Medsider: Learn from Medtech and Healthtech Founders and CEOs - The Most Important Piece of Advice for Raising Medtech Venture Capital: Interview with Sean Saint, Founder of Companion Medical

Episode Date: January 5, 2021

In this episode of Medsider Radio, we caught up with Sean Saint, the CEO of Companion Medical, which recently sold to Medtronic. Sean has more than 20 years of engineering experience in medical devices and various start-ups. Here are a few topics we covered in this interview:How Sean and his team at Companion Medical came up with the idea for the InPen.Sean's advice for raising money from medtech investors.Companion Medical's insurance and reimbursement strategy for the InPen.There's definitely a lot more that we cover in this discussion, but before we jump in, 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. 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 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.

It's without question, the hardest thing you need to do. Investors are skeptics as they should be. And as an innovator, you are fundamentally trying to do something new, something that most people disagree with or at a minimum, haven't thought of. So my advice is never stop talking, talk to everyone all the time, and never, ever get discouraged. It only takes one investor, and it's your job to find them and convince them. That is the job. Embrace it. And one more thing, except the fact that investors may get a better deal than you might otherwise expect. If you don't like it, find a better investor. If you can't accept that it's the best deal you were able to find, it's not their fault.

They enable everything you do. Respect them for that. 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, in this episode of Medsider Radio, we caught up with Sean St. CEO of Companion Medical, which recently sold to Medtronic. Sean has more than 20 years of engineering experience in medical devices and various startups.

He's also living with type 1 diabetes and is very well known within that community. Prior to starting companion, Sean worked as Director of Advanced Technology and Mechanical Engineering at Tandem Diabetes Care, co-founder and vice president of R&D at Allure Medical, engineering manager at Dexcom and senior engineer at Medtronic AVE. He has over 175 issued and pending patent applications. Sean holds a Bachelor of Science and Mechanical Engineering with a minor in computer science from California Polytechnic State University San Luis Obisbo and is a registered professional engineer in the state of California. 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 and health 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. medtech 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. Sean, please tell us a little about your personal background as well as companion medical. I am a mechanical engineer by training.

I ended up in the medical device space and then the diabetes arena, almost by accident. After 10 years of designing continuous glucose monitors with Dexcom, as well as insulin pumps with tandem diabetes care, I was diagnosed with type 1 diabetes myself. That diagnosis caused me to think differently. Instead of being frustrated that more people weren't using the great technology that is designed for insulin pumps, I tried to understand why. How do you come up with the idea for the companion medical and pen? Since most people were using insulin pens and not insulin pumps, instead of asking,

how do we make insulin pumps better? I asked, how do we combine the benefits of insulin pumps in the form factor of a pen? I am not the first guy to think about smart pens, but that is what led me in that direction. From there, I realized there wasn't a solution like I envisioned, but there definitely should be. So we said about designing a Bluetooth insulin pen that transmits doses and other info to your phone

where an app could provide many of the features of an insulin pump that are so important. Sean, can you take us through the process of designing, prototyping, and manufacturing the alpha or beta versions of the in-pen? The early versions of the pen were terrible, I'm glad. We moved very fast. We prototyped, we changed, we evolved, we redesigned. Most importantly, we learned. We knew that what we were making was never going to see the light of day in its current form, and that's okay. We gave ourselves the ability to be wrong. In fact, we expected it. We didn't even have a manufacturing line. Why bother if

everything was going to change anyway. But these early versions were good enough for us to realize we were onto something, that people wanted it and we needed to raise the money to go build it the right way. How did you go about navigating the regulatory environment? In other words, what key regulatory challenges did you have to solve for? We always knew that the pen would require FDA clearance. We all have medical device backgrounds, so we respected what that meant and what it required. Sometimes, startups in Silicon Valley do things better or faster. But in the medical device space, I think it's important to respect the regulatory environment we live in. Our head of regulatory was employee number four or five and was pivotal to our success.

It helped that the team had experience in diabetes, pumps, active implantables, etc. Sean, can you tell us more about your approach to clinical studies and trials for the in Penn? We didn't need traditional clinical studies, but we didn't need human factors studies. In regards to that, we had to learn. The first thing we picked up on is that engineers don't always make a user interface that everybody likes. We learned that by doing formative human factors testing early, and by making the designers do the testing themselves, it is very hard to support a design after you watch somebody's struggle

to use it. So design, test, iterate, rinse, and repeat until it works, but do it fast. In terms of raising money for companion medical, what is the most important piece of advice you'd give to other METEC or healthcare entrepreneurs. Raising money is without question the hardest thing you need to do. Investors are skeptics as they should be. And as an innovator, you are fundamentally trying to do something new, something that most people disagree with or at a minimum haven't thought of.

So my advice is never stop talking, talk to everyone all the time, and never, ever get discouraged. It only takes one investor and it's your job to find them and convince them. That is the job. embrace it. And one more thing. Except the fact that investors may get a better deal than you might otherwise expect. If you don't like it, find a better investor. If you can't accept that it's the best deal you were able to find, it's not their fault.

They enable everything you do. Respect them for that. When it comes to insurance coverage and reimbursement, Sean, what was your strategy with the N-PEN? We did a lot of work prior to launch ensuring that the larger insurance companies were aware of us. lots of miles and planes. And partially because of that, we launched with pretty good coverage, but we learned pretty quickly that isn't enough.

Most of our customers were getting charged reasonable amounts, but some didn't have any coverage at all. The issue this caused is that the doctors who are understandably skeptical of new technologies would be afraid to write prescriptions for the in-pen because they didn't want disappointed patients. We decided that nobody should ever experience a high cost for the device, and we made it our problem to either have good. coverage or cover it ourselves. This was key to our early success because we were able to tell the

doctors, don't worry, your patient will never have to pay more than $35 per year for the device, and that really removed a lot of fear. In terms of commercialization, what worked for acquiring and retaining your first customers? The beauty of the in-pen system is that when you see it, you understand it. Maybe it's not what you would have expected when someone said smart pen, but most of our customers intuitively understood it. In that regard to the right person, it sells itself. So we followed a two-pronged approach early and still follow it today. We relied on the traditional path of direct-to-health care provider sales,

but in addition, we did some direct-to-consumer outreach and it worked amazingly well. Of course, early on, we still had a lot to learn in terms of making a system that people want to stick with. How did the acquisition by Medtronic come about, and what are you most excited about over the next few years? Metronic and Companion Medical have been very aware of each other for years. They have always been interested and supportive. Metronic has consistently been very innovative, having created the first continuous glucose monitor, the first pump, the first sensor-augmented pump, low-glucose suspend pump,

and now a fully controlled-to-target system. They were able to see our vision. Once we had commercial traction, we all felt it was time to combine the two most important categories of insulin delivery into one company rather than an individual pump or pen company. Medtronic brings some technologies that we find very interesting, and certainly, an amazing commercial team both domestically, as well as globally. Together, I think we will have the world's most widely used methods of insulin delivery. Sean, where can readers or listeners go to learn more about you and companion medical?

Our website, companionmedical.com, is certainly the best place to learn about the product. You can also find some of our early stage presentations on the internet. They seem like so long ago that they really aren't. The fact of the matter is companies can grow up quickly, and we certainly did. Let's transition to some fun and personal questions. Sean, what is the most important piece of advice you'd give to someone that is starting their entrepreneurial journey in med tech or healthcare? I almost want to say don't do it.

But really, if you have a truly good idea, it probably means you are one of the very few people doing. it. Of course, that happens with dumb ideas, too. It's your job to convince the world you are right. Never stop talking. Talk to everyone. Every chance you get. Make it real. By sheer force of will if you have to. What influential books, podcasts, or resources have been most helpful in your entrepreneurial adventures? I love the typical entrepreneurial books. Lean startup? Zero to one, innovator's dilemma, all of them. But they are not lessons on what to do. They are just stories. some to be avoided. It depends on your particular situation. I also really love them, how I built this podcast. Sean, what business leaders are you closely following right now?

There are a bunch, but near and dear to my own life right now is Sean Salmon, the new president of Medtronic Diabetes. I expect Medtronic Diabetes to really thrive under his leadership, and I'm excited to be a part of that. The other fun, one is Elon Musk, but like the entrepreneurship books, there are plenty of lessons to emulate, and some to avoid at all costs. It's your job to figure out which is which. If you could put a billboard anywhere, what would it say and where would you put it? That's a tough one. I really have no idea.

But I would say that if you can look at things from other people's perspective, the whole world seems to make a lot more sense, maybe something like this. Remember to ask why they think that. If you had to teach a class on one thing, what would the topic be? The easy answer is something around the topic of entrepreneurship, but I don't think that's right. There is something about a good entrepreneur they learn, but they can't be taught. Something like that. Those people scare me. Last question, Sean, starting over in your mid-20s, knowing everything you know now, what would you do differently?

I would find my self-confidence. It impacts everything you do in life, or more importantly, what you don't do. Don't confuse this with egomania. Always remember you can be wrong, but don't let that stop you from trying.