How a Non-Medical Serial Entrepreneur is Shaking Up In Vitro Fertilization

Written By Patrick Kothe
 
 
 
 

Marty Gauvin is CEO of Fertilis, a company focused on helping prospective parents have a better experience with in-vitro fertilization. Marty is a serial entrepreneur and Fertilis is his first in medical device. In this episode Marty shares his views on entrepreneurship, where ideas come from, the differences and similarities between industries, what we can learn from outside medical device, and how the Fertilis products are aiming to increase the chance of people becoming parents.   

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Episode Transcript

This transcript was generated using an automated transcription service and is minimally edited. Please forgive the mistakes contained within it.

[00:00:30] Pat Kothe: Welcome! Entrepreneur is a word that's used a lot. Each of us have a slightly different view on what it means. To many it's someone who loves risk-taking or doesn't like working for other people. To me, it's someone who sees an unmet need, does a lot of work to see if the problem is shared by many people, figures out if it's able to be built, and most important that someone's willing to pay for it. After assessing all of these risks, they weigh the time it's going to take, and if the project is worthy of their time and worthy for them to take it on. Only then do they begin the project. They become comfortable in the level of risk. And the uncertainty that comes with learning along the way. Our guest today is Marty Gauvin CEO of Fertilis. A company focused on helping prospective parents have a better experience with in vitro fertilization. Marty is a serial entrepreneur. And Fertilis is his first company in medical device. In our conversation we discuss entrepreneurship, where ideas come from, the differences and similarities between industries, what we can learn from outside medical device, and how Fertilis products are aiming to increase the chance of people becoming parents. Here's our conversation.

Marty, you don't have the typical background of a medical device startup founder. Can you tell us a little bit about your background?

[00:02:09] Marty Gauvin: Yeah, absolutely. To say I start and run interesting companies that should be impossible out of Adelaide. Adelaide's my hometown in the South state of Australia. And I started out when I was 18, actually building a device that was probably more in, this kind of area.

I built a device to assist visually impaired people. And this was, before I'd started any kind of a degree, or anything like that. And found that was something that I enjoyed. And ultimately, to cut a long story short, I've only ever had two bosses. I've run, now I'm now in my ninth company. And I don't make a very good employee.

[00:02:48] Pat Kothe: So, so Marty, where did this come from? Were you, were your parents entrepreneurs? Is this something that you saw that you, you know, is it inside you, you know, what, what happened?

[00:02:58] Marty Gauvin: I think probably two things. I think... Firstly, my father and my grandfather both ran their own businesses and so it was never something that was unusual. It was never something that was going to be out of the ordinary. And, when I turned 18, my father said, look, I'm going to get my accountant, my lawyer and my bank manager over for dinner.

These are the people that you'll need to work with, if you're to build a company. And so, that was really a tremendous start. But the other thing that worked for me because neither of those businesses were very innovative, not very oriented towards invention. And I just found at early age that I got a real buzz out of solving problems, and particularly when you can solve somebody's problem in ones. this first device, this this device to assist visually impaired people, a customer a lady who worked in a library in Darwin, tracked me down, rang me at home one morning and I was 18.

I was a kid basically. And, rang me to thank me because she was losing her eyesight and our device meant that she could keep working. And so recognizing that ability to transform somebody's life, you don't need to transform. Lots and lots of lives to feel good. it's just that's been the buzz that I've chased from then on.

[00:04:18] Pat Kothe: So it's curious because those of us that have spent time in the medical device field, that's one of the real benefits that we get out of it is that, you know, you're helping people. It's something that's that's really a strong calling when you get those calling. So what happened to you? how did you leave medicine after such a strong feedback from a customer?

[00:04:40] Marty Gauvin: I think for me, I had quite a strong passion for software. I started out, I had the device and I had a, the A software system for those who have, for those of your listeners who are very old, it was a multi user version of MS DOS. And so that system, those two things together led to me receiving an award which was quite, a huge honour when I was 20 Young Australian of the Year. And then led to me getting a lot of exposure to different people and, different kinds of organizations and so forth. And I think one of the things that happens when you've got that sort of broadening of your outlook is you go, well, so there's, a lot to unpack here. How about I go consulting for a while? So I ran a consulting company. We did a bunch of really interesting things, and that sort of gave me a broader spectrum.

We did everything from putting in educational systems in schools, building a rural network for distribution. And this was back in the days when a 1200 baud modem was quick. And so doing things that were different and interesting still in the context of solving problems then became a pretty interesting part of it from my perspective. I returned back to not so much medical devices, but I did a large project going back 10 years or so ago. And so we built a mental health platform for Australia. And did that off the back of a research center, which I was involved in setting up. So of what I've done in the midst of all of that is messed around in government policy around innovation, particularly.

But that's also given me a lot of context around, so what are some of the bigger problems look like? And it's really in the context of some of those bigger problems that I've then come back to medical devices, and I guess medicine, because it's given me both, ends of the spectrum.

It's the, you solve problems for people when you solve problems in ones, but also, there are systemic that you need to get your head around in terms of working out the solutions.

[00:06:50] Pat Kothe: As an entrepreneur, there's a lot of different things that you need to do as an entrepreneur. And some of us are skilled in some and not so skilled in others. There's the visionary, there's the person who comes in and identifies the problem and pulls a solution, either from an adjoining area or comes up with a completely new one.

Then there's the person who's the implementer, the driver, the person , who really takes that idea and, brings it through. What are you, what flavor of entrepreneur are you?

[00:07:21] Marty Gauvin: I really distill that down to four roles. There's four roles I'm looking for in a startup. I'm looking for the leader, the innovator, the implementer, and the administrator. I don't need four people, but there can't be one. And you've got to have all four of those jobs filled or I'm really not interested in talking to you. And what I've been able to do is to develop my skills across all four and be able to be the ones that the rest of my team isn't. So, I've founded businesses with extremely strong innovators. And this is what the situation I'm in at moment with Fertilis. I've also been the innovator and worked with great leaders and even taken on more of the implementer and administrator roles myself. So I see that as one of my strengths, is as the business grows, and you grow a business from, two or three people to a dozen, to 20, to 50, to 100, you've got to change your management style and you've got to be able to change the roles you fill as those things step up as you, grow out of start up land and turn into a scale up.

[00:08:37] Pat Kothe: What's the most fun part of the business for you?

[00:08:41] Marty Gauvin: My history would suggest that it's got to be it's the buzz of, creating something. Particularly the buzz of building a team believes in itself to be able to do the impossible. the things I'm doing here, which the able to do this, is I've got a team where everybody permission to innovate. And you'd appreciate, Pat, that's not something you can do easily. Particularly, it's not something you can do easily without creating chaos. And so that's something, that I really enjoy. When you get a chance to look down a microscope look at a video or a result, and you go, no one's ever done that before.

[00:09:26] Pat Kothe: What's interesting about that comment of giving people the ability to innovate is many people think that it's at the ideation stage. It's, I'm going to innovate on the idea, and then once you get that idea, then it's just all about execution. but that's not how things happen. You're constantly innovating, even once you have the product that has been defined and done, and you've innovated through the manufacturing side of things, because there's innovations that occur in manufacturing as well, then you get to the distribution side and you can innovate how you distribute a product and how you talk about a product. So this innovation just doesn't stop. But as you said, it's it's chaotic. Too much innovation leads to some chaos. So how do you manage that to make it productive?

[00:10:22] Marty Gauvin: I think one of the things you've got to do is , you've got to look at the decisions you make with your eyes open. You can't just let decisions happen by themselves. So one of the things for me in entering a new industry, medical devices, has has been about saying, well, done a bunch of things the way that I've approached them in other industries have been different to the way they're typically approached in medical devices. And so every time it's like, okay, let me understand are done in medical devices. And let me see if I can bring anything to that, that can help. And often I can't because medical devices are I to say idiosyncratic, but they're also heavily regulated, and a well worn path, If you're to get lost. going off a cliff. But there are exceptions to that. There are opportunities to bring things from other industries. And that's the thing I've been finding interesting in the last couple of years.

[00:11:25] Pat Kothe: What types of things are we talking about here?

[00:11:30] Marty Gauvin: So as you're saying, once you get past manufacturing, are you dealing with? Now, the sort of the well worn path with medical devices is, you're going to need distributors. what markets do you want to get into? well with the whole regulatory thing in every one of those markets. Who's your Disty? Well, industries, people go direct. You sell online. what's the opportunities for doing that? In medical devices, there's a massive amount of face time. Whether it's a rep taking you to lunch or even just, your team. But in most industries, training's online now. Can we do that? They're the sorts of things.

[00:12:18] Pat Kothe: Medical device has come kicking and screaming into the digital age. But it's occurring. And, it's appropriate to have face to face at certain times. And it's unproductive to have face to face at other times. But changing is, like changing the ocean liner,you don't turn on a dime.

it takes a little bit to do that. And we've gone through that in medical device. Fortunately, through a horrible pandemic people have opened their eyes up and have started to, do things differently because of that. But that's not to say that medical devices is the same as tech sales, and it shouldn't be the same as tech sales because the stakes are a little bit different.

And training is so important for us, but there are different ways of doing it. we've talked on a podcast with different people who are doing VR training, for example. It's a nice use of a technology to get more reps. Instead of doing cadaver labs and, being limited by that amount, you can, get more reps. It's not exactly the same. It's not the gold standard, but if it's a silver standard, if you're getting more reps, there's benefits there.

From your standpoint you said that, you have ideas and some of them fly and some of them don't fly. What are some of the areas that you stubbed your toe in when you said, Hey, we, let's try this in here.

And then you found out that, it doesn't quite work.

[00:13:53] Marty Gauvin: I think, there's probably, two ways I'd answer that, in the context of medical device. I think there's a situation where the desire to try things, desire to iterate is built into a lot of the companies, that I've built in the past, they're software companies.

And so you operate on the of agile methodology, you've got two week sprints, and you keep on trying stuff. If you do that in a medical device, then no regulator is ever going to talk to you. And so, the sort of clash between the parts of my team that have got a long medical device history, and, my head of engineering, Alison Love is exceptional, she's done this across many devices. Then I've got other people who've come from the software business, or defense, or other sorts of industries. And, it's, it's like, can't we just give it a go? Can't we just give it a try? It's no. Just, no. not in the slightest.

[00:14:52] Pat Kothe: There's points when you can so you could do it during development, but once design freeze happensin agile methods break things fast and iterate. It doesn't quite happen here because you break something and then you're back to square one and doing all your verification and validation all over again and your regulatory filings all over again.

So yes, we can do that, but the stakes are pretty high when you do make that change.

[00:15:20] Marty Gauvin: Yeah, exactly. and also, I guess the thing I expected is that, I've had a lot to do with system engineering and these sorts of methodologies. And so I expected medical devices to be like that. It's okay, yeah, there's a rigor here. There's a methodology and so forth. and also, ISO 9001 and, quality management, all that kind of stuff. And my impression is that this has been , a journey, medical devices because of the way in which regulators engage with the industry. There's only one other industry I've worked in which has got this kind of feel of the engagement of a regulator, that's aviation. They're the only two industries I know where there is actually no cap on the budget of finding out what went wrong.

[00:16:07] Pat Kothe: So when you say that, the interaction with regulators. Tell me a little bit about that. Let's dig into that a little bit more. What kind of interaction at the front end? Or, as you said, at the tail end if something goes wrong, what about at the front end? Is that interaction different as well?

[00:16:24] Marty Gauvin: so it's not interaction, for us directly with regulators, but certainly our regulatory consultants and our quality consultants and so forth, and the people that we're working with are helping us understand the sorts of processes that we need to go through in terms of getting this whole, match. down the line having the right kind of documentation when you're going to a regulator having the right kinds of systems in place so that you can engage with the markets you wish to enter and So it's anti agile from that perspective if I'm selling software then I can in the extreme Just put it up on the internet People can start using it, I've no idea where they are, I've no idea who they are, and so forth. There's also no kind advertising code in most industries. And it's buyer beware. Obviously medical device is completely different. We don't talk about what we do. Or we don't talk about what we believe we can do. Unless there's strong evidence. And so that's been the other side of it for me.

And I appreciate this isn't necessarily part of the way a medical device company works. But have a science team. So my academics are my co founders. And so that's been the other side of it from my perspective is working with scientists, getting peer reviewed papers published and the rigor of the science side. Which is actually quite different to the rigor of the quality management system , and so forth. So I've got , two different groups putting different styles of rigor on the way in which the team needs to operate.

[00:18:06] Pat Kothe: and the rigor is geared at different objectives too. Because on the quality system it's geared towards developing and manufacturing something in a quality manner that, is fit for the marketplace. On the other hand your salespeople have to go out there and sell something clinically.

So you may be able to get clearance or approval for a device based on what you do with your regulatory system and your claims and all of that. But it's not sellable because you don't have the clinical data to support it or your claims that you have within your regulatory filing are a little bit off when you go and are able to talk to people in the marketplace.

two different things, you can get approval. But you have to selland how you marry your regulatory strategy with your sales strategy and marketing strategy are something else that's interesting within our medical device space.

[00:19:05] Marty Gauvin: On the sales side, I tell my teams, and I've done this, across all the different industries I've worked in, if you're breathing, you're selling. selling very much is. baked in, selling is cultural and I'm increasingly seeing that the same thing applies to quality. So are the two things that you want everybody in the organization to live, breathe, eat every minute.

[00:19:35] Pat Kothe: I'm curious about that because companies that are in your phase and we're gonna talk about your company Fertilis and what you guys are doing, because it's a really fascinating story. But companies that are developing technology and moving it through often You reach the point where they say, at what point do we need a quality system?

when do we need that? When do we need that quality? Because we know if we put it in, it's going to slow us down. And what I see over and over again is people wait and wait to put that quality system in. And then they say, we're going to go backwards and we're going to recreate things that we needed for the regulatory filing.

And it just slows everything down. And our quality systems are not there as a checkbox. Our quality systems should be there as good development practices. If you're a startup company and you've got Medtronics or Boston Scientific's quality system, well, that's not appropriate because you're a startup so you do things that are appropriate for a company your size and Then you grow them.

So Did you wrestle with that same thing? When do we bring the quality system in and tell me a little bit about what your decision was like?

[00:20:54] Marty Gauvin: we had. Quality consultants that we knew well and trusted, and as I said, Alison, my head of engineering, had worked in medical devices her entire career. these were the people that were responsible for, progressing it out and rolling it out across the whole company.

And so, we knew the way that it would ramp up. we implemented Greenlight Guru as it happens. Maybe a year ago we started that implementation. We got all of the documentation and so forth all organized and then, maybe four or five months ago, we ramped it up.

[00:21:30] Pat Kothe: It's important that all managers within the company completely buy into the QRS

I've seen it in several places where people are, Railing against it, upset with it, especially people who don't come from the medical device field like you.

So I want to ask you this, is did you have to bring people along and get them religion on a medical device QSR?

[00:22:04] Marty Gauvin: I need to bring everyone along, including myself, Yeah, it's like there was an awful lot of teeth grinding. It is something that you get through, and it's also something that is that is valuable as in, as is all quality management. I think that the surprise for me in medical device is the pervasiveness of quality as opposed to other industries I've worked in. And I think ultimately that pervasiveness is a strength but , it does mean that there is big step change from anywhere else.

[00:22:41] Pat Kothe: I'll just give you my my experience. The first startup that that I did, the VP of R& D viewed quality and regulatory as something to be tolerated. And, we implemented the system, and it was a constant fight, just a constant fight. And I learned my lesson, and the next startup that I did, we implemented the quality management system much earlier, and, it became part of the DNA of the company.

It's just what you do, and things all of a sudden go faster. They go faster, you go slow to go fast, and that's typically what you end up with, is , you're going through things in a systematic method, and then it turns out to be faster, even though it may seem like, it's slow at the time.

[00:23:29] Marty Gauvin: There's a great example of that. My, my CFO who I've worked with in other industries before now that we're through initial growing pains dealing with the QMS. He's gone, so the overhead that we need to apply to our costs compared to the other businesses in unregulated industries that we've run for quality management? And the people in team that have come from medical device companies say, there's none. Now, the evidence would show that's not right, but I think the important thing from my perspective is to recognise that people who get it, people who've worked in these industries, see it as like breathing. It's like, what's the cost of breathing? What are you talking about? Of course there's no cost of breathing. You need it to stay alive.

[00:24:17] Pat Kothe: so what we're talking about is the indoctrination of the non medical people into the medical industry. Now, tell me a little bit about what people that are in the industry need to be more open to.

[00:24:35] Marty Gauvin: The first thing about it is interesting to me is that there's a stack of, things in the language of medical device that is more idiosyncratic than people realize. When I say interesting, I mean interesting in the kind of Chinese curse way. may you live in interesting times. Because we've had lots of situations where for a period of months, half the company has thought somebody was talking about something, and the other half of the company has been thinking that it's about something else. And so, I think that medical device people need to understand that there's lots and lots of things that they say that don't mean what they mean to everyone else. if any of your listeners know the quote from Princess Bride we've started to use that analogy in our company. I don't think that word means what you think it means.

That issue of language that, embeds itself into different industries, and some industries you expect it, there's industries that are full of acronyms and so forth.

Medical device is not so much, so medical advice got way less acronyms than IT. But it's the everyday words that mean something different.

[00:25:48] Pat Kothe: Let's talk about Fertilis. Very interesting problem that you guys , are solving. tell me about the problem. Tell me about , what happens right now with patients that are experiencing this.

[00:26:01] Marty Gauvin: Sure, IVF. Known more generally as Assisted Reproduction Technology or ART. IVF's been around since 1980. it's obviously a well accepted technology. It's a well developed technology. about four and a half thousand clinics in the world that are doing it. And millions of babies have now been born through it. And you talk to a lot of people in the street, talk to investors and so forth, they go, yeah that's a solved problem. But then there's a couple of stats. You go, well, the chance of having a baby from an IVF treatment cycle is about 30%. And that goes down significantly as the mother's age increases, or particularly the age of the mother's eggs.

[00:26:47] Pat Kothe: let's go back a little bit. What exactly happens? Somebody goes in and says, I wanna have a baby. We're gonna do in vitro fertilization. What does that entail?

[00:26:57] Marty Gauvin: The first thing is that gametes, the egg and the sperm are going to be collected. The sperm's pretty easy. The egg collection happens laparoscopically, with ultrasound, so eggs are collected from the fallopian tube post fertilization hormones being, given to the patient. The patient generally administers those by themselves, by the way those eggs are then collected they are then fertilised two different ways.

So you can either, traditional IVF means that eggs and sperm are together in a petri dish, but the way that increasingly it's done is that a single sperm is injected into the egg. That offers a tremendous benefit. for male infertility. So if you've got a lack of sperm or a lack of mobility, the sperm can go on to fertilize an egg in that way. That's now used in about 70% of cases. So we now have an embryo and we're now going to grow that embryo for five days. Typically, it will grow up to the blastocyst stage. And then we've got two choices. So we'll obviously typically have a bunch of eggs, maybe 10 or 12. We're going to fertilise all of them using IVF ICSI, the injection. We're going to grow them for five days until there are 100 or more cells, thereabouts. That's the blastocyst. Then we're going to pick one, implant it, and freeze the rest. We freeze the rest using a process called vitrification. So that we can then use them in later cycles if the first one successful, and as I say, it very often isn't.

[00:28:42] Pat Kothe: So 30% don't take.

[00:28:45] Marty Gauvin: 30% take, and it's not 30% of eggs, it's 30% of cycles, so all the eggs you've collected in the first round, 30% of the time, end up with a baby.

[00:28:58] Pat Kothe: Okay, sorry, I had it switched. So 30%

[00:29:00] Marty Gauvin: Yeah.

[00:29:02] Pat Kothe: take, 70% don't. Why?

[00:29:05] Marty Gauvin: The biggest reason is because of stress on the embryo. So these are, cells that are obviously taken out of the body and we're now dealing with them outside the body. maintaining the environment in terms of temperature, in terms of pH, in terms of other kind of nutrients and so forth, is extremely difficult while we keep on opening the incubator and checking it and moving it around and of, sloshing the dish backwards and forwards, in some ways you can look at it to say it's not that it's terrible that only 30% of cycles lead to a baby. It's actually remarkable that any cycles lead to a baby, given the things that we're doing to this embryo. And so the whole thing from my co founder's perspective was really around saying, how do we maintain the environment that the cell is in? with precision. How do we make it so that we know exactly what's going to go on? And how do we change that environment slowly?

[00:30:05] Pat Kothe: Before we get to the solution, I want to go back to the problem again. So you've got people who are very involved in this, this emotionally want to have a baby. 30% of the time it works, 70% it doesn't. There's also a financial cost. What does one cycle cost?

[00:30:27] Marty Gauvin: So it varies enormously in the world but the price of a cycle depending on how many you do, how many eggs you get from that cycle and how many you transfer. In the US that can easily be $40,000. In other parts of the world, there's various levels of government support, but it still a tremendous cost. Not to mention the fact that it also has a tremendous cost emotionally. When we were looking at the economics of this business, the savings financially to patients, being able to this procedure more easily, is very big. But the savings emotionally, because... You're dealing witha fundamental human urge. this is a market that is any I've ever experienced. it's not price constrained in the same way that other markets are. If people want a baby, there's no other alternative. That's what they want.

[00:31:29] Pat Kothe: Marty, when we say cycle, so , you've harvested and inseminated. Half a dozen eggs. is

[00:31:35] Marty Gauvin: Yep.

[00:31:36] Pat Kothe: and so now you've got six eggs, is that considered to be one cycle and you put one in and if that doesn't take, then you put another one of those six in and so you've got six chances with that 40, 40,

[00:31:48] Marty Gauvin: but let's think about it in terms of failure rates. so I harvest 12 eggs. Nine of them fertilise. I then culture them for five days. Four of them have survived. I then start to, I start to implant those embryos one at a time. But four, only two of them are worth implanting. The first one I go to implant, it doesn't implant. The second one does, maybe it doesn't. So that's what the odds are like.

[00:32:21] Pat Kothe: As you said, it's amazing that it is 30%.

[00:32:24] Marty Gauvin: Yeah.

[00:32:25] Pat Kothe: So, at that point doesn't work. Parents have another choice, and the choice is... Let's do it again. And go through the emotional side of it, the disappointment, the dollars, the time. And from a time standpoint, , what is the time cycle look like from the time that they decide to do it to the time when they know that it either does work or doesn't work?

[00:32:52] Marty Gauvin: You've got this first cycle, the fresh cycle. So , the first egg isn't frozen. you basically create the embryo and then implant it, often. So you can do freezol, which I won't get into the complications. From the point of view of, treatment through to knowing that your first cycle delivered you a pregnancy is six to eight weeks. Then you might choose to skip a month if that cycle's not effective and then maybe go another maybe skip a go another and so forth. so the sort of time to pregnancy is often a year, once you've looked at all of those sort of steps in terms of the cycle. Because the other thing to keep in mind is that the chances of having a baby from IVF per cycle reduce with age. And obviously we're now living in a world where people are choosing to have children later. So if you're, that 30%, if you're 43, is 3%.

[00:33:56] Pat Kothe: Hormones are also not not free not without issues associated with them too. How long is a woman on hormones during this process?

[00:34:06] Marty Gauvin: You're absolutely right. The cost of the hormones is, often 30 to 50% of the cost of a cycle. The hormones are there to increase the rate of production of eggs. And so It's only something that needs to happen for a period of weeks in order to harvest.

[00:34:26] Pat Kothe: Interesting, when you said, when I said cost, I wasn't really referring to cost, but obviously there's cost here. I was referring to side effects what happens, is there an increase in cancer rate withso it's just those types of

[00:34:39] Marty Gauvin: Yeah, so it's, sort of costs, in terms of, driving the ovulation rate up, that, cost is, you know, it's an unpleasant period, There's no two ways about it in terms of, the side effects, emotionally and, physically. But the ongoing attempts then drive that rollercoaster on much longer. Because every time you're implanting a new embryo, you are seeking to drive the body, to a pregnancy. And so that can mean. Every month , through a long period of time, a set of emotional challenges, which in some ways failure to implant is the worst thing, but it can be even worse if you get a clinical pregnancy and that pregnancy then continues and then you miscarry.

[00:35:31] Pat Kothe: So obviously, you know, we've gone through and all of the issues associated with this. So we kind of have a good backdrop for need for improvement. So tell me about how you guys approach this and what your system's all about.

[00:35:47] Marty Gauvin: Sure. My colleagues, Jeremy Thompson and David Gardner they met each other about 30 years ago, and both have had stellar careers in embryology. And Jeremy from that conversation came up with the idea of saying, wouldn't it be great if we could create a tiny box that we could control the environment that the egg was in? The technology to do that, to create a tiny box and by a tiny box, we're talking something that's a 10th of a millimeter across. We're well into the sort of thousandths of an inch kind of realm.

[00:36:24] Pat Kothe: So we're going from a Petri dish to a very tiny box.

[00:36:27] Marty Gauvin: Yeah. And this was something that had been in Jeremy's mind for 30 years and saying, if we could just have that tiny box and we could then , take the media, take the fluid that's surrounding the cells, just feed it past the cells, rather than pipetting it up and dropping it into the next droplet, rather than opening the incubator door and so forth, what would happen if we could actually build something that was at the right scale? And in about 2017, was working at a different university, he's a professor here where I am at the University of Adelaide. And he was on sabbatical and came across this device, a 2PP, two photon polymerization printer, which would enable him to print at this kind of scale. And that's where things pretty interesting.

So he was then able to, all of his... Banked up ideas. Jeremy's, if nothing else, Jeremy's a frustrated engineer. he, all of these banked up ideas around how to the sorts of things that, were loose, were sloppy, were imprecise in terms of the way this whole procedure was working, then started to flood out.

And so we've got quite a solid pipeline of products. Seeing the way in which that then started to drive change and his students started to publish papers and so forth. It's like, well, is there a company here? he and I have known each other since our our daughters were in elementary school together. And he came to see me and it was like,let's start to unpick what this might look like as a business.

[00:38:02] Pat Kothe: So is the whole idea behind the tiny box to have greater control over the yield of one of these one of these eggs.

[00:38:18] Marty Gauvin: Yeah, exactly right. So if you've got a situation where essentially you've got all these eggs and almost everything dies, almost everything fails, then of the ways of looking at Jeremy's ideas is to say, well, really what he's doing is applying lean manufacturing to the manufacturing of embryos. As an engineer who's not worked in medical devices and not done that much in the healthcare space, that's become an interesting way for me to look at everything that Jeremy's looked at because all the different parts of the treatment, Jeremy's devices tend to remove waste. And as you say, it's all about increasing yield. This is one of the things that the whole industry is very much aware of. The first area that we are focusing on is this ICSI fertilisation method. And we know that if we can produce a device that means you get one more embryo from a set of eggs that you're trying to, fertilise, then that is going to deliver a downstream benefit. That's going to deliver higher success rates. And then the other side of it from our perspective, well as, when I, earlier on when I was talking about the problems of the industry, problems of the treatment, all true, it's really boosted by the problem that this is a supply constrained industry. That's partly reflected in the price, but partly reflected in the fact that even if people are prepared to pay the price, there is not the capacity in the fertility industry to be able to meet demand.

[00:40:06] Pat Kothe: What is that? Clinicians? Is it the systems? Is it storage? What is it?

[00:40:11] Marty Gauvin: it's clinicians, it's embryologists, it's labsit's all of those things. One of the stats that that is mentioned is that there's, about 7 million women in the U. S. that are experiencing infertility. So if you like, sort of 14 million people, 7 million couples. Less than 1% of those will have a baby this year. And so if there was any other area of medical treatment that had that kind of low success rate. So as I say, it's a combination of the 30%, as well as just a massive limitation. And that supply limitation exists around the world. Even in countries that have much higher IVF rates than the US, and places like Belgium, Israel, Australia, all have higher levels of IVF, but all the evidence is there that they're still supply constrained.

[00:41:08] Pat Kothe: Would a higher yield, more precise process have any impact on multiple births?

[00:41:16] Marty Gauvin: Multiple births are an interesting problem because early on in IVF it was famous for producing multiple births. The reason was because the logic was, if we implant a couple of eggs, then we'll have a greater chance of at least getting one. Of course the risk is you'd get two or three or however many eggs you'd implanted. And in most countries the standard is now a single egg transfer. And the reason for that is because it improves the health of the patient, also ultimately leads to a higher success rate. And once again David, , my co founder has been one of the key people to have published in this area.

And so the risk of multiple births, in IVF now , is fairly low in countries that have adopted that change. But, of course, what you then, you've then seen is very much a flattening of the success rate. So the success rate has flattened because multiple transfers have been removed.

We want to see the success rate start to ramp again, still retaining the single egg transfer.

[00:42:20] Pat Kothe: Marty, some technology improvements are incremental and some are major. What's your vision for this? Is this an improving from 30 to 40% or is this a much higher improvement? What's your vision?

[00:42:37] Marty Gauvin: Our vision is very much to change this quite significantly. So if we look at all of the, places where failures occur, all of the places where waste occurs in the chain of manufacturing an embryo. We see that there are opportunities to improve yield, improve outcomes each of them. And ultimately then, it should be possible to get to a situation where, an IVF cycle, you should expect to be able to have a child.

[00:43:09] Pat Kothe: So the only thing that is not under process improvement is once it's put into the mother, whether it takes or not. And that's something that Mother Nature is going to have something to say more than science is going to say.

[00:43:27] Marty Gauvin: Yeah, and and just one thing on that. There's an awful lot of people who are doing stuff in this world of IVF, and most of those technological advances are in embryo selection. The logic being that if I can choose the best embryo, that's going to give me the best chance of having a child. I look at that from an engineering perspective, as a little bit of potentially false hope, because if you've got a part that's the best part in the parts bin, but it doesn't meet spec. probably shouldn't fit it. It's a little bit like that in a biological context. Even the best embryo may not be able to produce a live birth.

[00:44:11] Pat Kothe: Marty, where do you stand? Where are you in development of the technology? When do you expect to see this implemented?

[00:44:19] Marty Gauvin: Our first device is seeking to improve the ICSI, the intracytoplasmic sperm injection. We've just started our testing in human. And expect that we'll be in the market late 24.

That's a 510K. We have some other, that will take a little longer. They'll be de novo applications.

[00:44:44] Pat Kothe: I'm assuming, when you made that choice of which part of that pathway, the embryonic pathway, whatever we wanna call it. You chose that for a particular reason. What was that reason?

[00:44:58] Marty Gauvin: ICSI is the most complicated procedure that embryologists do on a regular basis. It's incredibly hard to train on, and it literally involves you using two to move eggs and sperm around a micron at a time. You've got a job here where you're not even allowed to drink coffee. It's that precise. And so the skill level required is an obvious a key part of thesupply constraint. But it also means that embryologists tend not to have terribly long careers. It's quite a stressful job. Now we did some early work which showed that we could improve the rate of that. So essentially we've got a paper out that says we can halve the time it takes to do ICSI with a device like what we have. And we also need only one micro manipulator. That kind of benefit to the embryologist we see as pretty important. The other big advantage for us though, is that some of our devices are going to need a bunch of changes to the way the lab works. This one requires almost none. So it's a disposable part. It's a drop in replacement for a petri dish. It's a fancier petri dish.

[00:46:20] Pat Kothe: So there's a big problem there and potential for a major improvement.

[00:46:26] Marty Gauvin: Exactly.

[00:46:27] Pat Kothe: Going back to how, how we started this this conversation and it goes back to how people develop products. Google was famous for coming out and saying, you take a problem and you find the biggest potential issue with it, the biggest problem, and you go after that first, because if you can't solve that one, all of these other little ones along the way it doesn't matter. You're going to get stopped eventually. So you pick the biggest one and solve that. Is this is what, is this what you've done with this?

[00:46:59] Marty Gauvin: Yeah, absolutely. The easiest way of looking at this is we are an automation company. we're approaching automation from a position that's different to many, what many people do. Many people look at automation and they say, if we're going to automate something, we've got to have some kind of way of moving stuff around. What Jeremy thought of right at the beginning is he said, what about if we leave the thing in one place and we kind of flow the fluid around it, rather than duplicating what happens in a manual system and picking things up and dropping them So the complete reimagining Of what happens in an I V F treatment is really , that clever bit , and what that really means is that moving embryos, bad idea. What about if we don't move them? And that's really been the transformational step, from his mind.

[00:47:58] Pat Kothe: I wish you all success. Big problem, big emotional issue, big cost issue, for people who are trying to have children this way. And, it's a major step forward if you can help to solve this. so really, , good luck to you and your team as, you continue to go through your development cycle here. Marty, I wanna finish off with one last thing, going back to your entrepreneurial journey. Nine Startups now. You know, a thing or two , about startups. So when people come to you, aspiring entrepreneurs come to you and say, geez, Marty, what do I do? What's the secret?

What are some of the things that you like to talk to young entrepreneurs about about this journey that they're about to embark on?

[00:48:44] Marty Gauvin: Look, I think one of the main things I say to my teams, and the kinds of things that I like to run, and the kind of things I like about the life I built myself, is boredom is the enemy. You have to like change. You have to be drawn to change. And that's good change and bad change. You don't get to pick. Whatever's going to happen on any given day, could be an absolute disaster, could be a fantastic piece of good news. And then, number two, I think, is that I say to , my team, if you're breathing, you're selling. Everything's selling. Whether you're trying to sell something to your boss, whether you're trying to sell something to the organization, whether you're trying to sell something to the people under you or an investor, a collaborator, selling is fundamental. They would be two of the big things. The other one, and know you've talked to some of your other guests about this kind of subject, the other one is product market fit. I've had an interesting conversation with, some of my, more medical device oriented members of my team. The classic line, which I haven't had before in other companies, they go, So if we do da da da, would that be product market fit? It's like no, it's the vibe, your honor. There isn't a rule that says you've got there. There's not a finish line that you get to cross that there's okay. Now you've got product market fit.

The life of a medical device startup and the life of startups in general has gone through some crazy years in the last few years in relation to fundraising. One of the things that I do in my time I have done in my spare time is I've been involved as a regulator in the venture capital industry in Australia. And so I've seen a lot of how that kind of thing goes together with growing a decent sized industry here. And we've gone from a long period of, good access to capital to then a crazy period of very high access to capital to now a situation where there's not much and it may not improve for a while, depending on who you talk to. It's yeah, we're not going back to the old days. I think one of the things that happens in business is you go through these sort of cycles. And I used to say to my team back when I had a hosting company in the 2000s, I said, we didn't realise how much fun we were having in 1999. And then we didn't realise how much fun we were having in 2007. And then we didn't realise how much fun we were having in 2021. Always realise when things are good, it won't stay like that. Make hay while the sun shines.

[00:51:29] Pat Kothe: And also as an entrepreneur, make sure that you realize when things are bad, they're not going to stay that way either.

[00:51:35] Marty Gauvin: Right.

[00:51:37] Pat Kothe: Like me, I'm sure you know, someone who's struggled with having children and have gone the IVF route. I sincerely hope the Fertilis team can solve some of these problems and provide a better experience for would be parents. A few of my takeaways. First, Marty described the four roles in a startup that he's looking for. The leader, innovator, implementer, and administrator. Those are the things that he's looking for when he's bringing people into the team, but he also recognizes that sometimes he doesn't have all of those, so he has to step into one of these roles, when need be. He's developed a skill set across all four of these and now fills the role that needs to be filled at the time that it's needed. The second thing that I found interesting is he said that we speak in code a, those of us in medical device, we speak a different language and use acronyms and things that people don't understand. So it's hard for people from outside the industry to understand what we're talking about, but it may also be hard for people that are coming in from outside our company to understand we've got these shortcuts. And these can delay different projects, it can lead to confusion, distrust within groups. So make sure you communicate clearly and don't assume. Especially with new people that are coming into your group. The last thing was the approach to the problems in IVF. What Marty described as they broke down the steps. They identified which steps were giving the most problem , and then they identified the impact on performance of each of those steps. Once they did that, you could choose which step to begin with. And once they've got that done, then you could knock down the rest of them to have maximum performance of this new technology.

Thank you for listening. Make sure you get episodes downloaded to your device automatically by liking or subscribing to the mastering medical device podcast. Wherever you get your podcasts. Also, please spread the word and tell a friend or two to listen to the mastering medical device podcast. As interviews like today's can help you become a more effective medical device leader. Work hard. Be kind.

 
Patrick Kothe
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