Medsider: Learn from Medtech and Healthtech Founders and CEOs - Ancient Wisdom Meets Modern Medtech: Interview with Fisher Wallace CEO Kelly Roman

Episode Date: November 8, 2023

In this episode of Medsider Radio, we sat down with Kelly Roman, co-founder and CEO of Fisher Wallace, a company spearheading the development of wearable brain stimulation technology aimed at providing relief from depression, anxiety, and insomnia. Kelly is a Harvard graduate with an English major who took an unconventional path to medtech inspired by his experience co-authoring the graphic novel adaptation of Sun Tzu's "The Art of War." He took a career leap from literature and marketing to pioneer a novel approach to the treatment of mental health. In this interview, we delve into what Kelly's learned on his journey, touching on the value of unconventional thinking, the importance of making mental health treatments more accessible and less stigmatized, and the potential of decentralized clinical trials. Before we dive into the discussion, I wanted to mention a few things:First, if you’re into learning from medical device and health technology founders and CEOs, and want to know when new interviews are live, head over to Medsider.com and sign up for our free newsletter.Second, if you want to peek behind the curtain of the world's most successful startups, you should consider a Medsider premium membership. You’ll learn the strategies and tactics that founders and CEOs use to build and grow companies like Silk Road Medical, AliveCor, Shockwave Medical, and hundreds more!We recently introduced some fantastic additions exclusively for Medsider premium members, including playbooks, which are curated collections of our top Medsider interviews on key topics like capital fundraising and risk mitigation, and a curated investor database to help you discover your next medical device or health technology investor!In addition to the entire back catalog of Medsider interviews over the past decade, premium members also get a copy of every volume of Medsider Mentors at no additional cost, including the recently launched Medsider Mentors Volume IV. If you’re interested, go to medsider.com/subscribe to learn more.Lastly, if you'd rather read than listen, here's a link to the full interview with Kelly Roman.

I think there is an unfortunate association in the venture capital community that crowdfunding is kind of dumb money. It's not smart money. I didn't look at our investors as not smart money. Majority were our customers who already had version one. And so they believed in the technology. They were also interested in version two, which is kind of the whole point of us raising money at this point, is to build oak and to get a approved. That's very smart money in the sense of they know a lot about the technology. Welcome to Medsider, where you can learn from the brightest founders and CEOs in medical

devices and health technology. Join tens of thousands of ambitious doers as we unpack the insights, tactics, and secrets behind the most successful life science startups in the world. Now, here's your host, Scott Nelson. Hey, everyone, it's Scott. In this episode of MedSider, I sat down with Kelly Roman. a Harvard graduate with an English major who took an unconventional path to med tech, inspired by his experience, co-authoring the graphic novel adaptation of The Art of War. As co-founder and CEO Fisher Wallace, he spearheads the development of wearable brains stimulation technology aimed at providing relief from depression, anxiety, and insomnia.

Here for the key things that we discussed in this conversation. First, adaptive thinking and the willingness to explore alternative approaches can yield great results. Whether you're tackling FDA regulation or capital fundraising, leverage your resources, and real-world experience to get to your goals quicker. Second, be mindful of the obstacles standing in the way of your devices potential utilization, no matter how efficacious it is. The only way to create change and ensure long-term market success is to prioritize the needs, comforts, and desires of your end users.

Third, don't be afraid to consider remote trials for a cost-effective and expedient approach to FDA clearance or approval, particularly in the field of mental health research. Before we jump into this episode, I wanted to let you know that the latest edition of Medsider mentors is now live. Volume 4 summarizes the key learnings from the most popular medsider interviews over the last several months with folks like Rob Ball, CEO of Shoulder Innovations, Kate Rummel, CEO of Obelated Solutions, Dr. Christian Ramdo, CEO of Tempe Health, and other leaders of some of the hottest startups in the space. Look, it's tough to listen or read every Medsider interview that comes out, even the best ones. But there are so many valuable

lessons you can glean from the founders and CEOs that join our program. So that's why we decided to create Medsider mentors. It's the easiest way for you to learn from the world's best medical device and health technology entrepreneurs in one central place. If you're interested in learning more, head over to MedsiderRadio.com forward slash mentors. Premium members get free access to all past and future volumes. And if you're not a premium member yet, you should definitely consider signing up. In addition to every volume of Medsider mentors, you'll get full access to the entire library of interviews dating back to 2010. You'll also be able to see all of our playbooks, which are handpicked collections of the most insightful interviews with the brightest founders and CEOs.

Whether you're looking to master capital fundraising, navigate early stage development, tackle regulatory challenges, understand reimbursement, or position your venture for a meaningful exit, MedSider Playbooks have you covered. And last, considering that fundraising can be one of the most daunting tasks for any startup, we created a meticulous database of investors right at your fingertips. Explore a wealth of VC funds, private equity firms, angel groups, and more, all eager to invest in medical device and health technology startups. Access to this database is a premium member exclusive, so don't miss out.

Learn more about Medsider Mentors and our premium memberships by visiting MedsiderRadio.com forward slash mentors. Again, that's MedsiderRadio.com forward slash mentors. All right, without further ado, let's jump right into the interview. All right, Kelly Roman, welcome to Medsider Radio. It's great to be here. Yeah, yeah, I'm looking forward to the conversation. I've been kind of following Fisher Wallace for a while.

Some of my day is sounding Jew, you know, so kind of watching, what you've done with, you know, crowdsource funding, decentralized remote trials, done some, done some cool stuff. So along with obviously building a cool product. So looking forward to the discussion. So I recorded a brief bio at the outside of this episode, but let's start there. If you can kind of give us an elevator pitch for your professional background leading up to starting Fisher Wallace and kind of running the company of CEO, that'd be great. Sure. I didn't start in the medical device or on the medical side, really. I started in marketing, communications, social media.

So prior to Fisher-Wallis, I worked at a few companies. I worked at Nielsen Media, and that was really at a time when Bebo was a big social network. And I was responsible for building some partnerships between Bebo and Billboard.com and what was called the Book Standard and Kirkish Reviews around authors. So I was working with big book publishers and authors, and we were creating video content for the books. And then that was kind of much better than your typical book ad. And I recruited some film schools to do that. And we ran that content on Billboard.com.

And then I was actually offered a job at Bebo. I turned it down and ended up writing a book for Harper Collins. So I spent, which was always a dream of mine, I was an English major at Harvard. So I wrote out and did the basic illustration for a graphic novel and then worked with a brilliant illustrator named Michael Deweese. And we adapted the art of war, Sun Tsews the Art of War. So that's actually informed a lot of my business since then. So even though that's very different than a medical device company, I was living and breathing the art of war for a number of years. After that book project, I was looking for something to do.

and I met Chip Fisher, who had purchased the IP of our version one device from the engineers, and his co-founder had just passed away fairly suddenly of cancer. So I became his new co-founder, and we started very humbly. But, you know, Chip didn't have a medical background either. He came, he had, his father founded an electronics company that was very successful. It was called Fisher Radio, became Fisher Electronics. So he grew up in the electronics business. And so we had very different kind of backgrounds than a typical medical device startup.

And I think that's actually benefited us. Got it, got it. And is Chip still involved with the company? He is. He's the chairman, majority shareholder. He's not in the office every day, but I speak to him all the time. and he's very active, especially now we're back in fundraising mode. So, you know, he has a very deep social network.

And so he's very much involved. Got it, got it. If time permitting, I'd love to kind of pick your brain a little bit about your, some of the things that you applied, right, from your book to what you're doing at Fisher Wallace. But we'll save that question. But for those that aren't familiar with the devices that you're developing and commercializing, help us get a better, a better sense for kind of like the,

the underlying technology, what they do, and maybe explain it as if I'm a freshman in high school trying to learn about what Fisher-Wallis does. Sure. So I think we're all familiar with the foundations of human health, right? Most of us know you're supposed to sleep well, you're supposed to eat right. One of those foundations is also brain health. Everything that you do, that you think, you know, thinking, sleeping, feeling obviously is, is all rooted in the brain.

So on a macro level, we're in the brain health business. We have an electric brain stimulation wearable, and the brain is an electrical system. And so, you know, most of us are familiar with taking medications to change the way the brain functions. But another way to do that is to take a very refined form of electrical stimulation and actually harness what's going on in the brain and bring it back to a homeostasis, to a healthy state.

And you can do that electrically. So that's what we do. But you have to focus on something to start with for a reason for someone to adopt it. We've focused on depression. And depression is a complicated thing to treat. And there isn't a tremendous amount that's understood about how depression manifests itself in brain function, but we do know some things. And what we've discovered in our research and in commercialization is that electrically stimulating the brain with our technology

is actually much faster than medication typically is. There's a few exceptions. And also doesn't introduce any side effects, any serious side effects, because we're not a chemical intervention. So very rapid, safe treatment of depression, but also there's a whole scope of if you can think of anything that the brain is involved in, if we're bringing that brain to the state of health, then that will improve. And so there's a long list of other things that we proving out that it helps with. And we've actually done quite a bit of research already on many other things like Parkinson's and substance use disorder and anxiety and insomnia. So I really look at this as a super device for health care, something that you

might think of more like in the consumer app world and everything app. So that that's what we're trying to build here. Got it. Got it. I'm looking at the oak device on your website, which is Fisherwallis.com, Fisher, F-I-S-H-E-R-Wallace, Warris, Walsh.com. We'll link to it in the full summary on Medsider as well as Kelly's LinkedIn profile. But for those that don't get there, that's the website where you can learn a little bit more about the technology and the company.

But we'll get into the Clint Reg kind of topic and more detail later on. But is this a class two device then? It's class three for depression. Got it. Okay. It will be class two for most other things. Okay. But for depression, it is class three.

So it's a full approval process. Got it. Got it. Okay, cool. That's super helpful. And then give us a sense for where the company's at in terms of like development, reg and commercialization. because I know you started off with the 1.0 device, which I believe is in market.

You've done, you know, I think some extensive clinical studies, but where you're at, as it pertains to 1.0 and then the Oak 2.0 device. Sure. So we commercialized the 1.0 under a now, you know, ending and actually, in the case of depression, has ended temporary 510K clearance, which was not to get too technical, but the FDA used to regulate these devices under an antiquated form of regulation that came in when it was established when the FDA first came into being in the 1970s because there were electrical stimulation devices, crude ones on the market at that point.

And they updated that regulation in 2019 and now it's been taking effect fully this year. So we no longer market version one because of that has now. officially ended for depression and so now we're focused on getting approval for version two but under that temporary clearance we sold 100,000 devices so we you know it's about 40 million in revenue so we we've definitely proven product market fit we learned a tremendous amount from our customers and it also over that time we we did conduct quite a bit of research over the last few years, all the research we've conducted has been on the version two technology. The biggest difference is that version one was variable output so that the user could select the amount of electricity that was coming out of the device.

And the version two is a very precise fixed output. Got it. And then, of course, there's a huge difference in the form factor. So the version one requires a headband. It's a very rudimentary industrial design. It's been called like a radio shack looking device, which I don't mind. That's truthful. Has a couple of wires, red and black wires.

It looks like you're jumpstarting your head. And so what we did with Oak, the version two, is got rid of the wires, hired one of the best industrial designers out there, Eric Fields, who did the first nest thermostat and products for beats. We hired the engineering firm of beats, of all the beats products, called alloy product development. They've also worked on the HoloLens and a bunch of other products, including some medical products. And so we've been developing that for a year and a half, almost two years.

And we should have, hopefully, the engineering finished for the prototype. you know, by the end of this year or early next year, then we can pass it on to our manufacturing partner. And within a few months, they'll be able to build what's called investigational oak, which we can distribute before approval for research as well as for pilot programs. And so we plan to do that, not really for approval. We have a research version that we're doing the research for for oak. But we want to get Oak out into the world next year.

And then we're at the mercy of the approval process in terms of when we can be fully commercialized. We're expecting that in the second half of 2025. Okay, got it. So that interim period, let's call it maybe early 24 through maybe early 25, when you're sort of getting Oak out into the public domain, letting Oak go wild into the wild. Are you effectively commercially launching that just with limited claims then or like what walk us through kind of the process there? Because I think that that is unique. And I think most med tech or health tech entrepreneurs don't don't think in that in that same light. So yeah. So let me explain that. It's it's also tied to the manufacturing process. So we can't commercialize oak as in sell it to the public until it's been approved. And not only that, but you can't sell a device that hasn't gone through all of the commercial validation testing, the non-clinical testing, such as shelf life, drop testing, all the things you associate with

even a regular piece of consumer electronics. Now, for what's called an investigational device, it doesn't need to meet those commercial standards, either on the regulatory side or on the manufacturing side. It's called the EVT stage. So it's a fully functional device. It's kind of like you can think of it as the first fully formed version of it before all of that non-clinical testing has gone through. Not much should change, obviously, after that.

But as long as you have participants who are using it in a study or in a pilot program where there is informed consent, and you're able to have these things tested. An example of that is we recently wrapped up a pilot study with the Seattle Police Department. Now, they enrolled about 200 subjects, police officers, first responders, there were a couple other departments involved. And we could do that exact same thing with Oak before it's approved, right? Because you're using it in an investigational contact.

And so you can collect data. And so you can add to your portfolio of data. But the real intent, well, I shouldn't say that's one intent is to collect data. The other intent is to demonstrate that a partner like the Seattle Police Department can adopt it. It thinks it's valuable. It's really real world evidence. It's not, you know, just in a lab. These are people, participants who are using it out in the world.

and are being tracked remotely through an app. And so that's my plan. And I think a very great way to actually get market traction and to build a B2BK study, one or more. So we're planning to manufacture at least 7,500 devices like that. We have many pilot programs. We also have a lot of folks who, when they invested through us through equity crowdfunding,

and we can talk about that later, A lot of our past customers of version one, they got a coupon code to get Oak for free. We can invite those people to participate in what's called a usability study or confirmatory testing in which we're wanting to confirm that everything that we assume we've designed and built into this device actually works in the way we intended. Again, there's a research purpose, but you can certainly get the device out. out there. And in fact, the FDA requires what's called confirmatory testing. It's not a clinical trial. Like if you have a version two of something, right, whether it's a dialysis pump or whatever,

if everything basically is the same, but there are some significant, say, design, industrial design changes and so forth, they're going to want what's called confirmatory testing just to show that there's not a significant difference between the version one and the version two. And that's what we have to do for Oak, because it is, aside from the. industrial design, it is exactly the same as the version one. I didn't say it's fixed output, but we can use a version one industrial design and research, get the approval with that, and then get confirmatory testing for version two, because there aren't any changes that would, for instance, change the intended use, change the contact materials, change the method of control.

So, you know, you're able to, which I think is another important point for startup founders, is you're able to innovate design while you're doing research for that new design, as long as you're checking all the boxes that wouldn't require a whole new set of clinical data for your version too. And so we're being careful to make sure that we were able to take all of the clinical data and the approval from the research version. Yeah, yeah. No, I'm glad we're talking about. this because I think it's not every single device you know we're not going to be able to kind of follow this sort of pathway with every single device like as yeah as an example like if I'm if you're

developing a heart valve right I mean there's not like there's not maybe one to one sort of analogy here but I think kind of the framework though is is really interesting to talk about because the natural position that most met you know people that that are kind of like pure play medical device folks they would not think to get their their devices like this out into the public like into the end user's hands as early as possible. And if they are, maybe they're only thinking about within the context of collecting data, which is important, right? But as you mentioned, like if you can establish, if you can collect data and establish sort

of a precedent when you're working with like the Seattle Police Department, as an example, that has commercial implications, right? It has implications as, you know, in terms of iterating on the packaging as another gap or whatever. I mean, there's a lot of learnings to be had and a great opportunity to kind of showcase you know, the real world impact, right? Yeah, just the word of mouth of it is important. That can't be your primary reason for doing a pilot program like that. It has to be collecting data.

There is a legal reason for that. But the data, you don't have to fake that. Obviously, you want the data. So it's really the secondary benefit of that word of mouth from an important partner using it is very valuable. So there's an incentive to do that. Yep, yep, no doubt. I want to circle back around to your experiences running some of these remote clinical trials. But before we get there, let's go back and kind of touch on development for a little bit. Because you, and I'm looking at your website, I can see 1.0, right? It does look, I mean, the Radio Shack style kind of device, it does sort of ring true. But as you approach development with Oak 2.0, I'm sure there's probably a ton of learnings, right, coming out of 1.0, sort of that, that phase of Fisher Wallace. And this is, this is. is one of the most challenging aspects to any any health tech med tech founders like how do i be ask capital efficient as possible in these early development phases so i can i can learn as much as possible

but kind of you know continue to push the kind of the development forward so i guess is there anything is there anything you're doing differently this time around right with o2.0 versus 1.0 in terms of trying to um get to your your alpha your beta as fast as possible in the most efficient way yeah and i think I mean, our path is, I would argue, as much as a consumer product as it is medical. Or if you have a Venn diagram, we're in the middle of those two things, which is not your typical med device. So I would look at it more, to answer your question, more like how would you approach consumer product innovation? And we've already spoken about the ability to get new product out in users' hands through pilot studies. and I think the things that I learned from version one definitely informed the industrial design of version two.

People didn't like the wires hanging down. That was the biggest thing is how do you get rid of these wires, right? The second thing is batteries, right? Our version one uses two double a batteries. Version two uses lithium ion battery that can be rechargeable. So those two things alone, removing the water. wires having a rechargeable unit. I mean, that's a huge improvement in usability. Then we had to think about things like, well, in version one, you can look down at the device

because you can hold it with the wires coming up and you can see, you know, if you've lost connectivity between the electrodes, for instance, if they're not wet enough or if you've lost it or if there's something wrong with the battery. Well, if everything's on your head, you can't, you don't have that visual cue. So then you have to think about, well, how do you alert the user of these things. And so we built a little speaker into one of the pods, electropods, and we can communicate audio, and there is a little LED light. We can communicate. If you happen to be holding it, you can see, oh, it needs to be charged. So those are the kinds of basic usability questions. I think the two other things I learned is that we wanted to continue to

destigmatize treatment, especially for depression, right? And the version, one device, industrial design, it's inexpensive, which is also a plus. We're actually, the cost of building oak is going up version two, but we think we're going to get that back in terms of the desirability of it and it will cost less to market, right? So you're getting that extra cost of manufacturing, I think, well, more, more than, it's going to more than cover it. But the destigmatization part was a goal of version 2 industrial design. We wanted to make the device not look like something medical.

We wanted to make it look just like a really cool wearable that you would want to be seen wearing as opposed to not wanting to be seen wearing. And I think the other thing we learned is that we have lifetime customers. So our user is about 92,000 customers that bought 100,000 devices. Some people bought more than one. We've had people buy eight. They've eight different houses or some very wealthy customers who were able to get one for each house. You know, people want to use this device for the rest of their life.

We surveyed our customers and we were surprised at how many people were using it after symptoms went into remission. because of the cognitive benefits. And so if someone's using it for 40 years, then they're not going to use the same device for 40 years, right? Especially something that you're wearing on your head twice a day. It's going to get dirty. It's going to get worn.

You know, I think we'll be able to have a five-year shelf life with Oak. I think people who are active users using it twice a day, they're probably going to want another one in three years. And we can. build not unlike a cell phone and innovation schedule. Of course, it's more complicated in the cell phone if you have to go get new approval and stuff. So there's some stuff that will navigate there. But in general, we're expecting customers to get a new device every three years.

And so that in and of itself justifies focusing on product development, continuous product development. Yeah. 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. You'll get full access to the entire library of interviews dating back to 2010. This includes conversations with experts like Renee Ryan, CEO of Cala Health, Nadine Mared,

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