Medsider: Learn from Medtech and Healthtech Founders and CEOs - 4 Rounds of Financing, CE Mark, FDA Clearance, and a Category 1 CPT Code – How NeoTract has Grinded its Way to Success Over the Past Decade

Episode Date: October 11, 2016

Biz Stone, the co-founder of Twitter, has famously stated, “Timing, perseverance, and 10 years of trying will eventually make you look like an overnight success.”   In the world of medtech startups, this is almost always the case.  And it’s certainly true with UroLift, a device that came to life in the fall of 2004...[read more]Related StoriesWhy Intersect ENT is an Example of Hope for the Medtech IndustryAre Medical Device Models the Key to Building a Lean Medtech Startup?How Will These 2 Major Healthcare Changes Affect Medical Device Companies? 

Welcome to Medsider, 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 Medsider Radio. If you're new to the program, MedSider Radio is where we learn from MedTech and other healthcare thought leaders through uncut and unedited interviews. Just a few quick messages before we get started. First, if you've enjoyed these interviews of the last several years, please head on over to iTunes and rate our show.

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has famously stated, timing, perseverance, and 10 years of trying, will have eventually make you look like an overnight success. In the world of MedTech startups, this is almost always the case, and it's certainly true with Eurolift, a device that came to life back in the fall of 2004. In this interview with Ted Lamson, co-founder of NeoTract and primary inventor of Eurolift, we learned how they achieved U.S. and European approvals, obtained a Category 1 CPT code in near record time, and their approach to convincing CMS and other commercial payers to cover their device.

Here's some of the topics we're going to cover in detail. Ted's experience at ExploraMed and how the idea for Eurolift came to fruition. The process Ted follows when pursuing ideas for disruptive medical devices. Why Ted and his team at Neotract decided to pursue a CE mark in what they learned through that process. Lessons learned after raising four rounds of financing for Neotract. Against the advice of consultants, why Ted and his team decided to pursue positive guidance from Nice. How Neotract was able to obtain a Category 1 CPT code for EuroLift. Lyft, less than six months after receiving FDA clearance, and the approach Ted and his team are

taking to convince CMS and commercial payers to cover Eurolift. Of course, there's a lot more that we're going to cover in this interview, but without further ado, here's Ted. Hey, Ted, welcome to the Medsider program. Thank you. Great to be here. All right, so you founded NeoTracked back in 2004. It's quite a while ago. We were recording this in the fall of 2016, so that's over 12 years ago, a long time in the MetTech space. And you've been on quite a wild ride and experienced quite a few challenges over the past decade,

which I definitely want to dig into as part of our conversation here this afternoon. But before we go back in time, can you provide us an overview of your product, Eurolift, as well as the disease state that it treats? Yeah, sure. Happy to.

So we'll start with the disease state. It's in large prostate. It's also called BPA-H, or benign, and prostate hyperplasia. It essentially affects half of the population, that being you and me, men. And by the time you're 50, about 50% of men have BPH symptoms. By the time you're 80, it's over 80%. So it's a really large problem, quality of life issue.

Leads to needing to have to go all the time, getting up several times at night so you're tired and weak. and it's been proven to lead also to depression through isolation, so it can really be pretty life-dabilitating. The options prior to Eurilift were basically there's a pretty good surgery that was developed in the 1930s called TIRP. It's just where they go in through the urethra and carve out the inside of the prostate. it definitely removes the obstruction, which is the issue.

But it's fraught with side effects. So the side effects are, you're almost guaranteed to have sexual dysfunction one way or another, some kind of effect on that. And then there are low chances of other things, such as incontinence and strictures and transfusion and that sort of thing. So because of that, it's sort of a value proposition issue, and that is that it turns out that only about 3% of men that qualify for BPH surgery actually elect it, and that's a tiny minority.

So really the majority of patients are treated with medical therapy. There's a few different medicines, and the issue with the medicines is that they're palliative, so they make you feel a bit better. There are some side effects, dizziness, and weakness, and also sexual dysfunction. So with those things, you have millions of men that are on one form of medication or another. But what turns out is a lot of them are very well served, but there's a pretty large population of them that are not being very well served, but they really don't want the surgery. And so, you know, if you were to ask them, they'd give up taking a pill a day for the rest of their lives

and give it to the side effects if they had some way to, quote, get fixed, if they didn't have the risks or the extended recovery associated with surgery. And that's where uralift fits in. So that is the exact target we went after, is how can we create a procedure for BPH that a man will actually elect, and men don't elect things very well? So that's actually attractive enough and safe enough that a man will elect it earlier in the disease process.

And rather than sort of hanging on with it, drugs that aren't serving them well actually get treated and remove the obstruction. The way the thing works is it basically also goes into the urethra with the little scope that they use to diagnose the problem. And then with the system on the scope, it deploys these little implants into the prostate and they're really about the size and shape of the little things that hold price tags on clothes, but they're made with a lot of technology, and it's basically sized into the prostate at exactly where the device is put. And what essentially that does is just hold open the loaves

of the prostate without removing the tissue or hurting it or cutting it or anything like that. So these tiny little implants just hold the obstruction open. And the reason that's good is, is you haven't changed the prostate tissue or architecture so you don't affect sexual function. And because it's just a quick little implant, basically the recovery is a lot more rapid. It's a matter of a few days being back to normal and a few weeks for significant improvement in symptoms versus weeks for recovery of surgery and months for, for, for, for a few weeks for, of symptoms and full recovery. So it really has shifted the paradigm, and that's what we're seeing is the men that are electing this are indeed those that are unhappy with their options and

coming in looking for something different. That's a great description. And just to recap, did I hear you, right, with respect to the incidents? You said 50% of men have this, or deal with this by the age of 50 and another, it goes up to 80%. by around the age 80? Is that right? Yeah, isn't that amazing? I mean, in 2015, there were 12 million men under care for BPH, whether that's a drug or a procedure or something like that. So it's a really big target population, not just those guys suffering, but the ones that are actually getting some form of treatment. Okay, great. Yeah, that's an even higher incidence than I even suspected.

And so right, you know, prior to Eurolift, the procedure that was most common was this TURP procedure, pretty invasive procedure that was done, I would imagine in the OR setting. Yeah, that's right. Yeah, it's full anesthesia. And there are some other ways of doing TIRP. You can do it with a laser or a bipolar turp or a button or there are just a tremendous variety of ways to remove tissue and each has different advantages of maybe less bleeding. and quicker recovery, but they're all still full surgery, they're still removing tissue. And so they all actually still have a very similar sort of adverse event profile because they're based on removing tissue, basically.

Got it. Got it. It makes sense. And for those listening that want to learn a little bit more about Eurolift in terms of, you know, the device itself, it's a little bit hard to understand or sort of get a visual representation, just hearing it, I would probably encourage you to go to Eurolift.com. It's U-R-O-L-I-F-T.com to probably get a better idea of how this device actually works. But that's cool.

So you took – so the patient – I guess – one more follow-up question in regards to sort of the market and the number of patients that deal with this type of issue. It's an invasive procedure, and you said most men opt for, you know, pharmaceuticals as a way to treat or deal with the symptoms of this disease. Do the symptoms get worse over time, I would imagine, or the drugs get less? less efficacious, you know, if someone has been on the drug for, you know, 10 or 15 years versus, you know, when they may first start to take it? Yeah, that's a great point. In fact, what we're seeing is the men that are electing EurLift.

They actually are stopping medical therapy at two points. One is very early on, and those are usually the guys that are just really upset with the side effects, if you will. and then the others are quite a bit later in the disease process where it's really been wearing off over time because these drugs are based on, it's kind of a muscle relaxant, you could think of it that way, these alpha blockers, and they have a very modest effect, and it wears off a bit over time. And then you can add on another hormonal agent called a 5ARI that now starts to shrink the prostate, but it also does away essentially with the testosterone production process,

and that's an important element for a lot of guys. So there are side effects there, too. Yeah, okay, makes sense. Well, cool. Now that we have a better idea of EuroLeft, the company that, as I mentioned before, that you founded back in 2004, it's a long time ago, I definitely want to address the level of clinical evidence that you have for this product

because it's pretty robust considering, you know, it's a relatively new product, and it's pretty disruptive in nature, but I'd like to rewind the clock and really go back to, you know, the early 2000s when this sort of idea came to light. You were at Exploramed, the incubator Exploramid, correct? And for those that aren't familiar with their Exploremen, maybe you can provide an overview of the incubator as well as kind of your experiences there and how you were left came to fruition. Yeah, sure, happy to. So, I mean, I've got to say, I've been very fortunate to be a part of ExploraMed and its activities over the years. And it's primarily based on the fact that I was fortunate enough to work with my friend Josh McHour when we were both back in Pfizer in the very early 90s. And there he was kind of initiating this think tank for how to come about, how to innovate and how to address clinical needs.

and I was fascinated with that and running R&D for one of the divisions back when Pfizer had medical devices such as AMS and Halmedica and Schneider and big companies. And, you know, we hit it off with, I guess, a mutual respect on what we brought to the table from innovation, but also just complementary skill sets. And when he left Pfizer to start ExploreMed, I came out of Pfizer. I forget what it was, six, seven months later, and joining him. him in the first venture coming out of that, which was called transvascular. But basically, Explorment has a, I'd say it's a single mission, and that's to create important positive shifts in healthcare. So a lot of medical device innovation really is focused on iterative improvement to devices and having another one like the other company and that sort of thing.

And at Explorment, we really have no interest in that, and that's important work, but it's not ours. And really, what we're after is, is there a way we can absolutely improve health care in a dramatic way through a medical device? And so it's important that it also builds off of the core competencies, which for this incubator are really medical devices and mechanical work and not drugs and health care systems. changes, so to speak. So probably the most special part of the process is what Josh started in Pfizer and then further refined in ExploreMed. And now it's become, at least part of it, is the core of the Stanford Biodesign program. So it's actually taught as a process now. And the key aspect I'd say that made it unique from a lot of others was the absolute belief, and I share this to this day, that the most important thing you can do in innovation in medicine

is to spend the money and the time up front to develop what the need is and exactly what the need is and how to address all the stakeholders involved, such that once you're done with that process, you create essentially a report card. And with that report card, you will from then on gauge how your efforts are going and not deviate from it. And, you know, as engineers, we learn that engineering is done through compromise, and this is not a compromising thing. This is, I have to hit these needs in order to do the paradigm shift I'm trying to do. And that's the great strength is I think that process ends up with a very solid and valid,

needed specification and taking that forward, you know, quite frankly, developing devices and bringing them forward is hard but doable. But unfortunately, there are great machines for bringing these things forward that when they get there, it turns out they aren't solving the right problem. So this really is a way to avoid that by making sure you spend time defining that problem and essentially solving the right thing once you get there. Got it. So it really comes down to really define that. finding that core need and being able to address it and meet all of those, you know, checking all of those boxes on that report card. Now, is that a process that's taught as part of

the Stanford Bio Design program now? Yeah, it absolutely is. And I think, you know, it's a, it's really a fundamental that I think we've been able to prove through our successes as, you know, makes sense. Right, right. And I know you had mentioned kind of in our discussion before we hit the record button here for this interview, that being able to identify that true need and addressing it in a way that's achievable, that, you know, having that sort of as your beachhead, as you encountered various challenges that hopefully we can address you over the next, you know, half hour or so, that was extremely important. Am I describing that correctly? Oh, absolutely. I think once you've done this process and you really have,

You know, you believe in what you've come up with as what needs to be done, and you validate it with everyone involved in the process, the patients, the docs, the administrators, the payers, everyone. Then it gives you this confidence and momentum that when you hit the hurdles, that, and we all know there are hurdles at every step, when you hit them, you approach them with a level of, yeah, but I'm going in the right direction here, and I'm going to figure this out because I need to get past this. And I think that, you know, that leads to enthusiasm, but it also leads to confidence and just sheer, you know, I kind of called it before sort of irrational optimism. But it is what gets you there a lot of times is knowing that, you know, this should be done, so it's going to be done. And here we go. Got it. Makes sense. Now, specific to your lift, did you recall sort of how this came to fruition?

Were you looking at other disease states or other needs to potentially solve, or were you sort of really eyeing this BPH disease state? Oh, that's good. Great. So this actually started. It was just as Explorment was launching another company at Claren't, and I sort of took the task of, okay, I'm coming up with what's next. I'm going to try and lead that effort. And our technique at Explanement is usually to not have a single. idea or a single disease state, but pick two or three and develop them in parallel.

And what happens is as you develop them, they naturally shake out as, oh, this is a much bigger need than that, or this one has a much more straightforward path to a solution and various things that you look for that differentiate them. And to be honest, I founded what was called Explormet NC2. first on an orthopedic idea, and with it, next to it was another specialty. And then during that time, actually, I had a personal incident where my father and uncle each had prostate issues, and it really started piquing my interest there. And then it came up that maybe we should look at that.

And, you know, I think talk about compelling yourself to get into a project and get it going. There's nothing like a personal interaction with it to say, wow, things could be better here. Yeah, that's interesting. So you were actually pursuing a couple other ideas at the same time when, you know, you sort of had this personal experience. That's an interesting story. Now, on that note, how far down the path do you typically get with, you know, as you move these different, different potential ideas down the pathway or in parallel, as you mentioned. Do you get fairly far along before you say we're not going to pursue these other ideas? We're going to double

down on this one, this particular one? Yeah, you know, it seems like we go very far because there's a lot of work, but if you look on a basic time element, it's well under a year. You know, it's more like a, I think for, if I were to use neotract as an example, you know, I started. the NC2 effort in 12 years ago, actually, almost to the day. And started with at least two areas, ran that for a couple months. And then it was really around the beginning of 05, so about one quarter into it, that I started being very interested in BPH, and probably in Q1 of O5,

was that we threw everything else away and said this is what we're doing. So, yeah, it took three to six months, I'd say, to get to that point where we narrowed it down. Okay. Before Eurolift came, it sort of came to life anyway. Cool. I want to kind of fast forward to your experiences pursuing a CE mark. But before we go there, just a few quick questions in regards to your, you know, raising money, which is oftentimes pretty difficult for MedTech.

But you raised what I think is four different rounds in two, 2006, 2009, 2011, and then again in 2014. When you think about your experience is raising money throughout the course of, you know, 10 to 12 years, you know, are there certain best practices that come to mind or certain things that you remember that really stand out, you know, kind of looking at those different, you know, those four different, you know, rounds of financing sort of holistically? Yeah, for sure. I mean, I think if there was one thing, the most important thing, it's the fact that, that raising money is entering into a partnership.

And it's still and always is about people. And so if you have the ability, and hopefully you do, to choose between, say, venture capital firms, choose the one that you have the most confidence is going to be there with you through thick and thin. So over the years, you know, ExplorerMed is focused with NEA, and I've done a lot of work with NEA, and I've got to say they are just that.

I've been up against the wall, and they've been right there, too. And, you know, none of these things are ever easy. There's always a snag. And your investors have to have the same long view that you do. And they were great. I would say my biggest challenge was in 2009 because, I mean, it was the perfect storm. Basically, we had the banking crisis where the economy was shot. Quite frankly, the VC firms were taking advantage of that because they could.

I mean, GE stock looked like a startup at that time. And so essentially, it was a really difficult time to raise money and not lose all ownership in the company and wipe out your current investors. And, you know, we sort of pulled a rabbit out of the hat, and that was with the help of Johnson and Johnson Development Corps. And they are another great partner that, you know, they are just very mature and very much because they're in the business, very much know that these things take time and they take doing it the right way, not the fast and quick way. So, you know, those two, we have other, obviously, a whole consortium of investors at this point, but those two have been sort of the real backers during the early formative times. That's good advice. I have always heard that JJDC or Johnson & Johnson Development Corp is a very good MedTech partner.

But certainly it sounds like that was your experience as well. Now, kind of going back to that 2009 timeframe that you referenced, I guess that serves probably has a good transition to talk about your decision to pursue CE mark. So at that, if you can remember back to that point in time, were you pretty far down? down sort of the regulatory pathway with the FDA before you made the decision to pursue CE Mark? Or what were your, you know, what were the thoughts at that point in time with Neotract and Eurolift? Yeah. So this is, this is interesting. You know, there are a lot of things in a startup, in a new venture that are all about you and it's all about how you're doing and you're

progressing. And then there's the great big world and how that affects you. And in this case, it was the great big world. And basically, in addition to the perfect storm of the financing, at that time, quite frankly, there were some very serious issues at the FDA. They had a whistleblower issue. They had internal management issues, and they were really working through how they wanted to work with industry. But the net effect was intended or unintended was that you simply couldn't open up

a U.S. IDE clinical study at the U. that period. They were asking infinite questions and not allowing it to go forward. I will say my observation at this point is that that has been largely resolved and we've been really happy with our relationship with the FDA. But there was this period in that sort of 209 to 2010 period where, I mean, I had a lot of friends trying to get into clinical studies that wouldn't start. And we actually ran into that. And it came down to a decision, as it did with a number of startups at that point, where either we're going to kind of duck and cover, meaning, boy, we have to downsize to just enough to keep this thing going

and wait it out, if you will, or we're going to go to Europe and we're going to learn how to commercialize this, and it won't be profitable, and it won't be where we make it or break it, but we'll take advantage of this time to go learn how to introduce this into, quote, the real world. And that was the decision we made. It was a good one at the time because it really did give us a leg up on a number of things. So I would say we went there. Maybe some people thought we went there to make money. And maybe I sold it as that too.

But it was really not to make a lot of money. And our real hope that maybe it would break even the effort, which is even a struggle sometimes. But in the end, what it did bring was maturity. We ended up with a mature product. So by the time we did go into a U.S. study, we had a mature commercial product. This was not a, gee, I wonder if it will work product. Got it, yeah. And we also learned how to train physicians.

We learned how, you know, what the marketplace did and did not tolerate. And so there were a lot of good learnings there. It was expensive and lengthy. But in the end, we saved a lot later on. by that experience. Those are good anecdotes. Just sort of the maturation process, you know, pursuing the CE mark and then commercializing in Europe is, you know,

probably taught you a lot about entering, you know, entering the U.S. market. That's a, maybe that's underappreciated, I guess, sometimes, you know, when folks are considering pursuing CE mark versus, you know, versus FDA clearance initially. On that note, I remember having a conversation with Duke Rowling and for those listening that want to go back and listen to that interview, I highly recommend it, but he mentioned that, I believe, with CV ingenuity, I can't remember which startup it was,

but they made a very definitive decision not to pursue CE mark and instead pursue the U.S. market alone. And that was a little bit kind of more laddered up to their overarching strategy. But what are your thoughts on that in terms of a MedTech startup and whether or not they decide to pursue the European approval versus a U.S. U.S. approval initially? You know, personally, I think it's really specific to the disease, the device, the reimbursement landscape, everything. I think it's a full business plan you want to go through to see if for that particular thing you're working on, it makes sense. And I would say, you know, ironically, when I started Neotract, I didn't want to go to Europe first. I wanted it to be a U.S. first thing. And that was primarily sort of cultural connection. And that is that the U.S.

healthcare system is it rewards efficiency and less invasive and lower complication rates a bit better than a lot of other markets. And, you know, to this day, for instance, in Germany, there are hundreds of men that get Eurolift, but everyone that does spend two nights in a hospital because that's how the system works, and here it's done in the office, and you go home. So it's really kind of interesting how systems can dictate how care is given and valued, if you will. Interesting. So the other is, I mean, if there's an opportunity such as you really do have a locked-in reimbursement code in Belgium, you know, first of all, I would never say Europe is Europe.

Europe is all different countries. So you have to kind of look within it. But if you have, it's like, oh, I have this, and there's a code there, and it's been validated, they will be paying. Then you actually really do have a good early commercial opportunity. I know Kevin Seido had that with the St. Francis technology, and that really worked out well in his venture. But it was also a lock-in, and it kind of had the code there and ready to roll. And that isn't always true. In fact, it's more often it's not true than it is.

Got it, got it. So for someone listening that wanted to got to get, you know, a yes or no answer from you, they're going to get, it depends, which is probably the best answer. But I guess it's always interesting to hear, you know, hear, you know, these, you know, startup founders like yourself, you know, kind of weigh the pros and cons of going down, you know, a certain pathway, whether it's, you know, FDA approval or FDA clearance or CE marks. So that's good to know. On that note, I know you guys ended up getting some pretty favorable guidelines when it comes to when it comes to Nice, I think, in 2014, if my information here is correct. And I definitely want to use this as maybe a, you know, a stepping stone to talk a little bit more about the reimbursement landscape and that, you know, the challenges that you experienced to in the U.S. But specific to Nice, it appeared that those were pretty favorable guidelines. You know, are there any tips and tricks that you can share in regards to your relationship with Nice and how you, you know, how that sort of came about? Yeah, absolutely. It's a long story, but I'll try and make it quick. But, you know, the UK was

actually just shifting a national health care service when we were heading into Europe. They were, they were very publicly trying to become more efficient, more patient-centric, and they were saying overtly that they would value more efficient and less invasive approaches. And so we, quite frankly, against the recommendation of every consultant that I tapped into, we actually decided to embrace that and go in and try to become a flagship in that. And the way we did that, and also one reason that kind of gave us the boldness to do that was that we'd invested, you know, at that point, probably about $25 million. in clinical studies. So we had the data. We had a very high level. I mean, it was very high quality

data. So we were able to sort of go in and say, we're doing it the right way. Do you want to work together on this? And I think that really carried the day. But I will say, I guess as a kind of maybe tip or trick to that, is that good clinical data is essential. It's worth investing in. and unfortunately it's just table stakes. So the good data just gets you to the table. It doesn't win the hand. And my advice would be you never go to that table unless you've done all the other work,

which is working with the societies, making sure you have active clinical experience going on in that market, and really building advocacy from within the market, such that someone's trying to pull it through as well as you pushing it through. At that time, I don't want to spend too much time on this, but I do think it's interesting that you said that basically all of the consultants

that you had conversations with, you know, as you kind of approached this decision with Nice, they recommended not going down that path, but you did instead. You know, what led you to sort of make that call, which, you know, hearing you describe it seems somewhat risky, but I'm curious to get your thoughts around that. You know, it was risky, and I will say that part of it was serendipitous as well. So in building a sort of base foundational business in the UK under, you know, not so good reimbursement

because it was before nice and all that, you know, we were, we had built strong interests. We were running a international clinical study that involved some of the real, key opinion leaders in the UK. And, you know, we were just ourselves, meaning that I, you know, one thing I'm really proud about with Neotract is we really are very above board and, you know, the feedback I get is that we're good to work with because of that. It's a level of trust. And so we had gained that. And I just sort of felt like, wow, all the, all the people that are sort of tapped into this process are very much, they trust us. And so I always feel. like that is in the end what wins the day and that no payer ever decides to or health care system

decides to adopt something if they don't, if they either don't trust the data or don't trust who is giving them the data. So it really does come down to, you know, who we are, how we approach things, but also who we team up with and their relationships with us. And when I feel like, you know what, we're all locked in this together and we actually there's a good credibility factor, then it's not like looking at the stock market. It's a very specific stock, and you have the inside information. Got it.

Yeah, yeah. Now, that's good, that's good information. It goes back to your earlier point about sort of being above board. And, you know, you were confident in the fact that you had, you know, approached everything that you'd done to that point in a solid sort of above-the-board type of fashion. It reminds me actually of an article I read recently about Naval Rabakon, who's the founder of Angel List, I believe. And anyway, he referenced three characteristics of founders that he looks for in investing. And I think the three were intelligence, perseverance, and last one was integrity, which he said it was often is the hardest to judge.

But hearing you describe your decision-making process, they were kind of reminding me of that piece. So, you know, kind of piggybacking off, off the nice, you know, the favorable nice guidelines and kind of, you know, shifting our conversation into the U.S. You, the Eurolift device got FDA clearance in the fall of 2013. I guess that's almost three years ago now, but wasn't awarded reimbursement codes from CMS until the following spring, March of 2014. If, again, if my data is correct here on my end. And on that note, I guess that wasn't too far off from when you were approved by the FDA.

But, you know, I think most people would argue that reimbursement sometimes can even be the most challenging aspect of going to market even more so than, you know, regulatory approval. So you've had a lot, I know a lot of big wins, it seems like, from the reimbursement perspective. So can you maybe describe sort of your approach to reimbursement here in the U.S.? And then, you know, I know you mentioned that your level of clinical evidence was, you know, is really, really good. And I'm, you know, anxious to hear your thoughts on how that played into the reimbursement for your lift here in the U.S. Sure. I don't know if I was precocious or lucky, but, you know, I was remembering this back in 2006, I were raising our Series A after doing the first patients and standing in front of investors

and basically, I remember my pitch was that our tallest hurdle was going to be reimbursement. And so that was back in 06. And sort of explained, I remember saying, we're raising $10 million, but if you're not prepared to put in $30 million, then we're not, we shouldn't be talking. And it was about the fact that this was going to take time and money because here's why. First, we need to develop the evidence for. our customers, but importantly, we need to develop the evidence early and we need it broad so that we can do a quicker and more thorough pathway through reimbursement.

And, you know, I was just a young CEO at the time, but I feel like looking back, that was probably one of my better intuitions. No doubt. You called it 10 years ago. Yeah. So basically, we actually raised and planned the company on this. We are going to develop an expensive, big, deep clinical package, and that is going to be our strength.

So we did that early, and I have to say I also tied in quite early to the Specialty Society, to AMA because they were evolving a process on CPT codes, where they really didn't have criteria, but they were evolving them. And as that happened, I mean, really ended up, we structured our clinical studies to deliver on the right publication set that qualified us to rapidly go forward. So, you know, the information is a little bit different. What it is is in September 2013, we got FDA clearance to market.

And almost exactly five months later, the AMA approved Category 1 CPT codes, which other than J&J's drug alluding scent, I'm not sure if anyone's done it that fast. Yeah, that seems extremely fast. Yeah, and when I was doing research for our conversation, I saw, you know, I kind of came about that or dug that up, and I was like, wow, that does seem extremely fast, you know, five, six months. But, yeah.

Yeah, I mean, it does, unless you're in startups, and then it seems like plate tectonics. It's all years, yeah. But because the problem is that, yeah, they award the CPT code that February, and then they do a Ruck analysis, and really nothing goes into effect until the following January, so that's an entire year away. So it all seems good, and then it just seems really far away. But usually that's a two to three year process. So that really ended up that strategy paid off very well. But it wasn't just the data. It

was the fact that we made sure in our clinical studies we were very close to the specialty society, in this case the AUA, where key members were involved in the trial KOLs, but also the society itself, we were informing them of the progress. So that, I mean, it's they that actually bring these codes forward. And, you know, they were comfortable early on and ready to do it before they might otherwise normally have been. So that was probably the biggest, maybe the biggest takeaway to your reimbursement success is, clearly the clinical data was really, really good,

and you had done your, you know, you'd done your diligence there, but also just getting involved with the key clinical societies well in advance of any, you know, of the CPT code cycles and making sure that those, you know, that when the timing was right, you know, the societies could sort of, you know, bring that, you know, bring your device to the table.

Yeah, it's a tricky balance with startups because the general, conventional wisdom is to be as secretive as possible, you know, because of competition, which you obviously have to be when you're really vulnerable on a patent basis. But beyond that, you kind of have to give that up a little bit and share the news, I believe, you need to share the news with your customers or your ultimate customers because it takes a while for people to get comfortable with change and with a real new way of doing things.

And I think that's something we've probably done right here is to kind of cultivate that a bit. Yeah, that's good stuff. Now, I think most people would think, you know, with a level one CPT code in hand, the Rucks valued your code, you're off to the races, but there's a whole other phase of convincing the private payers to actually, I don't only cover this, but also pay for it.

So maybe can you, before we sort of, concluded the three, the last three sort of rapid-fire questions. Maybe talk to us a little bit about, you know, how you approached convincing the private payers that EuroLeft should be covered and that they, you know, they should pay, they should pay for it. Oh, that's really easy because they all want to pay for anything, really, but no. No, it's, we're still doing that. I'll tell you, that is a work, that is a job secure environment, the reimbursement world. But, you know, I think it all comes down to value,

and it all comes down to basically my experience is that very few insurers if they don't perceive a need. And that need means their beneficiaries and their providers are asking for it. So they never want to hear the noise in the network, but they need to hear the noise in the network asking for it. And so while that's going on, presenting your data and having a very steady cadence of publications, clinical publications, it's not just we did this study, but every quarter there should be another report coming out

because that report creates the ability to have another discussion with the payer. And so really lining up, sometimes you just want to get everything published, but lining it up to just constantly, like an annuity of clinical evidence, really helps the process along, and that's been our strategy. So we're by no means done, but the progress we have made, I mean, it's just been, I think, another good example of pretty strong progress. We, you know, as of Halloween, I guess, we will have all of Medicare in the U.S., which for our BPH men, that's 16.

5% of them, so that's great. Oh, wow. Yeah, and then we have a lot of commercial insurers that do their own analyses have come on board. Some others don't do their own analyses. They just sort of look to the side and wait for someone to step forward. So that's, to some extent, something we're working with now to make sure we're working with someone to take the first step forward where all the competitors then jump in as

well. Got it. Got it. Yeah. And so specific to, you know, convincing those, you know, those payers, is that, I mean, what does that look like, you know, from a pragmatic standpoint? Is that, is that, is that almost like a roadshow, you know, where you're, you know, you're kind of, you're making your, you know, your rounds through the, you know, into the various, you know, payer offices throughout the country? Or is that, you know, is that a matter of employing other field based, you know, people, almost, you know, almost like payer sales reps, so to speak, that sort of do, do, do, do the. a lot of that legwork for you. Yeah, it definitely is. If you're lucky, it's a road show,

meaning they never, they don't need to talk to you. And so convincing them that, that you should have a conversation is also, I mean, there's a whole industry, I think, based on making inroads into,

wow, could we actually have a conversation with a medical director team? And how do we go about doing that? And a lot of that has to do, I mean, to their credit, they're looking at all of health care, and in my world, it's all my one device and my one specialty. And so they are very busy, and they do get a lot of early calls from people that really could never get coverage at that time. So they're a little bit gun-shy on that.

But, again, I feel like it comes down to finding inroads, finding people in your specialty that have some sort of connection. And by that, I don't mean financial or anything, but just that they're comfortable with a medical director and vice versa. So that when they actually say something, they're somewhat believed. And that usually can get your foot in the door. And then the conversation is almost always, you know, a lot of people think these things are all about, well, it costs too much or whatever. It's almost always focused on clinical data and clinical value. I love being in those conversations. I feel like I can tell that story because that's what this is all about.

And so that's kind of in my role lately as I actually do that. Got it. Yeah. That's good to know. That's good stuff. Before we get to the last three questions here, when you think about the way you approached reimbursement, I know, as I mentioned, it definitely seems like you've had a lot of success, and that's very cool news that probably by the time this interview is, you know,

goes live or soon they're after anyway, you'll have, you know, you'll have all of the, you know, all of CMS sort of teed up, which is, which is great for those, those patients that have BPH and want to, you know, want to, you know, get the Uralift device, which is very cool. But, you know, looking back, would you do anything differently if you had to do it all over again? You know, on the reimbursement side, I think, okay, I think on the, I'd say on the overall venture, it's kind of interesting. That's an interesting question.

I think that, you know, for me, so this may be more of a word to those founding CEOs out there. I've come to liking a founding CEO to a starting pitcher. And, you know, when these, typically it's one person who can really take something and make it into, or almost nothing and turning into something and building a team around it. And a lot of times it's a different person who then can take that into a real going concern, a real successful commercial venture. And that happened in my case, too. So, you know, I was the starting pitcher on the mound at the sixth inning, handing the ball over to the coach.

They're always sadly walking off the field. And it's an emotional event. But it is a really important thing to do, and it's important to do it at the right time. If I were to do it over, honestly, looking back, I feel like I gave up the ball in the fifth inning, and I probably would have pitched to the seventh inning. But we're in the ninth inning now, and we have the right guy pitching, and that's Dave Amerson, our CEO, and it was great to hire him to really build this stellar commercial organization. And I stepped aside and ran, now I run all of clinical, medical reimbursement,

and I do some R&D and a lot of stuff. But the non-commercial stuff, if you will. Sure, sure. Yeah. No, that's good thing. So you wish you would have gotten a couple more innings? Still had a little bit of juice left in that. Yeah, I think that transition to Europe was one that I could have managed.

And I think I called it a commercial organization before it was. Sure. And so I think I probably should have run that period and then brought Dave in when we were teed up for the U.S. because that really is where it went. Got it. Cool. Very good. Well, it's awesome to see kind of, you know, hear more about the story of Neotrack because I think for those, you know, coming to, you know,

first getting their glimpse on kind of what Neotract is all about. I mean, it's, yeah, of course, of course you're, you know, to most people you'd be deemed a startup, but you've been working on it for 12 years. Certainly not an overnight success by no means. So it's very cool to see, you know, sort of, sort of what you and the rest of your team have built. So with that said, let's get into the last three rapid-fire questions.

They don't necessarily have to be rapid-fire answers per se, so feel free to expound if you want, but this tends to be more of my, you know, kind of a fun part of the interview. So first rapid-fire question would be, what is your favorite non-fiction business book? Business and non-fiction? No, just kidding.

That's right, yeah. No, actually, I would say my, the Bible I go back to a lot is a pretty old one, but a good one, and that's crossing the chasm. And to me, that one, the sort of distribution of customers, the early adopters, the chasm that is there that you have to get across, I've seen it play out every time I've done this, and I also feel like it gives me a barometer, not only with the market, but with the company, and also with even an individual I'm talking to to kind of like figure out where am I in this process? Because as a startup, you know, wow, you get, you know, a million dollars in sales. It feels like you are an overnight success. But that's not your goal.

Your goal is, you know, hundreds of millions of dollars. And there is a huge chasm between those two. And so I think that's been a really good book to help plan and be honest with where are we in our process. Got it, very good. Now, having said that, is there a business leader that you're following right now, Ted, or one that has inspired you over the years? Yeah, there's several. You know, I would say, just to go straight out of the industry or whatever, I'm just fascinated by Elon Musk and the stuff he's doing. I mean, I feel like he embodied, you know, in the team he has developed, but, you know, it's never, you know, just like the president we're electing this year. It's never the one person, but it is as a leader. It's what you set up.

It's what you set up and what you cultivate. And when you cultivate an environment, it's amazing what can happen. And I just see this guy out there with crazy big ideas, but because he's delivered and because he's built this environment around him, the ideas just keep getting bigger. Yeah. Yeah, that's always a save bet when you mentioned Elon. Elon Musk is a guy that you're, you know, a business leader that you're following.

On that no, I think I remember reading a recent piece where I think it was something like, it was an incredibly low percentage of the goals that he sort of, you know, offers up to, you know, in the public domain. It's like less than 10% he actually hits, which I, it was extremely low, you know, considering it seems like he hits every, every goal that, that he sets out there. But I think the fact that he's, he's done, you know, he's, he's done, you know, he's, he's, proved himself to a great degree. But, you know, I think he, the intent of making sort of those goals public is that he wants to sort of go big and set that expectation with the rest of the team.

So it's cool that you mentioned that. So last question, Ted, it would be, you know, if thinking back, you know, over the course of your med tech career, is there one piece of advice that you tell your 30-year-old self? No, I would have done it right there. But I think that, um, You know, what I would say, I've always kind of been an innovator and I've always been really turned on by just changing things. And I think my 30-year-old self, I would say, hold on just a second. There's a lot to learn from the people around you and the people above you. And I do think that you can be an innovator and you can be planning great steps and that sort of thing. And be in an environment, let's see, where was I?

was in Pfizer at that point, where there are a lot, there's a lot of great talent around you, and you may not feel like the system is as productive as it should be. But even if someone doesn't think, act or lead entirely like you do, there's always something really interesting to learn from them. So I think probably for me it would have been a more open mind to those seasoned veterans that had a lot to offer but weren't so innovative. Got it. Yeah. Always be learning. is the phrase that comes to my own as I listen to that advice, but certainly good nonetheless.

It's definitely something that I wish I would have listened to maybe a little bit more, you know, 10 years ago. But that's good stuff. So I just, like I said before, I think it's just the NeoTrack story is very cool, a long one in the making. And it's really, I don't put this lightly when I say it's really cool to see, you know, what you and the rest of the team have built. Because you're now, you're now in full-on commercialization mode,

Neotrack, correct? You've got sales reps in the field actively, you know, actively, you know, working with physicians and treating patients. Yeah, I mean, we're on the revenue commercial trajectory that, quite frankly, I've been dreaming about. So, yeah, we're hitting our goals, and that's what everyone likes. Yeah, that's great. That's great. Well, cool. Well, I'll have you hold on the line, Ted, but, again, thanks so much for, for, for your willingness to have this conversation and telling your story, telling the story of NeoTract. We really appreciate it. And for those listening to this interview, thanks for your ear. And until the next episode of MedSider, everyone, take care.