Fifth in a five-part series

 

In the fourth part of our series on helping early-stage med device companies that are seeking funding, we talked about the advantages of external involvement in the early stages of product development. We looked at how working together with the right external experts can expand the investor-investee relationship into a functional, productive family. 

As with all families, communication is key. Once you are on a funded path, you’ll need to keep your investor up to date on progress. To help make sure you are reporting clearly and accurately – and maintaining a strong, open relationship with your investor – we’ll look here at the important role real-world testing can play in the process.

Trust but verify

Computer-aided design (CAD) programs are a key tools in the development of products in today’s world. There’s no doubt they are amazing. They can make complex systems and interconnections look straightforward. They can project strength of materials, determine stress points, analyze potential failure modes and more.

And because they are so amazing, there’s a tendency for startups to report progress to investors based solely on CAD results. But these programs, like any analytical software programs, are only as good as the assumptions used to program them. If the assumptions are wrong, the foundation of the analyses and designs will be wrong. As a product developer and recipient of investor funds, you have a responsibility to report true and accurate results. Keep the adage “trust, but verify,” in mind.

Report with solid facts

To help you stay on target with solid evidence, not vapor-ware based projections, we’ve compiled a few tips.

•  Fail physical fast! In order to be sure computational models are reasonable and believable, build test fixtures to confirm key assumptions of critical design features and material properties. If you find a significant difference, look deeper to correct the assumptions and get back on track. In other words: make it, break it, learn from it.

•  Own the outcome. Be crystal clear on the user’s needs, and confirm with the user that you’re meeting those needs. Make sure you personally have verified that the approach will meet the user’s needs. You’ll save time and money, and be able to report accurate results to investors.

For a real-life example, consider a scenario in which neither an engineer nor manager followed this rule. The engineer received a request to construct a prototype injector consisting of a tube that would slide through a working channel, a Luer connector on the proximal end, and a needle on the distal end.

The engineer jumped onto his CAD program, designed a handle integrated with the Luer connector, and a needle adaptor. The prototype looked great, but a quick trial – simply the manager putting the Luer connector to his lips and blowing – found that it was solidly blocked.

The second try fixed the problem with an open lumen. Ready to move forward, the manager thought it looked good and took it on to an animal test without fully testing it first. At the test, he found the device didn’t fit through the working channel. As a result, several test objectives were missed. Neither the engineer nor the manager had confirmed that the device fit all the needs.

•  Stick to your plan. Investors are understandably anxious to speed products to market. Laser focus on goals is critical for startup companies – but so is the importance of sticking to plans when warranted.

An advanced infrared technology that could literally see through blood offers an example. As the system worked well in the animal lab, the development team proceeded under FDA NSR (Non-Significant Risk) provisions with the first of 50 human clinical trial cases.

In the first clinical trial session, the technology worked well in two cases and not at all in the other two. Based on the two successful tests, and concerned solely with avoiding any delays in achieving 510(k) clearance, the company’s new CEO – a sales and marketing-focused executive hired by the investor – decided to cancel the remaining 46 clinical trial cases and go directly to market. The investor took the recommendation of its executive. 

The company did obtain 510(k) clearance and began selling its systems. Things came to a halt when 60% of the systems in the field did not work.

As a result, the investors ordered the company to withdraw the system from the market and shut down operations. Having sunk precious resources into premature sales, marketing, and manufacturing ramp-up, they sold the intellectual property for a song – much less than its true value – to a company that never tried to perfect it.

After the four cases, engineering tested all the equipment that was used. Since everything worked well in animal testing, they concluded there was a critical difference between animal blood and human blood. No one ever learned the underlying reason, but the bottom line was that conducting only animal testing, and ignoring the two failed cases during extremely limited human testing, had disastrous results. Had the company balanced the enthusiasm to get to market with a desire to first understand real-world performance of the product, the situation could have been averted. 

Conclusion

Through this series, we hope we’ve helped clarify some nuances and key points of investor-investee relationships, and made the road to funding and achieving on-time on budget results just a little easier. Don’t hesitate to contact us with your questions – we’re here and ready to help.

If you missed any posts in the series, be sure to check them out:

The Truth Behind Investor-Investee Relationships

• Part 1: Understand investors’ perspective
• Part 2: The investee’s perspective
• Part 3:  The celebration – and the end of the honeymoon
• Part 4: The advantages of external involvement from the beginning
• Part 5: Know the importance of real-world testing (this part)

Larry Blankenship, Director