We recently caught up with Bruce Shook, the President & CEO of Vesper Medical. Bruce is a medical device executive with more than 30 years of experience, and a repeat Medsider guest.
In this conversation, we’ll discuss key aspects of running a medtech company, from the early design and fundraising stages through an eventual sale and exit. Bruce shares his expertise on raising start-up capital, designing and prototyping products, navigating the regulatory landscape, and managing reimbursement and coverage strategies.
But first, here’s a bit more on his background:
Most recently, Bruce served as CEO of Intact Vascular, which sold to Philips. Prior to Intact Vascular and Vesper Medical, Bruce was co-founder, Director, President and CEO of Neuronetics, a publicly traded device company that markets a non-invasive brain stimulation technology for the treatment of depression.
Previously, he was co-founder, Director, President and CEO at Neuron Therapeutics, a venture-backed company developing a drug/device product for the treatment of CNS disorders. Bruce also served as President of Abiomed, where he obtained a PMA for the first ventricular assist device. Bruce also developed cardiac pacing and anti-arrhythmia products at Cordis Corporation.
Bruce holds advanced degrees in Biomedical Engineering and Business Administration from Columbia University and the MIT Sloan School of Management. He also earned a B.S. degree in Chemical Engineering from Penn State University.
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Bruce, tell us a little about your personal background as well as Intact Vascular and Vesper Medical.
I started out life working as a chemical engineer for a Fortune 500 industrial gas company. After a couple of years of that, I realized that the chemical industry was boring and life at a large company was not really for me. So I quit a high-paying job and went to grad school where I got into biomedical engineering. I landed my first job in the medtech industry at Cordis in the 1980’s when it was the #2 pacemaker company in the world, and long before it was part of J&J.
It was a great intro to medtech, but after 3 years, the pacemaker division imploded and I needed to find a new opportunity. I was recruited into a tiny company in Boston called Abiomed. I was initially hired to create a clinical research and regulatory department, and I managed a clinical trial and PMA process that led to the first-ever FDA approved ventricular assist device. The product was crude in retrospect, but it was first and laid the groundwork for much better technology to come. I spent 10 years at Abiomed in its early days and later became President of the business unit.
I then departed to start companies of my own, which began with Neuron Therapeutics in 1998. We developed a new stroke therapy, but it failed in clinical trials and we literally had to auction off the furniture. Undeterred, I co-founded a second company called Neuronetics with several members of the Neuron Therapeutics management team and one of the investors -- Danny Sachs -- from Neuron.
I spent 11 years at Neuronetics where we brought a novel brain stimulation technology called Transcranial Magnetic Stimulation (TMS) to the market for the treatment of drug resistant depression. Neuronetics, subsequently, went public and is traded on NASDAQ today.
After Neuronetics, I joined Intact Vascular, an early stage start-up in need of new management and a capital infusion. We developed a novel approach to vascular scaffolding at Intact, called the Tack Endovascular System. We conducted several large clinical trials, and received 3 PMA approvals for our products in 12 months. After a successful product launch in 2019, we sold the company in September of 2020 to Philips. Along the way, we also spun out a new company called Vesper Medical, which is developing a family of venous stents designed to treat deep venous disease, a large and seriously underserved population of patients. I have managed both companies for the last 2-plus years, but following the sale of Intact, I am focusing all of my efforts on Vesper.
How did the idea for the Tack Endovascular System come about?
The Tack system was the brainchild of Dr. Peter Schneider, a very talented and prominent vascular surgeon who is a pioneer in endovascular interventions. One day, he was hanging Christmas lights on his house using a staple gun, and he thought, “Why can’t I do spot stapling like this inside an artery when I see a dissection following angioplasty?” The gold standard, up until that point, involved lining the entire lesion with metal using a standard stent, and it disregarded the fact that dissections can, and do, occur in discrete areas. So, Peter came up with a way to only use metal where you needed it when repairing arterial dissections. This dramatically reduced the amount of metal left in the artery, and therefore, the inflammation associated with the implant.
Bruce, you’ve been involved in the ground floor with several innovative medtech companies. When it comes to designing and prototyping the alpha & beta versions of a medtech product, what do you think is the biggest mistake most start-ups make?
The biggest mistake you can make during the design process is assuming you know what is, and is not, important or valuable to the customer. Engineers sometimes believe they know what is best. Until you dig in with the customers -- both clinicians and patients -- you don’t really know. So, do your voice of customer research at the beginning of your design process, and check back in with them whenever you are contemplating any significant changes in direction.
As you mentioned earlier, the Tack Endovascular System required a PMA. When it comes to navigating the regulatory landscape, what 1-2 pieces of advice would you give to other start-up leaders that are working on devices that require the same regulatory pathway?
First, you have to interact with the FDA very early in the process to define the targets you will need to hit. We made liberal use of the Q-Sub process and it was enormously helpful in working out the in-vitro, in-vivo, and clinical requirements we would need to meet in order to get to market. Make sure you do this BEFORE you start spending money and time on generating data.
Second, be thoroughly transparent regarding your data and the problems you have encountered along the way. No PMA is without warts of some kind. Be open about them and how you solved those problems. FDA is going to find out anyway so you may as well be up front about it.
What are a few of the most important lessons you learned when developing the coverage and reimbursement strategy for the Tack Endovascular System?
We were fortunate in that CPT codes and reimbursement for vascular scaffolding were already in place before we developed the Tack System. The one thing we did to ensure that we would be covered is develop relationships with the relevant professional societies in order to gain alignment on which codes would cover our product and why. We selected one society to work as our primary contact, and they led the way with the remaining societies. This allowed us to participate in the process -- albeit at arms’ length -- which worked out well.
Bruce, you’ve been successful in raising capital for multiple early-stage medtech companies. What is the most important piece of advice you’d give to other entrepreneurs that are trying to do the same thing?
First, raising money is all about storytelling, and you need a very good story to succeed. Before you stand in front of would-be investors, you must assemble a complete story that covers all the concerns investors are going to have. The topics range from targeted markets to product design to reimbursement to clinical performance to IP and so forth. Each key area needs to be addressed effectively, but briefly, within your pitch. Don’t go out there with a half-baked story.
Second, be enthusiastic, but realistic. You have to exude excitement to succeed, but you also have to acknowledge there will be challenges and unknowns. This is a careful balance that is the product of thinking through coherent answers to difficult questions in advance.
Third, if your pitch takes longer than about 20 minutes to deliver, it is too long. You will get one hour if you are lucky. Investors will have lots of questions, so leave plenty of time for them to talk. If they don’t get to talk, you are not walking out of there with cash.
As you mentioned previously, Philips acquired Intact Vascular in mid- to late-2020. When you think about positioning a medtech start-up for an exit, what helpful feedback can you provide to other folks in the same boat?
The well-worn cliché that says, “companies are bought, they are not sold”, is certainly true. But there are things you can, and should do, to make it more likely you are acquired. First, early on, you should identify those companies in your space that would be likely acquirers down the road.
Second, figure out which key opinion-leading physicians are trusted advisors to those companies and align yourself with those people. Get them on your own SAB. Get them involved with the development of your products and/or the management of your clinical trials. In short, you need to develop them as advocates for your company with the targeted acquirers.
Third, over time, get to know the commercial and business development leaders at the targeted acquirers. Introduce them to your company and update them on your progress at conferences you both attend. The goal is to gradually get them comfortable with you, your senior team, and your technology. In the case of Philips, we developed a relationship with the commercial leadership team: Chris Landon, Heather Page and Bud Fahey. They were the people who really recognized the great fit between our companies and drove the process internally at Philips.
Finally, don’t run your company based upon the idea that it is going to get bought at a specific point in time. Nobody can predict when, or if, acquirers will act. So, don’t paint yourself into a corner.
What’s next for you, Bruce? What are you most excited about over the next few years?
I am focusing my attention on making Vesper Medical a technology leader in the deep venous space. We have best-in-class venous stenting technology and I am confident we will soon have the same in terms of clinical data. I am also excited about contributing to other companies as a Director. I am very enthusiastic about helping Neuronetics expand and accelerate its brain stimulation business, and helping Devoro Medical pioneer its truly novel thrombectomy technology.
Where can readers or listeners go to learn more about you and what you’re working on next?
Okay, Bruce, let’s transition to some fun, rapid-fire questions. For someone that is starting their entrepreneurial journey in the medtech or healthcare arenas, what’s the most critical thing they should know?
Make sure you are solving important problems.
What influential books, podcasts, or resources have been most helpful in your entrepreneurial adventures?
A great foundational book for entrepreneurs is Crossing the Chasm by Geoffrey Moore. It's a classic.
Are there any medtech or healthcare entrepreneurs that you find particularly inspiring?
Bill Hoffman and his team at Inari have pulled off a miracle. I am in awe.
If you had to teach a class on one thing, what would the topic be?
Why you should make giving back -- to a world that desperately needs it -- a life priority.
Last question, Bruce. Starting over in your mid-20’s, knowing everything you know now, what would you do differently?
Reject the status quo at every opportunity, and spend all the time you can looking for problems to solve. Therein lie the great opportunities.