BoneChat #79 - Open Discussion

It was just a whole mess.

Who was the doc for the expired nails?

Kevin Friedman down in, uh, Bryn Mawr. He, um, so I was, so I was Andy's associate and I was probably only about a gosh, a few months in, and he says, go right ahead, you know, go, go into bachelor party or whatever. And then he calls me up and he says, hey, I'm really sorry, there's a distal femur and there's a DFN going on. It's like, go do the distal or the DFN with Dr. Friedman, you'll be in and out, no problem, everything's there. And this is before we had the Metro office, right? So it was kind of in, you know, somebody's garage. I show up nails were expired. He lit me up. I mean, lit me up. So never made that mistake again, that's for sure.

I bet. Yeah.

Who caught the— who caught the labeling? Was it a nurse or a rep or you, somebody?

No, it was me. So, so yeah, that was, that was basically the, the last podcast I said, you know, the horror story in the OR, and everyone then— everybody has one, and instantly when you say that, you go back to that moment. And so this was gosh, 20 years ago. And so I wasn't even supposed to be there. I was literally at a bachelor party on a golf course and he calls me and he says, hey, I'm really sorry. Can you get up there and cover the case? I was like, yeah, sure. He's like, everything's there. You're fine. So I walk in marching. This is only the second time I was in this account ever. And that happens. And so long story short, He calls for a Midas Rex. He was going to cut it. Ultimately he didn't. He didn't, you know, put in something else. And, um, and then they banned me from the hospital. I was like, I didn't even do anything, I just showed up.

Do they have your picture in the hallway?

All right, seriously, they must have. The funny thing is, um, you know, we've interacted years later and I tell him that story and we have a laugh over it and And he's like, did I really? Like, yes, you did. So, oh well, good learning experience.

Yeah, everybody's got those stories. This is, this is open discussion today.

So, okay, well, I have a story of the one time in 21 years, one time that I had an orthopedic surgeon upset with me in 21 years. And of all the people, now I'm home here in New Orleans, but this, I was living in Philly and I was doing a story about a post-Katrina recovery. And I interviewed the chair of LSU. When I did a follow-up story, the gentleman who was the chair of LSU at the time was furious with me. I laid out my case and I said, well, this is, you know, I never ever go to press without checking with the doc. And so somebody said to me, you know, it was probably just because there's a horrible Tulane-LSU rivalry. And I think, you know, that's probably true. He actually wrote to somebody, AOS, and all of this. And, you know, I thought, goodness. And the funny thing is, years later, I was hired by LSU to write their ortho newsletter, and they have a new chair. And he wanted me to interview this guy. And the guy's charming. And I didn't say a word about, you know, hey, I was the one. We've just had a great time ever since.

Funny.

That's awesome.

One time, that's it. In 21 years, I had a different interaction with one person. It's pretty good.

But you remember it.

Yeah, I do. I do.

I thought, what is he saying?

What?

I, I, I was a young engineer. I was at Mayo Clinic back in the good old days when you could just bring an instrument in and try it. Without any quality system. And the surgeon puts the instrument into total knee, doesn't work, throws it at me. It's all bloody. I catch it and he says, this doesn't work. Bring something back that works in a couple weeks. And boy, did I remember that forever.

You know?

Yeah. In the good old days, you put the instrument in your suitcase and you just went to surgery.

Yeah.

Remember when you used to be able to flash things too?

Oh yeah, yeah, just in time.

So do we want to use some of this time to brainstorm topics for future BIM chats?

Anything you want to do. This is your time, everybody. So I know Vinay wants to say something. We'll carve out 5 minutes for him. Um, but anything else, open topic?

Well, I just threw that out there. Let Venkat go first, no problem.

Okay, thank you. Uh, I just had wanted to make an announcement, um, to the group here, and it was— I would have to make it a couple of more times, as you know, just to increase my reach, uh, to this group. Uh, but I've set up a new consultancy which is, you know, provides clinical and regulatory services And our— we are focusing on providing services to startups and small companies who could benefit, uh, from, from our background. So we are a, um, it's, it's put together by me, but I have these engagement partners, and together we have a combined experience of more than 150 years. So I have, uh, orthopedic surgeon and a cardiothoracic surgeon as medical advisors, and a a leading statistical SME, and then two of us who used to work at Smith Nephew before in the clinical department. So between us, you know, we are looking to provide clinical strategy and regulatory strategy services, helping startups, you know, drive their clinical programs and address pretty much end-to-end clinical and regulatory goals. And beyond that, once, you know, beyond 510, PMA, but also addressing reimbursement or market adoption activities like evidence generation and then publications, podium presentations. So anything, you know, that we can help with. So if you Anyone of you know who can benefit from our services, then please, you know, refer our name to us and I'll put together the name of the website here. You all can see it, view it, and also welcome to visit my LinkedIn page. I have a page for the consultancy there as well, and I'm trying to post stuff regularly out there, so would be, you know, nice if you can follow it, and I will be happy to send out invites to all of you.

Perfect.

And I like, I really like the tagline in Vinay's group. It's we simplify clinical and regulatory complexity. I really like that.

Yeah.

Yeah.

And we can, we have some, you know, in the, from the past experience, we have a, we can put together some very cost-effective data capture studies. These are, these are not traditional clinical trials. So we can work directly with clinics, surgeons, and hospitals to put together data, to capture the data. And it is a data that you would capture in a clinical trial, but it's just not your traditional clinical trial.

So post— mostly post-market?

Post-market, yeah. And especially needs like reimbursement or, you know, case studies or putting together outcomes, white papers, abstracts, and publications. So very, very beneficial in, in those applications.

There seems to be a trend towards economic analysis, you know, not only clinical. So you, you guys do that too, right?

Vinay?

Yes.

Capture.

Capture.

We can capture. Yeah, we can capture, you know, health economic aspects all associated with the procedures and instruments and, you know, also compare with the competition out there. If we have access to it. But yeah, pretty much whatever is available within the electronic medical records with these surgeons and clinics and hospitals, you know, we can work with that data and produce evidence pieces.

Perfect.

Thanks. Yeah, thank you.

Thank you, Tiger. There's everything that needs clinical data now or economic data. It's incredible. Used to be clinical data just to get past, you know, your regulatory clearance, but now it's just continuous.

Funny thing is they require it, but it in the end it's, it's not the final decision driver. It's just a hoop you have to go through to get to the decision driver.

Exactly. It's a check the box for a lot of people. Yeah. Um, but it's still necessary. So what, what's up next? What— tell me, uh, let's just go around the table. Tell, tell everybody what you did in the last week. That'll be interesting.

Well, I can start. I don't mind starting. Um, you know, I have spoken to a lot of companies in orthopedics and other healthcare specialties. And I would say there are, you know, there's a lot of really fantastic companies out there with very promising products. But right now, it's just hard to match up the founders' and management team's expectations with the capital markets. They're just, out of sync with each other. You know, it's, you know, really a factor of, you know, some of it related to valuations and perception of valuations. Others are related to timing. They, you know, companies think they can get this done quickly, not going to happen. And so it's, there's just a lot of mismatch in expectations. And, you know, I try— I find myself thinking, how do I work to resolve that mismatch in expectations? And it's, it's difficult. It's like a reality check. And I think to some degree companies have to go out there and just learn that it's, you know, learn through experience.

So Colleen, has it been that the expectations of the entrepreneurs have shifted so much, or is it just this sort of recent, uh, change in the environment and people being hesitant with the funds?

Yeah, I think the macro environment obviously isn't helping, but there are still, you know, investors that are, um, you know, writing checks. And it's, it's like, you know, management teams, some of them are stuck in this mindset from, you know, 4 years ago or 5 years ago where, um, You know, capital was somewhat easier. Let's put the pandemic aside. So maybe 6 years ago when they, um, because a lot of these companies had done rounds pre-pandemic. And so I think that their experience was it was a lot easier to get things done. The costs of getting things done were lower. Um, and the valuations were actually, you know, probably overinflated then. So I do think it's more that. Than anything else. So companies aren't starting soon enough to go out and look for a capital raise. They're, you know, setting— when they do get some meetings with investors, their valuation expectations are, you know, kind of turning investors off in a way. Even though they say they're flexible, I think that that's not always helpful enough. Right, when you're asking for a really high valuation.

Yeah, yeah, I think, I think you're right. I think a lot of founders I talk to, or they still think it's 2019.

Yeah, yeah.

And it's— the world's changed dramatically, and the money is expensive now, and money's tight, and the, these, uh, the valuations, we will eventually mean correct back to the middle again, but Right now, valuations are way lower than, than they were before. And it's hard to get money. And they're getting like, you know, their family and friends and a little bit of grant here or there. The people are just nibbling on things instead of having big rounds, it seems like.

Yeah, I think that this whole macro environment is affecting healthcare more than other industries. You know, for instance, we just closed a $50 million deal for a clean hydrogen company. So, you know, I think in other sectors, there's a little bit less uncertainty, you know, with, with RFK Jr.'s, you know, comments on, you know, driving down the cost of healthcare and some of the uncertainties around, you know, how are tariffs affecting things and what's going on, what direction our economy is going in. I think that is really being felt in, in orthopedics and healthcare more than a lot of other industries.

Yeah, the p— I think people underestimate the macro. I remember a VC told me once that in the 1990s, he said a shaved ape could make money at a VC firm. You could throw a dart, you could throw 10 or 20 darts, and you'd have a few home runs. And it's just too easy in the 1990s. And then 2008, you know, everything changed. And then it changed again in May of 2022 is when everything flipped. Yeah, yeah, yeah. Macro is important. I don't know how long this is going to go along, but FDA uncertainty, trade tariff uncertainty, cost of borrowing money is ridiculously high. I don't know when it's going to change. Anybody have anything to add on funding?

The cost of borrowing money is really interesting. Um, probably like many, I get constantly contact about, you know, external financing opportunities, and it's, you know, And it's hilarious when you look at that, and I don't bother looking at them in any detail anymore, but, you know, loss-leading numbers. And then when you actually look at it, it's like 14%, 15%. The numbers are just crazy. So access to capital is a real challenge.

Yeah, it really is. So you either got to get to profitability as fast as possible or somehow extend your runway.

Tough time.

You know, I mean, even grants certainly, you know, from the sources that were typically available in the US are, you know, completely uncertain now.

So it's the same, same something in the UK, believe it or not. Yeah.

Yeah.

So we've had several grants from the UK government through the Innovate program and start of the year because of changes in leadership in the UK government. That funding source has been cut back as well, and they've not committed to even yet to what it's going to be for this year. Should have been announced in April. But yeah, that's significantly cut, not dissimilar to the US. So same challenges for UK entrepreneurs.

Yeah, one thing I would add is that it's not only like the economic perspective, I think from the innovation standpoint as well, the The gap that you need to have to your competitors to be attractive to a venture capitalist, it has been getting higher and higher and higher. So you, you, you, because of all of the macro and the way healthcare is going, unless you have a product that's 10x, investors are gonna be less interested in, in putting money and betting on it. So the, there has been more due diligence. It's, it's probably associated to all of the macro stuff, but they're, It feels like before you, you would pitch something that is reasonably within their thesis and they would be all over it. Now it's like you have to really prove how you are going to take the market or how you're going to win or how you're going to make their money back.

Yeah, I keep hearing family offices are the best place to go right now. They're, they're probably less sophisticated and they a lot of times have an emotional tie to some medical problem.

One, and they also kind of have, there's times where they've had an outcome and they need to deploy cash, right? It's just different, different dynamics in a family office. So, so yeah, I think that they can move faster. They're a little bit more independent and not as, you know, kind of tuned in to what everyone else is necessarily doing. They kind of work on their own schedule a bit more.

So Colleen, on that note, I have heard from a few different people over the past couple of months that family offices are also a little more patient than the VCs, that, you know, they're not kind of constantly crawling up your butt trying to, you know, looking at the results and appreciate that, you know, it will take time. Is that something you've—

Yeah, we've observed that as well. They are more patient. So on the front end, you know, they can move faster. Whereas I think the, the trend with VCs right now is to string out the getting to know you or diligence phase over such a long period of time, you know, that it's, it's very painful, right? You spend a lot of time and effort investing in a particular relationship. At the end of the day, they say, yeah, well, not yet, right? So I think you get a, you know, a faster answer from a family office as to yes or no. And then if it's a yes, I think they can actually, you know, close in a reasonable amount of time. And then they're really partners more than, you know, they're not necessarily looking for a quick exit.

Yeah.

Thank you.

Corinne, go ahead.

Corinne, do you see family offices investing in pre-revenue startups?

Um, you know, it depends. Um, there are some family offices that will, right? I mean, I wouldn't use that as a general statement, um, that they're interested in, in pre-revenue or early stage. It really depends on, on the family office.

So what's, what's the usual trend? Like, when do you usually see them I was talking to one family office regarding a company who is planning to raise Series A, but then even at Series A, the company is not going to have any revenue. It's only early clinical studies. But what they told was they don't invest in pre-revenue. So I was just wanting to know if that is a trend or is this—

I don't know that it's a trend. I think it's more, you know, most family offices have an investment thesis and, you know, that'll be, you know, either an industry focus or a stage focus, you know, or a geography focus. So, I mean, there are, you know, thousands and thousands of family offices. So finding the one, You know, that's one of the reasons, you know, why, you know, we feel companies should work with us because we can get them exposure to the right type of family office. The thing about family offices is they are hard to get to, right? They're, you know, they're harder than, you know, I mean, in VCs you can look at PitchBook and there's some other types of, you know, information you can purchase. Family offices are a little bit harder to suss out which is the right one.

I've got, for, for what it's worth, I've got a list of, you know, hundreds and probably thousand family offices that Ted Bird shared. I can throw it up on Gluu if any, anybody's on Gluu, and, uh, you know, after the call.

Yeah. I mean, why not? Right. You know, it might help.

Yeah.

Who knows? Yeah.

Would be good to see that. But Colleen makes a good point. Every investor has a different thesis, a different tolerance for risk, a different area they're interested in. And you gotta, you almost have to know their, their investment thesis or criteria before you even approach them, or it's just a waste of time. And they don't really publicize that. Very often, right?

I mean, I mean, not really, no. Um, they don't. Um, some do, but, but, um, you know, and, and it changes. Their investment focus can change over time. So, you know, what they focused on, you know, 4 to 6 years ago could be different than what it is today.

Yeah, I, let me ask an open question to the group. So I, I talk to startups every week, and, and a lot of them say Hey, Tiger, help me raise money. And I said, well, I, you know, I can't, I'm, I really can't help you. You know, I'm not in that space. Is there a, is there a place for a broker, you know, finance broker role where somebody could, I could send people to, you know, call Colleen or something and try to help you navigate?

I'm always happy to talk to companies. I, you know, you, you know, and I'll be very, you know, honest with them if, if they're too early stage. Stage, I mean, I'll just tell them, you know, you need to focus on industry insiders, friends and family. You need to do whatever you can because you're too early for, you know, most, you know, professional investment advisors to take you to market. The one thing I will say, they're all looking for equity, right? And so, you know, there's quite a few regulations in our country surrounding who can go out and do that and how they You know, if you're not licensed, you're technically not supposed to be doing that. So, you know, I mean, I know there's ways around it. You know, company— companies hire individuals as consultants to make introductions and then, you know, find a way to pay them that isn't a percentage of what's raised. But, you know, you really got to navigate that and don't run afoul of those regulations.

So a finder's fee is kind of not really above board.

Well, if you're not licensed, if you're not, you know, if you don't have a license, you know, that is issued by FINRA, then in the U.S., you know, there's a lot of things you can do, but what you can't do is typically get paid a flat you know, percentage finder's fee.

Got it.

And companies that are— some companies just don't, aren't aware of that, right? And they find ways around it. Um, you know, if you've raised a couple rounds and you've got lawyers involved in, you know, you know, preparing all the subscription docs and all of that, you know, you would, um, you know, there's representations you make to investors. Is there a financial advisor involved or not? Right? So there's, there's some disclosures that have to be done along the way.

Yeah.

Good.

But they can make introductions, they can pay them a retainer, they can, there's all kinds of ways you can, you know, compensate people for, for helping you.

Good. What, tell us what FINRA means?

It's a— FINRA is the body of, that, that really regulates the financial industry in the US. So that's, you know, that's really, you know, if you're a licensed banker, then you, anybody can go on the FINRA website and look you up.

Got it. So, Tiger, I'd say from a, yeah, from a company owner perspective, having access to one or a bunch of you know, individuals who are able to support fundraising, you know, would be valuable. It's the, you know, it's the one kind of constant, you know, you're trying to focus on building the business and kind of getting stuff moved. In the back of your mind, you're constantly thinking, right, am I going to pay the staff next month? Exactly. You know, it's a, it's a huge challenge. So any kind of support and networks, it's a tough thing to do to, to raise capital as we've just you just said. So, you know, any and all support from, you know, people with good kind of, you know, backgrounds, good bona fides, real professionals in the space is absolutely welcome.

All right, I'm going to start sending everybody to Colleen.

No, but now, you know, we don't actually work for free, but I'm happy to talk to companies and give them my perspective. At some point along the way, there, you know, there is, you know, the formal engagement process. But, but yeah, I mean, it's just an introductory, you know. Yeah, I have introductory meetings all the time.

Yeah, I can imagine.

But even that, Colleen, is hugely valuable because, you know, I've been through this a couple of times now, and I've now got a far better idea about what looks fundable and when you can start approaching people. But I would say the first time around, clueless, and you just don't know what you don't know if you haven't got the background. So even kind of half an hour with someone who's experienced, who says, hey, you're not quite there yet, you know, you could do with hitting the next 2 or 3 milestones, then come back and have a conversation. That's super valuable because you don't necessarily— yeah, you don't know what you don't know. Yeah, yeah, that's excellent.

Yeah, another thing that's important is that med device and medtech is a little— it's a little like sui generis in the sense that, you know, you go into a startup accelerator and they tell you, oh, raise pre-product and raise this, and they tell you all about all these AI companies that are raising with a PowerPoint, but our industry, I think the bar that they set for investment is higher in the sense that you need at least a regulatory pathway that's clear and that you know how to do it. So I think that it's great to have someone to support. I've had my share of crashing against the wall because I follow the normal startup path instead of trying to do an industry path.

Yeah, well, I read something today on Facebook— not Facebook, LinkedIn, sorry, it looks so similar these days. Um, and, uh, it was a really interesting comment that was talking about the difference between tech and health tech. And it basically said, you know, in tech it's all about speed, and in health tech it's all about trust. You know, if you go, if you go too quickly and you don't have the right product, you don't position it correctly, and you don't kind of get that customer trust because you've moved a bit too quickly that follows you around. It's not— you can't kind of move fast and break stuff in the same way you can in, you know, the tech side of things. So that was— it was an interesting observation.

That's a really good point.

Yeah. The other thing is that moving fast in our industry is very different from moving fast in tech. So you can be slow by tech standards and still very fast by ortho standards.

That's true. That's very true.

That's fascinating. Yeah, you can, that is really in the software world, especially you can iterate the product every week, you know, and it's my other business Tiger is a software business that I'm invested in and I work in.

So it's fascinating on one side having a SaaS business and on the other side and yeah, the pace of the two businesses is just, it couldn't be different.

Yeah.

Yeah.

And that's one of the reasons I always coach startups to don't, you know, even when you're going through the FDA, go do a surgery in a foreign country somewhere, get some, get, get a, get some feedback on your product. It's not a clinical study. It's almost like an R&D surgery, but it's so valuable because you can go to iteration 2 and 3 and 4 before you file with the FDA because, you know, we're actually doing that in the UK.

So we're registered in the UK. The UK is a great market for innovation. It's an absolutely awful market for product launches because the NHS is broke. I was talking to a trust yesterday and they're literally going around removing all the water coolers because they can't actually afford to service the water coolers. That's how, that's how broke they are. But the huge benefit of of the UK is on the investment in innovation that they were prepared to make. But it's the product iteration. We're probably 4 or 5 iterations in, in terms of the reports that we generate as part of the algorithm that we use. And we can, we can do that iteration, we can take it back to customers. You know, at first it was reports too detailed, so we made it simpler. Reports too simple. So, you know, you kind of, you've got a chance to go back and iterate and try so that when we are ready to launch in probably Australia next and than the US, we've got a really good feel for what is, you know, enough data for the surgeons to be able to kind of read the reports, absorb them, make decisions from the data. So it's been really useful as a test market, appalling as a commercial market, but really useful as a test market.

That's interesting. So, so, Emanol, you were on a few weeks ago and you sort of stress tested the US business model Yeah, I was going to—

when you kind of said any more comments, I was going to say that actually I think that's something that I'd certainly recommend that you do more of using this community because I found it hugely valuable to get everything stress tested and get such good feedback. So it hasn't— it didn't change. Let me think of a better way to explain this. It didn't change the strategy, but if we were going north before, we're now probably going north-northwest. So, you know, it wasn't, it wasn't a complete change, but it was a very useful tweak in terms of thinking about different customer groups, thinking about positioning, thinking about pace, thinking about where we invest in getting support to look at reimbursement. So it added a huge amount of value, no doubt about it. It was very, very useful conversation.

Yeah, I mean, yeah, you get collective wisdom of, you know, hundreds of years. It's incredible. People that have started companies and hit—

I'd have paid a small fortune for a consulting engagement that had given me the same quality of feedback. So we really do appreciate it.

Well, that's what BoneChat's for, where everybody's very sharing and they share their experience and they're not shy. They'll tell you that this is the wrong way to do it and you need to do it this way. And, um, yep, Elizabeth.

Yeah, so I just wanted to share something that, um, while it's not connected with Orthopedics This Week, it is very interesting. Um, so there is a, probably not a household name. This guy's name is Orlan Bethel. He's the 5th largest egg producer in the country. He had a back problem. He went to the head of spine at Pitt.. And he was very happy with the results. He donated many million dollars, came back because the head of the department, Jun Li, and a couple of his colleagues had for years been discussing the possibility of doing a musculoskeletal biobank, but they didn't have the funding. So Orlin Bethel, all in all, gave about $45 million to school, and it's huge.

Yeah.

So this is an entirely new entity at Pitt. They're collecting not just, you know, tissues and data about the tissues, but they're going into this omics, omics, like genomics, transcriptionomics, or omics, proteomics, and metabolomics. This is way above my science knowledge.

That's what Eminol's here.

Yeah.

Right. And so basically the thought is, you know, let's lift patient evaluation methods sort of out of where they have been and move them along. And so we'll get a better idea of what one surgical method might be better than another for a given patient. So it's sort of to take down the guesswork. And I just finished up the first interview for the accompanying journal. I could probably tell the gentleman with whom I spoke, but I won't. I'll just let you guys wait. But it's basically on setting up a lab. And it's pretty new. Emanol, what can you tell us about this kind of thing?

That's what my company does. We investigate the links between genomics and patient outcomes. So we're just in our second clinical trial now looking at reactions to titanium and cobalt chrome in knees. And we've got very, very clear directional data now showing that if patients with certain alleles have worse outcomes, if they have particular joints because the joints shared metal debris. And we can now, we've now got directional data that kind of shows using Oxford pain scores and Forgotten Joint scores that pain and outcome markers are worse in patients who carry those genes. So it's fascinating stuff and we're just starting. There's some interesting data as well to show that certain, very nascent, but that certain patients may be more susceptible to certain bugs in terms of pathogens. So it could be as well that, you know, certain folks actually should maybe avoid surgery altogether because of the risk of infection. It's— that's very, very nascent. We've only just got the kit into the lab to be able to sequence the bacterial DNA. But that's another area that we're going to be looking into. So the whole genomics area is— it's absolutely fascinating.

But a lot of people operating in that space.

No, it's— I think there's a piece of research done in Germany, the only other one I'm aware of, and they couldn't find any signals. But they only had 40 patients in the study. Our first trial had 700. Our next one will have about 1,500 that we're halfway through now. So some of it is just the data is that this— it's— they don't— one, they don't have the alleles they're looking for, and the trials aren't powered sufficiently to statistically be able to separate who's got what going on. So—

How do you see this area growing? I mean, how do you see this area growing? And had you heard of this new effort at Pitt?

No, I haven't heard of the new effort at Pitt, to be honest. But so I think in speaking with some surgeons, it's going to take time because a lot of people don't want to recognize. I mean, I'm looking at Vinay here. I think he said he's ex-Smith Nephew, so this will be an area that he has some familiarity with in terms of metal allergies, et cetera. But because the methodologies historically to identify patients with issues were terrible, skin patch testing is terrible, LTT is terrible. It's underrecognized because loads of false positives and negatives in the testing. I think in the next 5 years we will increasingly see people realize that actually the host response to what you're putting into the body is an important factor and it needs to be taken more seriously.

Insurers will love that because it's got to be so cheap.

The testing is actually really not that expensive. It's good if you compare it to kind of the sort of sequencing you do. It is 4-digit resolution testing.. But, you know, compared to the cost of a surgery, it's pennies. So you can do it very, very cost-effectively and potentially avoid revision surgery. So it's a fascinating area.

Wow. Well, I'll connect you with Jun Li if you want over at Pitt.

And no, thank you. That sounds— if they're going to be looking to that space, you know, we've only just kind of got ourselves registered in the US. We are partnered. We are working with HSS in New York. Um, but you know, finding more research partners is, uh, would certainly be fascinating. Thank you.

Sure thing, no problem.

That's a great lead. Yeah, the cost of, of, of like doing a genomics test has just plummeted, right? It goes down 50% every year.

And so it's in the future, the cost, the cost of the kit, like, you know, the Illumina kit and the stuff you have to buy is, is buttons. The issue is getting all the ISO certifications in the lab so you can actually do the testing. You know, that can take time to get everything kind of certified and signed off and what have you. So that's, that's a challenge. And then cost of, cost of staffing in the US compared to the UK is like 3x.

Yeah.

And for everybody, for, if, for pre-op, it's just a, it's a swab, it's a cheek swab, and yeah, it's saliva sample. Yeah, real, it's just like the 23andMe if you guys have done that, you just Um, and then for post-op, if you have revision, potential revision, and there may be ions floating around, that's a blood test, but it's still just a blood draw.

Yeah. Very straightforward.

Yeah. I, I mean, in 10 years, if you go do any surgery, you're gonna have a, they're gonna, they're gonna map your genome first.

I think the chall— I think the challenge will be in some of the kind of more switched-on surgeons have said, hey, if you guys have got evidence of this and the test's available and we don't use it and someone has a reaction, then that opens us up to kind of challenges about our practices. So I think our challenge as an organization is not to be seen as ambulance chasers, you know, but to make sure that it's available and also make sure it's available at a reasonable cost so it can be used as kind of standard of care and it's not you know, it's not priced at, you know, $3,000 or whatever it is they're charging for the oncology sequencing, which is crazy.

Yeah. Well, it's, they may not, we talked about this last time. They may not wanna know. There's gonna be a lot of hospitals that literally don't ask, don't tell.

Yep. But I think, you know, advice, one of the first conversations that, that you and I had was, you know, as much as you have to sell to surgeons, you have to make Gen Pop available. Aware of this. You know, the folks need to know what is available and what they should be considering. So there has to be that balance of, you know, making sure surgeons are aware, but making sure that, you know, potential patients are informed so they can make the best decision about their own care.

Yeah, terrific. All right, we're kind of going around the horn for the new people. Uh, basically, what have you been working on the last week? Mark, raise his hand.

Well, I was going to ask, see, if you could tie it to readmission rates, the hospitals would be interested.

I think we can certainly tie it to— I don't know about readmission, but certainly to follow-up rates because the amount of folks that come back have to be investigated for pain and loosening. So I think there'd definitely be an opportunity to look at that. That's what we're seeing in the UK. A lot of people coming back, bone scans, MRIs, trying to find out what on earth is going on. With the joint, you know, it's aspirated, there's no culture negative. So, you know, selecting the right joint straight out of the gates, you know, should reduce. But that's a— we're looking into an NIH study in the UK so we can do some longitudinal work on that. I don't think that's opening until September, so we're trying to get a grant to do a, you know, kind of a long-term piece on the research there.

That's cool. We're pulling for you. I put the, uh, it's explantlab.com. I put it in the chat.

Thank you.

Yeah.

All right, what else? What's going on, Karen?

Mark?

Tiger, yeah, thanks, thanks for having me on, Mark. Uh, thanks for the introduction to the group again. Uh, so yeah, in, in MoveUp, actually, we, we're, we're in the data space. We, we focus on real-world data for surgeons started by an orthopedic surgeon in Belgium. And we, we built a platform that captures patient data preoperatively and right through postoperatively. We developed a virtual care platform to be able to bring efficiencies to the whole care continuum. And that was the sort of foundation of the company. And then we licensed that across Europe to hospitals. Trying to tackle the US market. We built a few additional tools getting into the AI space, focus more on the efficiencies around how AI can help onboard patients, prepare them for surgery in a better way, and also capture outcomes and PROMs. So we're very, very strong on that as a tool and a platform. We can give insights, benchmark patients, benchmark hospitals, regional et cetera, et cetera. But actually, the past week was quite interesting because Mark joined us. And so we've been trying to break into the US. It's been a bit tricky, actually, because we're kind of unknown. And also, you know, some of the EHRs are a bit of a barrier to us, I would say. But we did have a breakthrough this week, which was kind of interesting of sorts, because we got in front of surgery partners through a bit of persistence on my part, and they, uh, they put it forward. A large team of VPs gave us a chance to pitch our AI tools. So we, we actually positioned ourselves as, uh, we, we, we, we presented our own AI, uh, which, uh, and then we kind of brought in one or two that Mark knows to kind of give them a full suite. I'm not sure if the, if the strategy worked, but It was an interesting conversation, interesting presentation. We're waiting for feedback, but we're trying to find that sort of point where we can open up, you know, kind of find the weak point and get into a system like Surgery Partners to focus on how we can bring efficiencies to them on, say, for example, scheduling. So for example, the patient interacts with a chatbot, we can phenotype the patient and then really work out quite quickly whether they should be seen, whether they are a good candidate for elective surgery on, for a hip or knee, or where they should be seen by, for example, a nurse or a physician assistant. And then, yeah, trying to show how we can essentially free up time for surgeons to do more procedures based on these efficiencies, both pre and post-operative. And then in turn, we actually try to sell that solution to the medtech, to the ortho medtech folks. So we have a deal with Microport, for example, where we are their digital platform for their robot to prove out the efficacy of that. But anyway, we're still waiting to hear from Surgery Partners. Mark was great to help gather a couple of other resources for that, and we'll see what happens.

Good luck.

I don't know how you felt the call went, Mark, but it was a bit tricky at times, but I think, but we'll see.

So I felt like we were talking to people that are going to get paid whether they really move the needle or not. You know, that sort of management space that's not a decision maker but an implementer, but sometimes has to make a decision and they drag it out. Um, so, you know, I wasn't necessarily overwhelmed by the I would call it the acuity of their decision-making potential. But I, you know, I don't know that, that's just my intuition. That's all that was.

Sounds like you've just described management in every big organization.

I don't have a lot of respect for a lot of that either. You know, as you can probably tell, but that's kind of, that's sort of an Achilles heel of most entrepreneurs. They, They're not patient with that decision process, and that's why they often lose everything.

Yeah.

So, but it was, it was a really good call. It was so much, there was a lot of brainpower, and all that AI talking to each other was pretty cool. The potential of that.

Anyway, is the panel familiar with Tempita and Dr. Kishore? Is he A little bit.

Yeah.

We have an interesting story there. Just in the last week, we have tied 3 different AIs together at Tempita and to produce an almost a brand new, almost something that's brand new so that you walk into a room, you talk to your patient, Your Apple Watch hears everything, and that's the ambient scribe-y kind of thing. And that's pretty common. There's a dime a dozen out there. Okay. And they'll produce a note that'll sound pretty soapy.

Okay.

And pretty correct. But what ours does is it takes that information, cleans it up in a very smart, doctor-y, medical way, and then puts that into a template that you as the physician have already determined is the way you actually do write your notes. So it totally customizes it to you as an individual and produces something that's quite usable. So that's AI number 1 talking to AI number 2 right there. AI number 3 takes that note and automatically puts it into your EMR as if you were looking at the EMR and clicking and moving. You know, there's about 15, 20 clicks with getting the information from the, from the encounter sometimes into the EMR. And all that takes is a minute or two. And all that time is now gone. It's just really super exciting. I mean, this has been a couple years' work to get to this point. And it's almost like technology constantly catches up to the ideas. And when it does, it's kind of magical, really. So that's kind of, that's where Tempita is. From last week. The thing that Surgery Partners should be interested in is, as you of course wisely, that's why you put us in the queue, was that Tempita is browser-based and doesn't have to get a license or permission from the EMR to interact with it. 'Cause no EMR, they're all siloed. No EMR wants to talk to any other EMR, or they don't want you, they don't want you going in their space Uh, you know, this is like the fences of in the ranches and the ranch wars of Texas in the 1800s. You know, nobody wants you in their space, and but we don't care. We just kind of run rampant over any EMR without permission, which I guarantee is they're going to hate us, which will make it kind of extra fun, I think. So anyway, that's, that's what I've been doing, Tiger, plus a couple of other horror stories with product approval for my orthopedic business.

Value analysis committees or something else?

Yeah, I got, I got a French company that we've been trying to get approved since last August and it's through incompetence and missing meetings on their part and, and everything else. I've now have doctors that are planning on next week using it without permission.

Oh, hey Mark, how do you access the EMR without permission?

Um, you pull the EMR up on your laptop or computer in your office, and this, this, uh, our program, uh, sits, you know, sits on top of it and simply moves the text, copies and pastes it into the EMR just as if you were doing it by hand.

So in other words, the user has to log in and all of that stuff, but from that point forward, they can— the EMR can be updated autonomously?

I mean, yes, the EMR. I mean, it's just like typing into the EMR, only the program is doing it for you.

But the program has been allowed in by the, by the user, by an authorized user.

No.

Oh, the program, the program has been on— the program is on that laptop by an authorized owner of that laptop or that thing. There's no authorization from the EMR. There's no license required from the EMR. So I mean, let's just say it's just like, it's just like I have, you know, I use, say, HubSpot CRM.

Right.

I can put this program into my lap, in on my computer, and the program can put, you know, your name, address, information, note from our encounter into that CRM. Same thing. Yeah, it's pretty unique.

That's why—

that's cool.

So that's what I've been doing, Tiger.

Yeah. So it's putting in the information. Can it also read?

Yes. Without permission?

It can also read without permission?

Yes. Okay.

Next week, license terms for all EMRs will include a human user.

You're probably right. I mean, Epic's probably big enough to pull that off.

Oh, that's funny. So Kyle teased us with a secret project, uh, a few weeks ago, but you're not really ready to talk about that again, probably. How's it going?

Uh, good. We're in the process of having some additional conversations today and doing some traveling next week. We've got kind of everything still on the table. So probably in 3 weeks, 4 weeks, we'll talk update. Maybe get into a bit more depth.

Cool.

All right. What else? We've actually got speakers for the next 3 weeks here. We've got, we've got an AI company. We've got, I call it poor man's spine navigation company, and we've got a value analysis discussion. Finally talked Copeland into coming back, teach us everything he's learned in the last year.

So Tiger, one thing to throw out there, I guess, just as an add-on to some of the things that Kali and others were saying earlier, with Priority Medical, I have a chance to be part of Plug and Play, which is this incubating startup thing that's got a vertical in Warsaw. And we're part of the mentor team. So I got a chance to actually meet with 6 or 7 of the companies last 2 weeks ago, and it was wild because every conversation, even though we are there to talk to them about development and clearance and design controls and testing and things mechanical, biomechanical related, one of the first parts of our conversation is always, well, we sure could use your help in finding a lead investor.

Yep.

Not really what we do, but I understand it's the same theme for everybody. Everybody, everybody I talk to is raising money or trying to raise money. It's, it's the common theme and everybody that's in commercial is going through value analysis committees. Those are the two common themes.

Yep.

It's tough out there. I talked to, I talked to startup yesterday that just got NIH funding, a lot of money. It was amazing. And I started asking questions, you know, there's no corporate structure yet. There's no, so I said, so basically you've got a science project, right? And the founder goes, yeah, we've got a science project and there's no employees, there's no cap table, there's no corporation, there's nothing.

So the difference in diligence from grant funding to actual, you know, commercial funding really does make you smile. Yeah.

Yeah, the problem, the problem with those grants is that when you're ready for that price round, it's a, it's a big, it's a big jump.

Yeah, the grants are usually unrestricted, right? They take no equity. They just try to help.

Yeah, they're just science grants. So, the way they work in the UK with Innovate is you're expected to cover 30% of the costs. So for example, they'll say, right, we're going to give you a £1 million grant. £1 million grant means £700,000 of Innovate money and £300,000 of your own money. So it's classed as a £1 million grant, but you have to cover 30% and you have to partner with— you have to partner with the public sector. So you have to partner with hospitals or healthcare in the UK. So there comes some caveats.. But there are no, there's no claim on IP, there's no equity. It's just very, very open. So it's superb in terms of the freedom you get to operate. But it's slow and painful working with hospitals in the UK.

I can imagine.

But if I look at, I've never done clinical trials in orthopedics. In the US, and I've been involved in plenty of clinical trials through my time at Pfizer in the pharma space. But let's say we've spent, for argument's sake, $4 million in the past 5 years on 2 kind of large clinical trials, 2,000 patients in total. That's anywhere— in pharma, that's $30 million. In orthopedics, I don't know, but it's probably, if you've got a CRO doing the work for you, $15 million for 2,000 patients for recruitment and tracking. And so it's impressive how cost-effective you can do a clinical trial, albeit it's slow and frustrating. But from a cost perspective, it's huge value to work in some of these markets that have, you know, supportive grant structures from the local governments.

That's, that's an interesting insight.

Who was it? Who got some money? Who got some money from the NIH, Tiger?

I can't say. It's just a, it's a stealth startup.

Oh, okay. It was a conversation. Okay. Never mind. Is the NIH still a thing? I didn't know.

I thought that was—

They are.

Yeah. It surprised me. They're, they're open for business.

Yeah.

And M&O is doing it in the UK. Interesting. Well, anything else? Jesse, you've been quiet.

How's— my, my week's been boring. I'm just dealing with VACs and operational stuff.

I'm not, I'm not—

I'm, I'm in the lucky part where I didn't have to do the initial fundraising, and we're, we're far enough along in the revenue cycle where people actually want to throw money at us.

We're not asking.

Oh man, what I'd give to be in your, in your chair right now.

That's—

it's, well, it's not all, all roses.

I mean, I'll take boring, operational, and funded.

Yeah, that's boring and operational at this point.

Sorry, it's a good place to be. Once you're commercialization, you have completely different challenges. Um, but it's a good, it's a good problem.

But yeah, we're at, when Mark was talking about the value analysis and doing cases without approval, that hit me right in the heart because that's usually how we get approval. Someone just gets fired up enough that they're just like, you know what, I'm just gonna book a case and see what happens.

So, you know what, that's, I was telling the, uh, the guy that called me in a panic, they're gonna use it without permission and it's not been approved. I said, you do realize that a surgeon can stick a piece of wood in you if they want to. They don't need FDA approval per se. If they judge that, I mean, all of the things that we think are actually restraints, some of those things, surgeons are able to kind of do what they want. I mean, I think people have forgotten that.

I'd say it's the same with prescribing. 65, 70% of medicines are prescribed off-label.

Yeah, they can use, yeah, they can use almost anything off-label if they judge it to be so.

Now they're medical judgment.

One of the reasons why they go to school for a pretty long time is to kind of weed out the morons.

But yeah, doesn't always work.

Doesn't always work.

So Jesse and I were going back and forth in May a couple of times on glue trying to figure out what, how do you use this thing?

It's— sorry, it's, it's, uh, you just got to play with it. It has an AI component, so it kind of creates threads for you, but you just got to play with it. Sorry about that. No, yeah, it's not cheap. It's like, uh, I think it's $4,000 or $5,000 a year to run the app. So, uh, hopefully you guys are using it. As we grow the BoneChat membership, it'll be more and more valuable too. Yeah, okay, keep trying. I'll throw the— I'll throw the funding list or the family office list and list of VCs and stuff on Glue when we get off.

That'll make it worth it. Take care.

All right, thanks everybody.

Good hour.

Thanks everybody.

Thanks.

Bye for now.