Medsider: Learn from Medtech and Healthtech Founders and CEOs - Why Keeping The End in Mind is Critical for Every Medtech Entrepreneur: Interview with Erica Rogers, CEO of Silk Road Medical

Episode Date: January 17, 2020

In this two-part interview, I was lucky enough to sit down with Erica Rogers, CEO of Silk Road Medical. We first spoke a few years ago and then again much more recently to catch up on what had changed at Silk Road since our first conversation.During our catch up, we discussed how Erica led her team at Silk Road through PMA approval, successful insurance coverage and reimbursement strategy, which led to a very rewarding public offering for Silk Road, opening at $20 a share. This resulted in the opportunity to continue the company’s goal, which is to change the standard of care in carotid artery disease with their TCAR procedure.Much of our first conversation was about Erica’s career trajectory and how she was able to successfully, and gracefully, exit multiple medtech companies. Her lengthy career and insight as a medtech thought leader is just as interesting today as it was when we recorded our conversation.Before leading Silk Road, Erica was the COO of Medicines360, a nonprofit pharmaceutical company developing drugs and devices for women. Erica was the founder and CEO of Allux Medical as well as the cofounder of Visiogen, which was acquired by Abbott Medical Optics in 2009.Prior to that, Erica spent over 12 years at Boston Scientific in a variety of sales and marketing positions. She began her career in pharmaceutical sales after receiving a B.S. in Zoology from San Diego State University. Erica holds five issued and 15 pending US patents for medical devices in nanotechnology. See more...

Yeah, now, you know, there's a real lesson there, Scott, and that lesson is, you know, how do you exit companies and exit them? It's great such that when those kinds of acquisitions happen, that you're invited to stay. And in fact, that's what happened. And many people in the original target organizations were let go in that merger because there was, you know, duplicity. And I was preserved and, in fact, elevated in my role in the organization in Nero and was able to stay in California and move up the ranks. target therapeutics inside Boston scientific. Welcome to MedCyder Radio, where you can learn from proven med tech and healthcare thought leaders through uncut interviews. Now, here's your host, Scott Nelson.

In this two-part interview, I was lucky enough to sit down with Erica Rogers, CEO of Silk Road Medical. We first spoke a few years ago and then again much more recently to catch up on what had changed Silk Road since our first conversation. During the catch-up, which you're here in part two. Unfortunately, the audio quality isn't as good as I would have liked, but we did discuss how Erica led her team at Silk Road through the PMA process, successful insurance coverage and reimbursement strategy, which led to a very rewarding public offering for Silk Road,

which opened up at an incredible $20 a share. This resulted in the opportunity to continue the company's goal, which is to change the standard of care and carotid artery disease through their T-Car procedure. Much of our first conversation, which you're here shortly, was about Erica's career trajectory and how she was able to successfully and gracefully exit multiple med tech companies. Her lengthy career and insight as a med tech thought leader's

just as interesting today as it wasn't when we recorded our conversation back then. Before leading Silk Road, by way of background, Erica was the C.O.O. of Medicines 360 a nonprofit pharmaceutical company, developing drugs and devices for women. Erica was also the founder and CEO of a Lux Medical, as well as the co-founder of Vizogen,

which was acquired by Abbott Medical Optics back in 2009. Prior to that, Erica spent over 12 years at Boston Scientific in a variety of sales and marketing positions, and she first began her career in pharmaceutical sales after receiving a BS and zoology from San Diego State University. Erica also holds five issued and 15 pending U.S. patents for a wide variety of medical devices in nanotechnology. As you can imagine, there's a lot of things that we cover in both parts of the interview with Erica, but here are a few things that I'd like to highlight. how she went or how she felt when Abbott purchased VizioGen in 2009, the company that she initially co-founded. Why keeping the end in mind is absolutely critical for every med tech

entrepreneur. The key lessons Erica learned at a lux medical when they were forced to shut the company down. Why every medical device entrepreneur absolutely needs to start with a problem first so you don't end up with a solution looking for a problem. And specific to reimbursement, why it's imperative to put yourself in the shoes of CMS and or societal stakeholders. Why Silk Road ended up going public and what led to their overwhelming success. And lastly, Erica's favorite business book, the CEO she most admires and what she tell her 30-year-old self. Of course, there's a lot more we cover in this wide-ranging discussion with Erica.

But just before we get started, I wanted to highlight a few things. First, admittedly, it's been quite some time since I recorded the last MedSider interview, probably close to two years to be more specific. But there's a good reason for that. I've been knee-deep in my own startup at Juve. That's J-O-O-V-V-V. It's where we manufacture light therapy devices, which is technically referred to as photo biomodulation

in the world of academia. It's a really interesting space because our products are technically class two medical devices, but we're following a very classic direct-to-consumer commercialization model. It's been a fun ride over the last three to four years and have definitely learned a ton. And if you follow these med-sidal interviews, I'll be sharing quite a bit about my experiences.

So keep on listening. And again, if you want to check out J-O-O-V-V-V-com, that's J-O-O-O-V-V-V-com. All right, second message, if you're new to MedSider Radio and want to be updated when the next interview goes live, head on over to medsider.com and enter your email address. That's Med-Sider, M-E-D-R dot com. Rest assured, you won't be spammed at all. In fact, the only time you'll likely hear from us is when a new conversation goes live.

Again, it's super simple. Just visit Medsider.com, and right there on the homepage, you'll see the opportunity to enter your email address. And lastly, as a small reminder, if you continue to enjoy these interviews, please give us a rating in your podcast app. It's super simple. Just open the reviews tab and click on the old five stars. Thanks again, that really helps us out.

All right. So without further ado, let's get to the two-part interview with Erica Rogers. Erica, welcome to the program. I appreciate you coming on. Well, thanks for having me, Scott. All right, let's go and start with VizioGen. You co-founded that company back in 2000, I believe the 2000 timeframe. if my notes are correct here on my end.

And then you left in 2004 to start Alex Medical. So let's go back, or let's, you know, I want to kind of set the stage here for when Abbott finally purchased VizioGen back in 2009. So I think that was about five years after you initially left. So with that in mind, you know, any thoughts as to, you know, where you were in time and what your sort of mindset was when Abbott pulled the trigger on VizioGen after kind of, you know, building that company back in the early 2000s? Yeah.

Well, I was absolutely overjoyed for a number of reasons. First of all, you know, obviously as the founder or co-founder of that company, I had extraordinary vested interest in seeing that technology come to fruition and kind of get to the market. We were taking on a massively huge challenge there at Vizogen, which was to create a true accommodating intraocular lens, one that would provide more accommodation power than any lens prior to that time. And the structure of that lens was very, very complicated.

It was a huge validation of the bet that I had placed in my career to do VizioGen in the first place, which kind of began with starting at Three Arch Partners as an entrepreneur of residence, and Vizogen was hashed out of that. So it validated the whole decision-making process around the unmet need there, around the technology, and all of that. Also, as a founder, I still had a reasonable position in the company, so economically it was good for me as well. And in terms of, you know, was it bittersweet?

Yes, of course, you'd love to be there at the end, sort of the exit end. It's never the end. The technology lives on and all of that. But, yeah, it would have been great to be there for that kind of victory lap. And also what I learned in hindsight, kind of many years later, is that because I wasn't there when the company actually exited, I didn't really get credit for the exit, even though I was one of the fingers. And so that was a little bit of a bittersweet pill for sure.

But the reasons for leaving in the first place were kind of twofold. One was the company was heading into what was going to be a very long protracted process with FDA. And I was, by the time I left, I was at that time running marketing. So as a co-founder, originally I was doing a bunch of things, wearing a lot of hats, you know, clinical and regulatory. marketing and some office and Ds run in and, you know, office management on the side. And then you narrowed the role, obviously, over the years to marketing. And so it was both a personal decision around geography just needing to be back in the Bay Area. And then secondly, wanting to place another bet because I knew it's going to be long and drawn

out at VizioGen. And I thought, well, you know, I want to go do another startup and place another bet and not have all of my kind of equity industry. someone's asked if you know what I mean. Sure. Yeah, that's a good anecdote. I want to ask you a few more questions here later on in the conversation about Alex Medical and your decision to kind of place another bet after founding Visigogen.

But let's go and set the stage for the audience. I provided, you know, an intro and your bio sort of at the beginning of this discussion. But you joined Silk Road Medical as president and CEO in 2012. We're recording this conversation in early 2017, so about five years ago or so, four to five years ago. So can you provide us an overview of, you know, of the device? you're commercializing now at Silk Road and really how it's different than, you know, cradded stenting or crowded in our directomies. And then give us a little bit of a take.

I don't want to see a little bit of a long winning question, but give us a little bit of a take on where you're at in terms of commercialization both here in the U.S. and abroad. Sure. And feel free to interrupt if I'm going long on either of those multiple parts of that question. But really, Scott, it all starts in the Silk Road story really all starts with stroke. And stroke, as you know, is a devastating and fatal, often fatal disease. And carotid artery disease is responsible for about a third of all strokes in the United States. And so unfortunately, one of the downsides

are performing a procedure to fix that carotid lesion and prevent the future stroke that it could cause is that in the process of fixing it, you can cause a stroke during or in the peri-procedural period. And so today, carotid artery disease is typically treated with an invasive surgery called carotid endarectomy or CEA. And CEA is super good at protecting the brain, preventing future strokes and strokes during the procedure, but it's pretty invasive. It's a long incision down the neck, meticulous surgical dissection, collateral damage, cranial nerve injury, and heart attacks and wound complications and things like that that that go along with invasive surgery.

And so to your point, over the last, call it 15 plus years, industry has attempted to solve for that morbidity around this invasive procedure called TEA. And we did that with a minimally invasive catheter-based approach called TAS, carotid artery stenting, and that is from the trans femoral route. And the problem is, as it turned out, KAS actually increased the procedure-related stroke risk relative to CEA due to inherent design and technology flaws, and in particular starting from the groin.

And so surgeons and pairs weren't willing to make that trade-off of excess stroke risk in and around the procedure just to get the minimally invasive benefits. And so Silk Road has been able to go to school on 15 years of trial and error around carotid stenting and really honing in on where the shortcomings lie. And it's really all about delivering the stent safely. And so K-KAR, which is trans-carotid arterial revascularization, which is the procedure we do, starts in the neck. It's a direct access to the common carotid artery. We set up a flow reversal shunt that's outside the body, returns blood into the femoral vein, and we place a stent under that flow reversal so that any debris.

that's rendered is captured and never ever has a chance to hit the brain. And so we published our first results from a big U.S. trial in the Journal of After Surgery in 2015 and showed a 1.4% stroke rate in all patients, which was the lowest published stroke rate of any modality, whether it be surgery or coronary stenting up until them. And so that's what really put Silk Road on the map, got everybody's attention. and last year we got a very favorable coverage decision, which we can talk about later if you want to. And we commercialized the device last year, really in earnest in April, and had a phenomenal first year with each of our territories annualizing it over a million dollars.

So we're off to the races. Really cool success story for sure, especially for watching an early stage med tech company actually commercialize a technology here in the U.S. without having to be acquired by a larger strategic for sure. So it's cool to see what you've done. You and your team have done up to this date so far. So we're going to circle back around and talk about some of those more specifics. But let's take this opportunity now to kind of go back in time and learn a little bit more about your career

and some of the challenges that you faced over the time as well as some of the lessons learned that have brought you and helped, you know, forged a path where you're at now with Silk Road. So let's go back to your days at Boston Scientific. I know you were there from like the mid-90s to I think around the 2000 time frame. So what first you brought you into the med tech space? And what were your roles like at Boston Scientific over that, over this, of those, you know, five years? So I'm going to tell you the true answer, which is that I had spent the early part of my career in the pharmaceutical industry. And so I was out in hospitals and

physician offices and things like that. And every time I would pull up to a hospital in my, you know, Ford tourists and I would park next to somebody who would get out of their, you know, BMW. And I would ask that person, what do they do? And they would say, well, you know, I sell medical devices in back in the day it was pacemakers right sure and so it became really clear to me early on the cool jobs were over in the med tech patient so that's the honest answer to the question that why did i start paying attention to that area of medicine in the first place and so i started boston scientific as a sales rep literally carrying the bag i was super drawn to that role in that company it was a company called meditech at the time. It was before it was even called Boston Scientific and before the IPO. Now, you should understand

I was a child prodigy. I was really only 12 years old when all this act. So if anyone's doing the math on how old I am, it's really embarrassing. But yeah, no, so I was around on Boston Scientific when public and I have one of the very first shares still framed in my office. And so what drew me there was obviously interventional medicine was just getting started. And it was obvious this was going to changed the world. The whole vascular bed was poised for shift from the big open surgical procedures to these minimally invasive things. And it started with, you know, really simple angioplastys of iliac arteries. And obviously, you know, history speaks for itself. That's what really drew me into Boston Scientific was this was the beginning of something really, really big.

So glad that you mentioned that that point about being in the pharmaceutical space and seeing your, your colleagues in the device space, just leading a much better quality of life in terms of income. I'm sure a lot of those people, including myself, that are listening to this interview, can absolutely appreciate that perspective.

The roles that you had at Boston Scientific leading up to when you left in 2000, so you eventually, I presume you eventually went in-house? Sort of. That's a complicated story. So I did work up through the ranks and the sales organization

and sales training in particular and ended up in, in leadership roles there, but there was a need for me to move physically to Boston, and I was unable to do that for personal reasons. And so I kind of maxed out in what I could do at Boston, which is how I ended up at Target therapeutics. And I crossed over into Target, did market development at the very, very early days of aneurysm coiling. Literally, I started at Target therapeutics, like within days of the 5thin K clearance on the first aneurysm coils. And my role there was market development. So it was figuring out how to go from, you know, the five

doctors in the world who could coil an aneurysm to, you know, taking over all of intracranial aneurysm therapy. And what were all the things that we were going to need to do to solve that puzzle? And it was everything, everything from reimbursement to additional data to randomized trials against aneurysm clipping. And, you know, it was just a giant puzzle that had to be solved on the market development front at Target Therapeutics. So when I think about my Boston Scientific years, I lumped them all together because I left Boston Scientific and went to Target therapeutics and within about 90 days of me going there, Target was acquired by Boston Scientific.

And so I was back. Boom ring. Yeah, boom ring effect. Yeah. Now, you know, there's a real lesson there, Scott. And that lesson is, you know, how do you exit companies and exit them? with grace such that when those kinds of acquisitions happen, that you're invited to stay.

And in fact, that's what happened. And many people in the original target organizations were let go in that merger because there was duplicity. And I was preserved and, in fact, elevated in my role in the organization in Nero and was able to stay in California and move up the ranks at Target Therapyers inside Boston Scientific. Got it. Okay.

And so when did you, I guess, take me back to that time frame because I have like when you, you know, when you first founded a visit. Vizogen in the early 2000s, but was when you went to Target and then Target was acquired by Boston Scientific, did you recall the dates? Oh, gosh. I'm going to go back in time. Yeah. Not a big guy. I was just trying to get a better feel for, you know, for sort of the, the time frame to help people track along. It was like four years at, you know, four years doing neuro inside Boston scientists. Those are like around 96. Got it. Okay. Okay. That makes sense. So you were in inside, you know, you went to Target, which was obviously a very early stage, you know, stage company. Boston acquires Target.

And then you make the decision to sort of, you go to Three Arch Partners. So walk me through that. And how did you end up as an entrepreneur in residence at Three Arch leading up to the eventual formation of VisioGen? Well, that's one of my favorite parts of the story. You know, when we take these right turns and we decide to kind of pursue the road less traveled, I was very happy at Target Therapeutics. We were just, you know, not going to cover off the ball there and making enormous strides in intracranial aneurysm therapy and getting into ischemic stroke. And it was super hot and super

exciting. And I was working for great people and I had a great team under me. And then I got introduced to three arch partners and they were looking for an entrepreneur in residence who had some background in the stroke arena, which is how I sort of came across them. I was really torn as to what to do because, you know, I had never been inside the venture community. I'd never done a startup. I didn't know what an entrepreneur residence even was and what you know how would my success be measured and all of those things and I was coming out of this giant organization Boston Scientific and one of the partners at three arts sat me down and he said look if every single aneurism in the world were coiled instead of clipped what would happen to the value of your Boston scientific stock

and I said well this is you know 2000 we're talking about 1999-ish I said well not a whole lot because at that time it was all about coronary and stocks rose and fell on the basis of coronary market share and coronary market entrance and spends and all of that stuff that was happening in the cardiac cath lab and so what he was trying to tell me was that I had reached a point in my position there where I could no longer have an enormous impact on the fate of Boston scientific And he said, if you come here and you do this very early stage thing, you will have an enormous impact. Because you will go and found something if we do this right. And I said, you're right.

I have to go do that. And so that was what was behind the decision, Scott. But then there was also this other small voice in my head that said, they're probably not going to ask me twice. Why should probably go do this with the leading venture capital firm in Silicon Valley? things. Right. At the time. And so what do you think was it that attracted the partners of Three Arts to sort of pursue you and want you to come on board as an EIR? You know, I have asked myself that question. I don't have to be the exact answer. But here's what I think. One is I had a real core competency in all things intracranial, you know, aneurysm and stroke. That was a hot

area of investment at the time. Three Arts obviously had, you know, some deal flow in that area. I would be helpful there as an entrepreneur and residence and a principal in, in that. capacity it was one of the areas that they wanted me to incubate around I knew all of the physicians globally so that was helpful to them but I also think that you can have an entrepreneurial spirit inside these large companies and I think they picked up on my entrepreneurial spirit and wanted to tap into that what separates some entrepreneurs is if you are an entrepreneur that has that spirit and that gut and you also know

what it's supposed to look like at the end when it's a big company, you can connect the dot from early, early, all the way up to what it means to be a Boston scientific. And so I think they became convinced that I could do that. I could start something very, very early and nascent, and I could take it all the way through and make it look and act like a big company. The notes that I'm jotting down here is the ability to see the end in mind for a med tech startup. That's a powerful thing, you know, in retrospect, you know, sort of looking at it under the guise of, you know, having the vision of, you know, 2020 vision.

But let's fast forward to your time now at VizioGen and then at Alex Medical. And I think there's probably some interesting, interesting things to pull through it at Alex Medical. But you're at Three Arch and then you decide to place a bet at Vizogen and kind of like slide back into the operator position. So what led up to, you know, founding VizioGen back in the early 2000s? Well, it really started with looking at a bunch of unmet needs and various, you know, disease. and therapeutic categories. And one of the categories that my then, you know, kind of thought partner at Three Arts, a phenomenal gentleman by the name of Reza Zadno and I were kind of joined at the hip there at Three Arts to figure this out. And one of the disease areas that we were looking at are

therapeutic areas was Presbyopia, you know, the loss of near vision as we age or the, you know, the change in vision as we age. And so, you know, we were two people from vascular, backgrounds and invented this intraocular lens. And we pitched it, I don't know, three or four times inside three arts to say, this is the thing we want to go do because we're absolutely convinced that we're on to something and this is going to be big and going to be transformational in ophthalmology. And, you know, we got the typical response. What the heck do you guys know?

You're two people from vascular. And how could you possibly know anything about inventing a lens in the eye, right? and what do you know about ophthalmology and running a business, ophthalmology, et cetera. So we were turned down multiple times to spin this money out. And so we had to really hone the argument and hone our own skill set. And finally we got it right. And they allowed us to spin it out.

And then they syndicated the first financing and we were off and running at Vizio. And so really we were trying to solve presbyopia. And we were doing it with a kind of cataract replacement. lens, which would give people at the time of cataract surgery back their full range of vision. And it was an extraordinary complex problem. And the learning curve was very steep. I did not know a whole lot about optics going into that, but I came out kind of knowing a lot about optics and the eye and all of that. Did you also want me to get into kind of like what led to my departure? Yeah, yeah. I was going to ask you one follow-up question before we go there.

But I'm interested in getting your take, the name of the other, your partner who helped you co-found VizioGen. What was his name again? Reza. Okay. So you both had vascular experience, but yet, you know, to the point of, you know, some of the other three arch partners who evaluated that deal and said, you know, what are you guys doing with vascular experience, trying to attack, you know, the ophthalmology space. Yeah, come to get inside your head. Because I think for most people, they probably gravitate towards something, you know, if a company they were going to found, their domain expertise is in the interventional vascular arena, they're probably going to gravitate more towards that space. But you both didn't,

considering your experience. So, you know, was it, was it the disease state, or was it just the new challenge? What was, you know, what was sort of going on in your head and why did you attack, you know, wanted to decide to do a new therapeutic arena with, with zyogen? So we were tasked with, you know, as I said, looking at and kind of just becoming smarter around several different areas. And at that time, obesity was really hot and ophthalmology was really hot and stroke, right? So, and there were a couple of others. And so we would go to the major medical meetings in those disease categories. Sure. And we, so we went to the major, you know, ophthalmology conferences and you know they're relatively dull and boring overall we walked around

you know the various breakout sessions and didactic sessions we realized the ones where there was standing room only and the rooms were packed and you couldn't get in were the ones that were talking about presbyopia and so just through observation we said well this is interesting people really care about this presbyopia. It's obviously a hot topic. And so we just dove in. And one of the things that one of my bosses said to me back in the Boston Scientific days, he said to me, you know what I like about you, Erica, is that you're so brave,

and you will just dive into anything because you actually have no idea that you can't do something. And so it never occurred to Reza or me that we couldn't invent an intraocular lens. And we simply figured we have the skill set to study the problem. And if we study the problem carefully enough and talk to enough people and do enough of the back of the envelope math and things like that, that you could probably solve that problem. And we did. Is that something that you believe is sort of innate to your character?

Is it something that you've sort of learned over time? I think it's innate. Yeah. You know, I would love to be able to say you can learn it over time. But it's been kind of a tenant in my entire career, which is, you know, just taking these giant leaps into the unknown with absolutely not a thought that I wouldn't be successful. It's just sort of like, I'm going to go do that,

and I'm going to go do that, and I'm going to be successful at doing that. Not in a cocky way, but just sort of like, and certainly I don't want to mislead you, very aware of my own shortcomings in doing so. So the key to success in these leaks of courage is knowing what you don't know, being hyper aware of knowing what you don't know and surrounding yourself with the people who know what you don't know.

Sure. And so that is the only thing that allows me to take these giant leaps of space. That's a really good point because it's not like you're just jumping off a cliff per se. You've got you're sort of intentionally surrounding yourself with people that are going to have the expertise that you know, that you don't bring to the table or some value that you're not, you don't have and making sure that you're around those people that can sort of, you know, bridge the gap in those situations. It's interesting you bring up this point because I remember listening to an interview of a kind of a serial entrepreneur in the tech space. And I think he made some comment along lines of, look, he was speaking to a pretty broad audience.

And he mentioned that, you know, look, I get to the plate and swing more often than most people. So of course, my batting average is going to be higher because I just swing more. You know what I mean? So it gets probably appropriate to your, you know, maybe somewhat of a similar analogy to your comment about willing to like, you know, willing to swing, you know, where most people maybe wouldn't. So that's good stuff. Let's, let's, for the sake of time, let's kind of move forward because I do want to circle back to, you know, your decision to join Silk Road back in 2012. But I'd like to ask you a question in regards to Vizogen and then Alex. So if we kind of, you know, move forward in the, in the

timeline of your career, you said earlier that you wanted to sort of, you're at a point with Viziogen that the, you know, there was going to be a pretty extensive regulatory hurdles, you know, that you were going to be running into in the future. So you wanted to take another bet with with Alex Medical. So I think if my, my dates are correct, you joined Alex Medical in 2004. So what did you see at Alex and why make the leap? And then, you know, talk to us a little bit about, you know, when that shut down, I think maybe in around the 2008 timeframe, what you learned from that experience. Oh, boy, that's a long, long tail. But let me start with Alex. So interestingly, when I made the kind of personal decision, it was time for me to exit Vigigen, again, both for

geography reasons and also wanting to place another bet. I went back. back to the investors that were around the table at VizioChim, and they said, well, let's just incubate you to go do something else, and we'll do it up in the Bay Area where you need to be. So it started with an incubator. And I got in another partner at that time, a physician, and we were funded by Three Arts, Venrock, and Prospect to incubate a bunch of new ideas. And again, it was kind of back to where are the big unmet needs, and looking at the clinical problems first, which I'm a huge fan of. Let's first look at the problem and then solutions to the

problem. And what we see a lot in our space is people who have solutions trying to find a problem. That is not what I do. So I start the problem and then go try to find a solution. And one of the things that we were incubating at the time was allergic rhinitis and the whole continuum of airway disorders, which is allergic rhinitis, nasal polyposis, acute sinus. And sinusitis, chronic sinusitis, a functional endoscopic sinus surgery, you know, that whole continuum. And, you know, here we are again. Like, I'm taking this massive leap into, you know, into ENT. I didn't even know an ENT when I was incubating this idea. And so we found some technology over in Europe that had not only received CE mark, but had already published some papers on the use of ultraviolet light in the anterior airway and down-regulating the immune. system for the treatment of allergic rhinitis, polyposis, and sinusitis. And that's what we did.

So we, myself and this partner and these three investors, we sat around and said, this is enormous, right? I mean, rhinitis and allergic allergies is just an enormous market, right? Not to mention chronic sinus disease. So we went after it, knowing that there was this public paper and data to rely on. We licensed the intellectual property from this team in Europe, and we started down a path to get it into the United States. And the good news was the technology had been kind of mostly developed. We had to tweak it a little bit. And we were very, very quickly into a clinical trial in the United States.

And we conducted a 350 patient trial in an allergy during an acute allergy season, applying this ultraviolet light inside the nose. And we massively failed to hit the endpoint. So much so that we had to look at our stuff. cells in the eyes and say, how could this possibly have happened? There's a published paper already on the results of this technology. And the thing that I learned, I completely underestimated, failed to appreciate how difficult it is to run a trial in patient reported subjective outcomes. The outcome measure for allergic rhinitis and all those disease was, you know,

things like how much are you seizing, how much you blow on your nose, how much you coughing, you know, stuff like that. And patients have to report this in a diary every single day and they have to turn these diaries in at the end of every. And it turns out there is tremendous noise in that subjectiveness and in those patient reported, although validated, but patient reported scales, which is why the drug companies that did, you know, Claritin and all the rest of those drugs literally have to enroll thousands of patients, two, three plus thousand patients to see the signal. And that was completely lost on us.

And that was probably the closest example to, you know, a real in your face of you don't know what you don't know. And not having a deep-seated experience in that whole disease date really took us by surprise. We surrounded ourselves with experts. We were working with really well-known allergists. We hired some people who were experts in allergy and immunology, but it was all lost on us. And so all of this was kind of crashing and burning right at the time of the economic crisis in 2008. And we had a choice of raising a bunch more money and trying to figure out what we were going to do next.

Or shutting the company down and cutting our losses, which at that time were very small. We hadn't raised that much money. And we had three investors for them. It was easier to write it off. honestly in 2008 and it was for them to continue to figure it out. And so that is what happened. Wow. And so the fact that you were able to surround yourself with with experts in the space and

you would think that something like that someone would have noticed that along the way. Like hey, this clinical trial, it's heavy on, you know, patient reported outcomes that are very subjective. You know, in hindsight, obviously that, you know, it seems like someone could have solved for that, like along the way. But do you ever look back and think, wow, you know, we could have done that different or how did we miss that? Oh, absolutely. For sure. I mean, you know, we, I think we relied too heavily on the, on the previously published work, which had been a very small study, smaller than what we did. And yet they showed a signal. And so, you know, always be skeptical about other people's data, even though they're published and peer-reviewed journals. So that's

one note of caution. I think the other thing is we actually parsed the data out and ended up discovering that the sickest of the patients actually did respond. And so, you know, I think the lesson there was if you're going to do a patient reported outcome kind of study, and that applies to a lot of things, like headaches and pain, you know, those are two really tough spaces that are patient reported, you know, although validated QOL scales in many cases, they're tough, right? And so I think it's had we chosen the sickest of the sick patients to begin with, in other words, had the inclusion and exclusion criteria have been such that we would have had very sick patients, we would have hit the end point.

I'd say, without a doubt, a good lesson for other med tech entrepreneurs that are listening for sure is even your comment about, always be skeptical of others, you know, data and where your clinical trial could potentially go wrong, I guess, is such a, such valuable feedback. So I want to be sensitive to time and the fact that I'd like to, you know, get to Silk Road Medical. But one other question about, you know, your background before we kind of come up to the current time. But you spent some time at Nanosis and then joined.

Medicines 360 as COO before joining Silk Road. So your position at Medicine's 360 as C-O-O, that strikes me as a little bit of a surprise considering kind of like your strength in commercialization and building companies. But is there a rationale that others could learn from in regards to your move to Medicines 360 before we jump to Silk Road? Yeah, well, let me just take them kind of holistically, Nanosys and Medicine 360. Both of those were driven by a desire to check a box for me. One was in nanotechnology, I really felt like nano was going to play an important role in medical devices,

and I wanted to get smart about it. And so I went and did that, and that was super helpful. Medicine 360, I had always wanted to be able to run a pharmaceutical company. And although I had, you know, strong operational background and devices, I had never run, you know, a device company. I mean, I'm sorry, a pharma company, which has all of it, you know, unique and different regulatory constraints and all. all that. And so what was cool about Medicine 360 is a drug device combination. And the challenges that they were facing were on the device side. It is a very successful intrauterine device for contraception. And they were having issues around the device piece of it. And so it gave me this brilliant

opportunity to come in and be operational, solve all the device-related problems and also get really, really smart about what it means to run a drug company. So it was just a fantastic experience. Got it. Hey there, it's Scott, and thanks for listening in so far. The rest of this conversation is only available via our private podcast for MedSider Premium members. If you're not a premium member yet, you should definitely consider signing up. You'll get full access to the entire library of interviews dating back to 2010.

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