Nadim has been CEO for 15 years and led CVRx through some major pivots and incredible successes. Today, we’re going to discuss his journey with the company, including Nadim’s expertise on clinical trial strategy, startup funding, and working with FDA & CMS.
But first, here’s a bit more about Nadim Yared and his background:
Nadim holds two graduate degrees, and started his career with GE. After getting his MBA at INSEAD, he went on to run several business units for GE, then spent four years as the head of Medtronic’s Surgical Navigation division. Nadim was then recruited to take the helm at CVRx in 2006, and has been CEO ever since.
Listen to the Interview with Nadim Yared
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Read the Interview with Nadim Yared
The following interview has been lightly edited for readability.
We’re excited to talk with you, Nadim, about the CVRx story. But first, what was your reasoning for wanting to join a startup after working for GE and Medtronic?
At Medtronic, I ran the Surgical Navigation Technology division out of Boulder, Colorado. We had a lot of fun. We used to bike to work and wear t-shirts. A very informal, casual startup culture. So, after four and a half years running it like a startup with the resources of a large company, we explored the possibility of spinning off Medtronic Navigation and running it as a separate business. After nine months of discussions with Medtronic, we figured out it was very difficult to disentangle the Navigation business from the rest of the company. I was already in discussions with a few investors and one of them happened to be the major shareholder of CVRx. They talked to me about the opportunity, and what they're looking for. And it was a match.
Am I right to think CVRx pivoted from hypertension to heart failure? Can you tell us a little bit more about how that happened and what your role was in guiding the company through this transition.
The founder of CVRx, Dr. Rob Kieval, was exploring carotid stents back in the year 2000 and noticed every time an interventional cardiologist inflates the balloon to deploy the stent, blood pressure fluctuates and often drops precipitously. He started researching this and discovered there’s a relationship between blood pressure and beta-receptors located in the carotid artery. By 2001, he founded CVRx.
In 2002, Medtronic was introducing the first bi-ventricular pacing device, or CRT, to treat heart failure. At the time, the world did not know much about heart failure and what works with CRT. So, why compete with Medtronic when hypertension, or resistant hypertension, is a wide-open space?
When I was hired in 2006, the company had designed the last trial, and I was recruited to run it as the primary focus of the business. When we got the data from the trial in early 2010, we had great efficacy data that led to an HDE (Humanitarian Device Exemption) down the road, which was approved by FDA.
Two things slowed us down along the way. Number one, the safety profile of the procedure was not to our liking. About 9% of the patients complained from sensations of numbness in the jaw after the procedure. While this could be acceptable for a major surgery like carotid endarterectomy, we felt that 9% wouldn’t fly with hypertension.
The second element was all of the hype around renal denervation as an alternative approach for hypertension. There was so much excitement around renal denervation in 2010 that we decided as a company to slow down a bit, go back to the drawing board, and try to make the procedure less invasive. We aimed to remove any nerve damage that created those numbing sensations and focus more on heart failure.
At the time, I had to make a decision as the CEO of the company. I can fight head to head with all of those companies doing renal denervation for hypertension, including Medtronic, Boston Scientific, St. Jude, etc. Or I can go all-in on heart failure.
On the flip side, some thought we would be competing with all of the biventricular pacing companies. However, by 2010, the world had figured out that biventricular pacing only works in a subset of heart failure, the patients with a wide QRS Syndrome.
In those patients, a CRT device works. But if the proverbial mountain is narrow and tall, many patients may not have a great solution. So, that’s where we decided to focus. It’s an unmet need, a severe morbid disease. From a payer’s perspective, it's very compelling too. So, I recommended to the board to slow down on hypertension and accelerate into heart failure.
At the time, we had a pivotal trial that had received IDE approval from the FDA in hypertension, but we put it on hold in 2013 to focus all of our resources, all of our money, all of our employees, etc. on heart failure. We did the phase one, phase two, and phase three studies in sequence from 2011 using the new technology, new platform, and new procedure. And we successfully got approval in 2019 from FDA. So, over that period of seven to eight years, we kept a low profile by design. That's why, Scott, you may have forgotten about us for a while.
Well, it definitely sounds like you weren’t sitting on the sidelines! The pivot you just laid out is pretty incredible. Did it seem like as big of a decision at the time as it does now?
Yes, it was! We knew exactly what we did wrong in hypertension, we knew how to fix it, which started us down this new path. If you look at heart failure since the advent of CRT, very few therapies have been successful. But at the same time, we had a lot of experimental data and we were comfortable & confident about the mechanism of action of our device.
That’s an incredible story. Maybe one for the ages! When you think about CVRx in the next one to two years, what are you most excited about?
Our success will be counted by the number of lives that we impact. It's all about our execution to go out and educate patients, educate & train physicians, and educate hospitals too. So, it's an exciting phase right now for CVRx, really exciting.
Let’s transition to some of the lessons you’ve learned along the way, starting with clinical evidence. What are your general pieces of advice for other entrepreneurs who are in the early stages of developing their clinical trial strategy and are trying to make sure their plan is solid?
A major driver that I always focus on is if you want to understand the mean, you have to narrow the standard deviation. As a CEO of an early-stage company, you have to understand your data, not only the mean or average, but pay particular attention to the standard deviations. Look at the deviations and learn from them. Figure out where your variability is coming from to make a better therapy that benefits a specific patient population.
Tell us more about what you can find from the variability in clinical data.
One of the things that we often do wrong in clinical trials is we do a single-arm phase one trial, 20 to 30 patients, often in Europe, and now in the United States. We derive information and then jump into a phase three randomized controlled trial with hundreds of patients. We spend hundreds of millions of dollars and don't have a plan B if the trial ends up hitting a wall. A lot of things could go wrong and 80% of the time, what goes wrong is the control arm.
You hear it often, people saying one of the cohorts did better than expected. Well, when you were running your phase one study, did you quantify what the control arm would do? Most often, the answer is no. Even if it means having a 40-patient control arm versus 20, you need to accurately quantify the data.
You can do what we did, which is a little bit more expensive. Phase one, phase two, and phase three studies. And phase two will likely be a randomized controlled trial so you can fine-tune the size of the patient population and efficacy of your therapy. That allows you to make very few changes between phase two and phase three. So, your phase three is just a repeat of phase two, but on a larger scale.
Let's take a semi well-funded, early-stage medtech company. Would you almost always recommend this three-phased approach where phase two looks very similar to phase three?
Interestingly, right now, we are conducting phase one, two, and three studies, all combined into one. What has happened between 2011 and 2021 is that a lot of progress has been made on the science of conducting clinical trials. And within FDA, the culture has changed and they’re more willing and open to listen to creative ideas.
10 years ago, you would sit down with FDA, offer a solution, and they would either say yes or no. Today, you sit down with FDA, you offer a solution, and they may say yes, but have you considered this alternative? Or looked at this instead? It’s a more collaborative environment between FDA and the industry sponsor of the trial these days.
If we had the FDA we have today back in 2012 when we were designing the phase two trials, I would have done phase two and phase three as a single sequence. Like two phases in the same trials without interruption to the flow of patients. That would save two to three years in the process.
Let’s talk insurance, Nadim. Recently, CVRx announced the receipt of NTAP from CMS. Congratulations! Tell us a little more about how this came about.
In June of 2015, CVRx was the first project for the FDA’s new Expedited Access Pathway designation. The FDA was still learning what it meant internally. We were all learning.
I was chairman of AdvaMed Accel at the time, which was the AdvaMed branch for smaller companies. We worked with successive administrations and eventually started seeing some changes with bipartisan support. The idea is that FDA is doing everything possible to shorten the pathway to approval for breakthrough therapies because they're needed. But, can we have access to those therapies if the products are not paid for? The answer is no. So, we need to have CMS on board.
I became Chairman of the Board of AdvaMed. So, I was on the front line of discussions with the administration, with HHS, CMS, the White House, and so forth, to try to get those changes implemented.
So, what is NTAP? The acronym stands for New Technology Add-On Payment. This program has existed for two decades. It's a way for CMS to provide incremental payments to novel products when they don't yet have a payment level associated with them. That payment used to be 50%, now it's 65% of what the hospital is paying for the device. TPT is a similar program for outpatient procedures. It stands for Transitional Pass-Through where the provider will get paid for the procedure costs and the full device costs for an outpatient procedure. CVRx received both the NTAP and TPT incremental payments from CMS last year.
Now that's on the payment side. On the coverage side, CMS also proposed, in August last year, a program called NCD, which is basically a four-year National Coverage Determination for breakthrough technologies from the time they get FDA approval. Within those four years, the company collects claim data and more evidence to submit the case to CMS to make the coverage permanent. Very few products actually receive full National Coverage Determinations and that's a great thing for breakthrough technologies.
15 years ago, we used to say give me a private payer every day of the year because you’re never going to get anything done with CMS. Now, it's the other way around. CMS is on the forefront and the private payers are lagging behind. From CVRX's perspective, we're very happy because two-thirds of our patients are above the age of 65 and are therefore CMS patients. But if a company is providing, for example, pediatric products or therapies for teenagers or even young adults, breakthrough technologies might not help them from a reimbursement perspective. If they don't have CMS patients, it's a moot point for them.
What advice can you offer to medtech entrepreneurs when it comes to fundraising?
Respect your early investors. With CVRx, New Enterprise Associates has been a supporter from the beginning. I brought in Johnson & Johnson in 2007 and they also have been a steady supporter. Many entrepreneurs focus too much on the valuation in early financing rounds. These are important elements, no question about it. But more important is the quality of investors you’re bringing on board.
Is there anything else, when it comes to raising capital, that you think is important for other medtech or healthtech entrepreneurs to understand?
In the entrepreneurial arena, it's about management, management, management. If you're an entrepreneur and don’t pay attention to the team you assemble, no matter how good your product or data is, it doesn't matter. You will get hurt. If you’re a great entrepreneur, but not well-rounded to lead the company, bring in a professional CEO to support you.
You definitely need to assemble a very solid team. Go out and get the best. Don't try to argue about the money. Go and get the best talent you can convince to join you, which helps in two ways. Number one, your ability to execute will go up, of course. But number two, bringing on top talent will send a strong signal to investors. As an entrepreneur, assembling a very solid team should be your number one priority.
Are there any influential books that you often recommend to other entrepreneurs?
Statistics for Dummies. Seriously!
When it comes to business, I've been very impressed with a few authors I've met over the years. Malcolm Gladwell, for example. I also like Clay Christensen, who wrote The Innovator's Dilemma and The Innovator's Solution. Another classic that I'd recommend to everybody is Crossing the Chasm by Geoffrey Moore.
If you could start over in your mid-to-late 20s, is there anything that you would do differently?
Oh man, where do I start? If you think there is nothing that you could have done better, there's something wrong with you. As I mentioned before, if I knew back in 2012 what I know today about clinical trials, I would have combined phase two and phase three studies in the same sequence. And then I would have educated FDA about why they should consider it. Then maybe, they would have accepted the data five years earlier!
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