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Masimo Management Walks a Fine Line Between Cooperation and Coercion
More than 300 Masimo engineers and sales leads have endorsed their CEO in the company’s latest proxy war with Politan Capital Management.
But at least some of those employees felt pressured into signing the endorsement letter, which states they “may leave” if CEO Joe Kiani is fired.
The fact that employees were even asked to sign such a letter—prepared on their behalf—is nothing short of corporate coercion. Regardless of loyalty, how much choice did they truly have?
Screenshots included in proxy materials Politan filed last week with the Securities Exchange Commission show those signatures were coerced.
"Employees are asked to sign a blank page without being given a copy of the letter," according to one anonymous message to Politan’s campaign. "Those who refuse are questioned, 'Why not?' in front of their peers."
Another anonymous message to Politan claims that management "wrangled all of engineering into small rooms and pressured them to sign a document which amounts to committing seppuku when your lord loses control of a territory."
The relationship between management and their direct reports is inherently unequal. That power dynamic makes it nearly impossible for an employee to consent to putting their name on a prepared letter without feeling some amount of pressure.
“People are signing out of fear of retaliation,” another anonymous message to Politan reads. The same message, along with others, states that employees are being told the activist investor will lay off most of the workforce if wins control.
I reached out to nearly all the names on Masimo’s letter over the weekend to anonymously ask (via SurveyMonkey) if they felt pressured to sign. I did this not to shoot additional fireworks into their holiday weekend, but for the sake of due diligence.
Of the 14 responses to the poll, three respondents felt pressured to sign; 10 said they did not feel pressured; and one person chose “other,” commenting that they, “Did not feel pressured, but had the feeling we will all be fired anyway, so it doesn’t really matter if we signed or not. Hope it is not true.”
In addition to the survey results, some Masimo engineers chose to respond to me directly. They raised some other interesting questions, which I intend to share next week in Pedersen’s POV.
I’m glad that not all Masimo engineers felt pressured to toe the company line in this power struggle, but that’s really beside the point. Masimo never should have solicited employee endorsement in this way to begin with.
There are more ethical ways to show shareholders ahead of the vote that employees are happy with the current direction of the company. Certifications based on third-party, anonymous employee surveys, for example, and the company’s ranking on Fortune’s Best Large Workplaces in Manufacturing and Production.
Even if employees genuinely support the CEO—and I believe many do—proxy wars should be fought in the C-suite, not the R&D lab. Leave the engineers alone to focus on their job.
Siemens Blood Testing Spinoff Finds a 'BetterWay' to Succeed Where Theranos Failed
For all its faults, Theranos did get one thing right: the now-defunct company proved that people want to have a choice of getting blood testing done in convenient, retail locations.
In 2015, shortly before the turning point in Theranos' story when it turned from fairytale to cautionary tale for all in medtech, two colleagues at Siemens Healthineers began talking about how the company could bring a better blood testing solution to market.
David Stein and Eric Olson began working with BD (Becton, Dickinson) on the sample collection end of the new venture and Siemens spun the project out. Olson left Siemens with a term sheet in hand and founded Babson Diagnostics. Siemens spun out licensing exclusivity and a cash investment into Babson, and BD also signed exclusive agreements.
I don't have any objections to people being skeptical. I think skeptical is what we need, because a lack of skepticism is what let too many things get through the cracks.
Today, the company announced the launch of its BetterWay lab test that uses a small amount of blood (about the size of a pea) from a fingertip. Babson said BetterWay’s unique finger collection device, technology ecosystem, and microsample lab eliminate the need for a phlebotomist, needles, and the vials of blood typically required for diagnostic lab testing.
The company is launching BetterWay in Austin, TX at select locations, including H-E-B Pharmacy, Peoples Rx, and Lake Hills Pharmacy, where trained pharmacy staff collect samples and use automated technology to prepare and store them. Couriers transport the samples to Babson’s Austin, TX-based, CLIA-certified lab, and medically accurate, easy-to-understand test results are available within a day or two.
MD+DI sat down with Olson, Babson’s founder, ahead of the launch.
Navigating skepticism in a post-Theranos blood testing industry
Many outsiders said that what Babson is doing couldn’t be done and yet, here it is launching its BetterWay blood testing service in Austin, TX. So what does Babson’s founder, chief operating officer, and chairman say to the people who doubted the company from the beginning?
“Had you asked me 10 or 20 years ago I would have also been a skeptic,” Olson said. “And I think that skepticism is super healthy and that's what we need in diagnostics because it's an industry where there has been a lot of frustration that, ‘Can't we do better than this?’ We all feel, in the diagnostics industry, that there does have to be a better way somewhere but we've seen so many different attempts to make things better and you know all of the different efforts to get us from where we are, which we kind of collectively see as the dark ages, to the Tricorder from Star Trek ... we know there's going to be many steps between here and there and we've seen so many people try to skip steps and for it to just turn out to be nothing, for it to turn out to be false or to make compromises that are just not reasonable compromises to make.”
As an industry veteran who has seen so many of these fly-by-night diagnostics companies come and go, Olson said it is easy to become disillusioned.
“So, I don't have any objections to people being skeptical. I think skeptical is what we need, because a lack of skepticism is what let too many things get through the cracks,” he said. “...But I would say the approach that we took, the advantage of knowing that skepticism is going to be rampant – and should be rampant – is a science first approach where rather than exaggerating the things to come we produced the data from the clinical studies that are needed to evaluate whether what we're doing works.”
So, Olson and Stein decided to be highly transparent in its public materials and with its partners and to share all the clinical data Babson has generated through clinical studies.
“For a skeptic, deciding whether something works is not a matter of being persuaded that it works,” Olson said. “It's not persuasion, it's data.”
Developing an ecosystem of blood testing technologies
The reason this is a first-of-its-kind solution is because it's hard.
Olson said BetterWay has been a complex program to bring to market because it has involved multiple components.
“This is not a silver bullet story where we invented a certain thing that all of a sudden broke through and made all of this feasible,” he said. “ The Babson technology story is really about an ecosystem of technologies that goes all the way from hand warming and sample preparation, to capillary sample collection, to capillary test accuracy, test miniaturization, all the way to reporting the results in a way that makes sense to people.”
It takes all of the different pieces to make it work and to be able to run broad ranges of routine blood tests from a small sample of capillary blood.
“The reason this is a first-of-its-kind solution is because it's hard. It's technically very challenging and it's taken not one technology but dozens of technologies at the same time to transform this value chain from a venous ecosystem to a capillary ecosystem, from phlebotomist’s office to a retail store, in a way that doesn't compromise the quality of the results or the cost structure with which we can do routine testing and keep it accessible.”
Key benefits of Babson's approach:
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Philips Respironics’ Alleged Mishandling of Safety Concerns: New Insights Emerge
The same investigative journalists who took Philips to task last year for waiting 11 years before coming forward with its respiratory device problem, recently revealed new insights into the saga.
The latest Philips report from the Pittsburgh Post-Gazette suggests, based on “newly obtained documents” that there were internal fights and resignations over safety standards during the pandemic and whether actions would tip off federal regulators.
The report tells the story of Hisham Elzayat, MD, who arrived at Philips as a medical director four years ago. The heart surgeon reviewed complaints about the company’s respiratory devices and met with the company’s top biosafety engineer who allegedly shared the doctor’s complaints.
According to the article, Elzayat began pushing the company to halt shipping of the devices in June 2020, but the company not only turned down his request but chose instead to ratchet up sales of its ventilators and sleep apnea machines during the COVID-19 pandemic.
The Post-Gazette journalists report that Elzayat has turned over hundreds of pages of company emails, text messages, and reports to federal prosecutors as part of the ongoing criminal investigation of the leadership of the company.
“The confidential documents, which have been obtained by the Post-Gazette, show for the first time the surgeon was among nearly a dozen Philips engineers and others who pushed the company to warn patients about the dangers of the foam before Philips removed millions of the devices from the market in a recall in June 2021 and to later stop the company from downplaying the risks.
The Justice Department reportedly declined to comment on the probe, but experts interviewed by the Post-Gazette say the internal correspondence could provide key information for investigators in assessing when top leaders learned of the deficiencies and whether they concealed the dangers. Read the Post-Gazette’s full story here.
Femtech Companies to Watch in 2024
By Katie Hobbins, Managing Editor
Femtech is finally getting its well-deserved time in the limelight as innovative women-led products hit the medtech stage. There are many reasons behind the boom, including awareness of once taboo topics around female reproductive health, understanding that women’s healthcare affects healthcare for all, and acknowledgement of previously poor care for female patients surrounding sex-specific health conditions or how sex affects how one diagnoses conditions.
“We see a de-stigmatization,” Brittany Barreto, Ph.D., founder of FemHealth Insights, and host of Femtech focus podcast, told MD+DI in a recent interview. “This has a lot to do with the younger generations being open and loud and questioning sex and gender but also just a society that says, ‘Hey if we can have Game of Thrones on tv showing very violent gore, why do we still have fake blue liquid in a menstrual pad commercial.’ People are finally talking about their menopause, endometriosis, and incontinence. With the knowledge of how common it is, they’re saying, ‘And there’s no solution? That’s unacceptable.”
And investors should take notice. Valued at $50.97 billion in 2023, the global femtech market is projected to grow at a CAGR of 15.38% from 2024 to 2032 ($177.05 billion). Additionally, according to FemTech Analytics, venture capital (VC) investments in femtech companies have quadrupled since 2015, rising from $600 million to nearly $2.4 billion in 2021. By July 2022, VC funding for the market had already reached $840 million.
One factor impacting the data, according to Barreto, is women in finance. “What I mean by that is angel investors,” she said. “To get that first check, you really have to convince somebody of the problem you’re trying to solve and when you’re trying to pitch about hot flashes to a room full of men who have never had one, they may not be as passionate about investing in that first round.”
During a recent video interview with Barreto, she highlighted some of the many femtech companies innovating the space.
Since then, I have also added to this not-even-close-to-exhaustive list.
Aspivix
Aspivix is a femtech company focused on modernizing gynecology and have developed Carevix for the 108 million women every year that are afflicted by the tenaculum in gynecological procedures. Carevix uses suction technology through its anatomical soft lip to stabilize the cervix. The 510(k) cleared device is indicated for IUD procedures, hysterometry, hysterscopy, and fertility procedures and is clinically proven to reduce pain and bleeding during transcervical procedures without compromising on performance.
“Aspivix’s ambition is to create multiple simple solutions in women’s healthcare, always coming from unmet patients’ needs and modernizing a space which has remained underserved for too long… and the potential is unfortunately humongous,” Ikram Guerd, vice president of global marketing and managing director US for Aspivix, told MD+DI in a previous article. “Aspivix is committed to conducting rigorous clinical research, collaborating with key opinion leaders, and striving for affordability and accessibility to make a positive impact on global women's healthcare.”
“Aspivix is a game changer,” Barreto said. “We’ve been using the tenaculum since the Civil War to remove bullets from men and they thought this little clamping medical device would be great to clamp the cervix to stabilize it when entering the uterus, most commonly for IUD insertion. The real blasphemy here is that doctors have not told women how painful the procedure will be. Aspivix is using a slight suctioning device that looks like a little smiley face that goes onto the bottom of the cervix you pull the edge of the device, and it creates a suction of air… stabilizing the cervix. FDA approved, billing code exists, for sale already in the US.”
Hyivy
Hyivy is developing Floora, its pelvic rehabilitation vaginal dilator, for the one in three women who experience pelvic health problems in their lifetime, like it’s founder, Rachel Bartholomew, who started the company after receiving a cervical cancer diagnosis.
Its pelvic floor rehab system includes a vaginal dilator, patient app, and clinical software. The Floora dilator is the first oelvic health rebab vaginal dilator that performs gentile auto dilation with air chambers, so there is no need fore reinsertion. It uses hot and cold therapy, lubrication, and is equipped with biosensors to collect data on the pelvic floor. The patient app allows patients to track progress, connect with clinicians, and set personal goals. The clinician app then allows healthcare providers to monitor their patients in real-time, set prescribed protocol, and provide personalized care.
“Hyivy was created by a cancer survivor, Rachel,” according to Barreto. “She had cervical cancer in her early 20s and radiation treatment for gynecological cancer can cause a lot of scar tissue. She was given a dilator set which essentially was a cylinder like device that she was told to go home and insert into her vagina to break up the scar tissue on her own, which is incredibly painful. She’s created this device that uses air to increase and decrease in size, it’s self-lubricating, it can have medicine inside of it, it uses heat and has this awesome dashboard that sends the data to your pelvic floor therapist.”
Nua Surgical
Based in Galway, Ireland, Nua Surgical is aiming to make C-sections safer and easier with its SteriCision device. Developed by CEO Barry McCann after the company and BioInnovate programme came together, the SteriCision C-section retractor is designed so that obstetricians and surgical staff can gain hands-free unobstructed access to the uterus during surgery.
“When you’re getting a cesarian, today’s standard of care is that you have a nurse on either side of the table holding your abdomen open with their hands,” Barreto told MD+DI. “[The SteriCision] looks like a very deep oval that can be inserted into the abdomen and it is in a shape that allows for a baby to be removed from the abdomen. It’s going to decrease infection and decrease the pain during recovery.”
Molli Surgical
Molli Surgical answered the call when a patient spoke up about her breast cancer treat experience, creating a wire-free, easier, and more precise way to locate lesions during surgery, while also offering more precise removal. Its technologies, Molli 2 and Molli re.markable, are wire, and radiation free.
“As surgeons, we don’t have X-ray vision, so we need something to guide us to the tumor and help us remove it as precisely as possible,” said Dr. Nicole Look Hong, a breast cancer surgeon at Sunnybrook and co-inventor of MOLLI, on the company website. “It’s so detailed and precise but also so simple. Instead of getting more complicated, the concept has gotten simpler — not to underestimate the years of work that have gone into it.”
“For women who have had doctors identify a lump in the breast and need to go in for a biopsy, usually what she has to do is go to the hospital early in the morning, and has a little metallic wire inserted into the side of her breast where the tip of it is pointing directly at where it needs to be biopsied,” according to Barreto. “This woman then needs to lay still until her surgical time and it’s not an emergency so sometimes she can be there literally all day with this wire hanging out of her that she can’t move. Molli Surgical is this little tiny bullet that is inserted next to the lump and the women can actually go home and doesn’t even have to stay in the hospital.”
Aavia
Founded at MIT, Aavia is a daily hormone health tracking app to help patients track and monitor 30+ physical, mental, and emotional hormone health indicators. The app utilizes user-input data and advanced algorithms to assess vast historical and communal datasets, enabling precise daily system prediction for a personalized and scientifically informed experience, according to the company. It also delivers research-based education on nutrition, exercise, and self-care to “equip patients with effective management strategies.”
“I recommend patients use Aavia to track their menstrual cycle, remind them to take their birth control, and track mood and other symptoms,” Dr. Uma Lerner, MD, reproductive health psychiatry, UCSF and Aavia medical advisor, said on the website. “This helps patients be more aware of their body and hormonal fluctuations. They can also bring this data into their appointments with me to help me better diagnose and treat their symptoms.”
Endodiag
Endodiag’s vision is to radically improve endometriosis management through earlier and easier diagnosis. Currently, the average diagnosis delay for endo is about seven to 10 years. In part, this is due to the diagnostic method used to confirm the condition — laparoscopy: removal of endometriosis tissue which is then assessed in a lab. Endodiag, however, is developing a non-invasive and reliable diagnostic test based on disease-specific biomarkers circulating in the blood.
“Endodiag believes that the development of a non-invasive and reliable diagnostic test based on disease-specific biomarkers will allow a simpler, earlier and more systematic screening of patients,” according to the company. “This would enable physicians to make informed medical decisions to prevent disease progression and potentially safeguard fertility.”
EndoDTect is a blood test that analyses changes in biomarker expression levels that indicate if a subject has endometriosis or not. The test is highly sensitive, specific, and “has the potential to dramatically reduce diagnosis delays,” according to Endodiag.
The company is currently conducting validation studies to confirm the predictive value of EndoDTect for disease detection.
Watch the full interview with Dr. Brittany Barreto here.
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🧐 New Speculation Emerges Around Baxter's Plans for Kidney Care Business: While on track to separate from its kidney care business before the end of 2024, the company is mum on the latest market rumor about a potential sale.
🗞 Masimo Update: Potential Partner Emerges Ahead of Shareholder Vote: A potential joint venture partner is prepared to make an offer for Masimo’s consumer business. But the details of the deal matter.
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