Theraclion is a French company, formed in 2004 as a spin-off from Edap-Technomed, and is a pioneer in the therapeutic use of ultrasound. Theraclion develops, manufactures and markets the Echopulse® medical device for the non-invasive, outpatient treatment of breast fibroadenomas and benign thyroid nodules.
Dr. Jochen Becker: What challenges do you see in the management of a Medtech company? What differentiates the business concept of a therapy provider from a classical Medtech firm?
David Caumartin: The main challenges in a Medtech company concern the availability of cash and general awareness. Both are linked tightly together: awareness on the one hand side costs a lot of money but will on the other hand generate money in the future. And then again the availability of cash will give you the right to reinvest. The difficulty is that the short term view puts a lot of pressure to make more short term decisions rather than long term. However, keeping the confidence to invest for the future is critical too as you need to remain financially viable.
In contrast to a classical Medtech firm a therapy provider faces even stronger impacts on cash and awareness. Due to the issues of regulatory pathways and acceptance a therapy provider has to bare higher costs but in return can protect the solution better and thus keep away the competition for longer. Additionally, it enables more disruptive healthcare pathway changes.
Dr. Jochen Becker: What are the central external factors, you as CEO of Theraclion S.A. are currently dealing with? How do you address them specifically?
David Caumartin: There are two main factors that we are currently dealing with: regulatory changes and stock prices. The changes in our regulatory environment such as a re-imbursement policy impact the way we to go the market for sure. Supported and consulted by the best advisors we always need to try to make the process as simple and efficient as possible. It is important to look beyond the most obvious answers which often also are the longest ones. For the re-imbursement policy this answer would have been PMA/IDN, however 513k sometimes is possible as well. More innovative ways and interventional re-imbursements may also be feasible. We never take no as an answer and rather aim to be bold. It is all about taking a chance with the smart people around you.
The stock price on the other hand impacts your ability to raise money. It is crucial to take a longer-term view rather than just looking at the last three weeks’ price. You need to explain to the investors with faith and honesty where you are going with your business and how you can make a large impact.
Dr. Jochen Becker: How important is it to have investors’ trust in you personally and in the strategy of Theraclion? What do you do to gain this trust? In the past, have there been situations in which you felt a lack of trust (of investors) in you?
David Caumartin: Having the investors’ trust is critical. As an investor advisor consultant I remember two things: the two pillars of a great business. It is the combination of IP and clinical impact paired with the right management team. I decided to talk truthfully and moderate the near term ambition with the ambitious long-term vision. I think the primary key is transparency. What influenced my way to think like this is the say/do ration I was raised with at GE. I always try to be just myself and who I am as a person. The challenge for us and especially for me as the CEO is to find the valuable investors. They are the ones that you will and need to count on for the business transformation: Thereaclion needs to move from one venture capitalist owner to several private equity supporting ones.
Dr. Jochen Becker: From your point of view, what are the special skills and characteristics of a successful entrepreneur (or manager) in the medtech industry?
David Caumartin: First of all, I think that domain knowledge is critical. You need to be familiar with and develop a passion for the healthcare environment. Further you need to have certain personal skills and a strategic and operational way of thinking in order to guide and lead your team. It is important that you support your functional leaders. Interpersonally I think it is also important to be inclusive and decisive at the same time. You need to impulse fast decisions and enable teams to deliver. You should empower your team and motivate them to over achieve. Too much control certainly kills innovation and speed. Thus hiring top talent that you can trust in is crucial.
Dr. Jochen Becker: What are the big trends in the Medtech industry (regarding the next 10 years)?
David Caumartin: The number one priority is cost reduction through innovation. That means understanding your customer workflow first in order to make it more efficient in the next step. If you do this for all stakeholders, it will allow you to better define your value proposition. In the second step you need to provide access so that unmet medical needs can become reality. One example here could be therapeutic ultrasound. But in order to start research on unique life savings therapeutics we would need to be larger. In the short term our focus is on cost reduction and workflow optimization like for example offering faster therapeutics than surgery.
Dr. Jochen Becker: How important is the collaboration with licensees for you? What are the points of friction here?
David Caumartin: Collaboration with licensees is not really a major issue for us. The friction will always be intellectual property (IP) but I am not a big supporter of IP sharing. In the past I have seen too many bad examples of awful business impacts of IP sharing in both the healthcare and energy industry.
Dr. Jochen Becker: In which technical fields/areas do you as Theraclion collaborate with young start-up companies?
David Caumartin: Everything that deals with the US therapeutics is of interest to us. Our aim is to offer as many indications as possible. Fifteen to thirty treatment times at once, no scarce, no OR, no anesthetics. These are just a few of the many ideas. We could already partner with a lot more start-ups now but at first we need to become a bit stronger cash-wise and more balanced investor-wise so that we can expand organically.
Dr. Jochen Becker: Many thanks for this interesting interview!