Medsider: Learn from Medtech and Healthtech Founders and CEOs - Key Lessons for Developing an Insurance Coverage and Reimbursement Strategy: Interview with Mike Kujak, CEO of Francis Medical

Episode Date: January 13, 2021

In this episode of Medsider Radio,  we’re talking with Mike Kujak, the President & CEO of Francis Medical.Mike breaks down Francis’ innovative new water vapor technologies, and provides some advice about developing the alpha & beta versions of a medtech product. We’ll also discuss how to navigate the early-stage regulatory environment, and hear Mike’s views on how best to plan & execute a clinical research strategy.Then we’ll discuss fundraising strategies and ask Mike what’s next for Francis Medical as the company plans for its second-generation development program. But first, a bit more on Mike's background...Most recently, Mike was the Chief Marketing Officer and Senior Vice President of International Markets for NxThera. Prior to that, he was the Vice President and General Manager of the Prostate Health business unit of American Medical Systems.Mike received his MBA from the University of St. Thomas and has a Bachelor of Science degree in physics and chemistry from the University of South Dakota.Before we jump into the conversation, I wanted to mention a few things:First, I’m trying something a little different with this next series of Medsider interviews, which will be focused entirely on stories from some of the most compelling medtech and healthtech startups across the globe. Here's the deal: I’ve asked these founders and CEOs to answer a series of questions, which I’ve converted to audio stories with the help of some professional voiceover artists. Think of these conversations almost like recorded fireside chats that you might find on Audible. They’re short and sweet, but packed with tons of great insights.I’ve never tried this before, so let me know what you think!Second, if you’re into learning from proven medtech and healthtech experts, and want to know when the next interview goes live, head over to Medsider.com. You can sign up for our totally free newsletter, which includes access to certain types of gated articles as well as regular content updates. Lastly, here's the link to the full interview if you'd rather read it instead.

You need to start early. We started with a reimbursement landscape analysis in the prostate cancer space. We discovered there was not a CPT code for facilities and physicians to report the procedure with our technology. So we filed a CPT application with the American Medical Association, even before we had a working device. In May of 2019, we were granted a Category 3 CPT code. We also filed with CMS for a new technology APC and planned to file for CMS. reimbursement and payment assignment once the FDA grants us a category B device exemption for our pivotal clinical study. Welcome to MedSider Radio, where you can learn from proven med tech and healthcare thought

leaders through uncut and unedited interviews. Now here's your host, Scott Nelson. Hey everyone, it's Scott, and in this episode of Medsider Radio, we caught up with Mike Koujak, the president and CEO of Francis Medical. Most recently, Mike was the chief marketing officer and the senior vice president of international markets for Nexthera. Prior to that, he was the vice president and general manager of the prostate health business unit of American medical systems. Mike received his MBA from the University of St. Thomas and has a bachelor of science degree in physics and chemistry from the University of South Dakota.

Okay, so before we jump into the discussion, I wanted to mention a few things. First, I'm trying something a little different with this next series of MedSider interviews, which will be focused entirely on stories from some of the most compelling med tech startups across the globe. So here's what's different. I've asked these founders and CEOs to answer a series of questions which I've converted to audio stories with the help of some professional voiceover artists. Think of these conversations almost like recorded fireside chats that you might find on Audible. They're short and sweet but packed with a ton of great insights. I've never tried this before, so I'm really curious what you think. Leave a comment as a podcast review or hit me up via email

by visiting Medsider.com. And if you end up leaving that review, just make sure it's five stars. Wink, wink if you know what I mean. Okay, second, if you're into learning from proven med tech and health tech experts and want to know when the next interview goes live, head over to medsider.com. You can sign up for our totally free newsletter, which includes access to certain types of gated articles, as well as regular content updates. You can also check out our premium MedSider memberships as well, which come with some super cool benefits, everything from clean, easy to read transcripts to exclusive Ask Me Anything interviews and masterclasses with some of the most experienced med tech experts in the world. Since opening up these premium memberships, I've been pleasantly surprised at how many people have signed up. So if you're interested, visit medsider.com to learn more. Lastly, we've got a lot of medsider goodness in store for the near future.

Not only will I continue to interview some of the best med tech and health tech leaders on the planet, I'm super excited to announce a new series here in the future. I don't have all the details ironed out just yet, but my goal is to give you a behind-the-scenes look at what it takes to get a startup off the ground, to go from zero to one, so to speak. It should be a lot of fun, so make sure to sign up. for our free newsletter at medsider.com. All right, without further ado, let's get to the interview. Mike, please tell us a little about your personal background before joining Francis Medical.

I've worked in the urology healthcare space for over 30 years and primarily in MedTech since 2004. I started out my career in the pharmaceutical industry holding several different commercial sales and marketing roles. In the mid-90s, I transitioned into the biotech industry building sales organizations and launched a few novel compounds. Then in 2004, I transitioned into the urology field within the medical device space. Prior to Francis Medical, I was on the leadership team of two companies, American medical systems and X-Thero, which were sold to Boston Scientific. Thanks for that, Mike. Now, tell us how the idea for Francis Medical's water vapor technology came about. The formation of Francis Medical in 2018 was personal for Michael Hoey, the company's

founder and chief technology officer. Francis, Michael's father, was diagnosed and eventually passed away from prostate cancer in 1991. Shortly after, Michael left the University of Minnesota to focus on the development of new thermal treatment technologies that could be applied throughout the body, including the prostate. In addition to his commitment to medical research, Michael has a lifelong passion for designing and building race cars. These personal and professional passions converged while Michael was testing one of his high-performance race car engines. He recognized that vaporized fuel represented a tremendous level of stored thermal energy and realized it could potentially be applied to various clinical applications when using sterile water vapor, including therapies

to treat prostate diseases and other urological conditions. Mike, you've been involved in several innovative med tech companies. When it comes to designing and prototyping the alpha or beta versions of your first product, what do you think is the biggest mistake most start? startups make. We have a philosophy of design, prototype, and redesign to make it better. Given most ablation devices need to go through animal or bench top testing, then extirpated human tissue, then finally inhuman testing. We allow our engineers to learn firsthand from using the device alongside physicians to see where they use the device and observe its performance. The Francis Medical Water Vapor Technology is currently being studied under an investigational

device exemption. When it comes to navigating the early stage regulatory waters, especially with these types of exemptions, what one to two pieces of advice would you give to other startup leaders? I don't know everything, and I learned long ago to surround yourself with people who are specialists in the areas that you need advice and guidance. I also have learned the FDA is our friend in CDRH wants to work with medical technology companies to bring innovative products to the market. I would encourage early stage companies to build and utilize a scientific advisory board early on in the development process, and make sure that board consists of specialty physicians and a couple of solid regulatory consultants.

Mike, tell us more about your approach to clinical studies for your water vapor therapy technology. We are currently enrolling in a 15-patient-FTA-approved early feasibility study with an investigational device exemption. Once we obtain the safety and efficacy data at six months, we plan to submit for the same exemption for our pivotal study, which will support our 510K application. Longer term, we need to make further investments in clinical data to support reimbursement and market adoption. We're currently putting together a clinical evidence plan to lay out our clinical roadmap to support our regulatory and commercial needs. What's your biggest advice for other early stage companies that are building out their clinical research roadmap?

Kick your team's initial thoughts down on paper, and it doesn't have to be perfect out of the block. Next, it inputs from all of your stakeholders outside of your company, like physicians, medical directors at payers, etc. What's most important is that your clinical evidence plan doesn't need to be a huge novel-like war and peace. What are a few of the most important lessons you've learned over the years when it comes to developing an insurance coverage and reimbursement strategy? You need to start early. We started with a reimbursement landscape analysis in the prostate cancer space. We discovered there was not a CPT code for facilities and physicians to report the procedure with our technology. So we filed a CPT application with the American Medical Association, even before we had a working device. In May of 2019, we were granted a Category 3 CPT code.

We also filed with CMS for a new technology APC and planned a file for CMS reimbursement and payment assignment once the FDA grants us a Category B device exemption for our pivotal clinical study. Coloplast recently invested in Francis Medical. In terms of raising money for early stage companies and evaluating different partners like venture capital versus large strategics, what is the most important piece of advice you'd give to other entrepreneurs that are trying to do the same thing? I would recommend having balance between venture and strategic capital. Both provide good insights and resources into your development, regulatory and clinical plans. But they have different agendas and needs.

We have four solid venture capital investors and two strong strategic investors, both in the urology space, and they have been very helpful in providing insights and resources for us to tap and do within their organizations. Mike, can you share what's next for Francis Medical? What are you most excited about over the next few years? We are in the midst of our second-generation development program. We are adding enhancements that will make the procedure easier to perform for the physician. We will also be kicking off a series B-rays in mid-2021 to fund our pivotal trial for 5-10K clearance

and the development of our commercial device. We are also working with the FDA to obtain a breakthrough device designation, which will help us navigate and lay out our final clinical study for regulatory approval. Where can readers or listeners go to learn more about you and Francis Medical? The best place to visit and learn more about Francis Medical is our website at www.francelsmedical.com. Okay, Mike, let's transition to some fun, rapid-fire questions. For someone that is starting their entrepreneurial journey in the med tech or healthcare space, what's the most critical thing they should know?

Be passionate about what you're developing. Network with people who can help you? Build a list of advisors and tap into them often. Do your research, follow your instincts, and surround yourself with employees and consultants who are strong in their functional areas. You don't need to know it all. What influential books, podcasts, or resources have been most helpful in your entrepreneurial adventures? I highly recommend these three books.

The innovator's prescription, the tipping point, and great teams. Are there any med tech or healthcare entrepreneurs that you find particularly inspiring? There are many that come to my mind, but one for sure is Doug Coors. If you had to teach a class on one thing, what would the subject or topic be? That's simple. How to build highly effective teams. Mike, this is the last question. Starting over in your mid-20s, knowing everything you know now, what would you do differently? I always knew I wanted to be in the healthcare field.

and I've held many different positions in various aspects of healthcare, and learned a lot from looking at problems from many different angles. If I had to do it all over again, I would have taken on more risk earlier in my career.