From the CEO's Desk

"Education is the premise of progress, in every society." – Kofi Annan

Summer is always an exciting time at the Fogarty Institute with the arrival of the Lefteroff interns, who will spend eight weeks shadowing and collaborating with our entrepreneurs, medical technology partners and mentors. We are proud to continue building on this valuable hands-on program, which has hosted over 40 U.S. and international students in its four-year history.

We would also like to congratulate our first Ferolyn Fellowship graduates, Kate Garret, Matthew McLean and Julia Fox; and welcome our new class. You will hear more about both of the Lefteroff and Ferolyn Fellowship programs in upcoming newsletter editions.

For this edition, we explore stories that demonstrate the many ways education remains at the heart of the Institute and our focus on improved medical technology: You'll read about our second educational seminar, which features a fascinating dive into intellectual property; the many ways that the FDA and our entrepreneurs have learned from one another through our robust partnership; and the progress that has been made by Materna as it prepares to bring one of its products to market. And we welcome Greg Bakan to our team as chief operating officer and mentor to our companies-in-residence.

Lastly, we invite you to view our newly launched Wine with Heart website, which includes highlights of our 10-year history spearheading medtech innovation. This much-anticipated event will take place at the beautiful Thomas Fogarty Winery on September 8, with the theme of "Building Upon a Legacy of Innovation."

As always, we appreciate your support and welcome your feedback and thoughts.

Andrew Cleeland, CEO of the Fogarty Institute

"At the Institute, we were able to have these eye-opening interactions that helped us realize that few entrepreneurs have the same resources enjoyed by larger companies." – Anita Nosratieh, Ph.D., FDA/CDRH Innovation Exchange Fellow

Fogarty Institute for Innovation Updates

The IP seminar speakers and participants included included (standing from left to right): Paul Parker, Perkins Coie; Jeff Grainger, Signum Surgical; Nena Bains, Kilpatrick Townsend; Peter Socarras, Nevro Corp.; Jonathan Feuchtwang, independent patent attorney; Dr. Fogarty; Denise Zarins, Fogarty Institute; Karun Naga, The Foundry; and Bernie Shay, Earlens Corporation. Seated in the front: Arthur Hsieh, Align Technology; and Andrew Cleeland.

Last month the Fogarty Institute held its second educational seminar, which focused on intellectual property (IP) strategy, a topic of critical importance to early-stage companies. A comprehensive IP strategy serves companies well in the long run by protecting core technology, blocking potential competitors and building value for both investors and potential acquirers.

The seminar was led by renowned experts in the field, several of whom are also IP mentors to our companies-in-residence. Karun D. Naga, president and CEO of Foundry SING1, set the stage for the lecture by highlighting the importance of developing an IP strategy for early-stage companies.

Mr. Naga then introduced a panel of three case studies to discuss the successful development and execution of IP strategy under different circumstances: A new and novel therapy with lots of "white space" (Ardian), an innovative technology entering a crowded field (Twelve), and a mixed scenario with elements of both (Nevro).

The case study panel included Denise Zarins, CTO of the Fogarty Institute; Paul Parker, firmwide chair of Perkins Coie's medical device industry sector; Karun Naga; Jeff Grainger, non-executive chairman of Signum Surgical and independent advisor to early-stage medtech companies; and Peter Socarras, senior director of IP at Nevro Corp.

The seminar concluded with a panel discussion on IP due diligence from the perspective of an investor or acquirer. Panel members included Renee Ryan, VP of investments at J&J Development Corporation; Nena Bains, partner with Kilpatrick Townsend; Juan-Pablo Mas, partner at Action Potential Venture Capital; and Mike Carusi, general partner and team leader at Lightstone Ventures.

Highlights of the seminar are included below.

IP credo for startups

  • There is no one-size-fits-all approach: While IP is important, each company has different priorities, needs and budgets. Startups need to understand where IP fits within their corporate strategy and tailor their strategy to serve their business objectives.
  • Effort and resources should be driven by business need: Startups have limited resources – they need to establish how to allocate them and make responsible decisions. Entrepreneurs need to give IP the thought it deserves and determine how to best leverage it.
  • Calculated investments made early can pay off big in the future: Time and money invested in understanding how IP can impact one's company and developing a strong strategy can create opportunities for potential fundraising, acquisition, or even revenue via out-licensing.
  • Be prepared...and prepare to be surprised: Entrepreneurs should commit to understanding the value of an IP strategy by reading references, journals and patents to learn which assets they can protect and patent. At the same time, startups must realize that change will be constant: Whether from business models, IP risk profiles, or company priorities, there are always going to be surprises.
  • Results are always better with cross-functional participation: For the best outcome, IP should be a business-wide process where everyone is involved.
  • Invest in people and relationships: IP is challenging and complex. It's important to empower and invest in team members to learn, understand and be accountable for it.
  • It's a competitive advantage to excel where others don't: IP is a company's way to distinguish itself from others: It should not be a "black box," but should be approached the same way entrepreneurs address other critical aspects of building the company.

Look ahead to keep options open

When thinking about IP, it's critical to keep options open. That means entrepreneurs should get creative and think of different ways to design or use a device, where the competition is and what potential fast followers might do. They should also anticipate where the market/s will go down the road, and how technology might change to meet future needs – and put it into their patent applications. Companies that put their "stakes in the ground" by filing IP each step of the way can afford to experiment with their core technology and still have options if their strategy changes.

Also, startups should always keep in mind what adds value to a potential acquirer or investor: Have they blocked out competition with IP? Acquiring companies need to evaluate the benefits of acquiring an early-stage company versus creating their own technology and IP.

Whether a company is developing a first-of-its-kind therapy or entering an already established (and potentially crowded) field, it's worth investing in legal advice to help create and manage the IP portfolio. This can be an expensive process, but it provides a significant advantage when it comes to getting funded or acquired. A comprehensive strategy can also be used to introduce certain language and definitions into not only IP filings, but also regulatory submissions, labeling and marketing materials to make it very clear if someone entering the same market is infringing.

Entrepreneurs can also consider hiring more than one counsel, with one specifically for docketing and U.S. prosecution, one for OUS format and prosecution perspectives, one with specific domain knowledge, and/or one with litigation experience.

IP should be a priority, from the top down

To be effective, companies have to create an "IP culture" that comes straight from the top: Send a clear message that IP is important and everyone needs to be involved.

Elements of success include:

  • Leadership prioritization of IP: There needs to be a healthy balance between depth and breadth. Create options in anticipation of success and build in-house capability.
  • Attitude of partnering and relationship building: Develop a culture that underscores that outside counsel is an extension of the team. Also, seek to establish a relationship with the United States Patent and Trademark Office to educate the examiner on the technology.
  • Create a tremendous cross-functional collaboration: Ensure teams are working hand-in-hand every step of the way, heading toward the same goal and delivering the same message.

Anticipate questions from investors

Companies need to identify how to approach and answer questions from investors. It's important to recognize where the issues and needs are and how to deploy the right people to address them.

Examples of questions posed by potential investors include:

  • Do you own your IP or does it belong to your previous employer or a collaborating physician?
  • How do you get a meaningful patent if your device is a therapy, not a technology?
  • Is the clinical literature that addresses your market prior art to your invention?
  • Is your device innovative enough and can you protect it with patents?
  • How quickly could other companies copy your device or therapy?
  • How do you appraise an already-crowded field to determine if there is enough room for your technology?
  • How do you create a risk profile tolerable to investors - even if you create a new device, could it be covered under competitors' existing IP?
  • How do you create an effective barrier to entry for others looking to come in your market?

When investors meet with early-stage companies, they assess how much the team understands the science behind their device, the technology and market they are addressing, the company's approach to IP, and whether its IP strategy mirrors the company vision. Also, if they are entering a crowded market, they want to determine how much homework they have done to understand the existing IP landscape. Last, but certainly not least, the investor assesses the team's willingness and resolve to work through the risk and unknown ahead. If a company doesn't come across as knowledgeable, competent and committed, they will lose value.

Entering an existing, crowded market

If a company is entering an already crowded market, it's critical to understand the existing landscape, know the key players, learn from existing IP, determine what has been tried, notice common design themes and build on interesting ideas.

Counsel, engineers and the entire team need to work closely together to answer three critical questions:

  1. Can the company create a device without being sued?
  2. What can the company protect?
  3. Can the company prevent others from adopting its key differentiating features?

IP knowledge creates incredible value in crowded fields and helps guide product development. It is critical to stay abreast of and constantly monitor the direction of competitor's developments via the patents they are filing and claim strategies. It's also important to identify risks, create back-up plans and ensure every part of the device under development is covered by IP.

When a competitor's patents cover technology that seems too similar to a proposed concept, a company can choose to take an entirely different approach, come up with an improved design, design a non-infringing alternative ("design-around"), or acquire a license to the competitor's IP.

To survive in a crowded market, a company needs to develop differentiated technology and establish and protect its own turf. While this may be difficult for early-stage companies due to lack of funding, these are critical steps that can pay dividends for decades.

Lastly, a company needs to ensure the IP strategy is aligned with the company vision and its competitive advantage.

Key takeaways

The seminar provided food for thought on a number of issues critical to early-stage companies. Among the sagest advice shared throughout the presentations:

  • Clearly connect the unique features of your technology to the clinical value proposition; make it easy for all stakeholders (investors, acquirers, patent office, and others) to understand the "wow" factor.
  • Develop and use first-in-class evidence (for example, peer-reviewed journals) to substantiate your story on differentiation.
  • The IP strategy should follow the company's story and be developed with the end game in mind.
  • Don't walk into a crowded battlefield without some weapons.
  • IP, just like other facets of medtech innovation, is about people, just as much as it is about the technology.
  • You will never regret a second or dollar spent investing in your IP position.

Our Companies

Mark Juravic, Materna's founder and CEO.

Materna prepares to launch Milli, a device aimed at relieving pelvic pain

Materna, a Fogarty Institute startup that is developing devices to prevent and treat pelvic floor disorders, is preparing to launch its newest device, Milli, which is aimed at treating pelvic pain, a condition that affects hundreds of thousands of women and often goes untreated.

It is estimated that 20 percent of women experience pelvic pain at some point in their lives. Numerous studies have shown that the primary or secondary cause of pelvic pain in women is from the pelvic muscles constantly contracting, making the condition similar to lower back pain. Physical therapy plays a major role in the diagnosis and management of female pelvic pain, and Milli was developed as a tool to optimize this treatment.

The startup began its beta launch, planning to sell up to 100 devices in the first few months to clinicians and their patients in order to collect data that will help them refine and finalize their product.

The idea for Milli originated from the startup's first device, which promises to reduce the incidence of childbirth-related injuries with a device that prepares the pelvic soft tissues for delivery. One of the physicians who was testing the device mentioned that a similar device would be useful to treat pelvic pain felt by many of his female patients due to bladder or gastrointestinal issues, or injuries suffered from childbirth. The device builds and improves upon existing devices, which currently take from six months to a year to show results.

While the startup prepares for the broader market release of Milli in late 2017, it continues to improve upon its childbirth device: the company recently completed a 30-patient clinical trial at Baylor College of Medicine in Houston, Texas. The study results showed a decrease in pelvic muscle injuries during childbirth, as well as potentially decreasing delivery time.

The company will soon engage with the FDA, a positive development since studies have shown that more than 80 percent of women who have a vaginal delivery suffer from some degree of tearing, and about 50 percent suffer permanent pelvic muscle damage that leads to serious health issues later in life.

Our Partners

Fred St Goar, Fogarty Institute; Elias Mallis, FDA/DICE, Jan Pietzsch, Stanford University; Greg Bakan, Fogarty Institute

Institute strengthens partnership with the FDA with mutual goal to bring innovative technologies to patients faster

In just two short years, the Fogarty Institute's first-of-its-kind educational pilot program with the FDA has blossomed into a successful, ongoing partnership that is being lauded on both sides for enhancing the understanding, communication and collaboration between entrepreneurs and regulators.

As a result of the collaboration, to date the Institute has hosted more than 50 reviewers, scientists and heads of departments with the aim of improving the efficiency of the device review process and accelerating disruptive technologies available to patients.

The relationship has proven to be beneficial for both sides, with the FDA more fully understanding the challenges inherent in device development, and Fogarty Institute entrepreneurs gaining a better understanding of how to navigate the regulatory process.

DICE develops educational materials to better navigate the regulatory environment

Recently the Institute hosted Elias Mallis, director of the FDA's Division of Industry and Consumer Education (DICE), who shared information on his team's role in educating and advising the medical device industry on how to best navigate the regulatory space. In turn, he was able to hear from the entrepreneurs who shared their needs and challenges. The feedback will help guide the division as it develops resources to meet the needs of the industry so they may more successfully engage the FDA on a variety of premarket and postmarket issues. The group discussed the concept of a "starter kit" and what content should be included to make it a useful resource to someone new to the medical device industry.

DICE educates a variety of medical device stakeholders, including regulated industry, consumers, researchers and others, through training materials such as workshops; CDRH Learn, a series of educational modules provided in a variety of formats; Device Advice, a narrative information written in plain language, and the traditional method of answering questions on a one-on-one basis. These topics cover the entire product lifecycle landscape, including the 510(k) program, clinical studies and the quality system.

The division's efforts have been so successful that in the past year, more than 110,000 participants have reviewed the 125 CDRH Learn modules, and almost 38,000 stakeholder questions were answered by the group.

Institute receives positive feedback from previous FDA/CDRH Innovation Exchange Fellow

Anita Nosratieh, Ph.D., participated in the Institute's 2016 fellowship, part of the FDA/CDRH Innovation program where they learn about the unique challenges faced by startup companies in bringing devices to market. During her time at Fogarty, she was exposed to a variety of aspects of the medical device innovation ecosystem, including a robust educational component that allowed her to learn first-hand from startups.

"At the Institute, we were able to have these eye-opening interactions that helped us realize that few entrepreneurs have the same resources enjoyed by larger companies. It allowed us to 'wear their hats,' so to speak – to see all the pieces of the puzzle that we don't have the opportunity to see from our offices and connect with the goal of bringing groundbreaking technologies to patients."

Dr. Nosratieh returned from the two-week fellowship inspired and began engaging more frequently with the CDRH Innovation group, which she was later asked to join. Previously, Anita was a lead reviewer where she primarily oversaw mammography devices for breast cancer screening and diagnosis. It was in this field where she felt she had yet to see true innovation. She hopes her work at CDRH Innovation will enable more disruptive technologies to enter the U.S. market.

As the Fogarty Institute's fellowship continues to gain traction and interest with the FDA/CDRH, Dr. Nosratieh hopes the momentum will keep building, allowing FDA/CDRH to integrate the lessons learned into meaningful education for other staff and reviewers with the ultimate goal of expediting patient access to safe, effective and innovative medical devices.

Monthly Spotlight: Greg Bakan, Fogarty Institute Chief Operating Officer

The Fogarty Institute is known for attracting innovators, and that includes its newest hire, seasoned medtech entrepreneur Greg Bakan. In his new role, Greg will help mentor the institute's companies-in-residence while assisting in the overall operational management of the Institute.

Greg's career spans over 25 years in the medical device industry. During this time he has sought out opportunities that allowed him to blend three of his greatest passions: science, business and entrepreneurship.

After receiving his undergraduate degree in Biology from the University of California, San Diego, Greg began work in an academic research lab. During this time he was exposed to inspiring researchers pursuing novel diagnostic and therapy technologies to treat a range of medical conditions.

Sparked by an interest in the business potential for such unique therapies, he subsequently earned an MBA from the University of Michigan and embarked upon a career working for some of the top firms in the medical device industry. Over the next eight years, Greg held positions of increasing responsibility in strategic planning, business development and marketing at Guidant, Johnson & Johnson and Medtronic.

Working for larger companies provided a powerful training ground to learn about the medical device industry and meet some of its most influential pioneers. It was during this time that he became exposed to Dr. Fogarty and other legendary serial medical device entrepreneurs in Silicon Valley.

When the opportunity to work at a well-backed Bay Area startup arose, Greg jumped at the chance, realizing it was a rare possibility to "plug in" to one of the most successful entrepreneurial networks in the medical device industry. In the 20 years since that time, Greg has held senior management positions at six startups helping guide them through development, clinical studies, regulatory approval and initial commercial launch. Combined these firms (which included Fox Hollow, Ardian and Nevro) have generated over $2.5 billion in returns to their investors.

When he learned of the opening at the Fogarty Institute, Greg saw it as an amazing opportunity to give back. "I've followed Dr. Fogarty's work over the years and have the utmost respect for his efforts. In addition to being one of the most successful inventors and entrepreneurs of our time, he's been equally committed to fostering innovation and educating the next generation of medical device entrepreneurs," noted Greg. "I was so fortunate, and benefited so much, from the mentorship I received throughout my career, I'm honored to be part of the Fogarty Institute and hope to return this favor to others," he added.

Please join us in welcoming Greg to the Institute.

Save the Date!

Building Upon a Legacy of Innovation
The Fogarty Institute for Innovation is hosting its annual Wine with Heart fundraising event on Friday, September 8, celebrating the Institute's 10-year anniversary. Visit the event website and read our history of spearheading innovation.

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