Finding Opportunities When Curveballs Come Your Way

Key Learnings From Ajay’s Experience

• A medtech CEO's first priority is to deeply understand the clinical problem their technology solves. Dive into the physician's perspective, patient needs, and how your product improves overall care. Immerse yourself where your technology will most commonly be used and get insights from those on the front lines early on. 

• Don’t accept capital from whoever offers it simply because you’re desperate for money. Find investors you can build a company with and make an intentional effort to nurture relationships with them. When you do so, they might eventually contribute to your venture in many different ways, like serving as board members or key advisors.

• Capitalize on every opportunity that arises, especially the unexpected ones. Stay agile as an organization to make the most of these moments. Cultivate a network of trusted advisors and harness your technical skills to sift through their advice, identifying and focusing on the core themes that emerge.

Ajay Shah is a mechanical engineer from MIT with a PhD in engineering from Harvard Medical School. As the son of a critical care physician, he spent his life in and around the world of medicine and is now married to a physician as well. 

As someone who stands at the intersection of healthcare and technology, Ajay understands how the latter can significantly improve the lives of patients and providers. Before founding Cytovale, Ajay co-founded two life sciences companies, one of which enjoyed a successful exit. 

Today, Ajay is tackling one of healthcare's most pressing challenges: sepsis – a severe dysregulated immune response to infection that, if untreated, can quickly lead to multiple organ failures. It’s the leading cause of death for inpatients, claiming over 350,000 lives annually – more than opioid overdoses, prostate cancer, and breast cancer combined. Early detection is crucial for preventing sepsis deaths. Each hour of delay in sepsis treatment can raise the risk of death by as much as 8%. On top of that, sepsis is also the most expensive condition for U.S. hospitals to manage.

While clinicians have objective tools to quickly identify emergencies like heart attacks and strokes, they lack a clear, objective tool for identifying high-risk sepsis patients as they enter emergency departments – which 90% of them do. 

Cytovale's flagship product, IntelliSep, is a diagnostic test that identifies sepsis in adult patients showing signs of infection within as little as 10 minutes. In very basic terms, the test works by squeezing white blood cells to characterize their responses to infection. 

IntelliSep received FDA approval in January 2023 and has been gaining traction since. The company already has paying commercial customers on board and more in the process of integration. 

"Compelling clinical outcomes are really shaping patients' care journeys and improving their outcomes, as well as providing meaningful financial benefits to the health system," says Ajay. 

Today, healthcare centers like Our Lady of the Lake Regional Medical Center and Froedtert & the Medical College of Wisconsin Health Network have already adopted the test and are reporting positive outcomes in terms of both patient care and financial metrics. Ajay is excited to announce partnerships with more centers in the near future.

Immerse Yourself in Frontline Insights

As a medtech entrepreneur, your first step is to thoroughly understand the clinical challenge your technology aims to address. This will also inform your clinical strategy and, subsequently, your regulatory pathway. This is important, especially if you’re tackling a problem with no established guidelines or predicates to follow. “Take the time to dig in and appreciate where the physician is coming from, what matters to the patients, and ultimately, how your technology changes their care journey,” Ajay advises. 

Healthcare startups have a crowded spectrum of stakeholders, from insurance companies and government payers like CMS, to various regulatory authorities. Connecting with top key opinion leaders might sound good at first. However, it’s crucial to engage with professionals who are directly involved with the technology's everyday use. 

In the case of sepsis detection, while broader input from specialties like critical care or infectious disease is valuable, the most grounded insights come from those working in the front line of sepsis diagnosis – emergency departments. Nearly 90% of sepsis cases are enter the healthcare system through emergency settings. Ajay shares, “We focused our core product development around meeting that emergency department need because that's where we saw it to be most acute. Rather than work on contrived samples or theoretical approaches, if we're building a solution for the emergency department, we need to develop it there.” 

Now, as IntelliSep moves towards commercialization, demonstrating its added value to the broader healthcare ecosystem is becoming more important as a first-of-its-kind technology that allows physicians, in just a few minutes, to triage their entire emergency department and identify which patients are experiencing a life-threatening sepsis condition. “Much like how an EKG quickly identifies a heart attack, or a rapid CT scan detects a stroke,” Ajay explains. Its value is not just about faster diagnosis but also the tangible benefits the device brings to healthcare providers – reducing costs, improving patient outcomes, and streamlining emergency care processes. 

The real-world application of IntelliSep is already beginning to showcase these advantages. Our Lady of the Lake Regional Medical Center in Baton Rouge, Louisiana, has used IntelliSep for just about a year. “Following implementation in their emergency department, they saw an immediate return on investment,” Ajay reports. The cost of care for patients tested with IntelliSep was reduced by over $1,400 per patient, their risk-adjusted mortality index dropped by more than 30%, and they saw a decrease in both mortality and duration of hospital stays. 

With these reports illustrating the impact of IntelliSep on patient care, Cytovale is confidently solidifying its position in the market.

Why Alignment with Your Investors is Critical

Navigating fundraising, especially in the initial stages of a startup, can be daunting. 

In today's challenging financial climate, it’s easy to become desperate and accept any investment to fuel your runway. But securing the right investors may be more crucial than ever for medtech startups – a mismatch will most definitely lead to significant challenges later on. This is critical not only for the company’s health but also for future fundraising efforts.

An entrepreneur who has been in the business for over a decade, Ajay’s last success was a $80 plus million series C for Cytovale. With all this experience under his belt, Ajay highlights the benefits of long-term relationships with investors. “As you spend time with them, if your visions are fundamentally misaligned, it's going to suck up a ton of your time, energy, and resources, and likely not actually get to a close if you have core different visions on how to build the company.” On the other hand, when your visions align, even if your financial cycle is prolonged, it allows for establishing deeper relationships with investors – who might eventually serve as board members or key advisors in your company. This could also enable collaborative diligence processes that can advance the company. That’s why it’s essential to maintain the trust established during the fundraising process. 

The other thing about fundraising Ajay draws attention to is the fact that it often takes longer than expected. If you estimate 6-9 months, be prepared for it to take closer to 12. Hopefully, your business will have grown significantly during that time. Ajay suggests spending that time on refining your story, your pitch, and preparing for the thorough due diligence that institutional investors expect.

There Are Typically No Definitive Answers in Medtech

Ajay started his career as a mechanical engineer. Although he was always close to the world of medicine through his upbringing, he didn’t officially step into it until he made the shift to medical technology. Now, he offers some insights for those who want to make a similar transition from engineering to medtech. 

“There are no right answers in medtech. There might be a few wrong answers, but there aren't necessarily definitive right answers,” Ajay says. Success often comes from navigating the gray areas and being ready to pivot when things don’t go as planned. In his words, “You need to find that opportunity in each curve ball that comes your way and be nimble to capture those opportunities as an organization.” That’s what his team did in 2020 when Cytovale's FDA clinical study was disrupted by the COVID-19 pandemic. Instead of pausing the study, Ajay and his team pivoted the resources to a study for suspected COVID patients. This was a success in demonstrating the versatility of IntelliSep as a pathogen-agnostic test. 

For founders without a commercial background, Ajay advises building a network of trusted advisors. Drawing on diverse perspectives – from healthcare and beyond – has been crucial for him to develop a nuanced understanding of corporate strategy. “Having that diverse base of advisors, and also the ability to distill the essence of the feedback that I'm getting, has been really helpful to me, certainly, as I've navigated that transition,” he notes. 

Still, he doesn’t disregard the advantage of analytical skills bring to the table. He shares, “What is nice about having technical training is the knack it gives you to collect multiple pieces of data, analyze them, and say, What are the common elements and threads? How do I pull those together? How do those apply to my unique situation?” 

Reflecting on the past decade at Cytovale, Ajay views it as a series of two-year chapters, each with its own goals and milestones. His lesson learned is to prepare for the upcoming chapter during each one as each success lays the groundwork for the next phase. This means intentionally setting milestones and building a network. He says, “I encourage folks to also think ahead. Ask yourself, ‘If I succeed here, then what? And what do I need to know and learn to be ready for that?’”