When You Should Give a Struggling Medtech Company a Second Chance: Interview With IONIQ CEO Jared Bauer

If running just one medtech startup is keeping you up at night, it’s a miracle Jared Bauer gets any sleep at all.

He has an MBA from Boise State University, and has put it to work successfully turning around multiple medtech companies.

Jared started by acquiring BurnFree Products in 2012, which he sold in 2016. While that company was on the exit path, in 2014, he became CEO of mobile diagnostics system ApolloDx. From that, he spun out Cibus Biotechnologies and became its CEO. The company’s main product is a handheld portable diagnostic system for detecting infectious diseases.

Jared is also CEO of IONIQ Sciences, makers of a device that uses bioimpedance to detect cancer as early as the first or second stage. In 2020, the device was granted a breakthrough designation for lung cancer by the FDA. Jared hopes that it will one day be able to scan a person’s entire body for multiple types of cancer at once.

One could easily assume that juggling all these balls leaves his head reeling, but as a self-described “heavy thinker” Jared says that having diversity in his projects keeps him clear-headed.

“When I add another element and I'm being forced to go and address something else in a different application, I can come back and think more clearly,” he says. “Rather than just feeling the intensity of the stress, I'm able to strategically evaluate the situation.”

In this episode of Medsider, Jared explains the two key factors he looks at when determining whether a medical device company is worth trying to turn around, why finding investors who really care about your mission is a strategic benefit, and why he hopes that IONIQ’s devices will one day have a place in your medicine cabinet.

Guest

Jared Bauer

CEO of IONIQ Sciences

Jared Bauer has spent his career turning around struggling medtech companies. He acquired BurnFree Products in 2012, selling it four years later. In 2014, he became CEO of mobile diagnostics system ApolloDx. Shortly after, he became CEO of spin-off company Cibus Biotechnologies, which makes a handheld diagnostic system to test for infectious diseases.

Jared is also CEO of IONIQ Sciences, which is developing a device that can detect cancer as early as stage one or two. It was granted a breakthrough designation for lung cancer by the FDA in 2020. Jared is also a trustee of The Oliver Fund, a non-profit he and his wife founded in memory of their son Oliver, donating play equipment to refugee camps and communities around the world.

Listen to the Interview with Jared Bauer

Key Learnings from Medtech Turnaround Expert Jared Bauer

  • The novelty factor matters when sizing up medtech companies that need help. Intellectual property rights are a big seller, as are major technological leaps forward.
  • Getting involved in a medical device company is a long and rocky road. Finding partners who invest their emotions, as well as their money, into your mission can help make it more sustainable.
  • Direct-to-consumer devices aren’t just about giving the patient access to quick and reliable information about their health. It also helps doctors keep track of their patients remotely.

Diagnosing Whether a Medtech Business can be Saved

Medtech companies that have hit a wall and require someone with Jared’s particular set of skills typically have issues in one of four areas: intellectual property (IP), governance, regulation, or the core science. Other potential problems, like manufacturing and distribution, are usually secondary to these.

Jared relies on two factors when deciding whether he thinks he can move a company past these issues.

1) Is the product novel?

It’s easy to understand how products that are designed to do something brand new can run into problems. Trial and error is part of innovation. But if a company is having issues significant enough to require new leadership, and its product doesn’t even break new ground, the problems likely run too deep to be worth untangling.

Another benefit of using novelty as a yardstick is that it leads you to products that likely have some kind of protected IP, which is valuable in its own right. “Something truly novel is also patentable, generally speaking,” Jared says.

2) Is there a market?

Even if you’re excited about a certain device, you need to consider whether anyone else will be — and whether they’ll be excited enough to pay for it. “Is anybody ever going to buy this? Is there a need?” Jared says.

Whereas a lot of medical devices aim to move the science forward incrementally, Jared looks for companies making products that are five to 10 years ahead of their competitors. Not only does this increase the odds that it’s a disruptive technology, it gives you an opportunity to meet a need no one else is fulfilling.

In short, most other issues can be overcome, but novelty and market can’t.

“You can get through governance problems, regulatory issues, and quality issues,” Jared says. “But if it's not novel; if you can't get IP around it; if there's no market; if you're only making incremental improvements, your likelihood of success is pretty low.”

Find Backers Who are Willing to Invest Emotionally as well as Financially

The science behind medtech is often fascinating, and there are some lucrative investment opportunities. But when you’re dealing with devices that could potentially catch, prevent, treat and cure deadly diseases, you’re likely going to find people who have an emotional connection to your mission. Knowing that your investors share your passion is an advantage.

Novel medtech is a risk. Bringing in investors who have personal reasons for wanting the product to succeed, beyond the potential financial upside, can help you maintain support and secure funding during the rockier parts of the journey.

For example, Jared says that several of IONIQ’s investors have had cancer, which is why they’re determined to help bring a nonintrusive early detection device to the public.

“I'm not sure that makes the work any easier, by any means. But it does make it so you have an investor who is in this for more than just the payday, and becomes much more of a partner than just an investor,” Jared says.

He believes so strongly in the value of alignment between investors and businesses that he thinks it’s worth using as a filter when you’re looking for funding.

He’s not just talking from a place of success. Jared recently ignored his own wisdom while trying to raise money for a certain venture. He tried to talk to every possible interested party (regardless of whether there was an emotional tie to the issue) and came up empty-handed.

“We're doing it very differently [now], very strategically finding those investors who are aligned with us, filtering them as best we can before we meet. I'm confident the outcome is going to be substantially better for us,” he says.

Direct-to-Consumer is the Future of Medicine

If you measure your glucose levels today, know exactly how many steps you’ve taken, or how fast your pulse is racing from reading this exciting content, you already know that consumers love having direct access to medical devices.

This has become even more apparent during the COVID-19 pandemic when once-neglected telemedicine took over as the primary form of interaction between many patients and their doctors.

Being a forward-thinking leader of several forward-thinking companies, Jared is hopeful that one day, IONIQ will be able to sell its cancer-detecting technology directly to consumers, or at least to pharmacies.

It won’t be quite as prevalent as something like a FitBit or Apple Watch — not a device you use every day. An equivalent might be a blood pressure machine: “Something that someone uses at home every three to six months: They're running a test and keeping tabs of that in an app,” Jared says.

Another possibility is that it ends up in a pharmacy, at least initially. “You go in and buy your eggs at a Rite Aid or Walgreens, and at the same time, you sit in this machine and run a scan for 20 minutes. Maybe you get a massage at the same time,” he says.

Jared is also very clear that the plan is not to cut out doctors. Far from it, he says that many physicians are strong advocates for technology that helps them remotely monitor their patients. For example, his mom’s cardiologist has asked her to use an Apple Watch that sends the office alerts via an app.

“This isn't about removing the physician: It's about empowering the consumer, and giving the physician additional information that gives them the opportunity to be more precise and more effective — something they all want,” Jared says.

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