Medsider: Learn from Medtech and Healthtech Founders and CEOs - Challenging the Gold Standard: Interview with Profound Medical CEO Arun Menawat

Episode Date: May 14, 2025

In this episode of Medsider Radio, we sat down with Dr. Arun Menawat, Chairman and CEO of Profound Medical. Profound is commercializing the TULSA-PRO system, an alternative approach to prostate cancer treatment that uses MRI-guided thermal ultrasound to target and eliminate cancerous tissue without surgical incisions. Before joining Profound in 2016, Arun served as the Chairman and CEO of Novadaq Technologies for 13 years, guiding the company from a startup to one of the fastest-growing, NASDAQ-listed medical technology businesses with a market cap exceeding one billion USD. Earlier in his career, Arun served as President of Cedara Software, a company that developed the industry’s first medical imaging software platform. Today, it’s part of IBM’s Watson Health.In this interview, Arun shares insights on building credibility with physicians, the strategic approach to clinical trials that led to their recent Medicare reimbursement coverage, and his vision for transforming the future of surgery beyond prostate cancer.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 3 packages that will help you make use of our database of 750+ life science investors more efficiently for your fundraise and 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 latest Medsider Mentors Volume VII. 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 Arun Menawat.

Sometimes, you know, there's a lot of pressure on the startup to get this done, get that done. And what happens is that if you don't spend the time to develop the technology properly, it will come back and bite you. You won't be able to commercialize it. If you don't spend the time on the clinical development, the surgeons will say, yeah, this looks interesting technology, you know, come back when you have all the clinical data to do it right. And so part of the way I feel like the way I feel like the way I'm, I focused on is how you build credibility with the future user. 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. in. Hey, everyone, it's Scott. In this episode of MedSider, I sat down with Arun, chairman and CEO of Profound Medical, a medical device company commercializing, customizable, incision-free therapies

for the ablation of diseased tissue. Before joining Profound in 2016, Arun served as the chairman and CEO of Novodak Technologies for 13 years, guiding the company from a startup to one of the fastest-growing NAST-listed medical technology businesses with the market cap exceeding over a billion dollars. Earlier in his career,

Arun served as president of Sedera Software, a company that developed the industry's first medical imaging software platform, today it's part of IBM's Watson Health. Here are few of the key things that we discussed in this conversation. First, resist the urge to rush to market and don't cut corners during development, even when facing financial pressures. Building credibility with future users requires comprehensive clinical data and a willingness to address their specific concerns. Second, strategically designed clinical trials to build trust with physicians and decision makers to

overcome the inherent skepticism that comes with disruptive technologies. Profound designed a head-to-head comparative trial against the current standard of care, an ambitious move that exceeded minimum regulatory requirements. This approach, while requiring more extensive resources up front, can create compelling evidence that may unlock adoption from even the most conservative practitioners. Third, when scaling disruptive medical technologies beyond the cadre of early adopters create strategic partnerships to achieve broader adoption, while innovators willingly adapt their workflows, mainstream providers require seamless implementation. All right, before we dive into this episode, I'm pumped to share that volume 7 of Medsider Mentors is now live. This latest

edition highlights key takeaways from recent Medsider interviews with incredible entrepreneurs like Bill Hunter, CEO of Canary Medical, Brian Lord, CEO of Pristine Surgical, Don Crawford, co-founder of Safion and current CEO of Corvista Health and other proven MedTech founders and CEOs. Look, we get it. Keeping up with every MedSider interview isn't easy. That's why we created Medsider mentors. These e-book volumes distill the best practices and insider secrets from top founders and CEOs, all in a downloadable, easy-to-digest format. To check the latest volume out, head over to medsiderradio.com forward slash mentors. Premium members get free access to all past and future volumes, plus a treasure trove of

other resources. If you're not a premium member yet, you should definitely consider signing up. We recently revamped Medsider with swanky new features, especially for our premium members. In addition to every volume of Medsider mentors, you'll get full access to our entire interview library dating back to 2010. You'll also get MedSider Playbook. curated guides packed with actionable insights and topics like fundraising, regulatory challenges, reimbursement strategies, and more.

And if you're fundraising, don't miss our exclusive investor database featuring over 750 life science VCs, family offices, and angels. We've even created three custom packages to help you with your next fundraise. Learn more about Medsider Mentors and our premium memberships by visiting MedsiderRadio.com forward slash mentors. All right. Without further ado, let's dive into the interview. Arun, welcome to Medsider Radio.

Appreciate you coming on. Thank you, Scott. It's wonderful to be here. Yeah, no, I'm very much looking forward to this conversation, especially with the rather compelling system, right, that you're developing at profound. So with that said, you spent over 20 years in kind of the broader, you know, med tech and healthcare arenas, including, you know, a pretty special story at Novodak, you know, starting, you know, going from startup to a billion dollar market cap, which is quite unique. So if you can kind of just touch on, you know,

without getting too far into the weeds, touch on kind of like your journey leading up to, you know, your current CEO role at Profound Medical. So, Scott, my journey actually started with my PhD program at the University of London. And it was a joint program with the National Institutes of Health. And so in the late 70s, you know, medical imaging was a very new area. And I got really attracted towards it because for the first time, we could actually see soft tissue. Prior to that, it was all x-ray and you could see bones breaking and so on, but you could see soft tissue. And I think that that allowed us to, for example, for the first time, literally see abnormalities inside a body without cutting the patient.

And you could literally see cancerous tumors and so on. So I think that was the beginning of what most of my career is about is in the medical imaging. And so the first one was really I had the honor of building a company called CIDARA Software, where we wrote medical imaging software for all the big imaging companies. So X-ray converted into CT. and then MRI and ultrasound and et imaging and GE, Phillips Siemens, these were the big suppliers. They knew how to do hardware. We wrote the software for these guys.

And as I was at this company, I began to also realize that if diagnostic imaging is good to diagnose the patient better, why would we not use it to treat the patient also? Why would we not provide it to surgeon at the same time? And so that was the inception of Novodem. where we took a very simple imaging modality, fluorescence imaging,

and we were able to design a product where surgeons could use it in surgical applications and they could see, here's my blood flowing, here's my abnormal tissue, here's the tumor, and literally in some cases they could even see the margins and so on. So that became an aid to surgery and is now pretty much standard in many, many different kinds of surgical procedures.

I'm really humbled by that. And then the third leg to me was, you know, if imaging can improve current surgery, can we actually take imaging and literally design it so you can come up with an already new way of creating a patient that has significant advantages in terms of precision and capability. And that is really what profound is about. Got it. I know you've been at profound for, you know, since I think 2016, I think based on our research. So, you know, almost, you know, coming up on almost a decade now, right?

So I'm on the website now, which is profound medical. We'll link to it in the full write-up on Medsider, but it's just as it sounds, right? Profoundmedical.com. But give us a high-level overview of maybe the system and how it's maybe, you know, what it's meant to do, but also how it's different than and maybe how you're kind of changing sort of the paradigm around how versus the sort of current standard of care. Yeah, absolutely. I'm very happy to.

So our primary product today is called Tulsa Pro. And it is about treatment of disease of the prostate. And our first focus is actually on prostate cancer. It is the largest cancer among men. And as men get older, they're most interested in making sure that they don't have to go. Urination and cancer, just the tendencies already get a lot more likelihood of getting cancer. Now, today's treatment are sophisticated, very expensive robotic equipment and very expensive radiation equipment, multi-million dollar equipment. The problem with these treatments is that 20% of the patients who undergo the procedures will become incontinent, and up to 50% will lose their erectile function.

So in today's world where men want to be active, they don't want to be incontinent. They want to go play golf. They don't need to change diapers all the time. And they certainly want to have a full life and not lose their sexual function. So there's a serious unmet need. Now, when we analyze what was the problem with these treatments, the problem really is that Rostit is in a very intricate space

so they can't see everything properly. So they cut nerve bundles that control these functions or they'll cut the muscles that control the functions. So we start with an MRI. We start by placing the patient into the MRI. So in real time, the surgeon who's treating can actually see where's the prostate, where are the number of those, what should I not? What should I stay away from? And so on.

So that clarity is really one of the big differentiator for us. The second thing is that we use AI to its fullest, not the buzz, but the reality. So the images show up, they click a button, and the boundaries of the prostate show up by the AI. So AI defines it, says, here's your prostate, and leaves the nerve bundles and other things outside. And the surgeon still makes the final decision, so they approve it or if they need to modify it, they can do that. But it's very software, very sophisticated technology that allows them to get precision about this and speed. The second thing that we do is we insert a little tube right into the center of that prostate. And that tube has these ultrasound waves.

It can issue ultrasound waves like a blade. And the sound gets absorbed by the tissue. And as it gets absorbed, it heats the tissue gently one degree at a time. And so like a thermostat, we have a set point of 57 degrees. When the temperature hits 57 degrees, it automatically stops. And literally it's the new age of how surgery is done because the surgeon is just sitting and watching the screen. They're only interfering if something has to be changed.

And at 57 degrees, the tissue dies. And then you pull the catheter of no incision, no blood loss, no hospital stay, patient wakes up. And the only reason they know that a procedure is done is because there's a catheter to keep that warm prostate safe for a few days. And that is why we have minimal side effects. We have almost no erectile dysfunction problems and so on. So that is the product that we are commercializing. It is truly a game-changing

product. Yeah, that sounds pretty incredible. If you don't mind, I want to ask you a couple follow-up questions. So that process that you just went through, starting with the MRI to the insertion of the tube, is that all in one setting then? So if I'm a patient and I'm going to be treated by, you know, the Tulsa Pro, is that, is that like one procedure, if you will, that's sort of all this is, okay. Yes. It's a great question, actually, Scott, because one of the things that when I joined this company, you know, as you said, almost, it's almost nine years now, one of the things I said to Wall Street

is that I want to develop a company and technology where a patient can be diagnosed in the morning, be treated in the afternoon, and be able to go home and help. and held a family. I was diagnosed, but don't worry, I'm cancer-free, right? And it's all done in one shot. And the beauty is that the images are there.

So physicians, after the patients are treated, they show those images to the patient and show here's where your cancer was. Here's now it's dark, you're cancer-free. Wow, that's really cool. And those sound waves that you mentioned, right,

that are delivered from that catheter, once that process is finished, right, the tissue is heated up to, you know, 57 degrees, I think you mentioned. What happens to the prostate tissue? It's now dead. Is it, is it, does the prostate sort of remain intact? Is it sort of sort of reabsorbed to a certain extent, right, within the body? Like, what happens next?

Yes, that's exactly right. So that is the reason why 57 degrees is a very important temperature. At that temperature, tissue dies instantly. And if you keep heating, it means the same thing. It's like if you get some steam on your skin, your skin will react and become red and so on. But if you gently warm it, the body just says, oh, I have some dead cells.

It reabs the cells. It doesn't react to it. And so what happens is the prostate shrink over time down to about 10% of their original size. And that speaks to the durability of our treatment. Right. So, and that was quite frankly a bit of a surprise when we did the clinical trials

and we start measuring their prostates after the treatment, we could start to see these prostitates are shrinking. Wow. Is your end goal, I guess in most cases, is it to sort of kill all of the tissue within the prostate or just certain sections? Yeah. So the way the product works is that the standard of care today

is treating the whole prostate because the belief is that there are micro cancer cells that remain. and if you don't treat the whole prostate, it will come back. But this technology is becoming more and more sophisticated. So there are certain situations where you don't have to treat the whole prostate. And the beauty of our procedure is the surgeon just draws the boundaries. If they want to treat half of the prostate, they draw half of the prostate. It kills whatever the surgeon says kill.

And anything that's inside the boundary, it will do it. So you can literally customize the treatment to fit every patient. Got it. Yeah, that's really cool. I know we were chatting before I hit the record button around, you know, how kind of novel this technology is and how sometimes I hate to use the word game changing, right? But it is truly disruptive, right? It's very different. And that's pretty cool to learn a little bit more about it.

So with that said, we're recording this in early Q2 of 25 here. Give us a sense for where the company's at in terms of its life cycle for those that may be listening to this app of the fact. Sure. So we are at the moment in the commercialization phase now. So basically, I call it checking all the boxes. So we did all the technology development that took a long time. We've got five-year clinical data because you need five-year cancer outcomes to be able to market a cancer product. And then as of January this year, we have been our technology and given reimbursement codes by CMS and AMA work.

working together. And so as of now, patients are now getting reimbursed. And so we have built this fantastic world-class sales team, fantastic leadership of the sales and marketing team, and we are now driving adoption. That's the phase we're at. In this earlier phase, we have well over 50 sites already. Most of the big teaching, opinion-leading sites already have the product and have treated well, I mean, I've been saying 3,000 patients for over six, seven months. So I'm sure we've treated close to 4,000 patients now as well. And we have very positive reviews from the patients as well. Yeah, that's cool.

That's fun. Fun stage for sure. So again, for everyone listening, Profoundmedical.com is the website. If you don't have a chance to get to the full article in Medsider. But profound medical, just as it sounds. And I definitely encourage you to check out their technology section, right, which covers a lot of the overview, right? and the workflow of the Tulsa Pro system that Arun is as mentioned. So with that said, Arun,

I want to kind of segue into, you know, at least for the next maybe 20 minutes or so, talking about like some key functions, right, that every startup has to get through, to get to the stage, right? That you just referenced this commercialization stage. And I'm not sure if we'll get to get to everything. I definitely want to touch on reimbursement because I know that's a significant significant inflection point for the company. And arguably maybe one of the more challenging, you know, obstacles to cross for any, any medical device company. But first one on the doc is I want to actually circle,

you know, kind of go back in time, you know, to this 2000, maybe 15, 16 time frame. You're either thinking about joining profound or maybe you've already joined. I'm sure the system looked a lot different back then, right, than it does now. It did. Learned a lot to those various phases of development.

But if I'm maybe a first time founder or maybe I'm somewhat new kind of to the device development cycles, Are there a couple pieces of advice that you would offer up, you know, based on your key learnings? Maybe it's at profound or maybe it's maybe, you know, even at a Novodak, for example. But, you know, what do you think are really crucial things to keep in mind in order to move as efficiently as possible during those, you know, those alpha and beta kind of, you know, development cycles? You know, I think for me, over the years, I have certainly learned a lot also because you learn by making your own mistakes. And to me, we have faced a set of challenges throughout this as well. And I think that, as you said, we truly are game-changing.

So to me, particularly for profound, the first most important thing was not to cut corners, to be honest, right? Because if you cut corners, sometimes, you know, there's a lot of pressure on the startup to get this done, get that done. And what happens is that if you don't spend the time to develop the technology properly, it will come back and bite you. You won't be able to commercialize it. If you don't spend the time on the clinical development, the surgeons will say, yeah, this looks interesting technology. You know, come back when you have all the clinical data to do it right.

And so part of the way I feel like the way I've focused on is how do you build credibility with the future user? And so your clinical trial, even though you're saying, I'm doing this for FDA, I'm doing this for being able to get guidelines, guidelines, and so on, I've sort of focused more on how do I build credibility with my end user. And to be able to say, let me do the clinical trial, let's do a few extra patients. Let's do different types of patients so that when they say, listen, for this type of patient, I'm not worried about, for another type of patient I'm worried about, you can say, yeah, and we have treated those, and here's the outcome.

And that builds credibility. And to be able to get that feedback and say, look, I have heard you, I'm going to update my product, or I'm going to do some other things and so on, they will say, you know, the early adopters typically will say, hey, every new technology has its things. And as long as I know that you're going to work on it and make it better, I'm going to work with you. So to me, not cutting corners and really building credibility are the primary lessons. Those are really good points because I think every startup is undoubtedly going to face these crucial decisions, right?

Especially early on. Yes. You're in a phase where you are trying to move fast, right? And you don't have endless capital. And so you're going to, you're going to kind of stare a lot of these decisions in the face. And I think that's a really healthy framework, right? If I make this decision, is it one where, you know, once I walk through the door, it like the door remains closed, right?

Yes. You know, and then is this decision going to either add credibility to our story? or look to the opposite, right, where it's redacting credit credibility, reducing credibility. I think that's a really, really healthy framework to make a lot of decisions through. Yeah, that's good stuff. And I just, like, I would encourage everyone that's listening to this, if you're kind of new to MetTech startups, that really is crucial. You're never probably going to have a perfect amount of information, right, at early stages.

But if it's a decision that is going to reduce credibility or not add to it, then maybe you should kind of take a step back and kind of rethink, rethink kind of where you're at or what you're trying to what you're trying to solve for. That's really really good points, especially, especially when it comes to truly disruptive technology like Tulsa pro. I mean, it even, I would say arguably maybe even matters more, right? Because you're up against that much more skepticism or that much more cynicism, you know, and trying to change, change a standard, a certain standard, you're going to be faced with that many more sort of, you know, skeptics. And so it's all the more important to make sure that you're,

you're doing it in a very credible, credible fashion. 100%. 100%. That the more game changing it is, the more you have to focus on building credibility, because your customers are going to be your partners. Yeah, yeah, no doubt, no doubt. And they truly are, especially those early adopters. They truly are. Yeah, those innovators and early adopters and that adoption curve are really truly more partners

than they are even customers. So with that said, I want to circle back around to this first of its kind, sort of clinical trial, going head to head with radical prostatectomies. But before we get there, I want to talk a little bit about your IPO, right? Because it's not every day that I have. have a founder or CEO on the program that has IPO successfully. And I know you recently closed,

I think late last year on a $40 million public offering. So when you think about the path to pursuing an IPO versus, you know, raising, you know, multiple rounds of financing kind of in the private markers, whether it's through early stage venture or maybe more late stage, you know, growth equity, what's been your experience like, you know, with this kind of this public path, right? And raising raising money in the public markets. Scott, that is also very important consideration, particularly for startup CEOs. And I've had the honor of, you know,

going from private venture capital companies to taking them to IPOs and then raising the funds we need it. And so when I think about it, there's, first of all, there's no doubt that if you're a private company, you have more flexibility. And in the early state,

that flexibility is important. And at least I've been lucky enough that even the venture capital funds that I've worked with me, I've had good credibility with them. So they've been very helpful, board members and so on. And if you have the right venture fund with venture capitalists with experience, that is really invaluable, in fact, to be able to have. And so I think my general thought has always been wait as long as you have to go to public markets. because once you go to public markets, every quarter matters.

You have to make commitments, you have to beat commitments. And in the early stage, with so many different things going on, that is really hard to do. So that certainly is a general purpose principle that I've followed. Now, having said that, you know, Profound in particular, you know, is Canadian company, there's not much venture capital. So we went public way early before revenue, before FTA clearance, which is very, very uncommon. And so I think that the reason the company did this is because the first rule I want to stay private. But the second rule is you cannot build companies that are game changing with a treatment modality unless you have sufficient cash to do it.

So one of the things I always sort of talk about is you need to be able to have the ability to raise the cash that you need to be able to do it properly. so that you don't cut those corners so that you do take the time to do it the right way because then it will work. It's a risk reduction way to do it that way. And so that's been the primary motivation that the companies that have taken public generally is to make sure that they can be funded properly.

And I might add one more thing. I've also focused a lot on who the investor base is. because a lot of times you will get investors who might be in retail who is excited about your technology, a patient who thinks this is interesting, but are they really long-term thinkers? Can they really understand what it takes? And they really understand the potential of a company like this. So we've spent a lot of time, in fact, not just saying, let's go raise the money, but really what is the right type of investor with which we should raise the money?

Such a good point, like thinking long term in a number of different ways, right? Not only with your investor base, but also, you know, kind of try to answer that fundamental question, right? Like the major underlying need here is capital, right, to truly get a disruptive technology to market. And I think the way you framed it up is really, really appropriate. I think it's valuable for anyone, right? Because if you're listening to this and you're working maybe on a technology, that's more

of a fast follower, right? Or a me betterer, right? That may look at, you may be able to get to market, you know, with less capital. capital on your sources of capital may be a little bit different. But if it's, if it's something that's going to be not only capital intensive, right from a development standpoint, but it's going to require, you know, extensive clinical data, you know, there's going to be a longer path to reimbursement, et cetera. That's going to, it's going to require a lot of money. And you need to be thinking about how you're going to fund this not just over the next year, but the next,

you know, five to 10 years. Yeah. Yeah, that's a really good, really good thought. 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. Here's why. First, Medsider premium members get access to every single interview dating back to 2010. That's over 200 episodes packed with expert insights from proven founders and CEOs. Second, premium members also get free access to Medsider Playbooks. These are thematic collections of hard-won insights covering topics like fundraising, risk management, regulatory, reimbursement, you name it. Next is Medsider mentors. These are

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