- Why Us
We’re discussing how startup entrepreneurs like you can remove the common regulatory obstacles your business faces and other tips and pointers you can use when developing new medical devices.
Our guest today – Mitch Levinson – is the CEO of Cerebrotech Medical, and with over 30 years experience as a startup CEO and executive for companies that have IPO'd like ZELTIQ Aesthetics and Thermage, he knows all about the ins and outs of FDA regulation.
His Number One Tip? Mitigating risks as early as possible.
We discuss the ways you can reduce your risks and shorten your regulatory audits, and the best way to do that is to pick the right tech.
Mitch also says to start early and meet with the FDA board as soon as possible so you know what parameters you need to meet ahead of time. And among these parameters, we also discuss more of Mitch’s insider tips.
Seeking FDA approval and mitigating risks go hand-in-hand in this industry. Tune in for Mitch Levinson’s insightful tips and tricks so you can start applying his advice to your startup today.
Like this episode? Subscribe today on iTunes or Spotify.
Holding early meetings with FDA to set your parameters right away
Growing a quality system organically so you aren’t struggling through auditing later down the road
Finding products that financeable so you can be backed by the investors you need
Pursuing clearance in the US and the EU at the same time to speed up your approval process
Building the right company culture so you have the most supportive employee team and board to keep your start-up running smooth
Announcer: Welcome to the Global Medical Device Podcast, where today's brightest minds in the medical device industry go to get their most useful and actionable insider knowledge direct from some of the world's leading medical device experts and companies.
Jon Speer: Hi, this is Jon Speer, founder and VP of quality and regulatory at greenlight.guru. Today, we have an exciting episode of the Global Medical Device Podcast. Yeah, today, we have a real rockstar in the med device industry. We've got Mitch Levinson, who is the founder, CEO, and president of Cerebrotech Medical. Mitch is one of those guys that you gotta hear his tips and advice. He's done this many, many times, especially in the med device space, and some of his previous startups have been successful acquisitions and IPOs, and he's doing it again with his latest company. Mitch is gonna share some key tips on how to remove regulatory obstacles from your startup and give you some tips and pointers on some fundraising as well. So, please, enjoy this episode of The Global Medical Device Podcast.
Jon Speer: Hello, this is Jon Speer, and welcome to The Global Medical Device Podcast. I'm really excited today. I have a wonderful guest, a startup pro and veteran, somebody that's been through this many times before. Today I have with me Mitch Levinson. Mitch is a startup medical device executive with over 30 years of experience developing and bringing revolutionary new products to market. Mitch is the co-founder, president, and CEO of Cerebrotech Medical, a medical device startup based in Pleasanton, California. Mitch started Cerebrotech Medical Systems in 2011 based on a technology developed at UC Berkeley. Mitch, welcome to the show.
Mitch Levinson: Thank you, happy to be here.
Jon Speer: I know that bio was pretty brief and I'm sure there are... As we talk today, you'll be able to share a lot of the other experiences you have. But if you wanna expand on that a little bit, talk about a few of the other startups that you've been a part of over the past few years, that'd be great.
Mitch Levinson: Oh, sure. Sure. Well, let's see, Cerebrotech is my fifth startup company and fourth in medical devices. The last company that I started was called Zeltiq. And Zeltiq is the company behind the CoolSculpting procedure. It's a noninvasive technology for killing and removing fat from places that you'd rather not have it. That company, I started there as the startup CEO back in 2005 and ran the company for four years and stuck around for another year in follow through mode as the commercial CEO took the reins. And that company had a nice IPO in 2011, and now it's over a billion-dollar market cap company, and it's right here in my hometown of Pleasanton. Prior to that, I was the startup VP of R&D at a company called Thermage, which had also a nice IPO in 2006, and is now part of Valeant Pharmaceuticals; got acquired a couple of years ago. And before that, similar role at BioSurgical Corporation, which is now a division of Baxter International; was acquired back in about 2000, I think. And before that, I was at Nellcor as development of... Or director of product development for the Perinatal Division, working on fetal pulse oximetry.
Jon Speer: Okay, it sounds like you've had quite a bit of success. I can imagine you're sought out quite often to run startups so that they can have a fantastic IPO and acquisition. So I'm sure the team behind Cerebrotech, your investors, are pretty excited to have you on board.
Mitch Levinson: Oh, well, well, thanks. Thanks. Things are going real well here. So far, so good.
Jon Speer: And what an opportunity to... You said you're from Pleasanton too, right?
Mitch Levinson: I am. I live right here in Pleasanton, been here for 20 years.
Jon Speer: Yeah. That's fantastic to be able to do what you do right in your backyard.
Mitch Levinson: Well, that's one of the nice things about starting these companies is you get to put 'em where you wanna put 'em, which is usually a couple of miles from home in my case.
Jon Speer: Yeah, well, that's good. Well, Mitch, I know we've been doing... Our audience has been participating and are listening to some of these podcasts now for a while. One of the things that we'd like to try to do at the very beginning is we try to, within the first few minutes, give them some valuable nugget, some key piece of information, some titbit or key pointer that you can share with them. And so, we're gonna start that off: What is your number one tip for a startup medical device company?
Mitch Levinson: Well, if I'm thinking about a tip for the entrepreneur who's starting up one of these companies, I would say, spend the time and pick the right project. You're gonna spend, potentially, years working on this project, and make sure that it's one that's got all the key attributes that are gonna make it a successful startup as well as make it something that you could really enjoy working on. So, key attributes are things like having a stand-out value proposition; something that's gonna improve care, reduce cost, improve efficiency, in let's say, the hospital process. All of these things are hot-button issues for medical device companies. Game-changing products are really fun. It's not critical; they're just, I think, more fun than working on projects or products that are better, faster, cheaper, but of course, those are also hugely important for the medical device industry.
Mitch Levinson: And these days also, I would say, a key attribute would be something that is finance-able. Increasingly, investors are risk averse, especially in this medical device sector. So think through what it is that investors are looking for and make sure it's something that you'll be able to attract funding for. And then, maybe lastly, a project that you would have the ability to mitigate the major risks early on a preferably small amount of capital. When I was at Zeltiq in the early days, I arrived there and this was back before the crash in 2008, when medical device funding got so tough. There was $7 million in the company... The VC's who got together and created the company then went out and looked for a CEO to start it and brought me in. And they had put in $7 million dollars there to build the company, and I felt like my job at that point was either demonstrate that this technology was never gonna work as quickly and inexpensively as possible, or to prove that it could work. And mitigating those risks early put us in a great position for our second round of financing, and well after that.
Jon Speer: All right, great. So let's talk a little bit about Cerebrotech, talk a little bit about the product, the technology, and then the next set of questions that we start to dive into will be some specific examples about Cerebrotech and some of your other startups and experiences that you've had throughout your career. But just talk a little bit about the technology that you're working on now. Of course, share what you can, and what you're willing to share with the audience, and where you are in the scheme of going to market.
Mitch Levinson: All right, great. Well, I co-founded Cerebrotech about four years ago with the inventor of the technology, a very creative engineering professor named Boris Rubinsky at University of California at Berkeley. Like maybe all the technologies I've ever worked on, it appears to be fundamentally very simple once somebody else has the insight. And the technology on its core level, what we're doing is passing radio waves through the brain, in this case, through tissue, and see what happens to those radio waves between the emitter and detector antennas. And that transfer function can tell us a lot about the bioimpedance of the tissue, the electrical properties of the tissue, which change when fluids in the tissue change.
Mitch Levinson: So in the case of Cerebrotech, the fluid changes we'd be looking for are changes in cerebral blood volume, changes that develop with swelling or edema. So those... That's the tissue fluid, intracellular and extracellular fluid and the cerebrospinal fluid, all of these different fluid changes will change the bioimpedance and change it in different ways at different frequencies. So we're using multiple frequencies and creating something of a spectrometer, looking at the frequency response of this bioimpedance. And from that, we can detect some really game-changing, new insights into what's happening in the brains of patients on a continuous, completely noninvasive way.
Jon Speer: So if I can just interject, excuse the pun, but it's like you're taking brain surgery to a whole different level.
Mitch Levinson: [chuckle] Yeah. Well, sure, this could be used in brain surgery, but there's a... Let's say, our first application is for patients who've just experienced an acute brain injury, either from a stroke or a brain trauma, and they usually come in to the hospital by ambulance. They are rushed into radiology, get a baseline CT scan, which is tremendous and has really changed the whole way that patients are treated today for these kinds of brain injuries. But once we get the picture and we can create a diagnosis, then the patient is admitted into the hospital, and we lose complete track of them. They hook them up to all the noninvasive monitoring technologies that they have like pulse oximetry, blood pressure, heart rate, which tells the neurologist almost nothing that they need to know. What they really wanna know is, is the patient developing cerebral edema or bleeding? And then, that will be able to prompt an intervention.
Jon Speer: Okay.
Mitch Levinson: We've got great interventions too. What has been missing for decades now is a good monitoring technology to tell the the clinical staff when the patient needs to have some intervention.
Jon Speer: So it's relatively noninvasive.
Mitch Levinson: It's completely noninvasive.
Jon Speer: Okay, got it.
Mitch Levinson: This is just... It's as noninvasive as a cell phone.
Jon Speer: Okay, all right. Well, that's a pretty good description. And so, I'm guessing, you've been around for a few years, but I'm guessing that... It sounds like this is a little bit of a blue ocean. It doesn't sound like there's been a lot of work in this space as far as devices are concerned.
Mitch Levinson: Well, I wouldn't say there hasn't been a lot of work. The problem has been there, but it's just been persistent, again, because nobody really thought of the right way to address it. Other neuromonitoring technologies either are invasive or they're not measuring really the right thing. There are a host of technologies out there or companies that are working on noninvasive intracranial pressure monitoring or detection, but that's not the same as measuring the fluids directly, and the pressure is something that reacts late. So if you want an early indicator or a monitor that can really track the progress of the problem as it's developing, you really need to be measuring the fluids directly; and for that, you really need our technology.
Jon Speer: Cool, and a rough ballpark, I'm sure your investors probably are curious about this too, and I'm guessing somebody that's been down this path many times before has a pretty good gauge on how far away you are from entering the market, but best case scenario, are you one year, two year, five years away? Do you have a sense for that right now?
Mitch Levinson: Well, yeah, we're getting closer than that. We've shown some excellent results in clinical studies at UCSF, at Stanford, Baylor College of Medicine. We submitted for and just received our CE mark, so we are ready to begin commercial operations in Europe. We're gonna postpone that until early next year when we have our first commercial grade device, and then we will go into what I'm calling a beta evaluation were we'll put it into key institutions and let them use it for a while until we make sure we work all the bugs out of it before introducing it for revenue.
Jon Speer: Yeah, that makes good sense, makes excellent sense. I had a chance to hear you speak at a recent event, and doing so, when I had heard you speak I was really fascinated to be quite honest. Of course, I am a little bit of a startup med device geek from time to time, but there's a couple of things that you said during your speech or your presentation that I jotted down and I wanted to chat with you a little bit about today. The first one is, I remember you saying that you are currently in the process of a series E round of fundraising, and E as in echo. It caused me to scratch my head a little bit because that defies conventional wisdom to some extent. Most med device startups who are in the fundraising round, at least once upon a time it used to be thought of, if you were on series E that something bad had happened. So can you talk a little bit about your approach? Because it was really novel and pretty unique when you explained it.
Mitch Levinson: Yeah, yeah, my belief is that those days are gone. We're in a whole different paradigm. That model really is broken; it doesn't work the same anymore. And that all changed pretty suddenly after the crash in 2008 when particular medical device investors, but really all investors from all sectors, just lost confidence in startups and their ability to make a good return on them. And in most of the sectors in technology and bio, other areas besides medical devices, those investors have come back, but in medical devices they really haven't. And there's this fear of putting money in at the early stage and getting diluted out. So we lost most of the venture capital firms who were investing in the early stages back in 2008, and they are beginning to crop back up, just a whole new set of VC firms. But they're still relatively scarce and there's a lot of competition for those early dollars.
Mitch Levinson: So I designed Cerebrotech to survive that type of a difficult early stage financing environment. And the way that I have done that is I have raised small incremental rounds, been very capital efficient in between them, hit key milestones, and focused all that money on just hitting the milestones that are directly in front of us that would increase the value to get to the next round. And virtually once a year, then, I have gone back out and raised another round with a steady increase in valuation, not an exceptionally high one, but not a low one either, and I think slow and steady is winning the race here. At Cerebrotech, I've only spent about $6 million over four years, so we've kept it extremely capital efficient. And that I think in today's environment is just key to being able to survive those startup years. I feel like we're getting past that now and now we've got a product that works; we got the CE mark, we're moving it into a commercial stage and there are more investors that are available for this stage of company, especially with a market that's as big as ours and the potential for the technology to really change medicine.
Jon Speer: Yeah, the other thing that I guess I drew a conclusion when I heard you talk about your previous startups and the successes that you'd had and the IPOs, and I automatically assumed until I had a chance to talk to you after, I automatically assumed that the investors for Cerebrotech were likely investors from your previous ventures, but that's not been the case.
Mitch Levinson: No, the investors in Cerebrotech for the most part aren't doing early stage medical device investing anymore. So no, I had to find all different investors, and back in 2000 when we closed our first round, it was really just trying to find people who almost hadn't invested in medical devices before because it's just a whole new crop of early stage investors that had to be found.
Jon Speer: Yeah, yeah. The other thing that you shared when I heard you speak, you talked a little bit about some of the biggest challenges that Cerebrotech has faced with, and I'm gonna confess, I don't remember the first three or four items that are at the top on your list, but the thing that stuck out in my mind is regulatory, and regulatory was almost nonexistent as a risk, as far as Cerebrotech is concerned. And that seems also against conventional wisdom. I talked to a lot of startups, and they're all always worried about FDA and how to get CE mark and then all those regulatory obstacles and challenges. So, what have you done differently? Why have you been able to reduce or, for the most part, eliminate regulatory from being in your top five from a risk standpoint?
Mitch Levinson: Yeah. Well, the first thing is, I picked a technology that has got a relatively low bar in terms of regulatory because it's so noninvasive. There's no way to hurt a patient with the device unless you drop it on your foot; even then, it's getting to be pretty small and light, so it probably wouldn't hurt anyway. But that's the beginning. If you have a very safe product, and then it's about efficacy, and in our case, we had to demonstrate that we were able to measure or monitor the progressive changes to fluids in the brain. And so what I did early on in our history is I held several key meetings with the FDA and culminating in a pre-submission meeting, and we got pretty good clarity on what it is that FDA needs to see to validate that our parameters and that our device is measuring this parameter of fluid volume change.
Mitch Levinson: So we understood very early on what we needed to do and we were going to do it. So we're in the process of finishing up gathering the data that I already know that FDA is gonna need. And we also had very early on a strategy, as many medical device companies are doing, of pursuing both regulatory clearance in the US and in Europe in parallel, and that's worked real well for us. So we're gonna be able to move the project right along and transition from R&D into commercial without having to worry too much about the regulatory timeline.
Jon Speer: So from a US perspective, the early conversations with the FDA, did that lead you down a De Novo path or are you able to go the traditional 510(k) a path?
Mitch Levinson: Yeah. We actually have both options, and it's a little... Our strategy there is fairly creative and I'm gonna keep that one to ourselves for now.
Jon Speer: Alright. Fair enough.
Mitch Levinson: But we're gonna eventually probably have a De Novo 510(k) in order to get some specific claims that other devices don't have.
Jon Speer: So that's your competitive advantage from an IP standpoint?
Mitch Levinson: Yeah, I guess so.
Jon Speer: Or one maybe, all right. You maybe touched on this already, but the medical device startups who are faced with regulatory as maybe one of the top one or two items on their list from a risk standpoint, what advice would you give them to reduce that risk? It sounds like you've had good success with the meetings with the FDA; are there other tips that you would recommend?
Mitch Levinson: Well, I think you hit on one which is that, don't make the mistake of believing that FDA is really the same as they were 10 years or more ago. FDA today is much more collaborative than they used to be. So I recommend holding early meetings, laying out the strategy, agreeing on the end points if you're doing clinical studies, which most of us are. And also, I don't think we need to be afraid of De Novo 510(k)s anymore. When I was at Zeltiq, we had to submit a De Novo 510(k), and in those days we didn't have a direct De Novo, so we submitted our 510(k), waiting for our NAC letter to come back. And FDA was just tripping on themselves with De Novos; in fact, maybe more accurate depiction would be they were just paralyzed, not really knowing how to move the things forward. And we waited for two and a half years to get this De Novo through, which was not uncommon at the time, but today that's just not the case anymore. So that'd be one other bit of advice I'd give.
Jon Speer: So, yeah, I've heard similar stories about De Novo; once upon a time it was just like a kiss of death. You were gonna kill your timeline and just be sitting there twiddling your thumbs while you were waiting for some reading one way or the other. But I think that's a very key point for the audience to understand is De Novo in 2015 is almost, at least in what I've heard and in my experiences, is almost as predictable, let's say, as a 510(k).
Mitch Levinson: Yeah, yeah, I think so.
Jon Speer: All right. Any other key tips that you would recommend, whether it be regulatory or quality system related or any of those types of areas that sometimes companies are like, "I don't wanna waste my time, effort and energy, I wanna focus on the technology, that quality system, design control risk." Those things are less important. Are there things that that company should be doing to put a little bit more emphasis or at least reduce those things from being obstacles downstream?
Mitch Levinson: Yeah, here's another thing I've done that's been unorthodox, is getting ISO certification extremely early. When I have my first submission for ISO certification, we put together our quality system; I was still running the company out of my spare bedroom. The company was only about a year, year and a half old; it was just me, it was all virtual company, we had no facility, we were only doing early stage R&D, there was no clinical studies, no production. And what turns out is that when the auditors come in to audit your quality system, you really only have one significant SOP, just your design control SOP, and there's nothing else to audit. And the certification process is really about finding flaws in your quality system, and if you really don't have much of a quality system, they can't find flaws. They kinda have to certify you. So we got our ISO certification at a really early stage. And then, you just build the quality system, and then once a year, do the surveillance audits, and the thing grows organically. And you don't have this big push some day down the road, three, four years in, where you've really got lots of stuff, lots of documentation and procedures that you have to have to audit and get all up to snuff.
Jon Speer: Yeah, that's unorthodox, and that is... I remember when you mentioned that to me a few weeks back, and even today, it's just one of those things... It's really hard for a startup company to wrap their head around, and it's one of those things that sometimes they push off and they delay till later, but there is a lot of value or a lot of... Yeah, just... I guess value in checking that box early. And then, like you said, the ISO process is pretty forgiving, but at the same time it puts you on a path so that they can come in very early in the process, certify your quality system, and then you just build on it from there. It's a very novel and unique approach.
Mitch Levinson: Yeah. Yeah, I find it works well.
Jon Speer: So, we've talked about quite a bit today, so one of the things I wanna... Last couple of things I wanna hit on today is, what do you feel about technology? I once read, and I'll paraphrase a little bit, something that you said about how important technology is to medical devices today, and it sounds like a lot of the startups you've been involved with, there's a strong technology at play. But can you speak to where you think the technology is going? Things like wearables seem to be dominating a lot of discussions that I'm reading about these days. So what are your thoughts about technology?
Mitch Levinson: Yeah. Well, technology is, obviously, critically important. But it is not as important as the value proposition. It's not important that you have a whiz-bang technology; it's important that you have something that's gonna make a real difference in patient care, is gonna improve outcomes, it's going to make the... It's gonna reduce costs and streamline and make more efficient the healthcare processes. So I would look much more at the value proposition than I would at the technology itself. Of course, you gotta get the technology right, once you've established what it's gonna be.
Jon Speer: Sure, sure. And, obviously, you've been successful in Pleasanton, California, but do you think that geography and the location... How important do you think that is for a med device startup today; does it have to be in Pleasanton, California or can you be in Indianapolis, Indiana or some other location? Do you have any thoughts about that?
Mitch Levinson: I do. It's getting much easier with all of the communication tools we have available. You and I are doing this interview over Skype 3,000 miles apart. And there's lots of progress that can be made. We can do these companies virtually, and I ran Cerebrotech virtually for three years. But eventually, when you need to build the company into... Have brick and mortar, have an R&D lab, and have engineers and other professionals across the different functional areas, it is important to be in an area where you're gonna be able to have those resources. And I'm a big believer in having the people be co-located so that they are bumping elbows and all the different functions are all blending together, and have very fuzzy lines between the functional groups. And that's very difficult to do if you don't have everybody in one place. So I don't know how many places there are in the United States where you have the type of people who can do that, but I know the Bay Area certainly is a major hub and there are several others, but you can't do that as easily everywhere else in the country.
Jon Speer: Yeah. And one of the things that I've often advised a lot of startups that I work with, it's okay to be virtual and rely on a lot of third party suppliers, but the adage that I've shared with a lot of these startups is, "It's ideal to have your supply base within strangling distance" so that way you can get in a car and you can drive to them without an inconvenience. Sometimes when you get on those critical stages, having your resources, like you said, co-located or within a couple of hours of your location, that's very key, especially as there's lots of iterations when you're going through things like verification and validation activities.
Mitch Levinson: Yeah, I agree.
Jon Speer: All right. You've shared a lot with the audience today, and I'll give you a chance to share any final thoughts that you have, something that is on your mind that we haven't covered.
Mitch Levinson: Well, I just wanted to reiterate that when you're putting these startups together, it all comes down... When it all comes down to it, it really is all about getting the right people on board. And that includes getting the right board members, your management team, your employees, your clinical consultants, your suppliers, and making sure that that company culture is right to be able to get the synergies you need across all the different functions. I think that that point just needs to be in the front of the mind of the entrepreneurs and the management team.
Jon Speer: All right. Well, Mitch, I appreciate your time. I just wanna let everybody know that they can learn more about you and what you're doing by finding Cerebrotech Medical, just a quick Google search. I believe your website is also cerebrotechmedical.com?
Mitch Levinson: Yeah, that's correct.
Jon Speer: Pretty much just as it sounds, so you can look up what they're doing, and I'm sure you can find Mitch also on LinkedIn. Mitch, are there other ways that people can get in touch with you or is that the best way?
Mitch Levinson: No, those are two great ways to find me.
Jon Speer: All right, great. My name is Jon Speer, again, I'm the founder and VP of Quality and Regulatory for www.greenlight.guru. Just to let you know, Greenlight is developing software solutions to help medical device companies with document management and design controls and risk management, and appreciate you listening to The Global Medical Device Podcast.
The Global Medical Device Podcast powered by Greenlight Guru is where today's brightest minds in the medical device industry go to get their most useful and actionable insider knowledge, direct from some of the world's leading medical device experts and companies.
Like this episode? Subscribe today on iTunes or Spotify.
Nick Tippmann is the Chief Marketing Officer for Greenlight Guru, a MedTech Lifecycle Excellence Platform (MLE) that provides an industry-specific solution to help medical technology innovators around the world use quality as an accelerator to move beyond baseline compliance and achieve True Quality. Tippmann is...