A Success by Any Other Name…

Bill StarlingWhat does success look like for medical devices these days? It’s easy to lose track of the wins with all the doom-and-gloom circulating about reimbursement struggles and regulatory pitfalls. Success might not look like what it used to, but it’s there.

Bill Starling, the notable medical device entrepreneur, discussed this topic at a recent Stanford Biodesign Alumni Association event. And who better than a guy who has seen success in many forms across his career?

Bill was a member of the founding management team at Advanced Cardiovascular Systems (ACS) back in the early 80’s. At the time, coronary angioplasty was still new, having been first performed by Andreas Gruentzig in 1977. ACS was able to quickly become a dominant player in this field because the larger medical device companies were slow to react. In fact prior to joining ACS, Bill was working at Edwards Lifesciences and had just tried to convince them to move into this new space. When they decided to pass, Bill promptly left to join the early team at ACS. Coronary angioplasty grew faster than even he expected, and ACS was there to capture the revenue. In 1984, ACS was acquired by Eli Lilly for more than $200M having raised only about $9M in venture funding. The bench to bedside was fast, the market penetration was rapid, and the return on investment was high. That’s probably one of the best examples of success from the early days of medical device startups.

PTCA Growth: Moveable Guidewire Technology

One of the biggest changes about med tech today that Bill highlighted was the cost of innovation. Previously, the time to market was so much shorter that introducing new therapies was orders of magnitude cheaper.

Cost of innovation

In addition, the amount of venture capital available, specifically within the last several years continues to shrink for an increasing number of entrepreneurs. As shown below, venture capitalists have shied away from investing in early stage deals and therefore money to fund these products is being filled in by angels and friends and family.

First sequence investment

However, Bill stressed, there are still opportunities for success today – they just look different. His current company Aegis Surgical is working on a 510(k) access and delivery tool for TAVR procedures. If you attended the event you were lucky enough to hear the specifics about this device. But suffice to say that the company has been structured in response to the changes within the medical device landscape.

Bill’s rule of thumb is that if it costs less than $5M to get to a first-in-man, then it is worth doing. Otherwise it may be too much of an uphill battle in today’s environment. Aegis is lean with a mainly virtual structure to keep burn low and the funding required minimal. This has also allowed them to envision multiple successful exit scenarios. On the flip side, the low overhead means that as CEO, Bill has to fill in for various roles that would normally be contracted out. However, Bill says he is “reinvigorated to do this all again.”

The Biodesign Alumni were thankful for the great talk and wish Aegis Surgical the best of luck.


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