Medsider: Learn from Medtech and Healthtech Founders and CEOs - 3 Critical Goals Every New Medical Device Should Aim For: Interview with Doug Evans, CEO of Lungpacer Medical

Episode Date: February 18, 2021

In this episode of Medsider Radio, we’re talking with the CEO of Lungpacer Medical, Doug Evans. Lungpacer is developing a novel therapeutic solution that preserves the strength of the diaphragm muscle for critically-ill patients on mechanical ventilation. Doug is also a board member of Intact Vascular, which was acquired by Philips, and the former COO of Kensey Nash. He’s a medtech veteran with decades of experience launching startups, developing products, working with payers & regulators, and commercializing novel technologies. Today, we’re going to discuss all these topics and hear more about Lungpacer’s impressive technology. But first, here’s a bit more about Doug Evans and his background: Doug started his career at GE in business development and later joined Kensey Nash when it was just a startup with fewer than ten employees. As COO, he led Kensey’s growth to over 400 employees, across the span of 20 years, before they were acquired by Royal DSM. After that, Doug began working with other startups like Intact Vascular and TELA Bio.Doug holds a master's degree in electrical engineering and photonics from Penn, as well as an MBA. He knows the medtech startup landscape better than just about anyone, and we’re grateful he’s sharing his perspective with the Medsider community. Before we jump into the conversation, I wanted to mention a few things:If you’re into learning from proven medtech leaders, and want to know when new content and interviews go live, head over to Medsider.com and sign up for our free newsletter. You’ll get access to gated articles, and lots of other interesting healthcare content. Second, if you want even more inside info from medtech experts, think about a Medsider premium membership. We talk to experienced healthcare leaders about the nuts and bolts of running a business and bringing products to market. This is your place for valuable knowledge on specific topics like seed funding, prototyping, insurance reimbursement, and positioning a medtech startup for an exit. In addition to the entire back catalog of Medsider interviews over the past decade, Premium members get exclusive Ask Me Anything interviews and masterclasses with some of the world’s most successful medtech founders and executives. Since making the premium memberships available, I’ve been pleasantly surprised at how many people have signed up. If you’re interested, go to medsider.com/subscribe to learn more.Lastly, here's the link to the full interview with Doug Evans if you'd rather read it instead.

I think my favorite story is we had started our clinical trial, phase one study. It was a patient down at UT Southwestern. And that individual, very proud, very strong man, but was on a ventilator for several weeks and just said, I'm done. I just can't do this anymore. I'm not going to live my life on this machine. And I was still intubated, wrote a note to the doc, said, hey, turn the machine off, I'm done. And the doc said, whoa, you know, should we consult your family? and the doc talked to his daughters, and the daughters were very upset about it.

And about a day later, we got the IDE approval to use the lung patient device at that site. And this would be the very first patient worldwide. And the PI principal investigator said, would you like to try this, describe to him the technology, the preclinical work we had? And he said no. The doc then talked to his daughters. They convinced him to do it. And long story short, is two weeks later, I'm standing at his bedside,

talking to him. He had weaned for mechanical ventilation after a couple of therapy sessions from Long Pacer, and he just basically said, you got to save my life. I'd given up and I wouldn't be here if it wasn't for this technology. So we've seen that happen so many times that I

really find an amazing, incredible satisfaction with bringing this technology to the marketplace. Because we're going to do it time and time again, and we're going to give people a lot more life than they would have with the current state of mechanical ventilation. Welcome to Medsider Radio, where you can learn from proven med tech and healthcare thought leaders through uncut and unedited interviews. Now, here's your host, Scott Nelson.

Hey, everyone, it's Scott, and in this episode of Medsider Radio, we're talking with the CEO of Long Pacer Medical, Doug Evans. Lung Pacer is developing a novel therapeutic solution that preserves the strength of the diaphragm muscle for critically ill patients on mechanical ventilation. Doug is also a board member of Intact Vascular, which was recently acquired by Phillips and the former chief operating officer of Kinsey Nash. He's a MedTech veteran with decades of experience launching startups, developing products, working with payers and regulators, and commercializing novel technologies. Today we're going to discuss all these topics and hear more about lung pacers' impressive technology.

But first, here's a bit more about Doug's background. He started his career at GE in business development and later joined Kinsey Nash when that was just a startup with fewer than 10 employees. As the chief operating officer, he led Kenzie's growth to over 400 employees across the span of 20 years, before they were eventually acquired by Royal DSM. After that, Doug began working with other startups

like Intact and Tila Bile. Doug holds a master's degree in electrical engineering in photonics from Penn as well as an NBA. He knows the MedTech startup landscape better than just about anyone and we're grateful he's sharing his perspective with the Medsider community. Okay, so before we jump into the conversation, I want to mention a few things.

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Okay, second, if you're into learning from proven medtech leaders and want to know when the new content and interviews go live, head over to Medsider.com and sign up for our free newsletter. You'll get access to gated articles and lots of other interesting healthcare content. If you want even more inside info from MedTech experts, think about a MedSider premium membership. We talked to experienced healthcare leaders about the nuts and bolts of running a business and bringing products to market. This is your place for valuable knowledge on specific topics like seed funding, prototyping, insurance reimbursement, and positioning a MedTech startup for an exit. In addition to the entire back catalog of MedSider interviews over the past decade, premium members get exclusive Ask Me Anything interviews and masterclasses with some of the world's most.

successful MedTech founders and executives. Since making the premium memberships available, I've been pleasantly surprised at how many people have signed up. So if you're interested, go to medsider.com to learn more. All right, without further ado, let's get to the interview. Hey, Doug, welcome to the Medsider program. Really appreciate you coming on. Scott, well, thank you very much for having us here today. We really appreciate it. Very good one. I'm excited to dig into your story, you know, and then maybe more, maybe more specifically the kind of the overarching kind of history of lung pacer, you know, and really interested to learn a little bit more about the challenges, the wins, et cetera,

that kind of you've experienced along the way. So let's start out with, I know I provided an intro to your background at the beginning of this conversation here, but why don't we start with kind of an elevator pitch for your history in MedTech? Because I know you sent most of your professional career in the space. So let's start there. before we go too deep with lung pacer. Sure. So a little bit on my background. So I studied mechanical airspace and biomedical engineering as an undergrad and added a master's

in electrical and photonics later from Penn as well as a master's in business management. So I was fortunate enough to be able to get a pretty broad background in a variety of different scientific disciplines as well as business training. Started my career at GE in their Edison Engineering Management Program. And while I was there, I was able to rotate through a couple different divisions, focusing on research and product development, and then went into marketing and business development. At one point, I was introduced to an individual who's starting a small med tech company, and I decided to join that startup company with full belief that I would eventually return back to GE, just a couple of years later, hopefully bringing with me some new skills from an entrepreneur. a real experience. But it only took a year or two and I was actually really hooked on the world of MedTech startups and really have never left that since. And so that company that I joined at

GE was actually Kenzie Ash and grew from 10 employees up to about 400, ultimately went public and then was acquired. And it was a terrific experience for me. It was really fortunate to have a great group of mentors and some talented peers who really, you know, they helped me learn about creating first of their kind products, you know, the kind of products that, you know, most clinicians don't really know that they need until you really put it into their hands. And ultimately that company was acquired. And then I started working with several other med tech startups like intact vascular, for instance, which was most recently led by Bruce Shook and acquired by Phillips.

and while I was working with a couple of these other startup companies, I was connected with another entrepreneur, and we had both experienced a similar personal tragedy related to a loved one who was on mechanical ventilation. And so we got together and we laid the foundation for what is lung patient or medical, which is focused on improving outcomes for mechanically ventilated critical care patients. That's an awesome story. And we can probably do an entire conversation, or I should say have an entire conversation, just around your background, especially making the jump from GE to Kenzie Nash and end up staying there for, what, 15, 20 years, something like that, wasn't it? Yes. I mean, there's so much to learn there.

And I want to spend most of our kind of our time around lung pacer, considering kind of the unique product that you're commercializing and kind of the need that it solves for. But one question that comes to mind, and we'll probably get into this. in a little bit more detail, but you mentioned with Kinsey and Ash, like developing products that physician customers maybe didn't even realize they needed. Can you walk us through that? Because that's somewhat atypical to how, you know, most entrepreneurs, especially mettech entrepreneurs think, and that there's some sort of need that they need to solve for and then they build a product around that need. And what I heard from you is almost like we have a hunch that the

product should be this and we're going to showcase it to our physician customers that they really, we're going to demonstrate that they actually really need it when they maybe didn't think otherwise. Oh, absolutely. And it was really, you know, for me, it was the entrepreneurs that started Kinsengh Nash Corporation that really pulled me in that direction. John Nash, Joe Kaufman, they were super role models for me in that business. And, you know, their sort of philosophy was that these great opportunities are really, they're sitting right in front of you and you just sort of have to see them. And then you have to roll up your sleeves and you have to, you know, really work very hard to try to, you know, find a way to get those ideas into the market. it and hopefully create a better future for patients. And so it was really all about thinking first about the patient. What are they experiencing? How can we make outcomes better for them? And then also looking at it through the eyes of the clinician. And, you know, how are they looking at this particular patient, the problems that they're facing? What are they not aware of that they're missing to be

able to get a better outcome for that individual? And then, you know, really it's all about persistence and problem solving when it comes to these first of the kind technologies. There really isn't a blueprint at all. It's all about trying and failing and observing and reformulating and then trying again. And then you're repeated all over. And then, you know, finally, you know, really made successful with these first of the kind products, you just have to, you have to be optimistic, you have to have the vision, you have to be confidence that you can get there, and you've got to motivate a really good group of people. And of course, you can never do anything worthwhile without a great team. You know, it's never just one person. And they taught me about finding smart people,

creative people, driven individuals, and bring them all together for a common goal. And so that, those were some of the really good lessons that I learned at that early startup. And the nature of the business was designed towards really looking in a variety of different clinical segments from cardiovascular to orthopedics, spine, general surgery, and really trying to use that same philosophy in all these different segments of, you know, what could be done. better, how can we improve the experience for the patient, how can we reduce health care costs, and then applying a very diverse group of technologies and science together to create a way to solve an unmet need.

Got it. That's great stuff. And I want to ask you a little bit more about, you know, those first alpha and beta versions of some of these products. And we'll kind of tailor the conversation to lung pacer. but I think, you know, based on your kind of your history and kind of the world of that tech startup, I imagine you'll have some good insights there. But before we get to that, can you tell us a little bit more about, you know, how this idea

for Lung Pacer came about? I know you mentioned that there's a personal kind of element to that story, but can you touch on that before we get to some other questions that kind of follow the path of over the last five to six years? Certainly. So these types of like brand new ideas, they often, it was so much so much. often start with a patient experience. And in this case, it was the mom of a professor at Simon Fraser University in Vancouver, and my son Cameron, who was a patient at Aedupon

Children's Hospital in Wilmington, Delaware. And for the son of that patient in Vancouver, and for me, you know, we saw loved ones who spent time on mechanical ventilation and actually struggled to what they call wean, which is a process by which when your body is ultimately physically better from some sort of initial insult to it, that you can actually get off that ventilator and start to breathe on your own. And this other entrepreneur and I, we were connected by mutual acquaintances after Kenzie Nash was sold, and then we collaborated to raise an initial $5 billion in seed financing for the company. And with that, we set up an office in Vancouver. And for me, you know, the death of my young son, which is always sort of difficult to talk

about, but that experience, you know, really has driven me to find a way to, you know, get better outcomes for these patients on mechanical ventilation and to focus on, you know, creating a better future for all individuals that have respiratory distress. And the situation that we face today with COVID-19 across the world has highlighted really, you know, the weaknesses of mechanical ventilation and the danger associated with traditional ventilation. So, you know, we created this company with a mission at lungacer to revolutionize the way that we treat these patients by providing them protective respiratory support. And, you know, the core principle for what we're really trying to do is, is that this muscle, the diaper muscle, which is just one of two muscles in our body

that are always working for us, you know, the heart and the diaper muscle are just always cranking away. This diaper muscle atrophy is at an extraordinary rate when a patient goes on a mechanical ventilator. And a patient can lose up to 50% of their muscle mass in just a couple days. And so, you know, at some point the patient recovers from, again, whatever brought them into the ICU, and then you've got this muscle that's just been getting weaker and weaker and weaker, and it's the one that has to do the breathing for them. So our idea is to use the lung patient technology to strengthen that muscle or to keep it from getting weak in the beginning so that when they're ready to wean, they can breathe on their own as quickly as possible. And we're really excited about the data that we have on it and bringing this into the healthcare system.

Yeah, that's an incredible story. And I'd be remiss if I didn't say it's tragic to hear about the loss of your son. And I know this conversation is obviously more meant to, you know, where we discuss business. topics, but meeting you for the first time, I mean, I can't imagine, you know, especially having four kids in my own what you've been through. So, I mean, thanks a ton for for touching on that story. And on that note, knowing that like the real life, like, challenge that you personally like experienced, how much of an impetus has that meant to you in pushing, you know, long pacer through, I would imagine, some challenging times? I mean, has that been something different?

Have there been lessons that you kind of learned, you know, with that in mind versus you know, other startup paths that you've experienced in the past? Yeah, I think it's definitely added an additional element. This time it's really personal. And it's been so truly rewarding is that I've seen dozens and dozens of examples of patients who were in similar situations to the mom in Vancouver and the child in Delaware. And, you know, I see my son in all of them. And we, you know, we'll walk into a nice.

see you, we'll have a clinician who says, look, I've got a patient here, their family's getting ready to make end-of-life decisions, they're going to go to hospice and remove life support, and this patient's not expected to live. And we get that patient into the lung pacer therapy program, and, you know, days later, they're off the ventilator, and they're going to go home. And they will live weeks, months, years after that point in time. I think my favorite story is we had started our clinical trial, the phase one study. It was a patient down at UT Southwestern. And that individual, very proud, very strong man, but was on a ventilator for several weeks and just said, I'm done. I just can't do this anymore. I'm not going to live my life on this machine. And it was still intubated,

wrote a note to the doc, said, hey, turn the machine off, I'm done. And the doc said, whoa, you know, should we consult your family? And the doc talked to his daughters, and the daughters were very upset about it. And about a day later, we got the IDE approval to use a lung patient device at that site. And this would be the very first patient worldwide. And the PI principal investigator said, would you like to try this, described to him the technology, the preclinical work we had? And he said no. The doc then talked to his daughters.

They convinced him to do it. And long story short, is two weeks later, I'm standing at his bedside talking to him. He had weaned for mechanical ventilation after a couple of sessions from lung pacer. And he just basically said, you got to save my life. I'd given up, and I wouldn't be here if it wasn't for this technology. So we've seen that happen so many times that I really find an amazing, incredible satisfaction with bringing this technology to the marketplace because we're going to do it time and time again. And we're going to give people a lot more life than they would have with the current state of mechanical ventilation. Yeah, that's incredible.

I'm sure you have a lot of friends, colleagues, et cetera, that are in, you know, even if whether they're in the startup arena or, you know, more, more traditional corporate environment that are outside of bed tech, right, or outside of healthcare. And they may be working on interesting products, but I know this type of conversations come up,

you know, quite routinely with me personally, where it's like, this is one of the things that why I'm always, I always kind of in drawn back to health tech and med tech is like, these, unlike maybe a productivity piece of software, like these products can make a massive difference,

you know, in people's lives. And that I don't, that sometimes can come off, sounding like a cliche, but it's very, it's very true, you know. And that's not to say, you know, all products have that same impact, but obviously lung pacer specifically, especially considering kind of your personal experiences, I don't know, it's just always, it always draws me personally kind of back to the space because it is, it is truly impactful,

you know, in a way that's, that's unlike, you know, so many other, so many other, you know, verticals, if you will. Certainly a reason for those of us to kind of, you know, continue to get to challenges. you know, for a, it's in the startup net tech scene for sure. Absolutely, completely agree with that. It's so exciting what we're doing in this industry and, you know, really building a better future. And I love the innovation that continues to come forward to help patients and to help

clinicians, you know, have better outcomes for them. And, you know, particularly during this pandemic, you know, we just see all, all the innovation, you know, how rapidly we've come up with a vaccine, you know, never been done ever to develop a brand new vaccine, you know, in less than a couple of years. and here we've done it in less than a year. So it's just amazing. I love the power of innovation and creativity and hard work.

And yeah, so I'm excited for what we're doing, but also for all the other entrepreneurs in the tech area for all the new technologies that they're working on to help patients. Yeah, no doubt, no doubt. Let's transition a little bit to kind of those early days of a lump pacer when you were, you know, raising, and maybe this was, you know, before, you know, you raise your series A, or your seed financing.

What are those first, you know, alpha or beta versions of your system look like? And maybe more specific to the audience that's listening, like, where do you think most mid-tech entrepreneurs make the biggest mistakes when it comes to that very early, you know, product development? That's a really good question. I, you know, I think it's super important to understand the user's needs. So you'd have to get yourself into the shoes of the clinician. And not only in how they're interfacing and trying to help the patient, but also the clinical pathway.

So what do they do every day? What are the time constraints? What are their objectives or the goals? How many directions are they pulled in? So you've really got to understand both those user needs as well as what their life is like when you first start out with the product. And, you know, once you understand that clearly, I think you can start to define the goal that you have to achieve. And it's important, you know, I really think to identify those critical features. They're the ones that really must be in the product.

And I think a lot of times, and we actually strayed on this one at early points in Lung Pacer, is that we sort of had a lot of nice-to-havs in our first alphas and betas. And, you know, I think, you know, it's really best to start with the must-habs for those products and get that first technology out there that has incremental improvement, measurable improvement, impact to help a patient and a clinician. And then the final thing I think it's really important is really focusing on ease of use. And a lot of times when you try to add too many features to that first product, it can get pretty complex.

And I think that's one of the biggest mistakes that people can make. You know, a lot of times an initial product can miss the mark if it's overly complex and not necessarily easy to use. I've seen customers opt for the simpler product, even with insurance. your data rather than spend some extra time on something that's a little bit more difficult to use. And you've got to think about it because not all customers are created equal, but they're only adopters. They're going to spend some extra time with your device. They're more interested in the technology. They don't mind a complex solution. They're sometimes perfectionists on results.

But really, most adopters won't spend that time. It's got to be simple, easy. It's got to fit within their clinical pathway. Otherwise, you know, the product likely won't reach very good adoption. You know, we had a product of a prior company that had deaths in its class clinical data. I mean, it was just superior from a clinical data perspective, but it was admittedly more complicated to use than we would have liked. And clinicians did opt for that easy-to-use product that had a higher, like a 6% higher complication rate. However, then we had another product where, which is the angiosyl vascular device, and we really were on a mission that we wanted it to be easy, to use. And we wanted to be as easy as step one was insert the device and step two was pulled the

device out of the patient. And we actually succeeded with that. And it was, you know, at one point, we're at a major medical conference and we had a clinician doing a live case. And he, you know, as he introduced the procedure, he just said, hey, I'm going to, I'm going to show you a magic trick. And this device is as easy to use as I push it in, I pull it out, and voila, the puncture is sealed. And as he was speaking, he was delivering the product, and it actually works that way. And so that type of device, that one in particular ended up with over 50% market share for 20 years. So, you know, it really taught me that ease of use is critical. You've got to get those key features in that you need for the product.

And if you do that and actually improve the outcomes for patients, you've got a good shot of being successful with your product idea. Yeah, I love those points that you hit on. ease of use and another phrase I think you used was like understanding kind of the I guess the clinical pathway for your users and is it something that fits in their kind of their typical kind of algorithm

or protocol or just something that you know is it something that's going to cause friction in that pathway those are like obviously two really two really important things you know and you can't you can't just solely rely on better clinical data that's really good stuff on that note I want to talk a little bit about

the emergency youth authorization that you're able to get with Lung Pacer, I think, in early 2020, probably around the time that we were really experiencing kind of the early, early impact of COVID-19. Before we get there, though, this kind of coincides with kind of how you were thinking about some of those early versions of Lung Pacer. How much did your team consider the reimbursement pathway? Because I know that's typically, and I think it's becoming more, I guess,

pronounce now around the need that a product like needs to have a very clear reimbursement pathway. Otherwise, it's just going to be an extremely uphill and expensive kind of hill to climb. So how much were you guys thinking about that pathway, you know, in those early days? Yeah, for a lung pacer, that was really paramount to the whole philosophy about building the product. And I think that comes back to some of the training I had in the early days at Kenzie Nash, where, you know, we were always looking at trying to hit this triple aim for our new devices. And number one, you wanted a clinician to achieve a better outcome. Number two, you wanted to improve, you know, the experience for the patient.

You have to really think about what they're going through. And then three, you've really got to try to figure out how to bring a new technology to the market and reduce health care costs. And I know it's really hard to do that. But you want to bundle all those together because we can't keep adding new technologies together that maybe have small improvements, but don't really, you know, have an impact on the health care costs because those just continue to grow. So, you know, health economics and reimbursement were really part of the conversation we had at the

onset. For others that are sort of thinking about this, you know, if it's an iterative product that's following behind other similar devices, it's often easier to sort of really predict what that coverage and reimbursement environment is going to look like for your device. Although the reimbursement landscapes do continue to change, and you've got to. to stay on top of it. But if it's a first of a kind device like lung pacer, you really do have to have a clear plan. You have to have that in mind at the onset. And then you just have to continue to watch it and be ready to adapt as things change. It's really important to assemble a team of,

you know, internal and external experts. And when you're a small company, it's mostly external experts. But you want to tap into them and you want to have the buyer side at an early time point. So you really understand that coverage and reimbursement environment as you're moving forward. because adoption and device utilization really are going to strongly depend on having a really compelling health economic value proposition as well as coverage and reimbursement to seal the deal in the end for that for your new device. For Lung Pacer, we're really excited because, you know, we've designed the clinical trial to really collect data that shows that the device actually can shorten the time on mechanical

ventilation and time ties to costs in the ICU, which ties to health care costs. So that is a really key piece of the clinical trial design that we baked in at a very early stage. And then our breakthrough designation, which we were able to secure for the device, also puts us in good position for CMS coverage and reimbursement. So, you know, those two things together really ought to position as well for having a device that, you know, doesn't have a lot of barriers to entry and hopefully adoption will be quick and rapid to bring this technology to those patients that need it. Got it.

I love that fact that you use strategic. incorporated some of those, I guess, those metrics in your clinical evidence roadmap, you know, so you could easily kind of tie those two together, right? efficacy and, you know, the health care economics component to it. That's great. And I'm glad you mentioned it. On that note, do you mind, I want to go back to your AAA framework real quick. Do you mind it being next?

I think that's incredibly valuable. You touched obviously on the need for one of the aims being, you know, the health care economics piece, meaning that there's insurance coverage reimbursement and we're, you know, effectively trying to lower health care costs. But what were the other two aims that you mentioned again? Sure. Well, so the other two is really better outcomes for patients. And I think that's the one that most people, that's the one that most people do think about when they're trying to bring a product to the market. You know, they want to have some advantage over the standard of care or the competition to some degree. So I think that one is what everyone thinks about when they want to develop a product. I can do it better or have a slightly different way to do it. So that one's common. But the next one really is the patient experience. And I think we're seeing, so much growth in the area of patients advocating for their own health care, families really looking out for how their loved ones get treated, that we have to think about what a patient goes through

and what's the impact of their health care situation, the disease state they have, the complications are going to experience, and how is your device going to make things better for that particular patient? And an example would be lung pacer, and, you know, it's quite sad now. I've seen this personally with not only my son, but with other patients that are experienced mechanical ventilation, but there's numerous publications out there that patients on mechanical ventilation would, and this is sad to say, but would actually rather die than be on that life support because it is incredibly isolating. It is stressful. It's traumatic. There are oftentimes when they're getting mechanical ventilation that they can't, they feel like they can't get enough air. And in fact, the standard of

care for weaning a patient off of a mechanical ventilator is backing off the support they're getting from the ventilator. So basically withholding that pressure support they need from the ventilator so that they have to work harder and they have to work their muscle to try to build it up over days. And these patients, they fear that. They have stress and anxiety about it. And many patients who will wake up with nightmares after they've weaned months later, you know, thinking about that time in the ICU where they really couldn't, they actually couldn't breathe and they couldn't get an affair. So patient experience is really critical. So again, we think about you have to have better outcomes, both for the patient and the

clinician, but you also have to think about that experience that patient's happening. It's got to be better. And then you've got to reduce costs to the healthcare system overall. Hey there, it's Scott. And thanks for listening in so far. The rest of this conversation is only available via our private podcast for MedSider premium members. If you're not a premium member yet, you should definitely consider signing up.

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