Medsider: Learn from Medtech and Healthtech Founders and CEOs - How to Outpace Your Competition: Interview with Contraline CEO Kevin Eisenfrats

Starting point is 00:00:01 So I needed a way to track these people. I got some UVA interns to basically code up a website for us. So someone could contraline.com slash participate and you enter your name, your email, date of birth and what date you're in. And then we have now a mass. I think it's like 7,500 people that want to be in our clinical trials over the years. And then from that, we've done a lot of market research. Welcome to Medsider, where you can learn from the brightest, founders and CEOs in medical devices and health technology.

Starting point is 00:00:35 Join tens of thousands of ambitious doers as we unpack the insights, tactics, and secrets behind the most successful life science startups in the world. Now, here's your host, Scott Nelson. Hey, everyone, it's Scott. In this episode of MedSauder, I sat down with Kevin Eisenfranz, a nanomedical engineer, by the way, the University of Virginia and co-founder and CEO of Contraline, where he leads the development of Adam, a novel, long-lasting, reversible male contract. Kevin has been working on contraceptive technologies since his undergrad years and has amassed over 50 patents in contraceptive drugs, medical devices, and biomaterials.

Starting point is 00:01:10 In 2017, he was honored with a place among the Forbes 30 under 30 in healthcare. Here for the key things that we discussed in this conversation. First, while academic rigor is beneficial, entrepreneurship demands a product-focused mindset. Prioritize moving fast rather than scrutinizing every detail, be cognizant of what slows you down and emphasize the initiatives that matter most, especially when raising early capital. For initial fundraising, consider pursuing smaller grants with less strings attached in parallel to venture capital. While non-dilutive funding is alluring, intensive grant processes such as SBIRs, are often time-consuming and administratively burdensome. Even if you're successful, there's an opportunity cost to consider. Third, direct engagement within users is critical for gaining market insights, improving customer understanding, and educating other key stakeholders.

Starting point is 00:01:57 Even more importantly, you can use this engagement to identify individuals' interest, in your product and guide them towards participating in your trials. All right, before we jump into this episode, I wanted to let you know that the latest edition of MedSider Mentors is now live. We just published Volume 5, which summarizes the key learnings from the most popular medsider interviews over the last several months with incredible entrepreneurs like Gabriel Jones, CEO of Proprio, Kirsten Carroll, CEO of Can Do Health, Dr. David Alpert, founder of AliveCorp, Greg Bullington, CEO of Magnolia Medical, and other leaders of some of the hottest

Starting point is 00:02:28 startups in our space. Look, it's tough to listen or read every interview that comes out, even the best ones, but there are so many valuable lessons you can pick up from the founders and CEOs that join our program. So that's why we decided to create MedSider Mentors. It's the easiest way for you to learn from the world's best medical device and health technology entrepreneurs in one central place. To check out the latest volume, head over to medsiderradio.com forward slash mentors. Premium members get free access to all past and future volumes. 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

Starting point is 00:03:03 entire library of interviews dating back to 2010. You'll also be able to see all of our playbooks, which are handpicked collections of the most insightful interviews with the brightest founders and CEOs that join our program. Whether you're looking to master capital fundraising, navigate early stage development, tackle regulatory challenges, understand reimbursement or position your venture for a meaningful exit, Medsider playbooks have you covered. And last, considering that fundraising can be able to be able to be. be one of the most daunting tasks for any startup. We created a meticulous database of investors right at your fingertips. Explore a wealth of VC funds, private equity firms, angel groups,

Starting point is 00:03:39 and more, all eager to invest in medical device and health technology startups. Access to this database is a premium member exclusive, so don't miss out. Learn more about MedSider Mentors and our premium memberships by visiting MedsiderRadio.com forward slash mentors. All right, without further ado, let's jump into the interview. All right, Kevin, welcome to Medsider Radio. I appreciate you coming on, man. Thank you for having me. Yeah, I know things are humming at Contraline.

Starting point is 00:04:09 A lot of action, a lot of moments that I'm noticing. So I appreciate you carved out some time to tell us a little bit more about your journey, building the company and kind of where you're headed next. So with that said, I recorded kind of a short bio, right, at the outset of this episode. But I always like to kind of start there. If you can kind of give us an elevator pitch, right, for your, you know, what you've been doing, you know, before or kind of leading up to the founding of the company. Yeah, so my background, I'm kind of a generalist.

Starting point is 00:04:36 I'm trained as a biomedical engineer. I went to the University of Virginia. I have a research background in reproductive biology, drug development, and I was also on the path originally towards med school before I started controlling. So I kind of dabbled in all the areas, but the one thing that ties all of them together is my passion and love for reproductive health. I've known since I was literally a teenager that this is the area that I want. it to play in whether that was becoming an OBGYN one day or that was creating new drugs and

Starting point is 00:05:08 procedures for fertility or contraception. So it was really in high school. I went to a medical high school and I was very interested in, I was watching different surgeries in gynaecological oncology and things like that. And it actually, one day I was watching the show 16 and pregnant on MTV, if you remember those days. And I remember these guys were like, oh, you know, I forgot to use a condom that one time or like my condom broke and I kind of just bond on me like wait a second all of these unintended pregnancies are being caused by really men's reluctant to want to use condoms because any younger men are not thinking about the sex committee obviously so why is there no male birth control pill and so that's when i started to think about this problem i was 16 17 years old

Starting point is 00:05:55 and i wrote my essay to get into the university of virginia on why there's no male birth control after I got into UVA, I discovered that there was a professor who was working in the field of reproductive health and also started multiple companies out of his lab. So including the first at home sperm test came out of our lab at UVA. That's FDA approved. And I did a bunch of research with him. And then four years later, this was around 2015, I started learning about this thing called entrepreneurship. At the time, I've never taken a business class. and I just again somehow that same question came back into my head why is there no male birth control

Starting point is 00:06:34 and I ended up creating a concept which ended up being controlling so that was the beginning of the company I'm a first time entrepreneur but I guess I've been doing this for eight nine years at this point and so definitely feels like I've gone through a couple of different companies yeah that's just been running this one that's awesome though I love the fact that you've been thinking about this this problem right this issue for a long time so you're obviously very, very dialed into the space and not only the needs, right, but how to effectively solve those in a kind of a user-friendly fashion that actually works. So with that said, we're recording this and just to level set the audience, we're recording this in, you know, in Q1 of 24,

Starting point is 00:07:14 and you've been working on this for almost a decade now, right? I mean, it looks like, you know, nine years-ish, something like that. Thinking about it probably a lot longer. So yeah, you've, it looks like, you know, a young new startup, right, coming off a, a nice series A raise, but it's, you know, you've been, you've been working on it for quite some time, which is not atypical, you know, for the world of life sciences. I'd love to understand, like, the product at a high level and maybe frame that up in terms of how it differs from some of the other kind of other startups maybe that are doing similar, similar things. Yeah. Well, let me start, give you a little bit of the history of male contraception. So male contraception has been

Starting point is 00:07:52 worked on since when female contraception has been worked on, which is the 1960s sort of time frame. So it's not like people haven't been working in this area for, you know, 60 plus years. There's been a lot of things that have been tried. And really, male contraception has kind of come down into, there's three areas. You're either going to give a guy hormones, just like we give women hormones for birth control. Those are in clinical trial for quite a long time. And they do cause some systemic issues, but they seem to be pretty effective. People have been trying to work on a male pill that's non-hormonal, where it like, you know, stops the production or the motility of sperm, but those are really challenging, those haven't gotten

Starting point is 00:08:35 very far. And then there's the third concept, which has been around for a while, called vast occlusive contraception. And that's the idea of, can we include the vast deference, which are these tubes that transferred sperm? The first time someone proposed vast occlusion was 1970. So this is not a new concept, right? And this Indian professor was working on like basically coding water pipes for filtration and stuff like that. And he was using this polymer for that. And he said, wait a second, I feel like I can inject this polymer into the body and that, and actually block sperm in the vast deference.

Starting point is 00:09:14 And that product is in India called RISUG. People have tried polyurethane in the vast deference, which caused cancer, but it showed it work. So that was thought that was in China. People tried silicone rubber. That didn't work because the rubber was too stiff. So it wasn't able to expand with the vast deference. So people have tried a lot of weird things to solve this problem. When I came into this field, which was, again, like around 2014, 2015, I knew about all of this research going on.

Starting point is 00:09:44 And so the first thing I did was I printed every single paper that's ever been public in this category. And I started really identifying what is it, target product profile look like? And what are the problems, like the scientific, technical problems that have not been solved? So let's take that product out of India, RISA, which then became vagal gel, which I think now is rebranded a third time to Planet A. It's gone through many different life cycles. That product is a styrene malacin hydrolyc and a hydropolymer. It's kind of a plastic. It's injected in organic solvent. I saw that they were having challenges with the viscosity of it. So it's kind of difficult to inject. Also, there was some confusion around

Starting point is 00:10:26 does it kill sperm or does it block sperm? And then there were some challenges with potential challenges with toxicity of that material. And then furthermore, the reversibility of it. And the reversal for a male contraceptive, the reversibility is the holy grail. People don't want a vasectomy alternative, something that's permanent. They want something that you can implant, it works, it's safe, and then you can remove it from the body, and the person's fertility will come back to normal. So the foundation for Contraline was basically, I was learning about these cool materials called hydrogels, which are water soluble materials. There's a bunch of hydrogels that have done very, very well in the medical device industry for different applications. And I couldn't find a single

Starting point is 00:11:09 hydrogol that was used for vast occlusion. So actually, just the concept for Contraline was, can we create a water soluble and easily injectable material? It's going to not cause any. And it's going to not cause any side effects or inflammation or any tissue reactivity. And also, we wanted it to only last for a couple of years. And that's another thing because what we found in our market research is men actually want something that lasts one to two years long. We kind of don't want, not a lot of men want to take a pill every day and not a lot of men want something that lasts for 10 plus years either.

Starting point is 00:11:44 So it took about four or five years to develop this product because it turns out there was no hydro gel that was FDA approved and could last for that long. Most gels either degrade really quickly in the body or they kind of cause a permanent reaction, but not something that can last for a couple of years and be reversible. We developed that product. We also developed a custom delivery device for implanting that gel into the body. Obviously we had to do all the preclinical work on it. And I'm sure we're going to talk about this, but most recently we just completed a first in human trial on this product called Adam in Australia. That's super helpful overview.

Starting point is 00:12:23 And for everyone listening that, you know, if your ears are perked and, you know, who knows, maybe you're interested in actually potentially being, being or using this technology when it's available, website is contraline.com. We'll link to it in the full article on MedSider, but it's C-O-N-T-R-A-L-N-E.com, just as it sounds, contraline.com. Again, we'll link to it in the full write-up. That's super helpful overview. and I'm not super deep into this space, right?

Starting point is 00:12:48 It's helpful to know that this sounds like the kind of the foundational sort of technology, which you're using to include the vast deference is very different, right? It's a unique, unique material alongside your custom delivery device. So with that said, I'd love to use this opportunity to kind of, you know, sort of go back in time, right, and cover some of these, you know, key functional kind of areas that every, every startup sort of entrepreneur goes through or like at least most go through. and maybe you can frame that into kind of what you've learned, you know, building contralines so far, having raised funds, you're in human studies, et cetera. So no easy feat to get there. So with that said,

Starting point is 00:13:24 first question kind of on the docket is, you know, you mentioned that you kind of came from academia, right? This is your first time CEO kind of came from academia. There's a lot of folks that listen to this particular podcast that either are their PhDs, their physicians, they think they're on to some, you know, a great idea, but they've never done it, right? They've never kind of of, you know, operationally ran a startup. So when you think about that transition, you know, what's maybe, what are maybe a couple of the key things that either you've learned or that maybe have especially, you know, worked well for you as you kind of navigated, you know, various, various line line, landmine building contra line. Yeah, so it's interesting. I don't know

Starting point is 00:14:02 if I consider myself kind of an academic only because I only did research for four years as an undergrad. I don't have a PhD. I don't have an MD. So, you know, I'm not sort of a true academic, but I work with a lot of PhD. I've obviously been around academics. I think the biggest thing is academics love the science. They love doing the science. They love talking about the science. And what I've learned is that the science is incredibly important. It's incredibly interesting, but it has to lead to a product. And developing a product that's going to be regulatory, require regulatory approval, whether it is a medical device or a drug or whatever it is, there are certain studies and experiments you have to do to prove either for regulatory purposes or for, sometimes

Starting point is 00:14:57 for investor purposes or sometimes for consumers and physicians and who are the users of the product, end users or users along the way. And you need to realize that when you start a company, you're there to develop a product. You're not there just to do a science project. And so I think that's the biggest thing is learning, like what are the crucial experiments? How do you move fast, right? You want to do your best science.

Starting point is 00:15:28 But you also want to not have to do, like you don't want to do the things that will slow you down either. So choosing what is the most impactful data, you can generate, especially in the early days to fundraise. I think that's a really big learning experience for, you know, early entrepreneurs. Yeah, those are those, that's some, that's some great feedback. And just that, that notion of like, of the, the reset, right, that needs to go on. I've been, I've been sort of, you know, in a, I don't want to paint like a sort of that

Starting point is 00:16:01 everyone's in this boat, but like, you know, doing a lot of research, sort of science experiments, if you will, right? And then making that transition to something that is going to require a fair amount of convincing, right? And in order to convince various stakeholders, investors, you know, included, you know, what sort of data ladders up to that? You know, all, you know, it's just, it's a significant research that, or reset, I should say, or a framework that needs to, that, you know, sort of adopt, you know, making, making that transition. On that, on that topic of funding, right, you've been successful with both non-dilutive funding as well as equity-based,

Starting point is 00:16:33 you know, financing. And I'd like to get your take for, on the former first, and then maybe We'll talk a little bit about equity, equity financing because you recently raised a series A. We talked a little bit about the fact that Jason Callicanus mentioned, mentioned Contraline on the all-end podcast, which is, I think, pretty cool. But let's talk about non-dilative funding first. What are, I guess, some of the key things that you've learned going through that process? Because that's where a lot of us start out, right, is pursuing grants to try to get something off the ground, right?

Starting point is 00:17:04 Some novel idea off the ground. So are there a couple of things that you've learned along the way? way, you know, in being successful at being awarded some of those funds. Yeah, and I know you said you wanted to talk about grants first. You know, I am going to mix the two of them together. I'm actually a little bit less traditional because I kind of, you know, I'm going to, I don't know who's, if I'm going to get penalized for saying this by someone out there. But in the early days, I actually was kind of anti-grants a little bit.

Starting point is 00:17:32 And I'll tell you why, because I wanted to move fast. I knew that there kind of was going to be a race to develop the first male contraceptive. I wanted to be the first one. And so I knew that the way to do that was to raise investor dollars. So I actually raised our precede round, which was $680,000 off of literally an idea, just me going to investors being like, I want to do this. This is who I am. I had a co-founder at the time who was a professor.

Starting point is 00:17:59 We had no data. And we're like just a vision and my persistence of pitching people. We did get a little bit of grant funding from organizations like they used to be called a Center for Innovative Technology. Now they're Virginia venture partners. I think state funding, there's, I don't know about every state, but, you know, we're based in Virginia. That is really nice funding if your state, you know, has, because it's kind of low strings attached. And sometimes it's like 50K or 100K here and there, even 20K, that can go a long way in those early, early days. And it takes a lot.

Starting point is 00:18:34 And those are easier than applying for an SVIR and waiting months and months and months to find out how you score. And then you get the funding. And then you realize that SVAR may not be going towards the product or the thing that will actually help you raise the money. So I actually, in the early days, focused on getting investor dollars through the door and maybe those kind of easy quick hit grants. We were lucky because there was a group called a male contraceptive initiative. It's a small nonprofit. They were starting around the same time as Contraline. And so they were able to get us a little bit of funding as well.

Starting point is 00:19:08 But really, believe it or not, Honsholing just applied for SBIR last year. And it's like eighth year of operations because now we finally have a little bit more time to do that. Yeah, that's such a great point. I actually have that same core belief, right? That yes, non-dilitated funding, that's definitely a path. forward, but in the earliest stages when you're trying to move fast and find some sort of version of like, maybe not necessarily product market fit in the life sciences, but signals of product

Starting point is 00:19:42 market fit. That's tough, right? Because those grants, once awarded could be in it and, you know, be driving you towards a certain direction that is vastly different by the time you actually get those funds. And so they can be kind of limited. And in fact, Derek, I think it was Derek Herrera, who's a serial med tech entrepreneur is onto, you know, his, I think, third company now. and it has a lot of experience with grant writing.

Starting point is 00:20:05 He said something very similar. It's just something you need to be very, very mindful of early on. And I'm not convinced that companies that are funded purely or mostly off of grants in the early days learn good skills for general company operations either. You know, it takes a certain moving fast. It takes a certain, like in the early days, even the documentation you have to do for those grants. It's not the type of stuff. It's not really how we do things with. product development per se.

Starting point is 00:20:34 And so I really think that it can be a little distracting and kind of create a company culture that's based on grants. And then now you're in the grant loop rather than the investor loop. The other thing I would say is having conversations with investors early, even though you're going to get a lot of noes along the way, is actually really helpful because maybe one or two out of every 10 conversations you have, even if they do say no, they might give you an insight or they might introduce you to someone that is a helpful connection for you. You might learn something about the market or commercial potential here.

Starting point is 00:21:07 And my point is like, there is something there about getting early traction from investors. If you pitch 200 investors and you get 200 nos in the early days, you really have to think about this and like, is this worth my time investing in this for the coming years, right? Yeah, 100%. I remember talking with Sean Morris. and we had an interview, I think it was maybe, gosh, last fall, something like that. And we talked about this very notion of like ABC, always be capitalizing, right? And, you know, there's going to be, there's going to be times where you actually truly

Starting point is 00:21:39 are trying to close around. But the rest of the time, you're just having a lot of these conversations, right, with investors. And it's not always like a hard ask, right? Of like, we are closing by X date. It's more like, this is what we're doing. Here's my background, right? This is kind of where we're headed next, et cetera.

Starting point is 00:21:53 And all of those conversations are definitely, definitely valuable. So I'm right there with you. I'm looking at one of your press releases, Kevin, though, and it's coming off of your series A, I think, which was a couple years ago now, maybe two and a half years ago. I'm looking at some of the investors, right, Rea Venture, Shang Bay, which is, you know, more common kind of med tech investor, you know, graphene ventures. But then, you know, Jason Calcanas, who I mentioned earlier. So talk to us a little bit, kind of that mix, right, that syndicate that you put in.

Starting point is 00:22:20 Because I think the onus for all of us, right, in the life sciences is, is it's easy just to gravitate towards the traditional med tech or life science vCs, but that money is in short supply. And, you know, oftentimes they're getting crushed from their LPs, right? They just don't have, they don't have, you know, capital to allocate. And so going kind of outside the norm, right, maybe it's a little bit atypical, but I think it's needed, you know, in order to kind of see a lot of these cool technologies come to fruition, you know, Contraline being one of them. So, yeah, talk to us a little bit about how you've done that, right?

Starting point is 00:22:52 How you've been successful in doing that? because it's really unique and I think it's a it's a really cool story I agree with you I think even though consular has quote unquote a medical device company at face value um based on our investor profile you you wouldn't think so right I think at the end of the day if you scrap away everything we're doing we're trying to revolutionize or change the paradigm of contraception that's a big ask that is that is not a five year vision that's not a 510K me too product that is you know If we can get tens of millions of men to be using birth control, that's going to change society. So from the early days, I was pitching investors.

Starting point is 00:23:32 Our seed round was actually led by Founders Fund, Peter Thiel's VC firm. They're, you know, the quirky VC firm that likes moonshot. They know that there's a low chance of this working, but if it does work, it's going to change the world. So that was my first institutional money, right? then as we grew, we were raising a little bit more from women's health funds started becoming a thing. There were no women's health funds in 2015, 2016 when I started the company. So now we have two women's health, VC firms, RH Capital, also known as Rea Ventures and Amboy Street Ventures. Shang Bay came along the way.

Starting point is 00:24:12 And then about a year or two ago, we were able to get Google Ventures or GV. on board, GV's starting to really make some big bets in women's health. A lot of these funds are looking at us as a women's health company. Why is that? Well, because it's kind of obvious. A male contraceptive would be really, really good for women. It would reduce the burden off of women as the main users of contraception. So I think that we have not had huge success, to be honest, just going to traditional, I'm going to pitch med device funds. They look at us and they're like, This is a PMA, first in class product. This is probably going to cost, who knows, $75 to $100 million to get this across the finish line.

Starting point is 00:24:58 That's a lot of money, you know. And it's not obvious what the exit game is because no one's done this before. And they're not willing to take all that risk. But bigger funds with long time horizons are because they know what the payout could be if we're successful. Oh, man. I'm so glad we're talking about this. And I want to move on to a couple other functions, you know, talk a little bit about your approach to reg and also like the clinical evidence right and that roadmap that kind of ladders up

Starting point is 00:25:24 to that rig process but um this topic is super interesting because I think you're dead on accurate and maybe maybe your product lends itself well to a couple of these more tech consumer funds if you will I'm like I don't want to classify them as such but deep tech yeah or like yeah it's deep tech in general or like moonshot sort of focused funds yeah yeah but I I absolutely love the approach and I'm I'm glad you know there's going to be an audience that hears kind of how you've gone about it because it's it's going to be so needed. And the reason I say it's so needed, it's not that you should ignore traditional MedTech VCs, but you could be very well on to a really great idea that, you know, is going to serve a huge

Starting point is 00:26:02 market. And the reality is like if you don't, if you don't get it funded, it's never going to see the light a day, right? And so don't stop. Don't stop just with, you know, your traditional med tech or life science VCs. I think the onus is on all of us to kind of go, again, go kind of far and wide. Hey there. It's Scott.

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Medsider: Learn from Medtech and Healthtech Founders and CEOs - How to Outpace Your Competition: Interview with Contraline CEO Kevin Eisenfrats

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