NHHTC/MIT Enterprise Forum of NH

(from NH High Tech News, a publication of the New Hampshire High Technology Council - Nov/Dec 2007) 

Why do pharmacists look like pharmacists and doctors look like doctors? The first speaker, Calvin Hunsicker is a pharmacist and owned several pharmacies before founding Emerlyn Technology. Emerlyn’s SureCost is like Orbitz.com for pharmacies.

SureCost, a web portal connects independent pharmacies to Rx manufacturers. There are over 23,000 independent pharmacies in the United States today and the prescription drug market will increase by 148% over the next decade. Furthermore, 78% of a pharmacy’s cost is cost-of-goods. SureCost saves the
average pharmacy about $25,000 per year, yielding a nine times ROI. Calvin assured us that the only way pharmacies make money is intelligent buying.

What an amazingly qualified panel: Bob Chin, Co-Founder and Executive Vice President for NaviMedix; Brian Widell, President of ProfitTools; and Thomas Cote, RPh, former CEO of Infusion Solutions. Bob Chin was very entertaining when he said, “You need to bat a 750 – better than Mannie the Bad Man, to score with the large-chain pharmacies.”

Bob Cote said his pharmacy spent about $70,000 per year for a bookkeeper to manage buying. SureCost aggregates data from (Group Purchasing Organizations) GPOs and allows for intelligent buying across multiple manufacturers. Bob’s concern was SureCost’s ability to compete with in-house systems provided by national retail chains like CVS. Initially this solution is targeted at the 23,000 independent pharmacies in phase one.

Brian Widell, President of ProfitTools, drew a parallel to his industry. Brian warned Calvin, “If you’re depending on the middleman to provide information and then eventually you’re going to cut them out of the equation, they can squeeze your data flow and strangle you while you burn though money waiting.” His advice was to find a compelling value proposition for the middle guy and to come up with other sources of revenue like consulting, customization, and set-up. Savvy.

The next speaker was Doug Vincent, President of Design Medical, makers of innovative heart pumps. Doug invented a heart pump to solve a major post-surgery problem, kidney failure. Fifty percent of patients that have heart surgery have organ damage due to an excess of fluid in their system. Hospitals spend about $6 billion fixing surgical complications. Design Medical’s heart pump improves blood flow and reduces organ damage, when a patient stays 22 days post-surgery, hospitals lose money.

This panel was stellar: Alan Kivnik, President and CEO for Corum Medical; Edward Berger, Ph.D. of Larchmont Strategic Advisors; and Jackie Eastwood, Co-Founder and former CEO of TissueLink.

The big debate with Design Medical is the chicken or the egg situation. For heart pumps, it’s a mechanical pump vs. a pulsatile pump. Design Medical has patented the mechanical pump and is betting his company on this approach.

Alan Kivnik said, “To succeed in this space you need to have the capital to survive the obvious clinical trials, FDA approval, and peer reviews. You need traction vis-à-vis favorable medical journals and physician referrals.” He also cautioned about the savings to hospitals – this has to be very accurate. His most insightful comment was that the FDA wants to see people like Doug succeed. He advised getting the FDA involved early, one hiccup could cost 7 years. Priceless!

Jackie Eastwood is an expert in bringing medical devices to market and is brilliant. Her bio highlights are: Co-founder & Former CEO of TissueLink, Entrepreneur of the Year as voted by Ernst & Young, Vice President and General Manager of Medtronic, a $12 billion company.

Jackie challenged Doug’s mechanical pump vs. pulsatile approach to the problem. She encouraged him to contact the Society for Thoracic Surgery - “We enhance the ability of thoracic surgeons to provide the highest quality patient care through education, research, and advocacy” - another gold mine. What’s more, she mentioned that over $1 billion has already been invested in heart devices over time – he really has to prove his approach is revolutionary.

Ed Berger from Larchmont Strategic Advisors was skeptical due to the number of companies who have tried to succeed in this space. His observations were, “the pulsatility vs. mechanical debate is still unsettled” and “your communication has to be flawless.” He ended by saying, “I’m not a doctor, nor do I play one on TV!”

In his parting shots, Doug confidently stated, “The world is round is against the conventional wisdom that the world is flat.” Spoken like a true MIT professor, inventor, and entrepreneur he passionately believes that mechanical is the way to go for heart pumps. All from a guy who looks like he’s right off the set of Grey’s Anatomy and smart as a whip!

That wrapped up another exciting night for the MIT Forum, hope to see you on February 5th.

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Catherine Blake, President, Sales Protocol International
cblake@salesprotocol.com, www.salesprotocol.com