How Strategic Partnerships Can Fast-Track Your Medtech Startup: Interview with Innova Vascular CEO Sanjay Shrivastava

Sanjay Shrivastava, PhD, is in what he calls the “body plumbing business.” As the CEO and founder of Innova Vascular, and founder of the recently acquired BlackSwan Vascular, Sanjay’s deeply entrenched in the cardiovascular interventional device space.

Sanjay has worked for household names like Johnson & Johnson and Medtronic as well as small, early-stage startups. Throughout his career, he’s gained experience in various core functional areas of medical device companies, having led teams in R&D, marketing, and business development.

In this episode of Medsider, Sanjay explains the financial strategy he’s used in his two startups, gives advice on when (and how) to develop strategic partnerships, what questions to explore in the early stages of a medtech startup company, and the best timeline for a win-win exit strategy.

Guest

Sanjay Shrivastava

CEO of Innova Vascular

Sanjay Shrivastava, PhD, has spent more than 20 years of his professional career developing and commercializing medical devices. He was the Director of Global Marketing for Medtronic, Senior Director of Business Development at Johnson Johnson, and in 2018, co-founded BlackSwan Vascular. He’s now the CEO of Innova Vascular, which he founded in 2021.

Listen to the Interview with Sanjay Shrivastava

Key Learnings from Sanjay Shrivastava's Experiences

  • If you’re looking to exit, your timeline will depend on whether your medical device needs premarket approval (PMA) or 510(k) clearance. PMA-driven technology can often be acquired early, whereas 510(k) devices may require commercial traction before a buyer will bite.
  • Strategic partnerships are a lot like marriage. Think of it as an ongoing relationship that requires careful selection and long-term commitment. Finding a good fit for your startup and your device portfolio is crucial.
  • The type of product you make determines how much testing and documentation you need to have ready at different stages of production. Anything that enters the human body (even temporarily) needs to be “debugged” before clinical trials. In other words, if the device you’re working on goes into a human body, it needs to be your priority

The Two Paths to a Medtech Enterprise

Based on his many years of experience, Sanjay believes there are two common origin stories of a medtech startup:

1. Applied knowledge

Technological, medical, or scientific experts proactively look for ways to use their specialized knowledge base to solve current medical problems.

2. Need-driven

Individuals (for a variety of reasons) experience an unmet need within the industry and actively set out in search of a clinical solution through alliances, partnerships, and internal or external expertise.

Sanjay’s career has led him to primarily focus on need-driven startups. In the early stages of his career, he worked closely with doctors specializing in interventional cardiology and vascular surgery.

“Having worked with these doctors and having viewed a variety of procedures in these spaces around the world, it gave me an opportunity to understand what was working, what wasn’t working, where the unmet needs were, and who to partner with to serve those unmet needs,” says Sanjay.

When physicians and engineers put their minds together, opportunities to turn innovative ideas into reality become attainable.

Saying ‘I Do’ to the Right Strategic Partner

Getting an idea off the ground is incredibly challenging. And yet, Sanjay’s led multiple successful medtech startups over the course of his career, some of which have relied on carefully-selected strategic partnerships to fuel growth.

Sanjay believes a strategic partnership is like a marriage: “It ends up being about chemistry… both parties are falling in love and happy.” But aspiring entrepreneurs need to have certain components in place before courting partners:

De-risk your concept before engaging with investors.

These days, a “back-of-the-napkin” concept isn’t enough for physician and engineering entrepreneurs to find financing. Do some prototyping to show that your idea has potential.

Have a plan, not just a patent.

You must develop a detailed business plan for potential investors. Sharing your strategy is crucial. Detail your timeline and be sure to address regulatory clearances, so that your strategic partners can understand what return on investment (ROI) to expect, and how long they’ll need to wait for it.

Give yourself time before you start talking.

Sanjay suggests that entrepreneurs who are looking for an exit plan with at least a year in mind. For BlackSwan, he started talking to potential partners about six months before his company received an Investigational Device Exemption (IDE) from the Food and Drug Administration (FDA). Four months after receiving the exemption, BlackSwan was ready to announce its official strategic partnership with Sirtex.

Incentivize partners with buy-out options.

One strategy that Sanjay successfully leveraged with both Innova and BlackSwan is the opportunity for early strategic partners to get a deal. They were given the option to acquire the company at set rates following key transition points for the technology: for example, when regulatory clearance was granted. It was a way to reward those partners who took a higher risk by investing in a new company.

Timing Can Make or Break an Acquisition Deal

Sanjay’s experience working in R&D for BTG (since acquired by Boston Scientific) and Johnson & Johnson gave him useful insights into the acquisition process.

Having had his hand in medtech company acquisitions as an investor and an entrepreneur, Sanjay believes there is a right answer for when startups should look to sell.

Premarket approval (PMA) products should look for a buyer after running trials with 40-50 patients. In doing so, startups have demonstrated safety and can at least hint at the effectiveness of their technology.

This juncture is a win-win for the startup and the buyer. Value will skyrocket after the next stage of development, which means an exceptional ROI for the buyer, but the startup finds itself at a scaling crossroads, which is incredibly difficult to achieve without significant funding.

Startups with a 510(k) designation should set exit goals with a longer timeline. Devices that seek this regulatory path (often because manufacturing costs are incredibly high) typically don’t have a scalability plan at this point in the development, because the design needs to be tweaked and modified before it can be mass-produced. For these companies, Sanjay says it’s all about long-term planning and preparation.

“I urge entrepreneurs to think along the lines of scale and commercial producibility before being ready,” says Sanjay. He says that mental preparation is vital. “Your exit may not happen until you're making these [devices], or have the ability to produce at a scale that makes it attractive for the strategic buyer.”

Planning With the Right Questions at the Forefront

Before a medical device startup files anything with the FDA, it has a number of important decisions to make.

Sanjay shares important questions that every entrepreneur should explore in the conceptualization and ideation phase:

Does your product go inside the body?

If so, you’ll need to invest significantly in product development before moving to clinical trials. Devices that function as operator interfaces will require less initial investment, and can be tweaked during clinical studies, and even in early commercialization stages.

“Anything that’s entering the body and doing something in the body — whether it’s an implant or an in-and-out-type product — needs to be debugged in early prototypes,” warns Sanjay.

Who are your potential physician partners?

How you design your clinical study could make or break your business. This includes identifying strategic endpoints and creating a plan that can be executed in a timely manner. Maintaining close relationships with physicians allows you to engage medical experts for feedback at many stages of development. Partnering with deeply knowledgeable clinical advisors and developing a robust and schooled advisory board goes a long way.

Is your clinical study feasible?

Understand the parameters of your plan and verify that it’s actionable. Important decisions include:

  • How many sites will you need?
  • Should you work with public or private hospitals?
  • Do you need the name recognition of a big academic hospital, or are smaller centers with access to large quantities of patients a greater priority?
  • Do you want to partner with a clinical research organization (CRO) or would you be better off building a strategy with independent professionals?

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