VGV's 2nd Investment - S4 Medical
William Fuller, CEO of S4 Medical, shows how a complication in heart procedures paved the way for a new, revolutionary device that eliminates risk of harming the esophagus. VGV invested in S4 Medical this past summer of 2018.
Tell me about you and your background?
I’ve been in the medical device commercialization field for more than 20 years, previously I was the CEO and founder of another company (Centerline BioMedical) and I was CEO-in-residence at BioEnterprise.
How did you come up with the idea to start S4 Medical?
I was working at BioEnterprise, and one day got a call from the Tech Transfer Office at Ohio State because they had a medical device technology they wanted to spread the word about. This was around fall of 2016. They called me and they said they had an interesting technology that had come through the office and they thought I would be a good person to consult with about it. The technology was a cardiac-related device. I met with Dr. Emile Daoud, an electrophysiologist, who was the one that come up with this idea. He explained why it was needed and what it would look like; at the time it was more just a concept. I really liked his energy and passion behind the technology and Ohio State seemed great to work with, so I wanted to stay involved as his mentor to help him evolve this. Everyone was in agreement with that approach. I went back to BioEnterprise and took this idea with me, and I did a lot of my own due diligence on it. I wanted to verify that there was a type of need for this device. I called around to physicians to ask them whether they would be interested in a device like this, as it wasn’t something I knew much about. I found out pretty quickly that the problem it deals with is a common complication that physicians have long been trying to solve. I did some research on alternatives that were being used and verified that it definitely was needed.
I went back to OSU and suggested that the best way to move forward was to build a prototype and create a proof of concept. They had internal innovation grant money for prototypes and we built a situation where OSU could come up with some money to support it and I helped track down some companies that could help us make the prototype. By the end of 2016, we found a company that would help us do pre-clinical testing. It took a couple of months to build the technology. We then ran a study which worked really well, the results were fantastic.
As I was doing my due diligence, I was reaching out to investors as well, asking if this was fundable, and I was met with a really great response that yes, it was. So we put the data together from our tests into a presentation and took this to some larger medical device companies. I asked several if they would fund it, one of them agreed to, and from there I started a conversation with Jumpstart and North Coast Angels. I took the pitch to them, and they immediately wanted to fund it. We went through Jumpstart’s process pretty quickly, they were really helpful, and they brought in some of their own experts for their own due diligence.
By the end of the summer, we had a term sheet, then by December we had done an additional close with Jumpstart and North Coast Angels. Just this past summer we officially closed out the round.
It sounds like S4 Medical had a really positive response from local funders; that this is a really promising technology that solves a common complication.
Yes, it was a really good experience in that regard. Jumpstart is great, their due diligence really tested our business plan as well, and it was a really collaborative approach that we appreciated.
What’s the biggest challenge starting a venture like a medical device technology?
I’ve learned a lot along the way, there’s always lots of challenges and difficulties that come with this kind of venture. I can’t really think of many big major challenges along the way for us, though. We made a ton of pitches and heard a lot of “no”, but we heard a lot of “yes” as well and were able to fill out the funding. We got rejected along the way, it goes with the job, but going back to the spirit of collaboration we were lucky enough to have a great experience, which really set the stage for the rest of investors to come along pretty smoothly. There were things I needed to update and change in the pitch, but overall it was really welcomed. OSU was wonderful to work with; licensing technology with other institutions can be pretty challenging but with them, it was great and not challenging at all. They were partners with us from day one. The negotiations were done within, maybe one day. This venture has just been a wonderful ride to date.
Tell me a bit about the technology of S4 Medical?
So Emile is an electrophysiologist. He focuses on arrhythmias at the OSU medical center. He treats patients with various types of arrhythmias and other various types of heart conditions. One type of arrhythmia is atrial fibrillation, which is an arrhythmia that resides in the left atrium. Typically if someone has this, they will try medications first. But this is not an option for a large number of people for one reason or another, such as if they can't tolerate the medications. The next course of treatment is catheter ablation, and this is a minimally invasive procedure. They go up into the heart to create lesions in the tissue. There’s a normal pathway electrical signals will go through and then when you have afib, the circuits have become abnormal, the pathways are not within their normal routes.
However, since they’re working posterior on the left atria, the esophagus is right behind it. They’re actually in contact with each other. When they do this ablation, they’re delivering energy of radio frequency, essentially kind of burning the cells inside the heart. And sometimes that energy can pass through the heart wall and can create damage to the esophagus. In some cases it burns enough to create an esophageal fistula, a hole in the esophagus. When that happens, you have a very significant rate of fatality. Most who get a fistula will die. If the temperature probe notes an increase in temperature during the procedure, they stop and wait for it to cool down. If you're inside the heart and delivering energy, by the time that thing in the esophagus heats up enough, you’ve already probably caused some damage. So, what our device actually does is it just moves the esophagus over a bit. The energy translation from the procedure to the esophagus drops significantly with this space in between. If you just move it away 2 cm, you can eliminate the risk of this complication. We replace this temperature probe, and our device goes into the esophagus, kind of like a catheter, and when the physician is ready to move to that area they just move the esophagus over a bit and the risk is removed. We prevent thermal damage to the esophagus and save time as the physician won’t have to stop and wait for the area to cool down, as that’s a huge interruption to their workflow and very challenging to get back exactly where they left off. Almost every one of these procedures includes an increase in temperature. Eliminating the risk for the temperature increase, they can really control their progress.
The really nice feature about our device is that it’s really controllable, so it can be moved to suit the patient’s esophageal position in relation to the left atrium. Once you get it about 1.5 cm away, you’re pretty safe at that point.
You mentioned with your device that there’s data on time and cost savings..
There’s definitely a meaningful reduction of time. If we can shave off 20-30 minutes, which is what we would typically help them save, they aren’t waiting for a cool down and can finish the procedure faster and more accurately.
Is this in beta testing? Has it been tested on humans or used during any procedures yet?
Not yet. We have a final study in January and the plan is in either April or May to enter into human testing!
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