Medsider: Learn from Medtech and Healthtech Founders and CEOs - Building a Consumer-Focused Medtech Business: Interview with Tivic Health Co-founder and CEO Jennifer Ernst

Episode Date: November 9, 2022

In this episode of Medsider Radio, we sat down with Jennifer Ernst, CEO of Tivic Health.Jennifer came to the medtech space after more than 20 years in the computing and electronics industries, serving in high-profile roles at Xerox PARC and Thin Film Electronics. In 2016, Jennifer founded direct-to-consumer medtech company Tivic Health and helped lead the development and commercialization of the company’s flagship device ClearUP.In this interview, Jennifer shares how consumers can play a key role in boosting support and evidence for over-the-counter medical devices, and why she thinks direct-to-consumer business models will transform the medtech space.Before we jump into the conversation, I wanted to mention a few things:If you’re into learning from proven medtech and healthtech 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 proven 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 a copy of every volume of Medsider Mentors at no additional cost. If you’re interested, go to medsider.com/subscribe to learn more.Lastly, here's the link to the full interview with Jennifer if you'd rather read it instead.

We believe strategically that whether we're dealing with a prescription product or a home use product and over-the-counter product, the ability to excite end users to excite the person that needs to be adopting and compliant with that person that I described earlier, every single day makes a decision whether or not to use your product. Getting them excited enough and having it well positioned for them, it's going to be a critical first step to then the rest, pulling the rest of the medical community along with you as part of their care journey. 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. In this interview, I sat down with Tivic Health co-founder and CEO Jennifer Ernst.

She came to the MedTech space after more than 20 years in the computing in electronics industries, serving in high-profile roles at Xerox Park and thin film electronics. In 2016, Jennifer founded direct-to-consumer MetTech Company Tivik and helped lead development and commercialization of the company's flagship device clear up. Here are a few of the key things that we discussed in this conversation. First, if you're making a consumer device, think about the form and function of your product

and how that aligns with consumer expectations. Your advertising and instructions for use should be as clear as possible from the outset. Second, focus on building support. for your over-the-counter device through user reviews and word of mouth. If consumers back your product and use it every day, they're more likely to share that with physicians who then recommend it to other patients, resulting in a flywheel effect that could open doors to further channel opportunities. Third, don't shy away from challenges,

but make sure you're also prepared. Getting financial backing in the direct-to-consumer space isn't easy. The more you demonstrate the value of your device in the real world, the more comfortable investors will be in funding your vision. Okay, so before we jump into the discussion, I wanted to let you know that we just released the first volume of Medsider mentors, a print-based book that summarizes the key learnings from my favorite medsider interviews over the past six months. Look, I fully realize 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 a way for you to learn from the best thought leaders in our space in one central place. Here's a teaser of what you'll see in this first volume. Hong Kong, founder of Health Quest Capital, teaches you how to successfully pitch your startup. Patricia Ziliak, CEO of Ivansans, discusses what you really need to know about clinical trials. Jared Bauer, CEO of Ionic Sciences, shares best practices for avoiding obstacles in your startup journey. That only scratches the surface, so if you're interested in learning more, head over to medsider radio.com forward slash mentors.

If you're a premium Medsider member, you'll get free digital access and a print version sent straight to your door. 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. This includes conversations with experts like Erica Rogers, CEO of Silk Road Medical, Dr. David Albert, founder of Livecore, and so many others. Learn more by visiting MedsiderRadio.com forward slash mentors. Again, that's Medsiderradio.com forward slash mentors. All right, without further ado, let's get to the interview. Hi, Jennifer, welcome to MedSider Radio. I appreciate you coming on.

Thank you. I'm excited to be here. Yeah, yeah, definitely looking forward to learning a little bit more about you and your journey with Tivik and the clear-up device. It should be a fun conversation. So I gave, at the outset of this interview or this episode, I gave the listeners a very high-level kind of perspective on your background. But can you kind of maybe add a little bit of color, a little bit of context into your, you know,

what you were doing before, you know, co-founding and leading a typical health. Oh, absolutely. So I'd like to just say to start, most of my background and my time, commercially, has been spent in the translational period between science and how you take breaking and groundbreaking science and turn it into commercial value. So the first part of my career was spent at Xerox Park, pretty legendary in the computational industry, maybe less known in the MedTech industry as the home of much of modern computing. So I had great experiences working with cutting-edge scientists across everything from materials to bio to ethnographic and social sciences, as well as a deep repository of computational science.

Love the experience. I could build teams there. I had a great deal of experience building up teams and new functions in the organization. But what I could never get due there was actually build a company. And so in 2011, I actually joined one of the client companies that I had brought into Park as a customer, ended up moving and joining a Norwegian-based company that was focusing on how to reinvent the way electronics were manufactured. So again, a case of being able to take what was happening in the scientific lab and at the scientific frontier and apply it to new methods of manufacturing for electronics. We ended up taking that company actually on the public market from eight people to about a half-billion market cap in five years

time. Incredible experience. Again, I had a Norwegian-based company, so we had an international presence pretty much from the time I joined the company. And then I started looking for something where I could really put my chops to work, put the experience I'd had to work. And I came across this fascinating field of bio-electronic medicine. It's an exploding area in science. I was incredibly drawn to it in part because of how little isn't actually known about how the electrical system of the body works. And yet we're at that point in the industry where you start breaking from it's pure and applied science into it's commercially relevant. And we are now forging a frontier of what could be the next pharmaceutical style industry.

So this area of bio-electronic medicine really drew me to it. And concurrent with that, I came across an invention. It was one of those friend-of-a-friend situations that was showing remarkable promise for relieving sinus pain, pressure, congestion, kind of all of these chronic symptoms associated with inflammation of the sinus passages. And I have to be honest, when I first started looking at it, it seemed like a really crazy idea and then every time I showed it to somebody and talked with somebody about it and started figuring out how many people suffer from sinus conditions and the best solution they had available to

them was washing their nose out with salt water. We started saying, you know, this is this is not only a great market potential, but the two co-founders also had a significant background in building companies. Between the two of us, there was about a billion dollars of value creation that we had built over a couple of, over our careers. And we looked at each other and said, it's irresponsible for us not to take a shot. So it really became something you just couldn't walk away from. So in late 2016, we founded the company. Started out with some really crude prototypes,

started out with some really crude prototypes, moved through several phases of design, multiple iterations, rapid prototyping, started our clinical study in 2018, got our FDA clearance in 2019, later that year put the product into market. And at this point, TIVIC is, we've sold over 30,000 units,

and we're a publicly listed NASDAQ company. So it's been a pretty fast, rapid, and exciting journey from concept through commercialization, now to actually providing our investors liquidity and having the opportunity to grow the company to, in this space of bio-electronic medicine, to a multi-product company. Yeah, that's incredible.

And I'm picking up on this trend where it's like you tend to have pretty big goals, pretty ambitious goals, right? I mean, you mentioned even before TIVIC, your experience at thin film electronics, you know, and going kind of from zero to, you know, I think you mentioned a multi-billion dollar, you know, a company in a very short amount of time.

And it seems like with TIVC, you sort of, you know, to a certain extent, replicated that as well, replicated that sort of that sort of trajectory. So that's certainly, impressive. And before we kind of, you know, rewind the clock and learn a little, learn a little bit more about sort of the journey or your journey with Tivik over the past, gosh, six plus years now, I wanted to touch on one thing with respect to bio,

kind of electronic medicine or this or bioelectronic, this whole kind of, this whole field. And it certainly seems like emerging. But when you first learned about it, did, did the clear up device exist then? Or were you kind of pulled or kind of drawn into the space? And then you sort of, you know, kind of came about this particular device or this idea? For me, it was actually a really interesting journey because with my background, I'd always started with the science and then figure out what you can do with the science. In the case of clearup, it was originally designed through a series of experimentation with an allergy specialist who unfortunately passed away. So the product had kind of gone into a

hiatus. It was, it had been designed, it was showing great results. There was some ideas about why it worked or how it worked, but at the time I started, there really wasn't a scientific foundation underneath it to say, well, here's the mechanism of action we're certain about. And so that was a very different starting point for me. As I said, I usually start from the science and then figure out how to apply it. In this case, we had the application and I was driving myself crazy trying to figure out, like why does this thing work? And we were joking. I mean, at the early, very early days of starting the company, you know, I kind of looked at my husband and said it would be a heck of a lot easier life if this thing didn't work. But it does. So we're going to figure it out. That's great.

I love the framework kind of the shift too, right? Where you're used to, you know, starting off the science and then figuring out an application for it. But it was the script is sort of flipped a little bit this time around. And it kind of reminds me a little bit if I, I'm one of the co-founders of Juve, which is a, you know, a red light therapy company. It's a direct-to-consumer red-like therapy company in the photomedicine or photobiomodulation space. And when I first heard about this, that science, it was like, this sounds, this sounds pretty sketchy. You know what I mean? I was pretty cynical. But it, you know, this, I had no idea what this concept of like, you know, modulating, you know, cellular activity with certain wavelengths of light. It just sound,

the whole thing was like new and just sounded a bit like woo-woo science to me. but that's one of the reasons I asked the question is like, you know, I'm always curious as to, you know, you have this new field sort of what attracted to you. And it sounded like it was a, you know, part, uh, interesting idea, but sort of the compelling kind of umbrella bioelectronic, you know, medicine was, was probably, uh, just as, uh, just as interesting as well. So, um, with that said, um, let's let's kind of, you mentioned, you know, kind of in early days, you had this, there was this existing device or this existing concept that appeared to actually work. So can you, let's rewind the clock a little bit and go back to those early days of TIVIC and this clear-up device.

As you and your team kind of work through the early alpha and beta versions of kind of perfecting, you know, this concept, where there's some key things that you kind of learned early on that, you know, would be helpful for maybe other, you know, med tech or health tech entrepreneurs that are kind of, you know, facing those same hurdles. Yes. if I think about the early days, the inventor of the technology had done a number of Class 3 type devices. And in the case of Class 3, you always have the opportunity to train the user. When I looked at this market and saw 40% of the users, the potential candidates for using the technology, don't even see a doctor. We knew we had to go the over-the-counter route.

We had to make something that was going to be really easy to use. And fortunately, I've had a background in ethnography, but it really challenged us to understand the mental models that people were bringing to the use of the product and how form factor affected, how form factor and how they held the device really affected how they thought of it. And so for humor's sake, I will share, one of the biggest ones we ran into is the idea that you don't put something in your nose. So when you're treating sinuses, almost anything you would hold in your hand, would be a nasal spray, a drop.

So the first thing, anybody who picked up the device wanted to do was figure, like, look at it and go, do I put this in my nose? And we're like, no, no, that's the whole beauty of it. It doesn't go inside the nasal passage. You just use it on your cheek, on the skin, on the outside of your, that was a pretty hard mental model, actually, to break. So we had to really think about, like, how's this form factor going to communicate that you don't want to do that. That's not how you use it.

how are we going to communicate with all the video, with the advertising, to make sure that the first time somebody picks up the product that we aren't feeding into a mental model that's going to lead them into misuse. So that's something, particularly when you're thinking about designing for over-the-counter or any form of home-use product, that as we've moved it forward and as I've interacted more and more with people in the device industry, I would draw a couple pieces of advice out of it. The first is you don't, I mean, your bandwidth to train a user, we figured out we had about 2.3 seconds to train a user. This is not open up the book and let them really study it and read

the user manual and detail. People are used to being able to pick up their cell phone and be able to take it out of the box and use it. So the standard for design, for product design, is so incredibly high. And that's the standard we have to get to as medical company. we have to be aspiring to the level of design that consumer product companies have achieved, that the best of consumer product companies have achieved. And that means understanding how people are going to take a mental model, I will be honest, there's one we missed.

A piece of the mental models, the way that you hold our Clearup unit feels a little bit like holding a mouse in your hand. I realize that many people have mice that have a button on the top of them that you push, and our clear-up button, clear-up has a button on the top that you push to turn it on,

but you don't push it while you're using it. And I started realizing that the mental association between something sitting under my finger, and is it a scroll, whether it's a scroll bar, a button, the concept I have something under my finger leads people to push the button while they're using it. Something we plan to fix in future versions, but it was one of those examples of where

very subtle mental models that people carry with them or intuitive or intrinsic responses to the technology, to things that they use in their daily life and how they map it to the product at hand can actually have a very significant effect on whether they're getting the clinical efficacy from the product, whether they choose to use it on a daily basis or under the routines that they are intended to use it for. And really, the way I've framed it for entrepreneurs that I've talked with recently is if you've got a product that has to be used at home, pretty much every single morning or every single evening, somebody is making a decision about whether they're going to take that moment in time to pick up and use the product you created. If your vision is going to really

become reality of how this is going to impact the world, every single day, somebody is going to be making that decision and probably hundreds of thousands of people eventually are making a decision this morning, do I pick up my device and use it? And so it really does draw us to a point of saying, we need to design products that people want to use, that they're driven to use, that they feel like, even if I don't have the, even if I'm not suffering today, I want to use it because it feels good to use it. I hope that that kind of construct of how we thought about design early on going from the ergonomics and the shape and the handhold and then really having to think and understand the mental models that users bring to a medical product from the consumer

industry experience, I think is going to have a huge impact on how these kinds of products play into the future. Yeah, they're such great insights. And I want to get to some other questions, but there's a lot to impact there. But a few things that really stand out, kind of hearing your description of how you and your team kind of worked through some of those challenges was even even from the from the get go, kind of understanding that, okay, this is a, this is an OTC consumer device. We just simply do not have time to train these consumers, nor, nor sort of the capacity. And so we just have to, we have to operate within that sort of framework, right? That this is, to your point, you had like two plus seconds, right, for the user to kind of

intuitively understand how to use the device. And so designing it in a way that was, that was, you know, intuitive, you know, easy to use. And I think that really stands out. And then the other thing that you just mentioned, Jennifer, that I think is really interesting is just the fact that even if this device works, right? And a patient, a user at home experiences a lot of relief. If it's hard to use and cumbersome, they're just going to be less app to do it, even if it works really well.

And so designing something that's user-friendly and that's somewhat enjoyable, you know, or hopefully, you know, pretty well-enjoyed. to use is is pretty important, right, for compliance. And so I think that, those are a few things that that stood out, you know, hearing you describe some of the key lessons learned along the way in the early days of designing the clear-up device. Exactly. Exactly. You summarized it. Great. You summarized it beautifully. Thank you. That's good stuff. Let's move on to kind of the regulatory waters. And you mentioned, you mentioned like, I think, well, I'll just, I'll just add, I think you're up to three regulatory

clearances now. Is that correct? Correct. We have a 510K, a de novo, and a CE mark for clear-up. Oh, for clear-up. Okay. And initially, was the clear-up a denote, was the first clearance that you got? Was it de novo, or was it a 15-K? Ironically, it was the 510K. We had a predicate device for pain, but not for congestion. And one of our sort of quarks of going through the approval process was that pain was considered a neurologic function. And so it needed to go through one. group at the FDA and congestion was considered part of the ENT group and so it needed to go through a different submission process. So we had a device, we had predicate devices for pain that we were able to demonstrate and use,

although we have clinical studies on pain specifically, pain in the sinus region. So we did do clinical studies for the 510K to be able to make the claims around the sinus relief, the relief of sinus pain, what has been expanded. and out of pain, pressure, headache under the CE mark. We then had to go a de novo for the, for the congestion, for proving that it worked for congestion. So yeah, a little bit, a little bit counterintuitive. Got it. But did the, so with your first 510K for pain, were you required to do clinical studies for that

particular submission or were you able to get to market with, through kind of a non-clinical 510K process? No, it was a clinical 510K. We didn't need to do because of the specificity of the claims we were making. Got it, got it. Okay. And then you sort of not pivoted per se, but pursued the de novo for those additional claims around congestion. So when you think about, that's that's a significant regulatory work for a consumer device, you know, to have not just one particular clearance, but three, all of which, you know, required clinical data. So when you think about that journey, considering your team has done this seemingly pretty quickly, right? Are there a couple, you know, things that stand out that has, you know, sort of either allowed you to move through these regulatory pathways pretty quickly or that's, you know, either, you know, some key things that you also learned, you know, through that process too. Yes. I mean, I have to give shoutouts to my team for both the expediency of the product design, the, the,

tight team work getting the product into clinical and then robust clinical protocols that allowed us to do those studies in an efficient way. But there are some underlying things about also the target population that we're addressing. So when you think about bodies of clinical work, the first thing is sinus pain, sinus issues, sinus problems are so pervasive and the device itself so low risk and so easy to use, that patient recruitment could happen in a pretty expedient fashion. So you've got a large population you're drawing from. Say we were going after a rare disease, you just have a much smaller population and it's much harder to recruit study subjects because there just aren't as many of them.

So that was one thing, is that fundamentally the scale of the market, the number of people we had to draw from, the fact we had access to Stanford University, one of the leading science, treatment centers in the world. We also had advisors out of Ohio, out of some leading E&T clinics. So we were able to do patient recruitment for studies pretty efficiently. The other thing is the magnitude of the effect. So if you have, we were looking at one competitive pharmaceutical product that the difference between placebo and active was 50% response to the basically with the placebo and 55. percent response to the active, and when your margins are that narrow, you have to have very large

numbers in order to see statistical significance. For the case of Clearup, the order magnitude of the effect itself is really strong. So when we have an abundant population draw from, and the response to the mechanism is there's a huge separation between what you get from the sham device to the active device and we have significant differential, that allows us to establish the statistical significance on relatively small numbers. So I'm talking about the nuances of the clinical design and the math that has to go behind it, but it allows to get with relatively modest, you know, less than 100 study subjects to highly statistically significant data.

That is something that I think is an interesting challenge for the device, therapeutic device industry is when you have these large orders of magnitude, you don't need so many patients in your studies, but your clinical community is used to seeing studies of thousands of patients coming out of pharmaceutical industry. They need to do it because the safety issues, they need to do it because they're searching for the long-term effects, and they also need to do it because orders and magnitude effect versus placebo are often not that strong. So you get a device product that can show statistically significant difference in treatment with relatively small numbers, you have to do a little bit of physician education to explain, to really explain why you don't

need to go to thousands of users to show that the product is affected. That's really good point. And these sort of these clinical studies that you, that you sponsored and managed through, you know, over the past, you know, three, four, five years at at TIVIC, were there things that allowed you to, you mentioned a couple, but I presume because this device is used at home, you were able to do this in some sort of like decentralized kind of remote fashion, but there's some keys to your success in being able to run these trials, you know, efficiently and quickly? We did have, we did run them with internal leadership of them. So we did have very tight

coupling between, I won't say coupling, I should say, our internal chief scientific officer like gerfine was on it i mean really working with the study sites directly and making sure and checking in with them regularly um good collaboration as we went into it and really i would say it was the first study was and was at the clinic handed the devices to people and then i think the study coordinators actually had a had an unusual experience of once you handed the device to the person you couldn't do anything like i'm just handing it to you and I'll sit here and watch and make notes, but I can't intervene or help you because we needed to demonstrate that somebody could take the product out of the box and get the effects

that we were promising. So the first study was done at the clinic. The second study we did, we did do a four-week at-home study where we sent the devices home with people. They then used it over time. So in both cases, I mean, at-home is always harder because you get some attrition in the study. Some people become non-compliant because their symptoms got better. why do they need to keep using it?

But the at-home, I think really the keys were highly motivated study leads. The principal investigator was so curious about this technology and so curious about the results we were going to get, that there was a drive from the clinical collaborators wanting to see the results that they were pushing as well. So if you're going, when you're doing it, I mean, we were able to do it on relatively low spending because we managed it ourselves. We set the protocols ourselves. We had a good IRB working with us. And having highly motivated curious principal investigators who wanted to see the outcome and were really curious to see where it was headed. And it did show, I will say, at one point, our clinical collaborator, one of the clinical collaborators kind of looked at it and said, oh, I don't know.

I don't know if this was going well for the company. And then we unblinded. And he was blown away by the data. That's cool. Yeah, it was a pretty funny, like, even the collaborators couldn't really tell which device was which, while they were in situ, and then the unblinding. We had a nearly perfect blinding index, and when the data was unblinded,

even the people that were sitting there on a day-to-day basis watching went, whoa, that is, I mean, there's serious separation between the sham and the active device. And that was pretty cool. 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 Yared, CEO of CVRX, and so many others. As a premium member, you'll get to join live interviews with. with these incredible medical device and health technology entrepreneurs. In addition, you'll get a copy of every volume of Medsider mentors

at no additional cost. To learn more, head over to MedsiderRadio.com forward slash premium. Again, that's Medsiderradio.com forward slash premium. Thank you.