Medsider: Learn from Medtech and Healthtech Founders and CEOs - How to Go from Physician to Medtech Entrepreneur: Interview with Dr. Bob Smouse, CEO of BrightWater Medical

Episode Date: February 9, 2017

Dr. Bob Smouse has over 20 years of experience in interventional radiology, endovascular surgery and clinical research. In addition to acting as CEO and CMO of BrightWater Medical and teaching at the University of Illinois College of Medicine, he provides interventional medical services to local hospitals through Central Illinois Radiology Associates. Dr. Smouse is a...[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?Substantial and Sustainable – 2 Words That Medtech Companies Should Get Used To 

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forge slash medsider. Again, that's reachfiredigital.com forward slash medsider. Grab that blueprint. Okay, on to the episode. On today's program, we have Dr. Bob Smouse, who has over 20 years of experience in interventional radiology, endovascular surgery and clinical research. In addition to acting as CEO and CMO of Brightwater Medical and teaching at the University of Illinois College of medicine, he provides interventional medical services to local hospitals through Central Illinois Radiology Associates. Dr. Smouse is a medical consultant and scientific advisory board member for a host of medical device companies, including Boston Scientific, Cook Medical, Indotronics, Novate Medical, Crux Biomedical, Indochate, the Medicines Company, and Varian Medical.

Dr. Smouse has been involved in more than 30 international and national clinical research trials as global, national and local principal investigator, and is the author of nearly 150 scientific publications and presentations. Here are a few of the things we're going to learn in this conversation with Dr. Smouse. The time when Dr. Smouse and his team first believed they had a winner on their hands with the Convert X system, how Dr. Smouse and his team built out their first prototype, his approach to raising money for Brightwater Medical, which involved a partnership with the venture arm of OSF, a large hospital system in the Midwest, the regulatory pathway that Dr. Smouse followed for the Convert X system and what he learned through that

process, how Dr. Smouse and his team are approaching value-based health care with respect to the ConvertX system, Dr. Smouse's favorite business book, The Sevenths, CEO he most admires and the advice he'd give to his 30-year-old self. So without further ado, let's get to the conversation with Dr. Smouse. All right, Dr. Bob Smouse, welcome to the program. Appreciate you coming on. Hey, Scott, I appreciate the invitation. I've been listening to your program for quite a while now. I know this is a little bit of a unique experience for me because, you know, I know of you, maybe not on a personal note, but I'm certainly thankful to have this, have this conversation, especially in light of the recent news with Brightwater and ConvertX.

So I'm excited to get into that story and, you know, and how it's come to life. But let's start with ConvertX. So, you know, now that it's FDA cleared, you're at a point now where you're probably ready to commercialize, do you remember, you know, if you kind of think back to how it started, do you remember that time when you thought, wow, you know, I think, I think this device really works. We've, you know, we've got a, we've got a winner here. Yeah, you know, it's funny. There were quite a few things that we did to, or at least I did, to figure out if we had something that was exciting. And I would say the real wow moment came when we started our pre-clinical testing of the device. And, you know, we had it drawn out.

and it was on the back of a napkin and it developed into CAD drawings we even had some prototypes but you know you just don't know until you know and We started doing the pre-clinical testing and it went in slick it went an easy And then it formed you have to shape it into a position inside the body And then we tested the disconnect the transformable component of it where it went from device a and a device B and Wow, it worked immediately you know within minutes of insertion we had no issue and then we extended the time further and further and eventually went out to a month and transformed it after it'd been beat up quite a bit. And it worked. And that was the wow time that it's like, wow, this technology works.

The team is stoked about it. Looks like we do have a winner. And I must say even before that time, we pinged a lot of people, right? I asked a lot of interventional radiologists what they thought about the concept and got really a lot of enthusiasm. We talked to the typical corporations, strategics in the space, hey, you know, this is what we have. what do you think? And we're getting positive feedback from that. But the wow moment came when we actually used the device and it worked. Yeah, that's great. And I certainly want to kind of discuss,

we're going to spend a decent amount of time discussing, you know, that process, you know, of development, you know, coming out of your incubator, ELG Co. But before we go there, let's sort of level set things for the audience. And I mentioned this in the intro to this interview to a certain extent. But can you kind of give us an overview of what convert X is, what it treats and how it's different than, you know, the current devices on the market or current procedures and how you're sort of, you know, disrupting the current process right now. Yeah, I'd be happy to. You know, I'm going to step back just for a second. And as you know, Scott, and I think a lot of the listeners probably know, too, that interventional radiologists

work side-by-side multiple physicians groups, and, you know, medical docs, pediatrics, interventional oncology or oncologists, surgeons, urologists, nephrologists, et cetera. And every so often we're called to push the ball across the line, as it were. That is, there's a really tough case, and perhaps it can't be completed in the traditional fashion. So we get the phone call, and with our angiography suite and our imaging equipment, we can thread the needle and get, you know, really tough cases done. Well, the convert X applies to those tough cases. That is, when there's a blockage in the urtor, that's the muscular tube that connects the kidney to the bladder,

that drains the urine into the bladder. The majority of cases are treated by urologists, and the standard treatment is to use a scope, go through the bladder and put a plastic tube up in a retrograde fashion from the bladder into the kidney. And that's a minimally invasive method, and that's called a ureteral stent. And they're very successful in about 85 to 90% of the time.

But in the really tough cases, cancer, a large impact is stones. We get the call. They either can't go up from below or they feel they won't be successful going up from below. So we take over the case. And the way we do this, Scott, is we do a more invasive procedure, but our mechanical advantage is greater.

So our success rate in crossing the really tough blockages of the ureter to put this dent in is really around 99% of the time. I think the number is 98.6%. But it comes at the cost of a more invasive procedure. That is, we have to work directly through the kidney itself. And when we do that, we go through blood vessels. So we have a stage procedure to put this internal tube in called a ureteral stent. That is, we bring the patient in, they're under sedation, they're on their stomach,

and we directly work through the flank of the patient, through the kidney, into the urine collecting system. We get a guide wire into that area, and we know that we can't put that internal stint in on day one because we have a hole in the kidney. That is, if we don't have something blocking up that access, there's going to be internal bleeding, or at least the high risk of internal bleeding. So on day one, and we've done this for 40 years, we simply put a drainage catheter into kidney called a nephrosomy tube.

We leave it in from three to 14 days until the blood vessels have had a chance to heal up, then we bring the patient back and we swap that tube out for the internal stint. And now we don't need anything blocking up that hole in the kidney because they're not going to bleed. And that's worked great. Don't get me wrong. It's worked great. But it's two separate, invasive, one-hour-long procedures in the room that requires sedation, time off from work, radiation from the floral, and, you know, the risk and pain associated with it.

So about 15 years ago, I thought, well, it'd be nice if we could combine two devices with one and convert it from an internal external drain into a simple internal drain. and that's what the convert X does. So on day one, the physician accesses the kidney, like we normally would, the IR through the flank. We put the convert X in that extends all the way to the bladder. It looks like a ureteral stint with an external component attached to it. Now, the interesting thing about the convert X is that this external component

can be detached at the bedside or in the doctor's office in three to 14 days whenever the physician fills its time. So you put it in. It takes about an hour to put it in the patient. patient is discharged either that day or the next day. And instead of returning to the hospital to have the internal ureteral stint swapped out for the drainage catheter, the patient simply comes back to the office,

the device is inspected, and under 30 seconds, the external part is detached, leaving the internal double J pigtail in place, eliminated that second procedure. Got it. That's a great overview. And I know everything that you mentioned resonates with me

just because of my past experience sort of in the interventional and vascular space. But for those that are listening that want to learn a little bit more about the device and what Dr. Smouse is talking about, we'll definitely link up to Brightwater. And in the show notes, you can watch the animation, learn a little bit more about the procedure. So if I have this right, you're taking two procedures that a patient would have to come to the hospital, to the IR suite to have done to, you know, roughly one hour procedures. And I think everyone knows, you know, when you go to the hospital, it's definitely more than just one hour.

It's the, you know, getting there a few hours in advance, you know, the post workup, all that stuff. So you're basically combining two procedures in. to one where that patient for the second time around doesn't have to come back to the hospital, per se, they can just go to the office to have that drainage device attached, correct? Yeah, that's right. You know, you are right about that. You know, when I talk to patients, it is never a one-hour procedure. They have to go through admitting.

They have to come in, get the IV set up. And every one of those patients for the second procedure that the Convertex eliminates, every one of those patients has to bring a caregiver with them because they're going to be under IV sedation, so they can't drive that day. and they can't drive for 24 hours. If they're on any blood thinners, warfarin, or any others, they have to stop that for five days before they come in. You know, they have to be NPO after midnight the day before.

All of that is eliminated with the convert X. So when they come into the doctor's office to have that external catheter detached, they don't have to stop their anticoagulation. They don't have to have any type of anesthesia, local or general, or IV sedation. They don't have to bring a caregiver with them. they can just stop in for a 15-minute office visit, a 30-second detachment, and boom, they're done, they're ready to go back. Yeah.

It almost seems so straightforward. It's like, why wasn't this invented, you know, years ago? No, that's a great overview. So on that note, before we kind of learn a little bit more about how this came to life, your 510-K cleared right now, you mentioned earlier in our conversation some clinical work that went into that clearance. Can you speak to that a little bit more in detail? Yeah, you know, there was no human clinical work.

This is a traditional 510K device. There are predicate devices. Yeah, so the FDA, they certainly had a lot of testing that we had to go through like any other medical device and we cleared those quite nicely, but no human clinical trials were required. Now, having said that, a typical ureidural stint does not require animal studies, but, you know, as a physician, you know, I wanted that preclinical testing. Sure. So I discussed that with the FDA ahead of time, even though the deform and function of the device is very similar. I knew there was a detachment mechanism. I just really, you know, as a doc, I wanted to make sure that there was no internal harm

during the detachment period. I wanted to make sure that the internal stint did not shift or move, not even a millimeter when I detached the device. And in the event that, you know, I did not want to detach the internal stent, and I wanted to take the whole thing out, I wanted to make sure in an actual, you know, model that I could take the device out without causing harm or without the device falling apart. So, yeah, human clinical is not done, but a lot of precliners. clinical testing was performed. Yeah, that's interesting. I didn't realize ureital stent or traditional

reutal stents, you know, are fast-track through the 510K process without, you know, human, human clinical work. That's good to know. It speaks to probably your diligence and obviously your experience as an interventional radiologist wanted to make sure that, you know, even though maybe it's not required per se, per the FDA guidelines, that, you know, you sort of feel good about, you know, check that box twice sort of thing, you know what I mean? So that's interesting. So let's kind of use this opportunity to go back in time. We'll learn a little bit more about, you know, how convert X came to life. I mentioned, the intro to this conversation that you're practicing interventional radiologist in central Illinois.

You're really, even if anyone looked at your background, you're sort of an advisor to the to the who's who within the med tech space. You know, name your company that plays in the interventional radiology space. I'm sure you've done some advising to those companies in the past. And now you're CEO also of ELG co, with the incubator that Converdex, I think, you know, was born out of. So can you speak to us or tell us a little bit more about, you know, how Converdex came to life and maybe take us back to the time when you were evaluating other technologies and why. you decided to really go down the path that led you to convertix? Yeah, Scott, I'd be happy to.

You know, physicians are tinkers by design. I mean, we like better mousetraps, especially interventional radiologists. We're always thinking about, you know, how can we improve something, how can we make something better? And that's no different for me. And I remember I had these different ideas and thoughts about different devices that may or may not have an impact and, you know, what I should do with that. So to kind of keep them organized and to get a formal process in place, I started an incubator called ELGCO with an investor, put all the ideas in there and started a little bit more of a methodical process to determine which rabbit hole we would go down.

And even though a device may be cool, I can tell you that the first device I ever designed and I got a patent on it had 28 moving parts. So it was absolutely complex and challenging. So early on, I realized after reaching out and talking to friends who were CEOs that, you know, docs are good at coming up with new mouse traps. And we tend to spend a lot of time and effort and even money trying to build these new mouse traps without looking at the market. You know, is there interest? Is there an unmet clinical need? Will there be physician adoption? Do corporations perhaps like it? Well, hospitals like it.

You know, what's the reimbursement pathway? What's the regulatory pathway? So with ELG Co is nice. We were actually studying three different devices, two of which we have patents on. And we started this really rudimentary market analysis. And we looked at the market potential, what's the unmet clinical need. And listen, I'm a novice, right? I'm not a serial entrepreneur at this point.

I haven't done multiple companies. So I needed to restrict my playing field. I didn't want to get into too deep of water. So I set some boundaries early on. I said, let's look at those devices that are 510K non-clinical, right? Because a PMA device that requires a 300-man clinical trial is probably beyond my ability as a new CEO to do that. So I wanted something that was restricted to the 15K space. And this all goes into ELGCO.

Also, I wanted something that was transformational, you know, disruptive, that is really highly differentiated. and at the same time had a benign regulatory pathway, relatively speaking, had a reimbursement pathway. I looked into the CMS pathway to go for additional coding, and that's incredibly challenging. I didn't want to go that way. When we did that, and we kind of was myself and Dan Heilbrun, who's my VP of Marketing and BD, and then Ken Stalker came in, and he's my VP of manufacturing and R&D. These guys have really a lot of depth in the space. So we looked at that and the device that really kind of rose to the top that had the best play was the convert X.

So it was a very thoughtful process going after the convert X device. It just to me, it ticked all the boxes. And then we spent quite a bit of time getting that validation, talking to companies, talking to positions, doing surveys, me talking to my own partners and then talking to the value assessment committee, kind of getting a handle on this. And that's what we've been doing for the last two and a half three years. Yeah, that's a great overview. And I love the fact that a couple things that really stood out to me, as you described, sort of that early thought process is just, I think it's easy, and this is probably more specific to early stage, you know, entrepreneurs that are out there. I was going to say physician entrepreneurs,

but it really doesn't apply just to physicians alone. But just the idea of like falling too much in love with an idea or device that, you know, as you mentioned, that may be overly complex and won't ever be adopted in the healthcare environment. So I love the fact that you sort of evaluated sort of all of those downstream issues to the regulatory pathways, you know, how much clinical data is going to be needed, you know, is there an existing path to reimbursement? You know, will someone get paid to use the device, I guess? You know, seems like relatively simple questions, but I love the fact that, you know, you evaluated, you know, considered a lot of different things early on. It probably speaks to, you know, obviously, your experience in the healthcare arena as a physician,

but also just, you know, your experience in dealing with, you know, large strategics as well. So, anyway, good stuff there. On that note, it's interesting that you said that you were evaluating a couple different, you know, I think three or so different technologies at the same time. I remember a conversation I had recently with Ted Lamson, and he was speaking to his experience before NeoTrack came to life. And when he was in the Stanford, you know, bio design program, actually I think it was at that time it was part of ExploraMed. But I think he mentioned the same thing that they were actually evaluating, you know, two or three different technologies at the same time. That evaluation process may extend, you know, to six, nine, 12 months before they narrow

down to one particular opportunity. So it seems like that's sort of like, you know, a best practice when it comes to some of these early stage technologies. Yeah, I agree. I agree completely. I mean, it's, I've seen it too often and I've done it myself and, you know, get enthusiastic about something. And then as you just try to start checking off the boxes, you, you really want to ignore the fact that, you know, something's not quite fitting. But, you know, it's important to listen to those things and look for the red flags and to make the internal pivots. And one thing we did with Brightwater in general. And we think we have a little bit of a platform technology. We can apply to other devices as well. But we early on and consistently reached out to our physician advisors.

And even though I'm a physician and I advise other companies, I know I can get blinders on, right? So it's always good to hear from other physicians. And as a matter of fact, I called a couple of them yesterday, getting their opinion on some, you know, modifications perhaps going forward some second gen modifications and third generation modifications. And, you know, internal pivots are common. They're appropriate. It's good to do it when you haven't invested the entire farm in it, you know. Sure. Yeah. So it's kind of been a very fluid, you know, process. And I can tell you, you know, we reached out to corporations early and continually over the last two and a half three years to get their input to ping them to find out what's in their strategic wheelhouse, what isn't.

we actually engaged other experts early in the process to help steer us in the right direction. I wish I could say it was all me. It wasn't. It was a group effort. It was having a really good team. And I can tell you this, and I tell this to other friends and colleagues that have a similar bent and interest and taking their device to market. And I can tell you really the least expensive help you can get is really the most expensive. And I found out very early on trying to cut corners and not get the appropriate management team or workers, you know, behind your device is really a very expensive way to do it. And so Brightwater early on, Scott, I got people I'd known for years who had really been in the business for at least 15 years and many times 25 and 30 years. And, you know, my director of manufacturing is 22 years with Abbott. My process engineer is 20 years with Abbott.

My finance officer is more than 20 years with Abbott. And other, my director of manufacturing and R&D is, you know, he, like 15 years with guidance and an additional 10 years elsewhere with ACS. And just having a real season pool of, you know, management team and even physicians who have domain expertise is invaluable. Yeah. Yeah. No, I mean, that's a great anecdote because I think it would be easy, it seems like, for

most people to look at your background, especially the fact that, you know, you're still a practicing interventional radiologist, your relationship in the med tech arena, and say, oh, you know, Dr. Smouse probably, he didn't need to build out a team for this. You know, you can, you know, answer most of the questions or make most of the decisions with relative ease along the way. But it's interesting that you say, you know, that's definitely the more expensive way to go about it and that you instead, you know, built out, you know, a solid team early on to help guide the direction of bright water and see convert X come to life. And then on that note, speaking of of that team, you know, you've got, as you mentioned, a lot of, a lot of people with really,

really great background as well as, you know, look at your clinical advisors, Dr. Barry Katzen, Dr. Alan Matsumoto, Dr. Rod Rabi. Let's spend a little bit of time discussing that. So how are you able to sort of coalesce, you know, a group of sort of high-powered individuals, you know, to join the, you know, what you were doing with Brightwater? Yeah, you know, those physicians I've known for many years and, you know, we would interface at meetings. You know, I'd talk at a few meetings here and there and just got to know them and really respected their opinion. And for example, Barry Katzen, you know, he has a lot of depth in health care economics. And the convert X really has a nice, you know, a nice niche in that space with the Affordable

Care Act and the change in the health care economics landscape, as it were, and the fact that we can eliminate an entire procedure. And, you know, that saves certainly a lot of health care dollars. So, you know, Barry was just a natural choice to bring on early as a medical advisor. And so, you know, it was one of those things where I'd reach out to these different physicians, the ones you mentioned, we also have Brett Wickman and Lindsay McCann, you know, out of Vancouver. And every one of them saw the vision. I mean, they got it. I mean, it was one of those things where I would start to go down the convertix pathway and they would stop me after just a few minutes and say, hey, Bob, you had me at hello.

I mean, this makes sense. It's something that eliminates a, you know, kind of a cumbersome procedure. And I can tell you, it really rang solid with them, even for a simple thing, like the insertion of the normal ureteral stint that we insert. And this is something I don't really talk about to corporations or hospitals, but, you know, when we take a urology stint that's made to go from the bladder up to the kidney and we put it in backwards, we have to actually turn it upside down and put it in. That's a very challenging procedure. It's rare that I'll let my fellow, for example, or any of my fellows do this solo on their own. I'll be next to them in the IR suite because it's a challenging procedure. And to a man, to a person on the MAB, when I told them about the convertix, they go, wow, you know,

that's going to make the ureidral stint so much easier to put in. And it's better for patient care. So, you know, it wasn't a big sales pitch I had to give them. I mean, they got it, they understood it. They thought it would be a nice bolt on technology to what they have already on their shells that they can use. So, yeah, I think it was just reaching out, explaining what the concept was and what we're planning on doing. And they jumped on board. It's pretty simple. It probably speaks to that you're probably familiar with this. I'm going to paraphrase, but, you know, there's a quote,

the best marketing starts with the product, right? And so you can't, it's hard to do really good, really good marketing or have a really good commercialization strategy if your product is sort of mediocre or substandard. So listening to you explain that, it sounds like you. you were able to hit, you know, solve a lot of pain points in this traditional process. And so it made it, you know, kind of easy for a lot of those well-known folks, people with a lot of experience in healthcare and med tech to join the team. So good to know. So let's kind of go back to the early thought process of convert X. And, you know, you've got at that point, you've got, you know, the idea narrowed down. And at some point, you're going to have to raise money to take this to the next step. And I noticed that you raised around with OSF Ventures, I think, was part

of that syndicate. So can you help us understand a little bit more about your approach to raising money and how you went about that? Yeah, you know, and there was some stumbling. There's no doubt. You know, when you're doing this for the first time, you kind of learn by trial and error of what works and doesn't work. And, you know, Mel Schatz is on my board and he's a serial entrepreneur and CEO with Tom Fogarty. And he was a lot of help. And I remember Mel early on in the process saying, Bob, you got to put the story together. A simple PowerPoint deck, put it together, make sure it says what the need is and how you're going to solve the problem out there and really make a nice story.

So early on, I kind of put the pieces of this story together what the convert X means. I did a lot of Google searching, a lot of literature searching. I wanted to understand what type of an impact the convert X may have for uretero blockages. Am I in a super nicheed area or is a more significant area? Talked with a lot of physicians. And once I had what I thought was a pretty good story together, that's when Dan Halberun, he's my VP of BD in marketing. And I've known Dan for many years when I consulted for guidance. Dan was the marketing and BD expert at guidance.

So we interfaced. And once we had a nice kind of rounded out our presentation, then we went to friends and family, very typical of most startups. I called, you know, a physician friends and physician colleagues that I knew. I talked to a local angel investor group, high net worth individuals and also some other physicians. And then, you know, through Dan's connection and mine, industry insiders, you know, other MBAs that do consulting for MedTech startups, other CEOs that actually have run and are presently running MedTech startups really like the idea. And they, you know, invested. And we didn't get a lot of money, Scott, right? But we got enough to keep us moving forward to developing the product.

And what was nice on day one when we started the company, this was in March of 2014, not too long ago. We had our IP issued, our foundational patent was already issued, which is really nice. And then we kind of build out the story and the market validation, the position adoption, sent out a survey. And by putting those pieces together, when we started giving, I hate to say, but it's the pitch. You know, started giving the pitch to different groups, it became more and more refined. We eliminated unnecessary slides and augmented areas that we would have questions in and had backup slides. And so was a friends and family push. And with that, we were able to raise about $2.2 million.

And that was almost like a seed funding. Now, I'd put in money in the beginning. I had a silent investor who also, who's an intermature radiologist, Carl Weingarten, who also put in some money. And we were able to get the ball rolling. And then St. Francis really came into the mix later on after we had. developed prototypes, we'd done some bench working, we'd used up, to be honest, most of the 2.2 million. Then we went and we said, well, to get this to the point where we can get regulatory

submission and approval is probably going to take another $3 million or so. And that's when I reached out to OSF Ventures, which is a BC, a healthcare VC group that's actually affiliated with my hospital system. And that took about four months of diligence, but they ended up becoming our lead investor. And they've been really good to be a good investor. And then, you know, just for other, you know, early entrepreneurs that once we had that cornerstone, that lead investor, it's amazing how people just followed on very quickly. That's great. I'm jotting down notes as you kind of are telling that story. And, you know, what really rang true for me personally is just, you know, that effort that went into building the story. And I think you mentioned that,

that advice, you know, came from mail shots. It probably was intuitive to you. But nonetheless, us, you know, that focus on building the story and what Convertex could become, you know, with adoption in the healthcare space. I think, you know, it is really important. It reminds me of a conversation I had. And, you know, by the time this goes live, the other interview with Dr. Marie Johnson will be live. She's the founder of O'M Cardiovascular. And she was sort of explaining similar thoughts or similar approaches to how you just explain your approach to raising money and, you know, building out that story. And really, you know, it sounds silly, but really kind of, you know, it's a little bit of a sales game, you know, in pitching your story and

building that out and, you know, and building enthusiasm. So sometimes it, there's like this mystique with early stage, you know, raising money for early stage companies, but it really comes down to, like, really honing in on your story and being able to convince others that it makes sense and that there's a lot of opportunity. So cool, nonetheless, can I hear it from you for sure? So let's talk a little bit about, before we kind of discuss, you know, what's next for Brightwater and what, you know, future plans are. I'm going to read a quote from Dr. James Beninati's the, pretty well known again in interventional space down in, well, really worldwide, but he practiced down at the University of South Florida, as you know. But he said the Converdex system is the kind of

technology advanced that we require to meet the dual goals of improving patient care and reducing the financial burden to the healthcare system. So I think that was maybe showed up in one of your recent press releases. And you sort of hinted at this already, but I'm just curious to get your thoughts on how, you know, once you begin to build out sort of the commercialization strategy for Convertex, how are you going to tell that story to hospitals and other healthcare providers that maybe are a little bit skeptical at first? Yeah, that's really a good question. And, you know, it's something that we've certainly chewed on for a long time.

I mean, probably a year and a half now we've been looking at that and doing a lot of analyses, reimbursement and hospital expenses, et cetera. And it's really getting, you know, your ducks in order. And, you know, as a physician, I know this, the mandates that we're having, there are several. One is that we've gone from a patient outcomes basis to include a patient satisfaction. So that's important, and that plays significantly in the medical value proposition of the convertics. I think we certainly will improve patient satisfaction. But then from more of a corporate level, hospital, economic level, we're really tasked with two things, Scott.

And that's to improve patient care while at the same time decreasing the health care expenditures. That's where the whole thing with the Affordable Care Act comes in. And so there are processes set up within the hospital, and certainly 20 years ago, there wasn't, for the the most part, value assessment committees. They just didn't exist. As a position, I wanted something, and even though I have perhaps two other brands on the shelf, I could ask my purchasing department to bring it in, and we could do that. But those days are, you know, they're long past and the majority of hospital practices. And so, you know, the device has to go through the value assessment committee. And nowadays, we know we need a couple things. We need to be able

to show the clinical value proposition. That's number one. And, and, and, you know, And, you know, I kind of pinged my own VA committee and I said, hey, you know, I've heard of this device that does X, Y, and Z. I didn't identify it as my company. And they were really taken by the fact that we were eliminated an entire procedure. So that resonated clearly with them. Well, usually the follow-on question is, well, what does it cost? And, you know, what products are they going to eliminate? And, you know, what's your health care economic message?

So it's really a dual one. I think with the physicians, they don't get into the economics too much. and they really shouldn't. They understand the clinical value proposition. So, you know, I think finding a physician champion to get behind this device is going to be very simple. And, you know, getting that physician champion is incredibly important. Anytime you have a medical device that comes into a hospital system, you need somebody to back it. Because, you know, a vendor, which I'm not, but, you know, if my sales guy came in to show this,

he's not going to sit in the VA committee. You won't be there. He's going to need to have a, you know, somebody who believes in the product. So getting that position champion will be really. really important for us. And that has really, you know, shown not to be an issue. I mean, physicians get it, they understand it, they like it, they want it. The next thing is to show them what type of, you know, economics improvements there will be at the hospital level by eliminating that procedure. And we're certainly still sorting through those numbers. But, you know, sometimes, you know,

when you have to get that ball across the line and you have to use a very expensive angiography suite, reimbursements may not cover expenditures. And we're kind of sorting that out. But there certainly is a very strong. They call it HCE message or health care economic message by eliminating that procedure. So that's kind of our pathway, is that we're going to have to make sure we dial in on the physicians to make sure they really understand it and see the benefit to it. And then also, on the other side, show how this impacts positively the health care expenditures. Yeah, that's a great description. And I love the fact that, you know, I think for most people that would learn a little bit more about convert X would probably have, you know, similar responses

if they're familiar with the interventional radiology space in the sense that it seems kind of obvious. You know, you're reducing an entire procedure. Of course, that's a great healthcare economic story. But I love the fact that you guys are still taking a pretty methodical, diligent approach. And, you know, and I think that maybe the lesson there is that even if your product or your story is, you know, is pretty obvious, you still need, you know, that support inside the hospital system. If it's a physician or, you know, some other sort of decision maker, that's going to really help to tell your story, you know, when you're not there. So I think that's a really good lesson learned. So before we kind of wrap up the conversation, anything else you want to share about

Brightwater in terms of next steps for either Convert X or other technologies that you guys are thinking of? Yeah, you know, I would like to say, you know, it's funny. When I looked at ConvertX and, you know, it was to eliminate that catheter to stand exchange procedure and, you know, all the benefits that would go along with that in the kidney. You know, one I'm very familiar with, when I started pinging physicians on this, almost to a person, and they would say, well, what about the billory system? What about the billory system?

And that kept coming back. And, you know, we are laser focused for two years plus on the ureterol device. But now that we have issued patents, we have, you know, proprietary materials, we've gone through all the testing of the FDA, the bowel compatibility, et cetera. Then the team kind of sat down and said, you know, Bob, we're still hearing this from multiple physician groups. What about the billory product? Is there a billory play? And our MAB brought that up very early, too, that, you know, we do internal external,

drainage for bile duct blockages in a similar fashion. For example, a patient may have a pancreatic head cancer that blocks the common bile duct or may have an internal cancer of the liver or the bile duct itself. And, you know, gastroenterologists are incredibly successful of doing ERCPs and putting stints up in what we call a retrograde fashion. But every so often, and this is around, you know, 10%, maybe 8% of the time, the blockage is just too big, too strong. They can't get across it.

So, you know, over 100,000 times a year in the U.S. interventional radiologists will access the liver. Again, working through the side of the patient into the bioluctant and an evasive procedure. And just very similar to what we do in the kidney, we put an internal external drain in. And then we send the patient back later to, you know, for gastroenterologist to use that drain as kind of an access to put a retrograde stint in. So the MBAB said, well, you know, why don't you make a convert X for the billory system, an internal external drain that you can detach. and leave a plastic stint in, banning the obstruction, so you don't have to send the patient back for that second, you know, procedure in the ERCP. So we're sorting that out. It's a nice platform technology to eliminate that. We're looking at potentially other procedures as well. But yeah, that's kind of, you know, besides taking the ureidal device further on, which we want to do and kind of building that space out and getting adoption for that, I think a nice follow-on products will be a converter auxiliary, but we have a lot of work to do.

At that point, we do have prototypes now that we're testing, but it's going to be a while before that one will be ready. Sure. That platform technology or that built-in sort of platform approach, I guess, it may be for lack of better description, is that something you realized early on, you know, through the incubation process early on with Converdex? Yeah, it was, Scott. You know, we realized it was there, but it is kind of a landmine, too.

You want to stay away from. It's real easy for, I'd say, green execs to kind of spin off in multiple different directions. And, you know, myself and my team, we really controlled that. We were very laser-focused on the convert Xerritoral, and we still remain incredibly laser-focused. But there certainly is an economy of scale. When we looked at the convertx billary, we realized the value proposition was exactly the same. The health care economics are the same. We also know that the target user, that is, interventional radiologists, are the same.

We don't change referral patterns. We just give them a better tool to do what they're doing. And so the similarities between the two were incredibly important. And, you know, we all have stories of where somebody invents a stint for the heart, for example, and they want to bring it out for a different part of the vascular bed, and they end up going to a different target audience, and it's just a nightmare. But the nice thing about the platform technology of the convert X that is eliminating the catheter to stem exchange procedure is that it really plays in the same sandbox.

It's IR used. It's a device designed by an IR for IR. So it just fits. So, you know, the first device may have taken, what, $5 million to develop. We can leverage the IP, the materials, the, you know, a similar regulatory pathway, et cetera. That's what we're hoping. And so there's certainly an economy of scale with the platform technology that allows us

to put another club in the bag without spending the same kind of funds and time that we did on the first product. Yeah, such a good lesson there. I love the fact that, you know, your point about sort of the focus, right, the early on focus, and realizing that this could be a platform technology, but at the same time, not wanting to make sure that you don't spread yourself too thin, and, you know, you sort of, you know, chase a bunch of different rabbits down different holes. So, you know, the goal being that you, you know, make sure that you do your diligence with Convertex as it stands right now. And then,

you know, the opportunity is there for add-on sort of devices or procedural related applications down the road. So great lesson there, I think, for every sort of early stage, you know, MedTech entrepreneur. So I want to finish up with sort of the traditional last three rapid-fire questions that I've been including with most of my conversations these days. But looking back at your experience at ELGCO and then seeing Converdex come to fruition with Brightwater, is there any other advice or things that maybe that you would have done differently or alternatively, you know, something that you're really proud of? Like, you know, we really did it this way and I'm glad we did it because of, you know,

X, Y, and Z. Yeah, I think I'm really proud in that, you know, we know the national average for getting a traditional 510K device declarances around 5.5.5.6 years. And, you know, Brightwater, the team was able to do it in under three years. So we were really tickled with that. And, you know, and I know traditional VC-backed companies are fewer than they used to be. And ours was non-traditional. A lot of it, I would say 90% has been friends and family, non-industry investors, you know, non-VC-backed. We were able to really, you know, get this up by the bootstraps without having to go to large VC groups and you know it may not be a big BC group play I mean that was part of our thought

process having Rod Rabi you know from Safion board was really good because they did likewise they raised significant capital without having to go to VC groups and and we kind of did that we're excited about that and the other thing is we're primarily a 1099 company I mean I do have some employees but the the majority of employees are 1099 they're consultants and they're really dedicated to bright water without a doubt but that's allowed us to really move quickly to make internal pivots to close down one aspect for example and augment another one and so that's made our flexibility great and our responsiveness very quick so I'm really proud of that and incredibly proud that we're able to get the 510k with the first pass around yeah and you know I got some good

advice early on from some of my other board members such as chas taylor he's the CEO of novate and then other people too. And I went to the FDA early and it got into a really nice dialogue with the lead reviewer and the FDA was phenomenal. I mean, you know, you hear a lot of stories, no doubt they're tough, but they're in a tough position, right, Scott? I mean, they've got to predict the welfare of the patient at the same time. They have to, you know, allow technologies to develop and improve.

And so I was really proud with the working relationship that I had with the FDA as we went through the process of clearance. Yeah. I know Bill Factor, who I recently interviewed. as well as one of the founders of the Clarenth now is the president's CEO of Earlands. And it had mentioned something similar that, you know, if you do your diligence right up front and make sure that, you know, you sort of build that relationship with the FDA early on. I mean, it can be, I mean, a relatively, you know, straightforward, easy process.

So it's very cool to hear that you have sort of a similar experience. You know, you took a nice approach, you know, seeing this through FDA clearance. So great stuff. So go ahead. Can I just give you one story about the FDA? Yeah, yeah, absolutely. The lead reviewer is Dr. Timothy Martin, and this is the type of thing that he did for us, and I thought it was really good. I remember I took my wife to a pizza place to have a slice of pizza at lunch, and we were getting towards the end of the time frame to get the approval.

And then I get a call from Dr. Martin. He goes, hey, Bob, you know, one of my reviewers has a question about this most recent response to the additional information that we requested. And the fact that he reached out on a cell phone call just to get my, you know, to ask a few questions. And then he, within 15 minutes, he put me on a voice call with the reviewer to discuss the concerns was incredibly helpful. I mean, you know, the bureaucracy of sending a formal letter and going through the whole process could have extended this out another six months, I'm sure, at least. And the fact that he was willing to pick up the phone and, you know, we obviously were willing to pick up the phone to engage in dialogue, cut through a lot of that red, I tell you, if the FDA is going down that pathway in the future, that's going to be very, very helpful to entrepreneurs like myself.

Oh, yeah, no doubt. And, you know, I mentioned that conversation I had with Bill Factor. He had mentioned the same thing with Dr. Schurin, and that, you know, that to your point, the FDA, I mean, that's like a no-win situation. I mean, they get pressure from, you know, from both sides, you know, in their efforts. But he did mention that he personally has known as, you know, a big change in terms of, you know, trying to make the process a little bit more efficient. So it sounds like you've got firsthand experience to what it could look like,

which is, I think, great news for everyone. So, very cool to hear and learn a little bit more about, you know, the story of Converdex and Brightwater Medical. I mean, I know I've known you, Dr. Smouse, as a sort of a physician entrepreneur, but it's cool to see something, you know, come to life. And, you know, here we are with FDA clearance and you're ready to start seeing this, you know, work in a healthcare setting across the U.S. So congratulations on that.

Well, thank you very much. So let's finish off with the last three rapid fire questions. The rapid fire, the questions are rapid fire in nature. your answers don't necessarily have to follow suit. But let's start with the first one. What's your favorite business book? You know, it was the 10-day MBA. Yeah, yeah, that was pretty good.

I don't know if I got through all 10 days, but it got me charged up. And, you know, I refer to it every so often when I run into a roadblock. But, yeah, the 10-day MBA. Actually, I've never heard of that. I love the fact that it sounds like a pretty efficient way to kind of get up to speed. So, good. It's funny. I ask people and know, I said, hey, is it worth as a position for me to go back and get

an MBA. They said, don't do it. You're crazy. Hire an MBA and pick up a book and, you know, learn that way. Yeah, sure. Yeah. And I completely appreciate that approach. Second question, is there a CEO that you're following or one that's inspired you in the past? Yeah, there really has. He doesn't know this, but it's Aymann Hobbs. He's the founder, and he was the CEO of angiotynamics. And I interface very early with him when I was in my fellowship period with Dick Hawkins out of Gainesville, Florida, Shan's Teaching Hospital. And Aeman used to come, and I used to talk to him about different devices and products. So yeah, I've been kind of following Aymond Hobbs for a while. Do you still keep in touch with him? Yeah, I really don't. Off and on, you know, I'll see him in a meeting

once out of every blue moon and I'll say hi to him. But other than that, no, I probably should reach out. That's a good thought. Yeah, I'm sure he'd probably love to see if he hasn't heard about, you know, Brightwater, what you're doing now. I'm sure he'd probably be thrilled to kind of learn about what you're doing. So the last question is take us back to your 30-year-old self. I imagine you're probably in residency or fellowship at that point, Dr. Smouse. Any advice that you'd give yourself at that point in time? Yeah, I'd probably say pull the trigger earlier. I've reinvented myself several times,

and I see a lot of people working towards retirement and stashing away funds. And I think if I were to tell my 30-year-old self something different, I'd say, you know, stash away the funds, but use it to go out and try something new. Yeah, that's great advice. I don't think I would have expected you to answer in that fashion. That's a great way.

I think great advice for anyone, even if you're outside of the healthcare space. So great stuff. I can't thank you enough, Dr. Smouse, for joining me. It was fun to learn a little bit more about your experience with Brightwater. I wish you nothing but the best with Convertex, and it'll be exciting to see what you guys do with it. Well, Stata, hey, I appreciate the invitation, and always nice talking with you.

Yeah, absolutely. I'll have you hold on the line, Dr. Smouse. But thanks again for your listening attention, and until the next episode of Med Tider Radio, everyone, take care. Thanks again, ladies and gents for listening. This episode has been brought to you from the WCG Studios here in Minneapolis. And don't forget to grab your Panopics. stacking blueprint by visiting reachfiredigital.com for slash medsider. Again, that's

reachfiredigital.com forward slash medsider. Okay, bye for now.