Medsider: Learn from Medtech and Healthtech Founders and CEOs - The Importance of Understanding Clinical Trial Design as a Medtech CEO: Interview with Nadim Yared, CEO of CVRx

Episode Date: March 4, 2021

In this episode of Medsider Radio, we’re talking with Nadim Yared, the CEO of CVRx, a pioneer in neuromodulation for cardiovascular diseases. Nadim has been CEO for 15 years and led CVRx through some major pivots and incredible successes. Today, we’re going to discuss his journey with the company, including Nadim’s expertise on clinical trial strategy, startup funding, and working with FDA & CMS. But first, here’s a bit more about Nadim Yared and his background: Nadim holds two graduate degrees, and started his career with GE. After getting his MBA at INSEAD, he went on to run several business units for GE, then spent four years as the head of Medtronic’s Surgical Navigation division. Nadim was then recruited to take the helm at CVRx in 2006, and has been CEO ever since. Before we jump into the conversation, I wanted to mention a few things:If you’re into learning from proven medtech and healthtech leaders, and want to know when new content and interviews go live, head over to Medsider.com and sign up for our free newsletter. You’ll get access to gated articles, and lots of other interesting healthcare content. Second, if you want even more inside info from proven experts, think about a Medsider premium membership. We talk to experienced healthcare leaders about the nuts and bolts of running a business and bringing products to market. This is your place for valuable knowledge on specific topics like seed funding, prototyping, insurance reimbursement, and positioning a medtech startup for an exit.In addition to the entire back catalog of Medsider interviews over the past decade, Premium members get exclusive Ask Me Anything interviews and masterclasses with some of the world’s most successful medtech founders and executives. Since making the premium memberships available, I’ve been pleasantly surprised at how many people have signed up. If you’re interested, go to medsider.com/subscribe to learn more.Lastly, here's the link to the full interview with Nadim Yared if you'd rather read it instead.

I think one is a major driver that I always focus on. And that's if you want to understand the mean, you have to narrow the standard deviation. And as a clinical, as a CEO, you know, running clinical trials or having clinical trials in your shop, you have to understand your data, not only from the mean or the average perspective, but from the standard deviation's perspective.

And, you know, the board just asked me always like, you look at the trial and you immediately spot strength and the weakness and I will tell them focus on the standard deviation, look at the standard deviation. There's much more lessons that you can learn from looking at the deviations of the data than the mean of the signal or the average of the signal. And, you know, I can go on for multiple examples, but if, for example, you want to improve your therapy, you have to understand where that variability is coming from. Welcome to MedSider Radio, where you can learn from proven med-toler and healthcare thought leaders through uncut and unedited interviews.

Now, here's your host, Scott Nelson. Hey there, it's Scott Nelson, and in this episode of Medsider Radio, we're talking with Nadim Yarrid, the CEO of CBRX, a pioneer in neuromodulation for cardiovascular diseases. Nadine has been CEO for 15 years and led CVRX through some major pivots and some incredible successes. Today we're going to discuss his journey with a company, including Nadine's expertise on clinical trial strategy, startup funding, and working with FDA and CMS. But first, here's a bit more about Nadine and his background. He holds two graduate degrees and then started his career with GE. After getting his MBA at Encead, Nadine went on to run several business units for GE, then spent

four years as the head of Medtronic's surgical navigation division. Nadine was then recruited to take the helm at CVRX in 2006 and has been CEO ever since. All right, one other quick thing to note, I'm experimenting with a new recording platform and unfortunately my audio quality isn't the greatest. We try to clean it up as much as possible, but it sort of is what it is. Nonetheless, Nadine's audio quality is solid and it's his answers that you want to hear anyway, not mine. I just wanted to call that out in advance. Okay, so before we jump into the conversation, I want to mention a few things. First, if you spend any time in the med tech or health tech space, you probably understand how difficult it may be

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When you post your project and set a rate, physicians then compete for the job with bids, and then you make the choice on who you want to hire. To get started, it's really simple. Just register your account, post your project, check out the bids that come in, and then hire a physician. No finder's fees, no obligation, and no risk. It's super easy. Even better for the Medsider community,

FlipMD is offering to waive their normal transaction fee for the first 60 days. So just head over to MedsiderRadio.com forward slash FlipMD for all the details. Again, that's MedsiderRadio.com forward slash FlipMD. Okay, second, if you're into learning from proven MedTech leaders and want to know when the new content and interviews go live, head over to Medsider.com and sign up for our free newsletter.

You'll get access to gated articles and lots of other interesting healthcare content. If you want even more inside info from MedTech experts, think about a MedSider premium membership. We talk to experienced healthcare leaders about the nuts and bolts of running a business and bringing products to market. This is your place for valuable knowledge on specific topics like seed funding, prototyping, insurance reimbursement, and positioning a MedTech startup for an exit. In addition to the entire back catalog of MedSider interviews over the past decade,

premium members get exclusive Ask Me Anything interviews and masterclasses with some of the world's most successful MedTech founders and executives. Since making the premium memberships available, I've been pleasantly surprised at how many people have signed up. So if you're interested, go to Medsider.com to learn more. All right, without further ado, let's get to the interview. Nadine, welcome to Medvedere Radio. Appreciate you coming on. Thank you, Scott.

It's my pleasure to be here today. All right. Well, the listeners are going to know a little bit about your personal background via the introduction that I've already provided. But let's start here because I'm really anxious to get to talk about the CVRX story. Because as I mentioned before, we hit the call record button. It's a company that's sort of been on my radar, you know, being in the interventional slash in the vassar space for quite some time. And it seemed like there was a bit of a quiet period where all of a sudden, you know, we really, I didn't really hear much about CVRX, and then all of a sudden over the past two years,

you know, the company has kind of bursted or sort of reemerged onto the scene, so to speak. So I definitely think that's going to be a fun part of the story. But before we go too deep, can you provide a little bit more of a personal background, you know, about yourself, as well as maybe a high-level story about TBRX? Sure. And Scott, stop me if I go too deep, particularly when I talk about myself, right? So I have two engineering degrees, and I started working at General Electric. in the research and development facility near Paris in France.

On 3D image reconstruction, that was my specialty image processing. I'm talking here early 90s. And I developed the software platform that became the platform for all of the GE imaging products. So I became kind of a famous nerd within GE, got promoted. Three years later, I decided enough of R&D, enough of engineering. I'd like to do something more fun. So I took a year sabbatical, did my MBA at, institution called InSiyadh. It's in France. It's a good worldwide name for those who know

in Siad basically on a make a famous ad. Anyway, so after insiad, I came back to GE, ran a couple of businesses for them, acquired a business for them in Salt Lake City, moved with GE to Salt Lake City to do the integration. The Metronic hired me to run one of their divisions. And after four and a half years of working for Metronic, I was recruited by the board. board of directors of CVRX to become the CEO of CVRX in late of 2006. So it's been 14 years. Very good. Yeah, that's a long time ago because we're recording this year in early 2021. So, you know, nearly, nearly a decade and a half ago. That's a great kind of starting point. And I want to go back to like your time at GE then the Medtronic and then the CVRX.

So two massive companies, GE and then Metronic. Like what was your kind of your reasoning for wanting to join a startup at that time? A few things. First, when I joined Metronic, I ran one of their best kept secret divisions out of all of Petronic. It's the surgical navigation technology based out of Boulder in Colorado. So great location, great team. We had a lot of fun. We all used bicycles to bike to works, you know, flip-flop, shorts, t-shirts in summer and so forth. So very informal, casual startup culture clashing with the rest of Metronic. And it was the only capital equipment business, the only 510K business within Metronic.

So kind of the cycle of purchasing of these products was different than the cycle of purchasing a spinal implant or a cardiovascular facemaker, or a stent, for example. So after four and a half years running it like a startup with the resource of a large company, I really had a lot of fun doing this. And we explored the possibility of spinning off metronic navigation. running it as a separate business. And after nine months of discussions with Metronic, we figure out it's very difficult to disentangle the Metronic navigation business from their other businesses like the Spine business of Metronic. So at that time, I was already in discussions with these few investors, and one of those investors happened to be the major shareholder of CVRX, and they talked to me about CVRX and what they're looking for, and there was a match. So I decided,

decided to say goodbye to a great job at Metronic, but I had a lot of fun and go to the unknown running a shot up on my own. That's great. And it sounds like the kind of environment there in Boulder when you were at Metronic was maybe a little bit similar to startup, maybe with, obviously, with a lot of resources at hand. But it sounds like it was pretty, you know, fast moving, but yet fairly casual at the same time. No? Exactly. Very good. Exactly. Let's circle back around to like you join. You're being recruited over to CVRX. this is kind of mid, you know, 2006, 5, 2005, 2006 timeframe for those following along.

And let's talk a little bit about more about like the early barrow stem therapy because my memory serves me right and I needed to catch up a little bit in preparation for this interview. But you guys initially started out with, you know, trying to solve for resistant hypertension and have since sort of pivoted what it appears to be a pivot into heart failure. So one, am I correct in that? And then two, maybe tell us a little bit more about like how the idea for the original barrow stem even came about. So let me start with the second part of your question. The barrestone technology used to be called Rios. So the category for this type of product is called

the Barreliflex activation therapies BAT in short. The founder of Ciberax, Dr. Rob Kival, was actually exploring carotid stents back in the year of 2000. And he noticed that every time an interventional cardiologist inflates the balloon to deploy the stent, blood pressure fluctuate and often drops down precipitously. And he started researching this more and more and he figured out, you know, there is a relationship in here between those beta receptors located in the carotid artery and blood pressure among others. By 2001, he founded CPRX. 2002, he started doing animal studies both in hypertension and heart failure. Now, let me take you back to 2002. That was the year when Metronic was introducing the first biventricular pacing device, or CRT, to treat heart failure.

At the time, the world did not know much about heart failure and what works, what doesn't work with CRT. So the company in 2002 and early 2003 decided, why compete with Metronic, right? hypertension or resistant hypertension is a wide open space. Let's go after resistant hypertension. The company did a phenomenal good job in the early 2004, 2007, 2005, and six on defining the exact need, creating some of the terminologies that is still used today. For example, what is the definition of a responder for a device-based therapy and hypertension? So all of those early work was created all by CVRX. So when I was hired in 2006, the company had designed the last trial but has not yet

run it. So I was recruited to run this trial, like running a business. And we did. And when we get the data from the trial in around early 2010, we had great efficacy data that led to an HDE down the road, a humanitarian device exemption approval by FDA. But two things slow us down. Number one, the safety profile of the procedure was the. not our liking. There were about 9% of the patients complaining from sensations of numbness in the

jaw after the procedure for a period of up to six months. While this could be acceptable for a major surgery like carotid and gastroxomy, now to treat resistant hypertension, we felt that, you know, the 9.6% of those complaints, that's not going to fly. And the second element was all of the hype around renal denervation as an alternative approach for hypertension. Now, we as a company have experimented with surgical denervation of the real arteries, understand the impact, and we characterize it very well internally. And we know exactly how it's different, useful, but very different than what we're doing. But the market at large did not see that. And there was so much hype around and renal deervation in 2010, that we decided as a company like, hey, let's slow down a bit here,

go back to the drawing board, try to make the procedure less invasive to remove any nerve damage that created those numbing sensations in the jaws and focus on hard failure, right? And at the time, I had to make a decision as a CEO of the company. I can go and fight head-to-head with all of those 80 plus companies doing greener than ironservation, including Metronic, Basel Scientific, San Jose, in hypertension. Or I can go in heart failure. Heart failure, you might say Nadine, but you will be competing with, you know, all of those bivisicular pacing companies.

Well, not anymore because by 2010, the word has figured out that biventicular pacing only work in a sub-segment of heart failure, the patients with a wide QRS syndrome. That means on their electrocardiogram, the first mountain is flatter, is wider. in those patients, a CRT device works. But if the mountain is narrow and tall in the electric garage area, those patients don't have a solution. So we decided to focus on those patients and two reasons for that. Number one, unmet need, severe, morbid disease, right?

From a payer's perspective, health systems perspective, and so forth, it's very compelling. And second, I was very concerned personally that if real derivation is successful, I will always be trying to defend why we have a place for our therapy. And if real derivation is not successful, which after looking at the metronic trial design, I was convinced that they will hit a roadblock, the market will become toxic, particularly the investment market. So I recommend it to the board to slow down on hypertension and accelerate in heart failure. Now, we do have a pivotal trial that has received the idea approval from FDA in hypertension,

that we put it on hold in 2013 to focus all of our resources, all of our money, all of our employees, and hard failure. And we did the phase one, phase two, phase three studies in sequence from 2011 with the new technology, the new platform, the new procedure, and we got the approval in 2019 by FTA. So that period of seven to eight years, we kind of kept a low profile by design. And that's why Scott you may have kind of forgotten about us for a while. because we got the FDA at Google. Yeah, you were, you were, it seemed like you were sitting on the sidelines,

but that was, by the sounds of that story, certainly that doesn't seem like you were doing anything like sitting on the sidelines. And I laugh and I, you know, I have, you know, I'm kind of, you know, tongue in cheek, but the story that you just described, Nadine, is incredible and it, on a number of different fronts, but it feels like that decision to pivot in a way, because I would imagine probably through that first clinical trial, you were confident enough in the therapy, for heart failure, but it seems like such a big decision, especially considering, you know, the capital that was maybe already raised and the capital needed to move forward with a focus

on heart failure. Did it seem as big of a decision at the time as it does now? Yeah, no, it was. And many reasons for that, Scott, you hit on some of them. It's going to the unknowns and abandoning the known. So we know exactly what we did wrong in hypertension. We know how to fix it and we started down this path, right? Heart failure, we didn't know what we did not know back then. That's number one. Number two, if you look at heart failure, since the advent of CRT, very few therapies have been successful. So there was this drought of any novel development in the medical device for heart failure. And some people figured, or start thinking that this is never going to work. And if you remember, renal derivation was tried in heart failure

with failures in 2010 and 11. A vaguely gel deriv simulation, there was failures by barceler antarctic, spiral cord simulations, failure by metronic and syndrome. So it was scary to go after the unknown. But at the same time, we had a lot of, you know, experimental data, and we were comfortable and confident about the mechanism of action of our device that we decided to go for it. Money was always difficult to raise, but, you know, if there is only one advice I'll give to any entrepreneur, is pick your early investors with extreme care. Money has a color in a way where the early investors will either carry you forwards. in a good way as a company, or they will abandon you, you know, at the middle of the way

and have you be going from a struggle to a struggle to a struggle. In the case of CVRX, new enterprise associates have been from the beginning. A steady supporter I brought in Johnson and Johnson in 2007 through their development corporation, their venture fund, and they also have been a steady supporter since then. So with those two access to be able to raise money, always difficult, but not in power, even at the height of drought of funding, like 2014 or 13, where VC money was drying out, we still had access to able to raise money. Yeah, that's great.

I hear so many, you know, med tech entrepreneurs like yourself mentioned that. Like, they can shoot your investors wisely. And I mean, it seems like you're sort of a poster child for that answer, really. And I say that and kind of like the counter to that is like oftentimes, as you know, raising early stage funds isn't, is. and easy, right? Series, you know, C, C rounds, series A rounds, etc. I mean, it's hard, it's hard enough just to generate interest. But you're, what I'm hearing you say is, like, make sure those investors that you, that you take on are really partners and are there for the long haul.

And it seems like that that's definitely proven to be incredibly helpful for you in CVRX. Exactly. Exactly. Listen, many entrepreneurs focus on dilution and valuation of these early around. These are important elements, no question about it, right? But more important than this is the quality of the investors that they're bringing on board. And they have to ask themselves questions, do they want to be a larger percent owner of a very tiny fish or, you know, a smaller percent owner, but a huge, you know, way. That's the difference between the two. Yeah, and it's interesting that you say that. I recently did an interview with Renee Ryan, who you probably know maybe even from your days with, you know, raising,

raising money in partnership with J&J's corporate development arm. She was, you know, she's a serial med tech entrepreneurs. It's been a fair amount of time at J&J is now running CalA Health. But she said the exact same thing in regards to the mistake that founders often make, you know, when it comes to, you know, raising money is they concern themselves too much with dilution at the expense of working with, you know, truly great partners that are going to be there for the follow-up rounds. maybe when the hurdles that you need to cross, get taller and taller. So I find it super interesting that you're echoing that her very same thoughts.

I have tremendous respect for her. I've known her even before her days at J&J. And of course, Julian could say, you know, plenty of change ADC, of course, but even before that, when she was at Jeffries. Yeah. Well, very cool. I mean, that's a phenomenal story. And I can't, if hearing you tell it, it sounds almost, I mean, it sounds difficult, but I can't imagine how, you know, those decisions that you were making at that time,

but pretty, pretty, you know, powerful nonetheless, especially to see, you know, kind of where, where you're at with CBRX and kind of where you, where you kind of, how you've turned the company into these, into this different direction, into the unknown, as you pointed out. A couple of other kind of follow-up questions that are a little bit more in line with some of those, some of those early phases getting the kind of the barrow and technology where it's at really revolve around clinical and reg, right? it sounds like you have vast experience with both, but especially when it comes to clinical trials. So on that note, and I don't want to paint too broad of a brush here with this question,

but when it comes to laying out that strategy in terms of generating clinical evidence for a device like Barrowston, right, that's innovative, like what are your general pieces of advice for other entrepreneurs that are kind of in that same boat, you know, in the early stages, but really trying to make sure that the plan that's in place is on solid ground before. Yeah, there's a lot of lessons over the years, but I think one is a major driver that I always focus on. And that's if you want to understand the mean, you have to narrow the standard deviation. And as a clinical, as a CEO, you know, running clinical trials or having clinical trials in your shop, you have to understand your data not only from the mean or the average perspective, but from the standard deviation. perspective. And, you know, the board just asked me always like, Damim, you look at the trial and you

immediately spot strength and the weakness. And I will tell them, focus on the standard deviation. Look at the standard deviation. There's much more lessons that you can learn from looking at the deviations of the data than the mean of the signal or the average of the signal. And, you know, I can go on for multiple examples, but if, for example, you want to improve your therapy, you have to understand where that variability is coming from. To figure out what is the patient population that will allow you to narrow this variability and what are the parameters of your device.

For example, if you have a programmable device, how do you program it to change to narrow that variability patient to patient to patient? So you've got the patient-to-patient variability and within the same patient, the longitudinal variability. Then you can figure out, all right, what's the patient population in whom this therapy benefits the most?

you probably heard the name of Dr. Brownwood, right? You know, his father of the modern cardiology, all of these cardiology books with his name, you know, right? So at one time, we invited him to chair one of her symposiums. I think this was 2011 in Paris. And I was talking with him after the symposium. And I've asked him the question about heart failure and heart failure with preserved rejection fraction. And he gave me one analogy that to this day is still ringing my ear. He said, if you have a great therapy, like, let's assume you have a superb.

the drug that works in malaria. But you did not know that it was for malaria. You only thought that this reduces fever. And you assume that this is a fever reducing treatment. You go, you test it on the wide population of patients with fever. You see that 3% of the patients are doing great in it, and 97% have no response. You abandon the therapy that it doesn't work. And in fact, you may have had a miracle cure for malaria, but you did not identify your

patient population or the disease properly. So focus on identifying the patient population or the disease or the phenotype of the disease, whichever way you look at it, so that you can narrow this variability, and then you can focus about so that you have the right therapy, the right trial, and so forth. Maybe I'm speaking Chinese in here, but for all of those adverse and clinical trials and statistics, they would understand what I'm talking about. Yeah, that's great. That's great.

Your answer is actually, I wouldn't have expected that. You know, I was, I was maybe thinking that you'd answer with, you know, some more high-level thoughts, but, like, I love the fact that you went kind of more into the weeds. And there's so much to, like, gain there. But the fact that, I mean, I'm completely, although I'm certainly no clinical expert, and I'm certainly not a data scientist. I'm not a person. But I think most people can kind of understand where you're going, right?

With looking at that variability, I think it's probably the key, the key word, maybe through the lens of standard deviation, looking at that variability, in order to better understand, like, where your therapy really works, you know, doesn't work as intended? Or is it working in a different fashion maybe that you wouldn't have otherwise expected? So I love that. I love some back then. But that answer was something.

You gave me a soft ball here. Let me try to answer with an easier question and an easier lesson for, you know, the general public in here. One of the things that we often do as an error in clinical trials is we do a single-arm phase one trial, first in man. You know, 20 to 30 patients, often in Europe now in the United States, we derive information. And then we go from phase one, we jump into a phase three, randomized control trial, hundreds of patients. We spent hundreds of millions of dollars, and we bet you beg. And we don't have a plan B if the trial ends up hitting a wall.

A lot of things could go wrong. And 80% of the time, what goes wrong is the control arm. You hear it often, people telling you, oh, my placebo arm or the control arm, did better than expected. Well, yeah, when you were running your first amount of study, Did you quantify what the control arm would do? No, do it. Instead of doing 20 patients, do 40, 20 versus 20.

Collect that data because you need this to quantify to understand what you're up to when you run your pivotal trial. Or do like what we did, which is a little bit more expensive, phase one, phase two, and phase three. And the phase two will be like a mini pivotal trial, randomized control so that you can fine tune the size of the efficacy, the patient population, buckle it up. And then you make so few changes, if at all, between the phase two and phase three. So your phase three is just a repeat of the phase two, but a larger scale, and then you get the FD approval. Yeah, I love that. I love that. I love your first answer, but the second one is, is even, like, arguably even better for maybe, you know, the layperson like me when it comes to clinical trials and clinical studies.

But I love that. It's almost, I love the approach of viewing it. I mean, the phase kind of approach to clinical studies is certainly nothing new. But your point about, like, the mistake that most or most people get in trouble is not fully understanding the control arm. And by sort of, you know, I don't know, making, making haps for lack of that description or maybe trying to find a more efficient way around your answers. Or maybe even quite honestly, maybe to save money, that may, like hurts you in the long run if you don't fully understand that control arm. I love that. So I guess to come full circle on that answer, Nadine, would you, like, let's take.

a semi-well-funded, you know, fairly early-stage med-tech company, would you almost always recommend kind of this three-phase approach where the phase two looks very similar to phase three is just phase three of that scale? Or would you, I mean, would there be situations where you make recommend to kind of trim down and try to get away with, you know, two phases? Interestingly, right now we are conducting a phase one, two and three studies all combined into one. It's XRX for the next generation. What has happened? What has happened? between 2011 and 2021 is a lot of progress on the science of conducting clinical trials and within FDA and the culture of FDA of being willing and open to listen to creative ideas and take the hard

road that could be faster to get those therapies approved faster to the patients who need them. And that did not happen overnight. That cultural revolution within the FDA, I thought Dr. Jeff Schuier, who's the head of the CDRH, started down the spot, I think around 2008, maybe later, maybe 2009, he figured out that he needs to move that chip in a big way. And the cardiology group within the CDRH, within FDA, was the first to jump into this, says, you know what, we want to be on top of it. Let me give you examples. Ten years ago, you would sit down with FDA and they would say yes or no. That's it. You offer a solution and they'll either say yes or no.

Today, you sit down with FDA. You offer a solution. They may say yes, but have you considered those or no? Look at this. Look at that. Read this paper. Maybe you've considered that approach. And that's a big difference because then it's a collaborative environment between FDA and the industrial sponsor of the trial to go back and forth and back and forth and leverage the best know-how between the two to figure out an approach that makes sense. If we had the FDA we have today back in 2012 when we were designing the phase two trial, I would have done phase two and phase three as a single sequence like two phases in the same trial without the interruption of flow of patients. And that would save two to three years in the process. Right now with modern

methods like, you know, Bayesian borrowing and others, a lot of tools are available to clinical trials sponsors and to FDA to do these methods. That's great. No, I love that. And I hear so many other, you know, MetTech leaders, whether they're in early-stage companies or at large strategic echo that same sentiment that it's imperative to work in a collaborative fashion with FDA. But I love the fact that you've been through that and are seeing some of those changes even

at FDA. that are allowing, you know, kind of more efficient ways that are better when it comes to clinical clinical trial design. Yeah, the conventional wisdom 10 years ago or 15 years ago when I don't see that, the conventional wisdom everybody gave me is don't ask the FDA because you may not like the answer. And right now, my approach is the absolute opposite business. 180 degrees is ask the FDA. Ask them often, ask them early. Don't wait.

Don't assume. Don't guess. That's great. I love that. Especially considering it's the exact opposite, as you mentioned, than it was maybe eight or nine years ago. On that note, I'm going to shift the conversation a little bit, but I think it allows, you know, where we're at and the discussion kind of allows for a transition into, you know, insurance covers and reimbursement. And I know that recently CVRX, your team announced that you received a CMS Intap. So can you maybe explain, like, well, for people that are unfamiliar with the Intat program, explain what that is. And I know if you can, maybe you can go back in time just a few years ago

when I think you actually received breakthrough device designation as well. And I know there's a bit of a time gap there between the device designation, I think, and the receipts of the intap. But can you tell us a little bit more about that? Yeah. So let me start with a breakthrough designation. 2013, I think there was some effort between I've made. I was part of this. and the staff of Congressman Fred Upton from Upper Michigan about this idea of a House resolution called at the time the 21st century cures. And we've articulated 10 points that we needed to see to accelerate pathways for those therapies that are needed by patients in their athletes.

The Congress took those on and accepted or at least embraced or adopted the FDA-related provisions. In the same time, Dr. Schurin was working on his own within his group to try to figure out a similar pathway at FDA. And we got invited in 2014, three CEOs to have this discussion with FDA and give them feedback about it. It was the CEO of JNJ, San Jude, and myself. And it was around the middle of 2014 or early 2014.

By early 2015, I think April 2015, FDA issued the guidance called the expedited access pathway. When the 21st century cure's proposal became law under President Obama in December of 16, it was called the Cures Act. The expedite access pathway from FDA was renamed to break through technologies and aligned with the law. So that was an administrative effort that converged with a legislative effort, and they end up in the same place at the end. When the proposal from FDA, the Expad Access Pathway, was published in April of 15.

Of course, I knew about it, right? So we took a month to analyze our data and submitted to FDA seeking a designation. And FDA, they had 30 days and they responded favorably to our designation. They gave us the designation. That's why we received our designation from FDA in June of 2015. We kept it silence for a few months. I don't think we've announced it until we finalized the trial with FDA. So it was probably toward the end of the year.

Now, we used that extra practice as pathway designation from FDA to work collaboratively with FDA. We were the first project. FDA was still learning what it meant internally. There were a lot of issues to figure it out, a lot of education to have happened within FDA that we participated in, but also we were learning. So it was painful, but at the same time, very interesting as we were, you know, plotting in here what it would need from, you know, basic statistics, science, multiple shots, goal, et cetera. So that's the genesis of this breakthrough device, every space access pathway. It's more to do with FTA than with CMS. Now, I was chairman of AgroMed Excel at the

time, which was the AgroMed branch for smaller companies, serving the need of smaller companies. We started down the past to saying, okay, our proposal back in 2013 had elements of the breakthrough technologies for CMS. And we still want to do that. to go through the legislatively and administratively. So we kept working with the successive administrations, and it was under Commissioner Seema Verma and Secretary Alex Azar that finally we started seeing some of those, you know, percolating down. Now, those are bipartisan efforts with bipartisan support. And the idea was that if FDA is doing everything possible to shorten the pathway to approval for those breakthrough therapies because they're needed,

we're talking about access and can we have access if those products are not paid for the answers no so we need to have CMS on board and part of those effort at the time i became chairman of the board of ivermed of all of ivermed so i was on the front line of discussions with you know the administration so with hHS CMS with the white house and so forth to try to get those implemented whether they are for payments or for coverage for breakthrough technologies So that's why in your mind right now, you associate directly breakthrough with coverage of CMS, but the initial was all about FDA, and then CMS came this past couple of years, actually. So February of, no, February we got the commitment. Atron CMS announced this program that for breakthrough technologies, the NTAP and TPP additional payments will be simplified and accelerated. So what is Entap, new technology add-on payment? This program has existed for two decades.

It's a way for CMS to provide incremental payments to novel products when they don't have yet at payment level associated with them. And that payment is used to be 50%. Now it's 65% of what the hospital is paying for the device. So basically, the CMS will reimburse the procedure cost plus 65% of the device. So the hospital still will make some losses on it with an end-up, give or take depending on the margin, they make on the procedure, but at least it's not all of the loss, right?

So that's the new technology add-on payment. TPP is a similar program for the outpatient procedures. It's a transitional pass-through. Both are for three years, and the transitional pass-through, actually the hospital will get paid the procedure cost and the full device cost for outpatient procedure. CVRX received both the NTAP and the TPP incremental payment from CMS last year. The NTAP came into force for us on October 1st, 2020, and the TPP on January 1st of this year.

So right now we would benefit from both of those. Now, not we, our customers would benefit from both of those programs, whether it's a name patient or outpatient procedure. Now, that's on the payment side. On the coverage side, CMS also proposed in August last year a program called MSCIT, which is basically a four-year national coverage determination for breakthrough technologies from the time they get FDA approval. And within those four years, the company would collect claim data and more evidence to submit the case to CMS to make it permanent.

and very few products actually receive a full national coverage determination. And that's a great thing for breakthrough technologies. Now, of course, it's not all breakthrough technologies. It has to fit within the criteria where there are some products that are, for example, if it's a capital equipment, they don't have an NCD. It's part of the, you know, the durable payment mechanism is different. So we're talking for implantable devices. It's pretty straightforward, you know.

Breakthrough device. you will be part of NCIT, you will have a four-year national coverage determination. So it's not, the way I understand, and I certainly don't want to get too much into the weeds when it comes to coverage and reimbursement, because I know there's a lot of complexity here, but is it kind of an obvious for CMS to grant NCIT if you already kind of meet the requirements for intap and TPPTP, the transition pass repayment? Scott, you're asking a very good question, very irrelevant question. From my perspective, the answer is obviously yes.

Now, of course, there is another side to this, right? And the other side of it was the following. Who determines if a product is a breakthrough or not? Well, it's FDA. Who's paying the tab? It's CMS. And when FDA says, yes, this product is needed, often they define the patient population

who would benefit from the therapy. CMS wants to know if this patient population has benefited from the therapy, are there other therapies on the peripheries? So it could be different patient population, right? So this match is not always 100%. That's why it requires a lot of discussions between FDA and CMS about this program early on, and it was kudos in here. Big kudos to CMS to embark on this and trust FDA with that decision that will tie the hands of

CMS to give them this. Now granted, it's only four years. Granted, there's only a few products. And granted, we know with medical devices, even with coverage, even everything, it's not like pharmaceutical products where the day it's approved, every single doctor will be prescribing it. In medical device, we have to train physicians to do the procedure. And we have less resources.

So usually the first four years of any product, even when you're in a large company, you're not going to sell billions of dollars, right? You'll be selling millions, maybe hundreds of millions. So the overall impact at the level of CMS and the level of the budget is not that negative, even if they're taking a risk with those. So that's what the point that we're always trying to make. It's only for four years and during four years with medical device. It's a gradual progression of uptake, even the most successful ones. They will not get to billions of dollars.

So in the big scheme of things, it's okay to take that risk to accelerate access to the U.S. patients who need this therapy. Got it. That's incredible feedback, considering you were so early, you know, with the breakthrough device designation. And I think you mentioned it wasn't even necessarily called back in the, you know, in the early days. But as it's kind of a sort of an add-on question, right? We're talking about CMS. But, you know, with your patient, or the patient population that's ideal for CBRX, is it an option? Having these types of designations and, you know, being eligible for intap and the transitional pass-through payment programs,

is it that much easier for the private payers than to get on board with coverage and reimbursement? We don't know yet. We don't know yet. So right now with private payers, our, let's put it this way, our patients who would want to benefit from our therapy have to submit a request before they get the procedure. This process calls prior authorizations. We're having good success with it with a good rate of positive response, but it delays the process. sometimes takes one or two months. So patients who now have to wait this time.

And in some diseases, you can't always afford to wait one or two months before you get the therapy. So MSSIT, you know, this program to get the NCD for four years, hopefully, should be an open door for the private payers to look at it and says, you know what? Yes, we understand that the smaller number of products, smaller potential financial impact on us definitely needed for those patients. Let's try to figure out the program with them. I don't know if we'll be the same thing or something similar. But I encourage all 378 payers in the United States to look at this program carefully

and try to create their own version of it or just copy it. Got it. On that note, and I want to make sure that we allow enough time here for the kind of the more personal rapid fire questions. But on that note, I think that's super interesting that you brought that up. Why isn't there, or maybe more importantly, like what will it take to get private payers to be more in line with CMS when it comes to these types of, you know, access initiatives? Well, they are private for-profit companies, most of them. So they can do whatever they want,

most of them, right? Now, not for the Medicaid advantage, but for their own patients, particularly for closed-loop systems, right? They can decide what is a high priority or lessens, a high priority for them. That said, FDA NCMS are planning away in here saying, listen, And it's not for every setup. It's only those very few that are serving in need that doesn't exist in the marketplace. We FDA certify the data is good and on and on and on. So what could a private payer look for more than this? I don't know.

Frankly, I don't know. I think FTA and CMS are providing here a blueprint for them to copy. Now, again, it's interesting how times change 15 years ago. We used to say, ah, give me a private payer any day of the year. just, you know, we're never going to get anything with CMS done. Remember? Now it's not the way around. It's like, okay, CMS is on the forefront.

And the private players are lagging behind. Things have changed. From CV-Rex's perspective, we're very happy because two-thirds of our patients are above the age of 65. There's for CMS patients. And this is carrying the day for us. But if a company is providing, for example, a pediatric product or, you know, product more for teenage,

right? Or even the young adults like sports, medicine or others, a breakthrough technology might not help them from a reimbursement perspective because if they don't have CMS patients, it's a moot point for them. Yeah, so interesting how that paradigm has changed where now CMS is at the forefront. But, I mean, nonetheless, they're often programs, and you made a really, really great point that even though FDA, your device may be eligible, and FDA has this breakthrough device kind of designation program, without access, it kind of doesn't matter.

You know, I don't want to over, I'm sorry, I don't want to underappreciate the breakthrough device designation. But if, I mean, you and I both know that if hospitals aren't willing or can't pay for it, you know, access is going to be an issue, you know, so a major issue. So I love the fact that you, uh, how you kind of weave, weave those two things together. On that note, let's transition to kind of the last more like business related question, I should say.

And it really revolves around, around fundraising. And I know you mentioned earlier, we talked a lot about this, how important it is to identify partners that are going to be there to support you in those follow-up rounds, especially if the company needs to pivot or iterate. Is there anything else when it comes to raising money that you think is important for other, you know, MedSec entrepreneurs to understand whether they're in the early stages or maybe whether and, you know, follow-up, you know, series B or series C rounds? Oh, absolutely. You know what they say in real estate, right? Location, location, location, location. in the entrepreneurial field, it's about management, management, management. Okay, so if you're an entrepreneur and you did not pay enough attention to the team you're assembling together, no matter how good your product is or your data, it doesn't matter. You will get hurt.

If you're an entrepreneur and you think you're not well, you know, rounded as a CEO, bringing in a professional CEO to support you. but definitely assemble a very solid team next to you. Go and get the best. Don't try to argue about the money. Go and get the best talent that you can convince to join you. And if you are able to convince a talented VP to join you, it's helping you in two ways.

Number one, in the execution, of course, internally. But number two, sending a strong signal to the investors that this VP came in from X, Y, and Z, and trusted by looking at the stories, trusted what they're seeing, and they invested in their time, in their career, with their money and everything to join you. So, yeah, as an entrepreneur, that should be your priority number one to ten

before anything else, assembling various quality. That's great. And I love the fact that the second point that you mentioned about bringing in the best, you know, I immediately kind of gravitate towards, yes, of course, because they can execute like, like, you know, those and most, but, you know, also mentioned the fact that it serves as a really, really solid signal to the market that,

you know, you're serious about making, you know, making an imprint on the market year after. And so I love that. That's a great answer. With that said, I know we're kind of running a little bit short on time. So before we get to those last rapid-fire questions, Nadim, when you think about TVRX over the next one to two years, what are you most excited about? Well, we're entering the next phase right now, which is the adoption phase for our therapy by patients, right? And our success will be counted by the number of lives that we impact. And to get this done, we've, you know, done all of the clinical trials, all of the R&D before

that, the experiments, et cetera, all of the legwork that I described with CMS. And now it's all about us. It's all about our execution to go out and educate the patients, educate the physicians, train the physicians about this, educate hospitals, convince them to embark on our therapy, and so forth. So it's going to be an exciting. phase right now for CBRX. Really exciting. I've been waiting for this now 15 years. That's great. I can only imagine, especially considering the journey that you've been on. Incredible. Yeah, especially to be... Scott, I did not know clinical trials before I joined CBRX. I did not know implantable. I did not

know Kaldiase. Why did the board hired me? I have no idea. I think they like me. I don't know, right? But the fact is I'm a commercial guy. You're like, you know, marketing in sales is what I did. my previous jobs before Metronic at GE, I was running, say, the marketing for the X-ray business, the X-ray imaging business for General Electric. And I missed that, right? And now I'm back into the game. So I'm having a lot of fun. Oh, yeah. I can imagine, especially with your commercial guy. I do. Like I spent, you know, my entire career in sales and marketing positions. And that's really where my wheelhouse is. But I love the fact that, like, you, I would have never guessed that you didn't really spend much time in the world of clinical trials, clinical

study management. Like you're you sound like an expert and I think probably that proves out the notion that probably proves out the notion. I've got those yellow book clinical trials for dummy and statistics for dummies. That's great. That's awesome. Yeah, I love it. I mean you're you're proving the point that like you can learn so much better when you're actually doing it you know versus just you know sort of you know reading and understanding something academically. I mean I certainly believe that to be the case the ramp to to pick up on a certain topic is so much faster when you're actually sort of playing in the

sandbox, if you will. But yeah, that's great. Hey, everyone. If you're looking for a contract manufacturer that specializes in minimally invasive interventional devices, you need to consider switchback medical. Here's why. First, their world-class engineering team has deep domain expertise in the endovascular space. Think of pretty much any interventional device and a switchback engineer was probably involved in its creation. I can't think of another R&D partner with the sheer amount of knowledge and experience they have in the vascular arena. Switchback can be your single-source solution for all your contract design and manufacturing needs. Second, Switchback recently launched

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Again, that's Medsider Radio.com forward slash Switchback. Okay, let's get back to the rest of the conversation. In the last few minutes here, Nadim, I'd like to transition, I should say, to some more personal kind of fun, fun questions. There's really three of them. And, you know, you can expound on your answers if you want to, or you can, you know, answer them with the answer, which is, you know, quick statements as well.

But let's start out with advice, right? So we talk a lot about advice already. But if there's, like, one thing that you would, you would offer to other, you know, med tech or healthcare entrepreneurs that are going to listen to this conversation, what's, like, the single biggest thing that you think they should know? You know, when you're,

I'm talking here to entrepreneurs who, been working in a large company. The band of emotions you have in a large company is very narrow. As a CEO of a small company, you can go very high up, exhilarating, and also very down when you hit an obstacle. So your bands of emotion is much wider. So your goal of the CEO is to narrow this band of emotions. You can keep your team steady. That's great. Love it. All right. Second question is around books, resources, et cetera. Are there any, like, influential books that really stand out or maybe, you know, the book that you've, you know, you most often recommend to other entrepreneurs.

Oh, yeah, a lot. But I mentioned those statistics for dummies, right? No, seriously. You know, when I was at GE, you know, Jack Welsh at the time was, you know, the manager of the century, right? We learned a lot from him. And since then, Bill George of Netronic also wrote a couple of books about leadership. You know, you have to go through.

I've been very impressed with a few authors I've met over the years. Malcolm Gladwell, for example, match him one time at Ivermad. Impressive guys, you probably had, you know, you read some of his books, you know, the tipping point and the what dark saw, etc. Many of those books, it's not just one time that you read them. You have to go back, you know, on them over and over. The other set of books, Clay Christensen, you know, the innovators dilemma, the innovator's solution.

actually there is a third. I think you could call the prescription dilemma as well, the third one. Very interesting. And every time you read this first time, and then five years later you go back to these books and then you look like, wow, okay. And now I get it.

I should look at this problem in this way, different way. Another classic that I'd recommend to everybody is Crossing the Chasm by Jeffrey Moore. Crossing the chaos is about, you know, the life cycle of stuff from getting adopted by the innovators, early adopters, and then you go to the early. mass markets, right? And then the laggers were the end. The problem with this, most products

end up being innovators and maybe only adopters and then nothing. You hit the gas, right? So crossing that gas and requires a different way of thinking and you have to transition a CEO, even your hat from how do you sell to innovators to how do you sell to the early adopters in the mass market. Yeah, I love it. And I couldn't agree more with your comment around like even going back to some of these books. Like you mentioned Clayton, the Lake Clainton Christensen, I was just having a conversation, I think it might even even been yesterday with the partner that I'm working on a startup with. And we were talking about this very same thing. And it was largely within the context of kind of these procedural movements that are happening from the hospital to the, you know, from the hospital,

the office-based lab setting. And it's very disruptive on a number of different fronts. But we were talking about this very same concept. It's like, oh, I thought that's what Clayton, Christensen meant. You know what I mean? That's a perfect example, you know. So I love, I'm a lot. I read that book, I know how long ago. It was years ago. And then it's like, you know, it's like, oh, okay, that concept is beginning to materialize in my head. So I love it. Last question, Nadine.

If you could start over in your mid to late 20s, let's kind of, you know, take the time, the meds out of time machine back to that period. Is there anything that you would do differently? Oh, yeah, a lot of things. Oh, man. Where do I stop? Listen, I go from the first thing that when you look back, if you think there's nothing that you could have done better, there's something wrong with you. Because there is absolutely no way that you did not learn something new since then that you could have applied to do things different. Now, would I have gone to a startup earlier or later?

Would I have gone to GE or metronic? I don't know, right? It's very hard to think. But would I have done a few things different? I just give you an example about clinical trial. If I know today, if I knew back in 2012 what I know today about clinical trial, I would have done phase two at phase three at the same sequence, and I would educate it FDA, why they should look at it,

and then ended up maybe FDA accepting it five years earlier, this concept. Yeah, that's great. A lot of things. Sorry, I'm sorry. No, no, I love it. I love your example that there's always something to learn. how true that is. So with that said, we're up against the clock. I can't think enough, Medina, I'll have you hold on the line, but I can't think enough for taking time out of your

schedule, especially considering all of the activity at CVRX right now. It's really fun to see to see where, you know, where you've taken that company and the rest of the team. You know, it's pretty, to your point earlier, you're at an exciting, exciting phase, and I certainly wish you the best here over the next few years. But thanks again for taking time out of your schedule to do this. And for everyone listening, if you're interested in interviews, just like this one with Nadine. Conversations with other proven med tech and healthcare leaders, go ahead and head over to MedSider.com and sign up for the free email newsletter.

We'll let you know when the next discussion goes live. And in addition, all of the in the show notes for this particular episode, if you just go to Medsider and use the search bar for CVRX, you'll find show notes to this episode and we'll link up to their website as well as some of these other topics that we discussed as well. So with that said, thanks for everyone's listening attention until the interview goes like. Take care.