating that procedure. So that's kind of our pathway is that we're we're gonna have to make sure we dial in on the positions to make sure they really understand it and see the benefit to it. And then also on the other side show how this impacts positively. The health care expenditures.

Scott Nelson:   34:18
Yep, that's a great description. And I love the fact that, you know, I think for most people that would learn a little bit more about Convert. Ex would probably have similar responses if they're familiar with the, you know, the interventional radiology space in the sense that it seems kind of obvious, you know, you're reducing in an entire procedure. Of course, that's a great healthcare economic story, but I love the fact that you guys are still taking a pretty, pretty methodical, diligent approach. And, you know, and I think that maybe the lesson there is that even if your product or your story is, you know, it's pretty obvious you still need, you know, that support inside the hospital system. It's a physician or, you know, some other sort of decision maker that's gonna really help to tell your story, you know when you're not there. So I think that's that's a really good lesson learned. So before we kind of wrap up the conversation, anything else you want to share about bright water in terms of, you know, next steps for either convert axe or other technologies that you guys were thinking of.

Dr. Bob Smouse:   35:07
Yeah, you know, I would like to say, you know, it's funny when when I looked at convert X and you know it was to eliminate that catheter to stand exchange procedure. And you know all the benefits that would go along with that in the kidney. You know, when I'm very familiar with when I started pinging physicians on this almost to a person, they would say, Well, what about the biliary system? What about the military system and that kept coming back? And, you know, we're laser focused for two years plus on the Raider roll device. But now that we have issued patents, we have proprietary materials. We've gone through all the testing of the FDA, the vile compatibility, et cetera. Then the team tennis sat down and said, You know, Bob, we're still hearing this from multiple physician groups. What about the biliary product? Is our Billary play in our Maybe brought that up very early to that, You know, we do internal external billary drainages for bile. Duct blockage is in a similar fashion. For example, patient may have a pink radic had cancer that blocks the common bile duct or may have a internal cancer of

Scott Nelson:   36:05
the

Dr. Bob Smouse:   36:05
liver or the bile duct itself. And you know, gastroenterologists are incredibly successful of doing E. R. C P's and putting stents up in what we call a retrograde fashion. But every so often. And this is around, you know, 10% maybe 8% of the time. The blockage is just too big, too strong. They can't get across it. So, you know, over 100,000 times a year in the U. S. Interventional radiologist will access the liver again, working through the side of the patient into the bile duct in an invasive procedure and just very similar to what we do in the kidney. We put an internal external draining, and then we send the patient back later to know for gastroenterologist to use that drain is kind of an access to put a retrograde stenton. So the end baby said, Well, you know, why don't you make a convert X for the biliary system, an internal external drain that you can detach and leave a plastic stenton banning the obstruction so you don't have to send the patient back for that Second you know, procedure in the E R C p. So we're sorting that out. It's a nice platform technology to eliminate them. We're looking at potentially other procedures as well. But yeah, that's kind of, you

Scott Nelson:   37:09
know,

Dr. Bob Smouse:   37:09
besides taking the Redl device further on which we want to do and and kind of building that space out and getting adoption for that, I think a nice following products will be a convert expert, Larry. But we have a lot of work to do at that point. We do have prototypes now that we're testing, but it's gonna be a while before that one would be ready.

Scott Nelson:   37:26
Sure, sure. That platform technology or that built in sort of platform approach, I guess it may be for lack of a better description. Is that something you realized early on? You know, through the incubation process early on with ConvergEx.

Dr. Bob Smouse:   37:39
Yeah, it was Scott. Well,

Scott Nelson:   37:40
we realized

Dr. Bob Smouse:   37:40
it was there, but it is kind of a land mine, too. You want to stay away from? It's really easy for I'd say green execs to kind of spin off in multiple different directions

Scott Nelson:   37:50
and

Dr. Bob Smouse:   37:51
you know, myself and my team, we really control that we were very laser focused on the convert extra. Read a roll, and we still remain incredibly laser focus. But but there certainly is an economy of scale. When we looked at the convert ex pillory, we realized the value proposition was exactly the same. The healthcare economics are the same. We also know that the target user that is in eventual radiologists are the same. We don't change referral patterns. We just give them a better tool to do what they're doing. So the similarities between the two were incredibly important. And, you know, we all have stories of where somebody invents a stint for the heart, for example, and they want to bring it out for a different part of the vascular bed, and they end up going to a different target audience. And it's just a nightmare. But the nice thing about the platform technology of the ConvergEx that is eliminating the catheter to stand exchange procedure is that really a place in the same sandbox. It's I are used. It's a device designed by and I are for I R. So it just fit. So

Scott Nelson:   38:49
you

Dr. Bob Smouse:   38:50
know, the first device may have taken but $5 million to develop. We can leverage the i p the materials, the you know, a similar regulatory pathway, etcetera. That's what we're hoping then. So there's certainly an economy of scale with the platform technology that allows us to put it on another club in the bag without spending the same kind of funds and time that we did on the first product.

Scott Nelson:   39:12
Yeah, such a good lesson there. I love the fact that your point about no, sir, the focus right, that really unfocused, not realizing that this could be a platform technology, but at the same time not wanting to make sure that you don't spread yourself too thin and, you know, you just sort of, you know, chase a bunch of different habits are different, different holes. So you know, the goal being that you, you know, make sure that you do your diligence with ConvergEx as it stands right now. Then you know that the opportunity is there for at on sort of devices or procedure, Really, the applications down the road. So great lesson there. I think for every sort of early stage, you know, med tech entrepreneur. So I want to finish up with sort of the traditional last three rapid fire questions that I've been including with with most of my conversations these days. But, you know, looking back at, you know, your experience at Yale Geico and then seeing, you know, convergex come to fruition with bright water. Is there any other advice or things that maybe that you would have done differently? Or alternatively, you know, something that you're really proud of, Like, you know, we really did it this way. And I'm glad we did it because of, you know, X, y and Z.

Dr. Bob Smouse:   40:07
Yeah, I think I'm really proud in that. You know, we know the national average for getting the traditional 5 10 Cate device to clearances around 5.5 years, 5.6 years and, you know, bright water. The team was able to do it in under three years, so

Scott Nelson:   40:21
we

Dr. Bob Smouse:   40:22
were really tickled with that. And, you know, and I know traditional VC backed companies are fewer than they used to be. And our sister nontraditional. A lot of it. I would say 90% has been friends and family. Non industry investors, you know, non VC backed. We're able to really, you know, get this up by the bootstraps without having to go to large VC groups. And, you

Scott Nelson:   40:44
know, it may

Dr. Bob Smouse:   40:44
not be a big B C group play. I mean, that was part of our thought process. Having broad Raby you know, from Saffy on

Scott Nelson:   40:51
board

Dr. Bob Smouse:   40:51
was really good because they did likewise. They

Scott Nelson:   40:53
raise

Dr. Bob Smouse:   40:54
significant capital without having to go toe bc groups and and we kind of did that. We're excited about that. And the other thing is, we're primarily a 10 99 company. I mean, I do have some employees, but the the majority of employees are 10 99. They're consultants,

Scott Nelson:   41:08
and

Dr. Bob Smouse:   41:09
they're really dedicated to bright water, without a doubt. But that's allowed us to really move quickly to make internal pivots, to close down one aspect, for example, in Augmon another one. And so that's made our flexibility great and our responsiveness very quick. So I'm

Scott Nelson:   41:27
really

Dr. Bob Smouse:   41:28
proud of that and incredibly proud that we were able to get the 5 10 k with the first pass

Scott Nelson:   41:32
around it.

Dr. Bob Smouse:   41:33
And, you know, I got some good advice early on from some of my other board members such as Chazz Taylor. He's the CEO of know Vadim Varian and then then other people, too. And I went to the FDA early and got into a really nice dialogue with the lead reviewer, and the FDA was phenomenal. I mean, you know, you hear a lot of stories

Scott Nelson:   41:51
nose out,

Dr. Bob Smouse:   41:51
they're tough, but they're in a tough position, right, Scott? I mean,

Scott Nelson:   41:54
they got

Dr. Bob Smouse:   41:54
a project, the welfare of the patient at the same time, they have

Scott Nelson:   41:57
to,

Dr. Bob Smouse:   41:58
you know, allow technologies to develop and improve. And so I was really proud with the working relationship that I had with the FDA as we went through the process of clearance.

Scott Nelson:   42:08
Yeah, I know Bill Factor, who I recently interviewed as well as one of the founders of the Clarence. Now is that president, CEO of Ireland's and had mentioned something similar that, you know, if you do your diligence right up front and make sure that you know, you start to build that relationship with the FDA early on, I mean, it could be, I mean, a relatively, you know, straightforward, easy process. So it's very cool to hear that. Yes, sort of a similar experience that, you know, you took a nice approach, you know, seeing this through FDA clearance. So great stuff. So go ahead. And

Dr. Bob Smouse:   42:35
can I get Can I just give you one story about the FDA?

Scott Nelson:   42:38
Yeah, Yeah. Lead

Dr. Bob Smouse:   42:39
the league reviewers Dr Timothy Martin. And this is the type of thing that he did for us. And I thought it was really good. I remember I had my I took my wife to the pizza place to have a slice of pizza at lunch, and we're getting towards the end of the time frame to get the approval. And then I get a call from from Dr Martin. He goes, Hey, Bob, you know, one of my reviewers has a question about this most recent response to the additional information that we requested and the fact that he reached out on a cell phone call just to get my, you know, to ask a few questions. And then he within 15 minutes, he put me on a voice call with the reviewer to discuss the concerns

Scott Nelson:   43:16
was

Dr. Bob Smouse:   43:17
incredibly helpful. I mean,

Scott Nelson:   43:18
you

Dr. Bob Smouse:   43:19
know, the bureaucracy of sending a formal letter and going through the whole process could have extended this out another six months, I'm sure at least. And the fact that he was willing to pick up the phone. And, you know, we obviously we're willing to pick up the phone to engage in dialogue, cut through a lot of that red tape. Yeah, I tell you, if the FDA is going down that pathway in the future, that's gonna be very, very helpful. Dr. Bernard like myself?

Scott Nelson:   43:41
Oh, yeah, no doubt. And I mentioned that that conversation I had with Bill Factor he had mentioned the same thing with Dr Sheerin and that you know that to your point, the FDA mean that's like a no win situation. I mean, they get pressure from from both sides, you know, in their efforts. But he did mention that he personally is known as a big change in terms of you're trying to make make the process a little bit more efficient. So it sounds like you've got firsthand experience toe what it could look like, Which is, I think, great news for everyone. So very cool that to here and learn a little bit more about you know, your you know, the story of convert X in bright water. Medical. I mean, I know I've known you Dr Smells as a sort of Ah ah, physician entrepreneur. But it's it's cool to see something, you know, come to life. And, you know, here we are with FDA clearance, and you're ready to start seeing this, you know, work in a health care setting across the U. S. So congratulations on that.

Dr. Bob Smouse:   44:26
Thank you very much.

Scott Nelson:   44:28
So let's finish off with the last three rapid fire questions. The rapid fire, the questions are rapid fire nature and your answers don't necessarily have to follow suit. But let's start with the 1st 1 What's your favorite business book? Yeah,

Dr. Bob Smouse:   44:39
it was the 10 day M B A. Yeah. Yeah, that was That was pretty good. I don't know if I got through all 10 days, but it got me charged up. You know, I refer to it every so often when I run into a roadblock, but, yeah, the 10 10 day MBA,

Scott Nelson:   44:52
actually, never. I've never heard of that. I love the fact that it sounds like a pretty efficient way to kind of step to speed. So

Dr. Bob Smouse:   44:58
I asked people I know I said, Hey, is it worth as a position for me to go back and get an MBA? They said don't do it. You're crazy. Hire an MBA and pick up a

Scott Nelson:   45:06
book

Dr. Bob Smouse:   45:07
and, you know, learn that way.

Scott Nelson:   45:08
Yes, sure. Yeah. And I completely appreciate that approach. The second question, is there a CEO that you're following or one that's inspired you in the past?

Dr. Bob Smouse:   45:15
Yeah. They're really has. He doesn't know this, but it's a man. Hobbs

Scott Nelson:   45:19
has

Dr. Bob Smouse:   45:19
the calendar, and he was the CEO of Angie Dynamics. And I interface very early with him when I was in my fellowship period with Dick Hawkins out of Gainesville, Florida. Chance teaching hospital. And a man used to come. And I used to talk to him about different devices and products. And so, yeah, I've been kind of following a man hops for a while.

Scott Nelson:   45:36
Do you still keep in touch with him?

Dr. Bob Smouse:   45:38
Yeah. I really don't often

Scott Nelson:   45:39
on.

Dr. Bob Smouse:   45:39
You know, I've seen that a meeting once out of every blue moon, and I'll say hi to him. But other than that, and I probably should reach out. That's a good thought.

Scott Nelson:   45:46
I'm sure he'd probably love to see if he hasn't heard about, you know, bright water. What you're doing now, I'm sure you probably be thrilled to kind of learn about what? You're what you're doing. So last question is to take us back to your 30 year old self. I imagine you're probably in in residency or fellowship at that point. Dr. Smells Any advice that you give yourself up that point in time?

Dr. Bob Smouse:   46:01
Yeah, I'd probably say pull the trigger earlier. You know, I've reinvented myself several times and I see a lot of people working towards retirement and, you know, stashing away funds. And I think if I were to tell my 30 year old self something different, I'd say, you know, stash away the funds, but use it to go out and try something new.

Scott Nelson:   46:17
Yeah, that's great. Great advice. I don't think I would have expected youto answer that fashion. That's Ah, that's a great I think. Great advice for anyone, even if you're outside of the healthcare space. So great stuff. I can't thank you enough. Doctor smiles for joining me. It was it was fun to learn a little bit more about your experience with bright water. Wish you nothing but the best with convergex. It'll be. Be excited to see what you guys do with it.

Dr. Bob Smouse:   46:36
Well, hey, I appreciate the invitation and always nice talking with you.

Scott Nelson:   46:40
Yeah, absolutely. I'll have you hold on the line, Dr Smells. But thanks again for your listening attention. And until the next episode of net side of radio, everyone take care. Thanks again, ladies and gents, for listening. This episode has been brought to you from the W C. G studios here in Minneapolis. And don't forget to grab your pan optic stacking blueprint by visiting reach. Fire digital dot com for slash met cider Again. That's reached fire digital dot com forward slash met cider. Okay, bye for now.