Stethoscopes & Rugby Balls

Episode 2 - Graeme Smith, CEO of Lightpoint Medical

October 13, 2021 Stephen Carter Season 1 Episode 2
Stethoscopes & Rugby Balls
Episode 2 - Graeme Smith, CEO of Lightpoint Medical
Show Notes Transcript

In this episode we hear from Graeme Smith, CEO of Lightpoint Medical with his unique perspective on bringing medical devices to the market and the key parts of the jigsaw the need to be in place to achieve success.

Graeme is a seasoned medtech industry executive with nearly three decades of experience successfully driving profitable business growth at global medical device companies. He has an exceptional track record in medical device sales and marketing; distributor management; and corporate financing. 

As CEO of Lightpoint Medical, Graeme is fully focused on the commercialization of the company’s new cancer detection probe for minimally-invasive and robot-assisted surgery, SENSEI®.

For more information, check out Lightpoint's websites: www.lightpointmedical.com and www.senseisurgical.com

Graeme can be contacted at: graeme.smith@lightpointmedical.com
Or via LinkedIn: Graeme L. Smith | LinkedIn

Your host, Stephen Carter, is Founder of The Intellectual Property Works (https://theintellectualpropertyworks.co.uk/) and a patent attorney by trade.

Over the last 25 years Stephen has worked with some amazing businesses, including writing the patent applications for the Speedo swimsuit that helped Michael Phelps to his record breaking 8 gold medal haul at the Beijing Olympics and Second Sight, a West Coast US startup who make a retinal implant to restore sight to the blind.

Stephen is now recognised by IAM Strategy 300 as one of the world's leading IP strategists and is on a mission to help innovative businesses succeed by protecting their most valuable asset, their innovation, so they can make a positive impact in the world.

Follow Stephen on LinkedIn: https://www.linkedin.com/in/stephenjcarter/

Follow Stephen on Twitter: https://twitter.com/theipstrategist

Contact Stephen directly: stephen@theintellectualpropertyworks.co.uk

Stephen Carter:

Welcome to season one of stethoscopes and rugby balls. The podcast series for med tech and sports tech innovators and entrepreneurs in which we hear from founders, leaders, investors, and advisors, who've been there, done it and got the t-shirt. Learn from their stories, including their successes and failures and hear their top tips for those starting out on their entrepreneurial journey. I'm your host, Stephen Carter of the Intellectual Property Works putting IP at the heart of your business. If you enjoy this episode and want to learn more from other guests, make sure you follow us and visit our website at the stethoscopesandrugbyballs. uk.

:

Hello and welcome. And I'm delighted to have with me today Graeme Smith, who is the CEO of Lightpoint Medical and Lightpoint are a world leader in developing tools to help surgeons find and remove cancer. Welcome Graeme, how are you today?

Graeme Smith:

I'm fine. Thank you, Stephen. And thanks for inviting me along.[inaudible]

Stephen Carter:

It's fantastic to have you on the show. So hopefully what we're going to get into today is a little bit about Lightpoints journey and how you've grown to be the business you are today. But maybe just before we get into that, you'd like to just take a few minutes to just introduce yourself and tell us a bit about light point and the business it is today.

Graeme Smith:

Yeah, sure. Well I was introduced recently at a fundraising event as a, as a medical device industry veteran, so that was the first time I've been called that, but, I've been 32 years in medical devices now. And I started with United States Surgical Corporation, a Connecticut based, global company in medical devices, very innovative at the time, introducing surgical state playing, and then one of the early proponents of devices for minimally invasive surgery that kicked into popularity 30 odd years ago. So I mean since then, I've, I mean, I enjoyed a fine eight years at that company and learned an awful lot. And many of the colleagues that I work with are still in the industry and we often cross paths. The training we had from US surgical was exceptional. We did most of our work in the operating theatre, so had a kind of firsthand view, if you like, of what it takes to get a conceptual idea from medical devices in to commercial reality, utilizing the kind of pathways into the different medical device, healthcare systems in different countries. So that was a great experience. And since that time I've moved to various different medical companies, some have been very large organizations. I've been fortunate to be involved with five MedTech startups that have gone on to trade sales to larger medical device companies. That's been an experience and again, has given me invaluable knowledge about how to commercialize a medical device idea and then bring it to marketplace, how to get it protected IP wise, looking at the kind of, if you like the feasibility of the device, because many people have got good ideas and many surgeons and nurses and various clinicians may come up with ideas, but it's how feasible they are and whether there's actually a marketplace. So all of that has to be analyzed, and the packaging before bringing the device to market.

Stephen Carter:

You must be part of a small gang being someone who's successfully brought five businesses from startups to success.

Graeme Smith:

Yes. And often working with many people from US surgical, and the last one was Mederi, which sold to Restech, and that was again, your surgical colleagues were in that company and that was just sold two years ago, but the companies we've sold to include Cook Medical, Sanofi biosurgery, Novartis, LeMaitre so it's a fascinating pathway, you know, when you're, when you're involved in a medical device startup, usually with only one product, the focus on one product, similar to my experience right now with Lightpoint, where we've got one key product at the moment in cancer detection with a very definite user benefit, which will improve patient pathways. So I've been asked to bring my experience to Lightpoint Medical for the same reasons. Ultimately, I suppose the one thing I'm pretty good at is commercializing medical devices, many things I'm not good at, but that is one of our strengths. So that's why Lightpoint have recruited me and employed me because they're brilliant engineers, brilliant physicists and clinical experts within Lightpoint Medical. And it's now time to bring the sensei product to the marketplace. So that's why I'm here.

Stephen Carter:

Excellent. Excellent. So, I mean, it sounds like you have a wealth of experience, and I think you will hopefully get the opportunity to delve a bit more into that in a minute. But do you want to just start by, if you can kind of walk us through, specifically Lightpoints journey, kind of how they got to where they are today at this point where they, you know, they brought you into, I guess, take the next big step forward, but clearly there's a fairly long journey that's brought them to this point. So yeah, if you talk a bit about that, that'd be amazing.

Graeme Smith:

So, the founder and main shareholder in Lightpoint Medical is now the executive chairman of the company, his name's David Tuch, and he's a MIT, Harvard graduate, brilliant product developer, but also extensive experience within Novartis and various other well-known pharmaceutical and medical companies. So David had the idea for Lightpoint Medical about six, seven years ago. And I met David when I was introduced by one of the board members of Lightpoint Medical General called David Ford, another very experienced medical device professional, who was the CEO of BSI at one point. And when I first worked with David, it was when he was the CEO of, I forgot the name of the company now. So th ere's a, there's a little edit that needs to be done, but anyway, David's highly experienced and he introduced me to David Tuch and David has, h e and I served as non-executive directors on a board from a sp inoff o f Lightpoint medical called Active Needles. So I always knew I could work with David. I was always impressed with his logical thinking and his creativity. And so when he asked me to join him, it became a fairly easy decision. I was CEO of a Scandinavian based company, when I was offered this role and that, again, another innovative technology based on, you know, helping to ease the life, the lifestyle and the kind of difficulties o f patients having to live with permanent ileostomy. So I've been in and around the cancer space for many of the developments that, and the products I've been working with a nd LightPoint Medical is indeed, really next generation in utilizing miniature sensor technologies, in combination with breakthrough cancer targeted imaging agents. So the combination of those two things to help surgeons intraoperatively during procedures to target the exact positioning of a tumor, that's the game we're in. We're trying to make life easier for the surgical teams and therefore make things better for the patients, b y offering a more precise in tra-operative r e al t i me d etection of cancer. And Sensei is in t hat sphere

Stephen Carter:

That kind of real time must make a massive difference to the patient experience because presumably, you know, beforehand either the surgeon had to err on the side of caution and take away more tissue than ideally you'd want to take, or, or you had to keep presumably had to get a patient on the, on the operating table and go away, do your biopsy and check that you've taken what you needed to take.

Graeme Smith:

That's exactly right at the moment, if a surgeon believes tissue's cancerous, but isn't sure he has to take a biopsy, which certain parts of the body can be quite invasive, and then send for histo pathological analysis, you know, and back will come the result and often takes 20, 30 minutes for the results to come back. And that's a lifetime in the operating room, especially if there's not much else going on, but waiting because they can't progress the procedure. So we aim to offer an easier pathway, which is why Sensei is creating an awful lot of interest in the surgical community right now.

Stephen Carter:

Fascinating. So, I mean, obviously as with any business, Lightpoint and Lightpoint's no different, you got to make money, you've got to raise money to carry the development forward. I guess, based on your Lightpoint experience, and also based on the experience you've had over the years with the other businesses, love to get some insights for you about what are the sorts of, when you're having discussions with potential investors, what are the sorts of questions they're asking you? What are they probing f or? What, what are they looking for you to demonstrate to go, yes, this is a company I want to invest in.

Graeme Smith:

Oh, well, I mean, that's a very good and broad question. I mean, it really just depends. First and foremost, of course, you need a technology that's going to get attention, and with the likes of Sensei, we're in minimally invasive, robotic and cancer detection. So three major boxes tick t here in terms of anyone looking to invest in the med tech sector. But generally speaking, they're looking to see innovation and they're looking to see what the market size is and the capability of the team and the company to take advantage of that and to gain market access and generate sales. So, a nd from that, of course, how quickly will the company be i nto profitability and how secure their investment is likely to be in, of course, for t he money to work for them, t hey a re looking for a return on t he money. So they're looking for innovation first and foremost, but they're also looking at the team very closely, to see whether or not the team has the capability to bring the technology that we have to market successfully. So it's a, it's a very broad brush, but, uh, interestingly on, you know, you've got your private equity firms, you've got private investors, high net worth family offices. We were at the London stock exchange last week because the London stock exchange, have been watching us very closely. And we've been having numerous meetings with the LSC and also the nomad companies, the nominated advisor companies that, that are kind of a precursor to a potential listing. So for us, the funding, we're leaving no stone unturned where we're looking at. We have a lot of private investors right now who have looked at our company and seen something exciting that they want to invest in. We're also looking at raising money through a very innovative, loan note, which has been created, based on the future fund, which was released by the British government last year to help SMEs like ours and a syndicate of our, of our own shareholders have taken an element of that and have kind of redefined it to make it attractive for investors looking for growth companies like Lightpoint Medical and giving them the attraction of a decent return, through the platform of the convertible loan n otes. So, that's a debt funding, kind of instrument a nd u p t o d ate, we've been mainly equity funded. So it is, it's a change of direction for the company, but we believe it gives some real attractions for our existing shareholders. Not least it's not immediately dilutive. So from a s hareholders point of view, they'll see that we're raising the money we need to take us to self-sufficiency, which is what we're planning to be in the next three years. So we're working to increase sales and global market penetration in the next three years. So we've become self-sufficient from our own revenue streams that creates a different atmosphere within the company. Yo u k n ow, we're not dependent on investor money any longer. But then of course, looking to see what the exit will be, whether it's a trade sale, which I've got reasonable experience of helping a company get to that point and, or, i f the trade sale's not a pathway we could exit via a listing. So either way, you know, the shareholders wi ll b e l ooking at what we're doing and making sure that our business plan is robust and it stands up to scrutiny.

Stephen Carter:

I mean, so you mentioned trade sale there as a possible exit. And you said previously that the five successful businesses you've worked for before their exit was trade sale. Would you, in your experience, is that, you know, you've got kind of founders starting out on their development journey, is that the most likely exit at the end of the day? Or is there kind of a balance between that and listings or,

Graeme Smith:

Yeah, very good question. I mean, it's been, my experience that trade sale has been the pathway to an exit for innovators, but I've equally seen numerous occasions where listing is taking place and provided that exit. So I think that I would hesitate to say it's the normal pathway, but it certainly is one that is reasonably repetitive in our industry and the med tech industry, because the large companies that are out there looking to expand their sales base and to make money for their shareholders, t hey need to be continually growing, and often they'll see technologies like ours, that w hen w e've proven the market share and the penetration that we can obtain. Now, it's the case that they would rather pay more for us when we've proven concept th an i n the early days when I was actively involved, often the large companies would acquire companies just because the technology was very innovative and then ho pe t o make it work, but that doesn't tend to work anymore these days. I think large companies are more conservative they're a little bit more cautious, so they would far rather see a company like Lightpoint Medical prove concept and pay more for the company than take a chance at the front end. That's seems to be what's happened.

Stephen Carter:

So pay more, but gamble less, effectively.

Graeme Smith:

Exactly.

Stephen Carter:

So it sounds like, I mean, so what I take from that discussion so far is that, you know, early stage it's very much about the, when you're looking for investment, it's very much about the innovation and the people, all of that's crucial. And then if you like later stage, I was going to say that people become less important, that's not, I don't really mean that in a bad way, but i t's still very much about the innovation. And i f particularly there w as a trade e xit, i t's those companies looking to take that innovation that they think is going to be successful, but they want some kind of reassurance that it's going to be successful. So there's some kind of proving in the marketplace that this is actually g oing t o be a goer.

Graeme Smith:

Yes, absolutely. And I think the more, the more we can build on revenues and build the company as though we aren't headed for a trade sale or for a listing effectively become self-sufficient, that's a healthier state of affairs for our company, and that's what we're aiming to do.

Stephen Carter:

Yeah, that's interesting. And I guess it means, in fact, your almost irrespective of what the exit ultimately is, it's the same plan for now because you're just, you're trying to build a sustainable company

Graeme Smith:

It's the same plan. You know, the pathway to commercialization has become more complex in the medical device industry. It's regulatory is far tougher in many jurisdictions and so the licensing and regulatory elements are vital. IP protection is also vitally important as well. And I know that's a subject that's close to your heart, but IP protection's very important and becomes a factor when companies are looking to acquire you, how protected is your IP, how difficult or how easy is it to copy your idea? Because that happens a lot as well. So IP is slightly important in terms of the global protection you have, and then when you have reassured yourself, if you like that, the, the market is there, that the clinical, and we do a lot of surgeon interviews, and we do a lot of kind of user interviews to ensure that we're not kidding ourselves, that we, where we think there might be a marketplace. So we'd rather go to the users and whether it's a specialty like thoracic or colorectal or urology or gynecology, and we'll get expert opinion back from the surgical teams. And we liaise a lot with clinicians, you know, we've got a very high quality advisory board already. For us, the feedback we get from clinicians is vital. So all of these steps are vitally important even before you get to the point of the manufacturing and the, and then the kind of, uh, commercialization through sales and marketing, you know, all of those boxes have to be ticked to make sure that your product is feasible and viable.

Stephen Carter:

So the feedback you're getting from the surgeons is that's kind of, I guess it's like a feedback loop that's then feeding into the ongoing development of the product.

Graeme Smith:

Absolutely. And product design can change because of the feedback from the users. If they give us very definite feedback that something needs to be tweaked or changed, then we, our engineering team would then set about making those changes to improve the technology.

Stephen Carter:

So that's interesting. Obviously like you said, IP is the thing that's closest to my heart, being the world I work in, so glad you mentioned it. Thinking about that IP part of the journey specifically, either in Lightpoint or in other businesses you've been involved in how, I guess how important has it been in the context of the fundraising? And can you think of things that you've done or have seen other businesses do that have worked well from an IP perspective that have made it easier to raise that money?

Graeme Smith:

Yeah, I think it's vital. I think it's really very important that you work with a top professional organization and there are many out there. I've worked with quite a few over the years and, my last company, interestingly enough, we changed our IP firm, not for any reasons of inefficiency, or costs, i t was more to do with, kind o f local support and various things l ike that. So it's not unusual for a portfolio to move between firms for various different reasons that have been involved in that process. And, you know, lawyers to lawyers is always an interesting debate, but, you know, from the company's point of view, sometimes you have to make those decisions. And it's also about the, where the core competency lie, where the legal teams and the IP lawyers can help you in your design process and your feasibility assessments and the design and engineering pathways and confirmations. It's all so important. So, you know, to take a product from concept through to full commercial deployment, it's a step-by-step process. And the IP firm that you work with and select should be an integral part of your management processes and decision making, because it's invaluable, absolutely invaluable. And in terms of how you look to a potential acquirer, if you have solid IP, that's protected globally, the valuation of your company is exponentially higher than if you've neglected that. So I would say it can be expensive, especially for a startup firm, but the effort is invaluable. You cannot underestimate the impact on the value of your company having a proper IP strategy.

Stephen Carter:

Naturally I'd agree, but it is great to hear that. And it's a story I hear from many other people as well. I particularly like the fact you mentioned that it's good to have the IP firm you're working with almost kind of, I guess, as part of the team, because it is that, you know, that close relationship in my experience really, really benefits the strength, the ultimate strength of the IP portfolio. Absolutely. I guess on the flip side, I mean, you've been fortunate enough to be involved in a number of successful companies, but I guess you've probably even in those, or maybe just in other businesses you're aware of, you've probably encountered some bumps along the road. Is there anything, any kind of mistakes that you've seen and you don't have to name names as to which companies they were, but kind of, you know, mistakes you've seen, I guess at the minute, I'm thinking particularly from an IP perspective that you've learned from, and it's meant you've done things different things differently next time around,

Graeme Smith:

A classic one that's been relatively recent, a non-executive commercial director on an international c ompany's board. And they made the mistake of launching a product that was challenged from an IP perspective and had to pull everything off the marketplace. So, that was hugely expensive, t ime c onsuming and extremely negative for the company. So, you know, making a mistake, can be catastrophic for the company and it's painful, you know, and I think that often you can't delve too deeply into the IP strategy too soon. I think from the point of view of real time experience of how it can impact sales, those products ha ve t o be withdrawn from market. So it genuinely is a major issue.

Stephen Carter:

It's a great point and I think you're right. And it's particularly in the smaller businesses, smaller companies it's one that in my experience is often overlooked. There's, you know, when people think about IP, there's a focus on protecting your own innovation and that can be expensive. And some, as a result, some companies say, well actually IP is going to be low down on the agenda, but they forget the flip side of that is that their competitors potentially have IP portfolios o f patents in particular, I guess, in this space that they could be infringing or could infringe when they launched their product. And, you know, in investing the right amount of time and effort into investigating the kind of IP position of t he competitor marketplaces is crucial often, isn't it?

Graeme Smith:

Absolutely. And I think that highlights the need for management checks and balances as well, because if you leave the IP strategy in the hands of a few trusted colleagues or a department and don't as the CEO have an overview of exactly where the strategy is leading. I think that you're doing the company, your company, a disservice. So you need the checks and balances, the working closely with the IP team within your own company, and also with the firm that you've appointed to help you along the pathway. So it's highly recommended that that's done.

Stephen Carter:

That's right. And have you seen, I mean, I've certainly seen over the twenty-five years I've been in the profession, that IP is kind of, certainly in the larger company, that IP has worked it's way up and it's definitely a board level topic now, obviously not getting into the detail, but it's, you know, it's one of those things that's on the agenda of board meetings often just to make sure that as you say, that there's that connection between the business and the IP, but I think in some smaller businesses that it's still not given that sufficient degree of scrutiny.

Graeme Smith:

Yeah. And I think that's the challenge when you're a small startup company and funding is tight. You can sometimes try to cut corners, but it will always end up costing later. So coming into a startup organization with your eyes wide open will, I think, prepare you to take the right decisions to ensure that that painful experience doesn't become a reality for your own startup. It's a false economy to think that you can, you can push on without the necessary IP protection and being able to gain the IP protection goes a long way to showing you that you've actually got a product that is feasible and marketable because you will then be able to see how much, how much protection you can garner for your, for your device. And that'll show you quite clearly if there is competition already or not. So, you know, it's, again, it's a good check and balance.

Stephen Carter:

And that's another good point because you can use patent data as kind of marketplace intelligence really. And you're right, if you're able to secure patent protection, it at least tells you that you've got something that's unique in the marketplace, and then of course, you know, there's a whole host of other questions as to is it actually something that the marketplace wants, which is clearly where one of your skills comes in and that was fascinating. So I'm conscious of time just two kind of final questions I wanted to finish off with, both of which I think could be quite quick answers I suspect. And the first one, and these are kind of two questions that I'm asking everyone that I'm speaking to on these interviews. Now the first one is looking back over your time at Lightpoint, but also your time at the previous businesses, what one piece of advice would you give to strictly to a med tech startup who's kind of just setting out on their journey

Graeme Smith:

Create your business plan and know your business plan back to front. So that would be my advice, because that, that goes into every element of your business, the planning, the money raising, the ongoing management of your company. So put your time and effort on your business plan at the start, and then know it back to front, be prepared to change and adapt as you go, but the business plan, I think is key.

Stephen Carter:

Excellent, great advice. And then the final question is, would you rather fly on a magic carpet or own an invisibility cloak?

Graeme Smith:

I think own an invisibility cloak.

Stephen Carter:

Excellent. I won't get into why.

Graeme Smith:

That could be more productive.

Stephen Carter:

That's great. Well, listen, Graeme, it's been a pleasure speaking to you.

Graeme Smith:

We'll cut down in airfare fees and the company. I can remember the name for David Ford was Vernon Carus.

Stephen Carter:

That's great. Well, listen, thank you for your time. It's been a real pleasure talking to you, and I think there's some real nuggets in there that the listeners will really benefit from. Enjoy the rest of your day. See you again soon.

Graeme Smith:

All the best!

Stephen Carter:

Thank you for listening to this episode of stethoscopes and rugby balls. Don't forget to follow us, so you don't miss future episodes and look out for season two coming early in 2022, I've been your host, Stephen Carter of the Intellectual Property Works. If you want to connect with me or our guests, you'll find contact details in the notes and on our website, stethoscopesandrugbyballs.uk. And remember there's a way to do it better, go find it. Until next time. Take care.