How Cross-Training and Extreme Ownership Help You Advance Your Career with Rollie Carlson

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Pat Kothe (00:31):
Welcome! I'm fascinated with how leaders
learn and develop.
And then the paths they've takento get where they are today.
In medical device, it's commonto see people taking on new
challenges and moving up withintheir own company.
It's also common for people tomove to new opportunities and
join teams and companies of thesame or different size.

(00:54):
Some skillsets transfer.
However, some did not.
What can you do to assure you'repreparing for the broadest set
of opportunities?
Well, we're going to explorethat in today's conversation.
Our guest today is RollieCarlson, CEO of Immunexpress.
A company that's pioneeringtechnology that can rapidly

(01:17):
detect sepsis.
Raleigh contributed to thesuccess of Abbott laboratories
for 20 years, starting off in Rand D then transitioning to
leadership positions in globalbusinesses and startups within
Abbott.
His attraction to startups ledhim to become CEO of Asuragen
and then WaferGen Biosystems.

(01:39):
In this episode, we discuss howhe prepared for new
opportunities, the benefits ofextreme ownership, balancing
company, vision and mission,alignment of everyone inside a
company, why sepsis is such abig problem, and what
Immunexpress is doing to helpclinicians better manage sepsis

(02:01):
patients.
Here's our conversation.
Raleigh, the first 20 years ofyour career was spent, at
Abbott, large company, largeresources, and then you
transitioned out of there intostartup world.
So tell me a little bit aboutwhy you did that and what drew

(02:21):
you to startups.

Rollie Carlson (02:22):
I went into Abbott actually on the R& D
side.
I was a marine biologist bytraining, PhD, and Abbott was
interested in looking fornatural products from the sea
for their pharmaceuticalprograms.
And, what Abbott was able to dois provide resources, much
broader than what we have right,right now, and to be able to

(02:43):
fund basic R& D, but at the endof the day, it was really get a
product out.
And during the course of mycareer in R& D, Abbott was a
great learning um, venue for me,in the fact that, practicality
of developing a product wassomething, and using the product
by the customer and fulfilling acustomer need, uh, was really

(03:04):
ingrained in the culture there.
What Abbott really representedwas a diverse health care
company, and then for me, it wasone where I could transition
from leading R& D programs intoactually leading business units
there.
And I really love doing that.
I raised my hand for a lot ofopportunities.
Took advantage of the diversitywhere I had both pharmaceutical

(03:25):
businesses and diagnosticbusinesses and the last business
opportunity I had at Abbott, thepresident, Rick Gonzalez, who's
now a CEO of AbbVie at thispoint, we acquired a small
company called Vysis in theChicago area and Vysis was a
molecular diagnostic company,fast growing and had a very

(03:47):
strong brand.
And really focused on oncologyand genetic disease testing.
And Rick asked if I'd beinterested in joining that
company, running it aspresident, as an affiliate of
Abbott.
But unlike what we normally do,which would be to assimilate and
indoctrinate business into theAbbott culture, it was to be run

(04:10):
separately.
And so that was a greatopportunity.
We had, myself, one financeperson, one R& D person sort of
parachuted into a company of ahundred, uh, people that were
quite entrepreneurial, verypassionate about what they were
doing, and they were on a growthtrajectory.
And it's how could I be able tohelp resource that?
And how could I be able to takeadvantage of the infrastructure

(04:32):
of Abbott, and to be able togrow that?
And it was really rewarding, andwe, ran the company separately.
We did take advantage ofinternationally and other
opportunities that Abbottresources that we had, but grew
the company at a growth rate ofwell over 60 percent per year,
and, developed and got FDAclearances for some key

(04:54):
products.
One for breast cancerdiagnostics, path vision, and
probably one of the mostsuccessful molecular diagnostic
products called Eurovision.
We grew to the point where wehad to be assimilated by Abbott
into Abbott Molecular.
And I was being offered somegreat additional opportunities
at Abbott, but they were to beleading a large organization,

(05:20):
uh, 500 million plus, you wereresponsible for that business.
But as I had learned, if youwanted to move in a direction,
steer the ship, to, to 60degrees or something like that,
it might take six to nine monthsto be able to do that.
And the culture that I found atVysis was that you could take
action, be quick on your feetand be able to change direction

(05:44):
if necessary, which is veryimportant in biotechnology
because the best laid plansaren't necessarily the way it
turns out and you need to beable to adapt to the
marketplace.
So I actually looked at mycareer and I said I could be
very successful at Abbott andcontinue.
It's a great company.
Still is.
However, for myself andfulfillment for myself, I like

(06:06):
to be on the other side and beable to grow something and be
part of the beginning of atechnology group and, see what I
can contribute.

Pat Kothe (06:15):
The way companies are managed and who's managing them
is, it's always interested, uh,me and where they're coming
from.
There's a lot of finance peoplewho run companies, people come
up on the marketing side.
It's my impression that not asmany R& D folks come up and
become the CEO of the company.

(06:35):
Is that your impression too?

I would agree as far as small companies,
startups, many times it'll betechnology founder.
in, in that regard, but reallywhen you're moving into the
operating side and, the companyI'm with right now, it's an
example of that.
the founders, uh, uh, did agreat job as far as developing
early stage, you know,technology, but it's really
implementing that as far asbeing successful and having

(06:59):
adoption in the medicalcommunity.
And generally RD people don'thave that, uh, experience, you
know, when they are going, anddeveloping their careers.
Fortunately at Abbott, which aregoing back to, you know, with
Abbott inside my first productthat I developed, they said,
well, congratulations, here itis, you guys go launch it.
And it was management philosophywas, oh, contrary, you're

(07:22):
staying with this product andyou're going to be out there for
two to three years, you know,it's helping to support that
product and find out.
what's working and what's not.
And it was really useful becauseit really made you think, uh,
much deeper when you develop thenext product, as far as what
sort of, product need market,inputs that you need to have to

(07:43):
develop that, uh, and made, madeyou better and stronger from an
R& D perspective, but the factthat I had the opportunity to
work for two to three years, onthe front line with sales, with
marketing, and certainly atAbbott, which was very fiscally,
conservative and measurementoriented, put it that way, you
really had to have results.

(08:04):
And so, As a consequence ofthat, all those other inputs and
necessary abilities, if onecould be able to develop that
are the ingredients, I think,for being a successful CEO.

Pat Kothe (08:16):
Do you remember back when they said, go ahead and
take the commercial side of it?
What were you thinking at thatpoint?
Was it exciting?
Scary?
What was it like?

it was exciting and scary at the same time.
I mean, I actually, it was acircumstance where, our
commercial leadership had movedon.
and there was a void there.
Our product was really takingoff and I was really.
supporting that.
And I raised my hand.
I said, you know, I can do this.
And, and quite frankly, I was,rolled out of the office a

(08:47):
couple of times by the presidentof the division, but I think
that, after, some unsuccessfulcandidates came in, then they,
uh, were willing to take.
Uh, a shot and let me have thatopportunity.
And so it was one where I thinkthat, really working in
conjunction with marketing, youknow, there's certainly sales is
important, but having a plan andbeing able to, to arm, arm the

(09:10):
salespeople, with the righttools, which in biotechnology is
going to be technical, but it'sgoing to have to be something
that's going to be simpleenough.
You know that the medicalcommunity sees what the value is
and can you can adopt it in thewhatever that medical paradigm
that you're trying to trying toimprove.

Pat Kothe (09:29):
So, this was back in the 90s?

Yes.
That's right.

Pat Kothe (09:33):
Back in the 90s, um, marketing and R& D had a
handshake, but they weren't tiedin, in general.
They weren't tied in together astightly as they are today.
At least that's my experience.
When you were, transitioningover to this, is this something
that you saw that you needed todo from a career development

(09:55):
standpoint, or was it just aopportunistic thing?
I mean, were you activelymanaging your career and wanted
to get that downstreamexperience?
Or was it just this opportunitywas there and said, Hey, I can,
I can do this.

Well, it was both.
I think the motivation was Iwanted this.
I had put a lot of time andeffort in my R& D program to
develop a product, and I didn'tsee that it was being positioned
correctly.
And I thought that and I wantedit to be successful.
from my perspective, from asomewhat selfish standpoint,

(10:32):
I'd, you know, you know, This isa great product.
I know it can be successful, butit's just not being stewarded
the right way, you know, fromthat standpoint

Pat Kothe (10:40):
I trust me.
I don't trust you.

Exactly.
And so what happened was, is mytransition was, okay, you can
lead the marketing group and thesales group will be independent
of that.
And to your point where the R& Dand marketing weren't in sync
necessarily with 1 1 1 another.
That was my job.
I knew I had to be successful tothat and we were very successful

(11:04):
that regard evolved where I wasable to take and run the whole
business unit.

Pat Kothe (11:11):
So for someone who's in a, in their career right now
and they could be in themarketing track, they could be
in the R& D track, could be inthe quality track, what do you
think about cross training orwhat's your opinion on cross
training and getting experiencesoutside of your, your, your

(11:31):
chosen track?

Oh, I'm a huge advocate of that.
And almost all my organizations,you know, that you talk about
getting out of your comfortzone.
And typically, you know, as one,I'm a marketer, I'm a quality
regulatory person or somethinglike that.
And people just don't reallythink about that.
But If you can have diverse, uh,uh, you know, experiences and be

(11:56):
able to integrate, not onlyyour, what your foundational,
expertise is, but then be ableto expand that, into other
domains, It's very useful.
It's very useful from anindividual's career perspective
because it become moreversatile, you know, overall, I
think, from a businessstandpoint, it helps the
business because then you're notonly looking at from the lens or

(12:18):
silo of your domain, you'relooking at it from a more
comprehensive businessperspective.
And then it gets more alignment,within the organization, because
we're here to have goals, to beable to accomplish something,
and we're all sort of in thesame boat rowing together.

Pat Kothe (12:35):
it really is walk a mile in my shoes.
Yeah, so you don't understand myproblems You don't understand my
limitations, you don'tunderstand my passions now
getting in there Andunderstanding it from somebody
else's viewpoint.
It will help you as you start tomanage things going farther and
farther along Yeah so youIdentify that, this is a passion

(13:01):
of yours.
You don't want to, you want tomake sure that you have,
Immediate impact and decisionsare not the six to nine month
decisions.
You can have immediate impactand be nimble and the startup
side kind of worked for you.
When you moved into startupland, it's a big difference.
Abbott's got all of thosedollars behind you.

(13:22):
You just go shake the money treeand stuff falls off.
Not quite the same in startupland and resources as well.
what was that like when youmoved?
into the startup world.

Well, fortunately, I did have that
Vysis experience.
So I really was that was a verygood sort of transition
experience for me overall.
I went to a company calledAsuragen, which was just
starting up.
It was a spit out of a companycalled, uh, Ambion that had been
purchased by applied biosystems.
The founder really had coretechnology that was very

(13:56):
exciting.
Uh, micro RNAs for boththerapeutic and diagnostic
purposes and wanted to havesomebody who was experienced in
both pharmaceuticals anddiagnostics, which is me.
And when I interviewed for that,that job, I was in Austin,
Texas, and, it was interestingthat the founders said, well,
here's our business plan, readthis, tonight and then, let's

(14:19):
talk about it tomorrow.
And let the let's talk about ittomorrow was a group of, uh 10
people who had developed thisbusiness plan around the table,
and asked me, what did you thinkabout it?
And at first I said, um, and,and what I have found, which is
really, the core attribute, Ithink of a small company is

(14:41):
highly aspirational, and verymuch, looking for shooting, you
know, shooting for the, for thestars.
But I asked them, I said, greataspiration, but I think you guys
are smoking something from abusiness perspective, because,
you know, we're not going to be10 million in two years, based
upon a new technology thatnobody's ever seen before, and

(15:03):
never been clinically validated,and, that was not the answer
that they wanted to hear.
There was no question about it.
There are, you know, bettermarkets that you want to be in,
are there bridge technologies wecan do if this is a
foundational, core technology,we're going to need to be able
to develop it.
It can do a number of things,but we have to get to know, uh,

(15:26):
as far as, uh, the, all theopportunities for that and
really focus in that regard.
Um, and I came back in Chicagoand I told my wife, that's a job
I won't be getting.
And I got a phone call and Imoved to Austin, Texas and
joined the company.

Pat Kothe (15:42):
Let's talk a little bit about vision and mission
because, in the startups, whenyou put that vision statement
down and it is aspirational,it's who you want to be when you
grow up.
but you never get there unlessyou can dial in on the mission
statement very So when you're inthat type of position, as the

(16:02):
leader of the company, you wantto have you have that vision.
How do you?
How do you dig down and how doyou determine what that mission
is?

Well, I think the mission, you have to keep
the, um, frankly, the endcustomer and market in mind, and
then how are you going to beable to, to access.
You know, access.
I mean, if we had a vision ofbeing, you know, the micro RNA
company, you know, and formedical, for medical solutions,
and then it's like, okay, whatare we going to how, how and

(16:32):
what are we going to fulfill inin that regard and the how and
why is what you have to buildon.
At Abbott when I was a scientistthere, basically I was advised
and You know, innovation is veryimportant, but you need to be an
Edisonian type of scientists.
And what does that mean?

(16:53):
Well, it's 10 percent is theinnovation and 90 percent is the
perspiration of being able tomake that happen and make that
reality.
And so you have to be able tobuild the scaffolding and the
house by which everybody's goingto be working under, to be
successful.
I think the mission is everybodyneeds to understand and believe

(17:14):
in it, you know, because if theydon't, if they're here and it's,
it's a difference.
I mean, Abbott, there's noquestion.
uh, the intent of the wholeorganization was to, uh,
provide, you know, newer, newerinnovations and products to help
healthcare, you know, on abroader basis, but owning it,
you know, perhaps not everybodyowned it, you know, and then the
smaller company, uh, everybodyneeds needs to own it, or they

(17:37):
may not be in the right, rightplace.

Pat Kothe (17:40):
think a lot of us too, as, leaders within
companies, you get tired ofsaying the same thing, but
unless you say the same thing,it doesn't get lived.
And a mission statement is oneof those things where, you know,
you annually, you look at yourvision statement, look at your
vision, your mission statementand say, okay, these are what we
want to be.
And you put the, put that back.

(18:02):
Everyone wasn't in that roomdeveloping that vision and
mission statement.
And everyone, doesn't hear thatroutinely.
And if you don't hear somethingroutinely, it doesn't become
ingrained.
So it really has to be stronglyand repetitively put out there
in order to filter it and makesure that it gets across to

(18:24):
everybody in the organization.

As you get products into the marketplace
and, um, you know, Asuragen, wasone that had multiple products,
but we, but as they were in themarket and making a difference,
we had employee meetings andthen we would actually have
customers come in and tell uswhat the, the value of the
technology, and products that wehad brought to their, their,

(18:49):
solution and for their health,healthcare, situation.
And in some cases patients, youknow, that were, uh, positively
impacted.
That's where you want theorganization.
Actually, yes, leadership has tobe able to repeat that.
But hopefully you want theorganization, you know, uh,
adopting it and promoting itthemselves.

(19:11):
And and different ways that youcan be able to have that occur.
I think is really important.
And even if you don't have aproduct on market about,
somebody coming in andunderstanding, here's our
medical need.
This is what we need.
If we could have this, we couldhave that, the marketing people
who are looking at productmarket fit.
Certainly they, they're doingthat type of research, but for

(19:32):
the organization to understandthat, I think that's.
that helps.
And of course, the smaller theorganization, the easier it is
to do that.
Yeah, there's no question.

Pat Kothe (19:41):
Absolutely.
so we've talked a little bitabout, new, newer technologies
and value creation based on newthings.
And as an R& D person, I'massuming that's one of the
things that, that's at yourcore.

Absolutely.
I mean, for me, the,intersection of novel
technologies, that couldpotentially be a new solution
for, a classic medical need,that's really the jazz.
And it's also the challenge, youknow, because, particularly, if
you're bringing a technologythat's going to change medical
practice, that's not easy to do,you know, because medical

(20:17):
practice is pretty ingrained,and many times generational, uh,
overall.
The opportunity is there for anew technology, but the, the
challenge is, is how, how areyou going to be able to make
that successful?

Pat Kothe (20:31):
Ideas come from a lot of different places.
They could come from, atechnology that's been
developed, in another field thatcould be applied to yours.
It come, can come directly fromthe customer.
It can come from ideas thatpeople inside a company have.
What do you think aboutcapturing these ideas?
What's the best methodology thatyou've seen to capture different

(20:53):
ideas to get to thatintersection?

Well, capturing...
I do want to say first is thatmany times what is thought to be
a good idea may not be right forthat time.
And sometimes actually what arethought to be two bad ideas can
come together and be a wonderfulidea, in that regard and I,

Pat Kothe (21:17):
like the, that's like the post it notes from 3M.
it was a poor adhesive thatcaused that to happen.

Well, yeah, exactly.
And so it may not be right forthe time might be later per
later, or there's a necessaryelement of this that has to
happen for this idea to be ableto be potentially viable, in
that regard.
And I think that, yeah, forcapturing that, certainly we,
you want us to be able to setaside for, for brainstorming, in

(21:43):
that regard.
But when you're in productdevelopment, then you're in a
situation where you really needto be really structuring all of
that, to get to answers.
Yes, no answers and no could bejust as good as yes, because you
could spend a lot of time, a lotof money, and trying to,
overcome something where, youknow, perhaps, yeah, you can't

(22:04):
do it.
Or maybe the best thing to do ispick up the phone and try to
partner with somebody that mighthave the capability of that
particular element to do that.
And that's a challenge for notonly large, but particularly
small organizations, because,there's a strong sort of not
invented here type of attitudehere.
NIH factor, I would say, and youcan't afford that.

(22:27):
You can't afford that in a smallcompany when your resources are
limited, and you're also underthe time crunch.
I mean, you need to getsomething, you know, that's
going to be, a quality productout in a short amount, as short
amount of time as possible.
But the worst thing you can dois be able to come up with
something that doesn't fulfill amarket need.
You spent all that time, allthat money, and then, you're

(22:48):
struggling to keep the companygoing.

Pat Kothe (22:50):
Rollie, I want to ask you a little bit about research
and development.
Two different words, researchand development.
and how...
R& D is different in a largecompany versus a small company,
a startup company.
Is it different and how is itdifferent?

Well, it, it is, and it depends about the company
though., From a companyperspective, uh, R& D should be
little R and big D, from myperspective, and, uh, and you
look at, obviously, your budgetsand what sort of proportion, in
large, in, in larger companies,there's a tolerance to be able
to have of your R& D budget, soto speak, have about 20 percent

(23:32):
of that, uh, be in the R, uh,world..
And then the rest was associatedwith, with, with development.
In smaller companies, hopefullythe R, the initial R has been
done, you know, and so you'vegot the essence of what that is,
and the challenge is, is to getout of that R mode and into

(23:54):
development and do you have theright people to do that?
And in many cases, smallercompanies don't.
And you're, you're reallygetting into the factor where,
and this is a founder syndrome,you know, quite, uh, I see many,
many, many times where.
This is great technology.
It'll sell itself, and you lookat all the things that need to
happen in between and in thetrue development side side of

(24:16):
things that have to happen.
Development is going to consumemost of your budget.
You have to make sure thatyou're on the right track to
have something successful.
And from my standpoint, the.
Thank you.
Moving from R to, to D is, youhave to get across what I call a

(24:36):
feasibility threshold andfeasibility is really a proof of
concept because if you can't, ifyou can't do that at that early
stage, you're not going to be onthe right track, from a
development standpoint, and ifyou can't, and if you can't do
proof of concept, You know what,that idea, that concept, you

(24:57):
need to kill it, or change it,or do something, you know, take
that other idea and merge itwith it and make it, uh, make it
better.

Pat Kothe (25:05):
I've always found the R& D, name, To be a little bit
off, because a lot of theresearch that we're doing is not
research into how to manufacturesomething or the properties of a
material or anything like that,but it's research that's done
into the application of theproduct.

(25:27):
It's research that's done intowhat the physicians want, how
the workflow works.
It's those types of customerdiscovery things, which often
don't reside within the R& Ddepartment.
They may reside in the marketingdepartment.
So it's, you're doing research,but it's not the traditional R&

(25:48):
D department's responsibilityonly.
I mean, they have thatresponsibility too, but other
people are doing that researchside as well.

Yeah, and clinical research too, medical
clinical as well.
The vast majority oftechnologies that, um, you know,
for example, you know, Abbott,which became AbbVie.
I was on the acquisition team atAbbott when we were looking at,
at buying a BASF specificallyfor, Humira, which was not
cleared.
It was, we had an R& D team,that was looking at auto immune

(26:20):
diseases, really knew that, uh,anti alpha.
F uh, factors were somethingthat were the future.
Did we discover any of that?
No.
We just we knew the science andwe knew, you know, we were
looking at what's the best onethat is out there.
And you look the first, youknow, fully humanized antibody
that was out there, you know,uh, in Humira, uh, that was the

(26:42):
catalyst for us converging.
Which was, you know, one, do thedeal, and the other is put that
into your clinical developmentprogram, and then, what else,
would complement that from a,uh, uh, from the next, you know,
what would a drug candidate, youknow, for example, and you
build, and you build afranchise, uh, in, in, in that
regard.

Pat Kothe (27:03):
So we spend a lot of time in the R& D side, that's
your heritage, that's yourbackground, but you're CEO,
you've been CEO of a company,President and CEO for a long
time.
Let's talk a little bit about,about being a CEO of a company,
because you've had theopportunity to be a CEO of a
private company as well aspublic, companies.
Tell me a little bit about thatand how it's different, how you

(27:27):
do your job differently as apublicly traded, CEO versus
private.

Well, of course, responsibility of a CEO, whether
it's private or public, ismaking sure you have adequate
funding and raising money, youknow, uh, and in that regard
and, um, and when you'reprivate, you're generally in
the, the venture, um, andprivate equity world, um, and
you have, Hopefully, in general,your investors are, uh,

(27:57):
understand what you're doingand, uh, and know, and, and know
what the milestones that mightbe associated with that, uh,
when you're publicly at a NASDAQcompany, um, which, Wainbridge
and Biosystems in the Bay Area,um, which had great technology,
uh, in fact, probably the mostsophisticated technology that
I've, I've been around and hadto manage a single cell

(28:19):
analysis, being able to do awhole genome from a single cell.
But my investors didn'tunderstand, uh, you know, what
we were doing and I had to spendmore time, the reporting
responsibilities, all of, all ofwhat's necessary to stay, you
know, on being a listed company,uh, on a quarterly basis was,

(28:40):
was time consuming.
And you had to spend a lot oftime with your, uh, investors,
uh, on the one hand, If youneeded to raise additional
money, you can do, shelfregistrations.
There's a completely differentprocess, uh, that, that you do
and it, uh, you, you can get,um, access to resources, uh, and

(29:00):
if you're publicly listed, um.
As long as you're performing,you know, uh, I'd say, uh,
easier than a private, privatecompany and particularly at this
time, in, in, in this day andage here, when, really
investments in privatecompanies, are very challenging.

Pat Kothe (29:17):
One of the other challenges that we all have,
whether large companies, smallcompanies is building the team,
managing the team.
How's it different in an Abbottwhen you're hired, hired a lot
of people and you've got, a lotof resources to do it.
And you, and it's a certain typeof person that likes to work for
the big company, and thenthere's the startup.

(29:39):
How is team building differentin the big company versus the
small company?

We talked about vision and mission, and I think
that it's harder to do that ina, in a larger company, uh, and
try to get everybody, to be, uh,motivated the same way, you
know.
Um, there's also, job securityfactor where, particularly in
the past, it was viewed as a lotlarger companies there was more

(30:03):
job, job security.
So therefore there, they werein, employees would be
insulated, and Abbott, we werevery much, we always went
through what we call every yearan organizational inventory, OI
review.
During that, we would look atwhat, you know, you classify
your, your organization and youtry to find out who's your top

(30:24):
10 percent or performers, youknow, and the top 25 and what
they're contributing, et cetera,along those lines.
And we were actually challengedthat in our top 10 percent
percenters, that.
You wanted to give them otheropportunities, and many times
that's outside of your ownbusiness, which was, you know,
incongruent with you as abusiness manager saying, I need

(30:46):
that person to be successful.,in that regard, You want to have
top performers in whateverorganization you have.
But I think that when you get tosmaller organizations, you, You
have to wear so many more hatsthan you do in a larger company.
You know, we talked about beingsiloed before.
You can't, I mean, I'm wearingmore hats now than I think I've
had in many, many years, youknow, uh, in, in that regard.

(31:08):
Because, Yeah, certainfunctions.
You may not have therepresentation that you you are
used to having or experience,put that way.
You look for people in yourorganization, in a larger
company, you're really lookingfor him to fulfill that position
and that domain expertise.
Whereas, you know, in a smallercompany, it's okay.

(31:30):
They have to have obviously somedomain expertise, but what else
can they contribute to?
My current company, for example,it was really a discovery, a
discovery and developmentbiomarker discovery development
company.
But now we developed theproduct.
It's in the commercialization,uh, stage, uh, many of the

(31:50):
individuals have never gonethrough sort of that transition
from development to be incommercial.
Um, and, uh, one has to be ableto, one, are you willing to
embrace taking on otherresponsibilities?
And so this is not in my domain.
In smaller companies, uh,there's certainly a willingness
for that.
And that goes back to thepassion, the mission, everybody

(32:12):
on board.
I'm pleased to see people aredoing things that they haven't
never done before, you know, andthey're starting to excel at
that.
And then, the company'sexpecting an employee to be able
to contribute.
We might give them, options orequity and things along those
lines, but it's really importantfor each, uh employee, an
individual to build their ownequity.

(32:34):
And by, I think the way theybuild their own equity is to
have more of that diverse sortof experience and under their
belt that they, they havecapabilities in a number of
different domains.
That will help them not only intheir current job, but when
they're looking at the next,next opportunity.
And, you know, nowadays, um,that job security, whether it's

(32:56):
a large or small company, uh,is, is, is no longer really the,
an assumption anymore that way.

Pat Kothe (33:06):
When you were describing, early on in your
career, you had that extremeownership and you wanted to make
sure your product was doneright.
So you stepped out and youbenefited by that.
And then as your company grows,your job as a CEO is to fire
yourself from other jobs.
Okay.
I'm growing, so now I can bringsomebody in to run the marketing
organization, salesorganization.

(33:29):
All of these different things,you're, you're, you're doing it.
But the bargain that you madewith the company is you have
made it successful and you havebuilt not only the company, but
you built things into yourselfthat allow you to take that out
into other areas.
And you're more valuable toother companies by having that
breadth of experience.

Yeah, that, that's a good summary.
Very good.
Well,

Pat Kothe (33:54):
So let's talk about your current company,
Immunexpress.
Very interesting space that youguys are playing in.
So tell me a little bit aboutthe company and the problem that
you're solving.

Immunexpress based here in Seattle, um, or,
uh, A private company and we'rea small company and, we've been
working in, uh, in the genediscovery world for a number of
years and a lot, a lot of thattechnology was founded in, in,
in Australia and we're lookingat actually human host response

(34:32):
to infectious disease.
So we have discovered, uh, novelgenes, uh, that are associated,
um, and expressed either overexpressed or under expressed,
due to a path pathogeninfection, but not just a
pathogen infection and pathogeninfection.
That leads to sepsis.
And sepsis is what our focus is.

(34:53):
And we, we are looking at tryingto, trying to work on
technologies and products, uh,that can detect sepsis early
because sepsis is adysfunctional, host response,
uh, to inflammation, thatresults in organ dysfunction and
failure and, and death.
And many times what looks likeyou can detect sepsis in the

(35:18):
late stages, certainly, but youcan't be able to intervene at
that point.
Or the mortality rate is veryhigh or morbidity rate is very
high.
And we all know examples, Ithink, uh, of that.
It can lead to severe amputeeismif somebody survives.
It's a worldwide problem.
In the U.
S.
It's the number one cause ofdeath, uh, in the hospital.

(35:40):
It's also the single greatestexpense category, even though
it's only represents about, youknow, five or five to 6 percent
of cases and in the hospital.
And as each hour goes by and onedoes have sepsis, the
probability of mortality goes upby 8 percent per hour.

(36:01):
So it's very important to beable to catch it and catch it
early.
And quite frankly, there aren'ttechnologies that are out there.
What we have developed is whatwe found was that if a human has
an infection that's leading tosepsis because there's certain
genes that are cer that are overexpressed on white blood cells.

(36:23):
But early stages of sepsis lookslike what is called systemic
inflammatory response syndrome,or SIRS uh, which looks like
sepsis with a, a path pathogen,but does not lead to that.
It's, it's an ephemeralinflammatory response.
So with sepsis, what isessentially happening is your

(36:43):
immune system is overstimulated.
You start going down thecytokine cascade and that
results in organ failure.
So we found that if a human hasSIRS, systemic inflammatory
response syndrome, without aninfection, that there's certain
genes that are downregulated.

(37:05):
So as a consequence, what we didwas we actually went through
hundreds of genes and narrowedit down to a two to four marker
system that if a patient isinfected and it's leading to
sepsis, that gene isoverexpressed and the other
genes don't move at all.
And if indeed they're having asystemic inflammatory response,

(37:27):
then.
that gene does not move at all,and the other ones actually are
down, downregulated.
So we're, as a consequence ofthat, the difference between
those genes expression, we cancome up with a prediction of
likelihood of sepsis.
And, that's what we developed,uh, that's what we, uh, got FDA
cleared, uh, in, uh, the end of2021.

(37:50):
And we're in the midst ofcommercializing.

Pat Kothe (37:53):
Let's go back for a second and talk about current
technology and how things aredone.
So somebody comes into thehospital and they've got an
infection.
and tests are run.
So at what point are they sayingthis person is septic or not
septic?
What's the current testingmethodology?
What's the current diagnosis ofsepsis like?

It's a challenge.
And so if a physician right nowhas to be able to look at
multiple inputs to make adetermination as to, as do they
think that this is probablysepsis, they'll look at white
blood, white blood cell count,they'll look at fever,
tachycardia, lactate levels, uh,perfusion, um, but the, the

(38:40):
really there's no gold standard.
And so they're looking at about10 or 12 inputs and trying to
make that sort of determination.
If there is a gold standard,it's called, it's blood culture.
And so if I suspect that thispatient, is becoming septic,
I'll take a blood draw and beable to culture that up.
And I won't get a result formaybe 18 to 24 to 48 hours, if

(39:04):
at all.
In fact, research shows in ourown clinical studies that even
when somebody is sepsis with abacterial infection, septic with
a bacterial infection, you onlyget a positive blood culture
back about 15 percent of thetime.
So, in the meantime, physicianbasically, when in doubt, I'm

(39:25):
going to treat as sepsis.
And, certainly if there issepsis, uh, occurring and it's
due to a bacteria,administration of antibiotics is
very important to get on and do,and be able to have broad
spectrum antibiotics,immediately.
But large epidemiologicalstudies have shown that 43

(39:46):
percent of the time when a, aphysician has admitted a patient
to the ICU and said, this, thispatient is septic, 43 percent of
the time they did not have it.
So therefore, you've got otheritiologies are going on.
that patient is sick, butthey're being treated for
sepsis.

(40:06):
And so one, you're ignoring whatit, what else is going on.
It could be, it could becardiovascular.
It could be, brain bleed,something, something else in
that regard that needs to gettreated.
And treated a different,different way.
so, so it's very important to beable to rule in sepsis, uh, and
at that point in time, then yes,indeed, you do start your broad

(40:27):
antibiotics.
And at that point, point intime, you're being able to
comply with what CMS says isthat between one and three
hours, you need to be able to,if somebody is septic, you need
to be able to be administering atreatment.
But, In the case of patientsthat have kidney disease, for
example, broad spectrumantibiotic could actually lead

(40:49):
to mortality in and of itself.
So it's very important to beable to, at that early stage,
when doctors are really,essentially, it's a flip of the
coin, to be able to rule in orrule out sepsis.

Pat Kothe (41:02):
I spent some time in the concussion marketplace and
concussions are a constellationof symptoms is basically what it
is.
And it's similar here, sepsis isa constellation of other things
that people say, well it'sprobably sepsis.
Um, but we won't know until 18hours, 24 hours till we get it

(41:24):
back.
So we're going to, we're goingto make a choice to start you on
antibiotics or not start you onantibiotics.
And what you talked about, withif someone is undiagnosed, they
have sepsis, but it'sundiagnosed every hour that goes
by that you're not treating it.
It increases the death rate byeight percent.

(41:45):
That's if we're looking at itfrom the sepsis, viewpoint.
If you're looking at it fromcardiothoracic or cardiac
disease standpoint or cardiacevent standpoint, and they don't
diagnose the cardiac eventbecause they think it's sepsis,
well now you can start lookingat what the, what the risk is
for somebody that was notdiagnosed for that.

(42:06):
So the key here is we're talkingabout how do you get a valid
diagnosis as soon as possible soyou can hit the disease or hit
the injury with the appropriatetreatment immediately so that
you have better, better outcome.
So it's all about the diagnosis.

Absolutely.
You know, the, yeah, there'sroughly 5, 000 hospitals in the
U.
S.
and, uh, and they're withinprobably about 450, you know,
hospital systems.
And they all go about sort oftheir early diagnosis of sepsis
differently.
Systems typically have what theycall a sepsis bundle, that if we

(42:47):
suspect, uh, sepsis, we will dothis, you know, uh, in that, in
that regard, um, and there'sversions of that, which many of
that is, uh, driven by EMRsystems that have early warning
sepsis, uh, sepsis programs,their algorithms by, from Epic
and Cerner, For example, um,that say they take those all,

(43:09):
all those factors come up withthe algorithm and they'll,
they'll predict sepsis.
But what's going on now is, is,uh, we'll call it, you know,
alarm fatigue.
I mean, uh, the EMR is callingit sepsis.
The sepsis team will be goingthere.
They look at patient and indeedthey do not have that.
And so basically those systemsare being turned off.

(43:31):
But CMS is measuring every sixmonths hospitals compliance with
what they call the sepsisbundle.
Uh, are you administering andtesting to make sure, that
you're in compliance, uh, with,uh, triaging that sepsis
patient?
And when they met the overallnationwide score is about 60

(43:52):
percent compliance with that,and the range is between 20 and
80%, even within the samehospital system.
So what one really needs to haveis in their sepsis bundle, a way
to be able to early on be ableto tell whether or not, uh, you
know, predicted sepsis or not.
And then you could be able toget that patient on, on the

(44:13):
appropriate bundle.
Or look for those otheritiologies.
And that's exactly how we'repositioning, you know, our tests
Septicyte Rapid, in thehospital, to be able to help
improve, really compliance toyour sepsis bundle and CMS one
to, one to three hourresuscitation bundle.

Pat Kothe (44:31):
So what is Septicyte Rapid.
Tell me a little bit about, themachine, the technology, what
you're testing.

Sure.
So what we're testing isactually the gene expression off
of white blood cells.
We're measuring messenger mRNAby a highly sensitive PCR test.
When I first got into moleculardiagnostics, if one was to do a
gene test, basically, you had tohave three rooms with about five

(45:02):
different pieces of equipment,one for isolation, one for
purification, one foramplification, and you had to
make sure that there was nocontamination at all.
So, uh, our test we've developedis actually in this cartridge in
my hand, and this is essentiallythat whole molecular three, lab

(45:23):
system in, in the palm of myhand.
And in,

Pat Kothe (45:26):
For those that are, that are listening, uh, it's
roughly the size of a, of twodecks of cards.
Put two decks, decks of cards ontop of each other, that's about
how big it

that's right.
Absolutely.
And this contains all thereagents that are necessary to
be able to do the extraction,purification, isolation, et
cetera, like that.
And what we do is we takeactually about one ml of whole
blood.
And I'm opening up what is aport on the top of the cartridge

(45:56):
here that you would inject onemil of blood in, you close the
cartridge up, then you actuallyput this cartridge in what looks
like a, uh, uh, DVD, you know,uh, instrument, a tray, press
the button, it goes in, uh,that's actually does the
amplification and the PCRreading, uh, in and of itself.

(46:18):
And then, uh, within about onehour, you have a result.
so you think about the currentgold standard, uh, takes 18 to
24 to 48 hours.
We can come and say, you know,this patient has a high
probability of sepsis.
So therefore, uh, rule in, geton this patient, you know, from
a septic standpoint or a lowprobability of sepsis, which

(46:40):
means you should be looking atfor other, other itiologies.

Pat Kothe (46:45):
So, Raleigh, that, that cartridge, is specific to
sepsis.
Is my assumption that you'llhave other cartridges for other
types of diseases?

Yes, I mean, we're, we're staying within our,
our sepsis, um, you know, focusat this point in time, but the
follow on tests that we have isthe next question is, okay, is,
uh, you know, is it sepsis?
And if indeed it is, what'scausing that?
And I think that everybody knowsnow that, uh, after the pandemic
that, that COVID, uh, again, uh,obviously, uh, is something that

(47:22):
we've all experienced, but about30 percent of deaths associated
with COVID were due to COVIDsepsis, and viral sepsis was not
on the radar, quite frankly, uh,as much as bacterial.
And sepsis can be done, may bedue to both bacterial, viral,
and fungal infections.
but the next question from atreatment standpoint is, okay,

(47:44):
if sepsis, is it bacterial or isit viral?
Because you're going to do verydifferent types of treatments,
uh, modalities for that.
And certainly if it's viralsepsis, it's a waste of time
putting, you know, antibiotics.
Uh, administered to that, that,that patient.
So we have, and we're developingthat in, in, actually in the
same cartridge.
if sepsis, then is it bacterialor is it viral?

(48:07):
And, uh, that's what's in our,our, our, our pipeline right
now.
And then finally, you know, weare able to determine if, if, if
it's bacterial, is it grampositive or gram negative?
Because then, uh, you wouldadminister different specific
antibiotics instead of broadspectrum ones.

Pat Kothe (48:24):
So you received your regulatory clearance in the U.
S., Europe as well,

Yes, now we have C mark.

Pat Kothe (48:32):
and, and this occurred in the middle of COVID?

Yes, that was a challenge.
Um, We were doing our clinical,our final clinical trials, uh,
when COVID hit.
And.
Uh, that obviously slowed thingsdown because hospitals were
being over overwhelmed withaccrual of the number of
patients that we needed.
But on the other hand, it gaveus the opportunity where we had
never, you know, the test wasdeveloped when there was no

(49:01):
COVID.
And then all of a sudden COVIDis now as a reality and we know
it's going to be a reality forsome, some time.
So how well does the test workwith covid patients?
So we conducted trials,additional trials with covid
patients, uh, in both in Europeand, and the U.
S.
and, one, determined that highlyaccurate for determining, uh,

(49:22):
covid sepsis as, as well, uh,and that was part of the
submission.
And then the other was actually,as you know, covid patients
would show up in the hospital,covid positive, one didn't know
whether or not they'd progressto severe covid cases or not.
It's very difficult to do that.
And the test did a very good jobof being able to predict who
would end up in an ICU two orthree days later, uh, in that,

(49:46):
that regard.
We finally finished our clinicaltrial, and then the FDA was only
giving clearances to COVIDtests, you know, at that point
in time.
So we had an extended reviewunder, under that case.
But we were fortunate.
We were one of the first teststhat were non COVID, uh, that
were cleared by the, by the.
Uh, FDA.
Um, and that was really at thevery end of 2021.

Pat Kothe (50:10):
These are not point of care testing machines.
They're, they're in, in the lab.
Is that correct?

Uh, so they're not clear waived.
Uh, it's, we, we say near topatient, uh, because it's, it's
very simple, you know, one toadminister one only has to be
able to know how to pipet blood,uh, in, in that regard.

Pat Kothe (50:32):
So does a, does a, does a nurse, uh, draw the blood
and then just send that, thatvial down to the lab?
Or do they put it into the, intothe cartridge and send the
cartridge

Well, that's a great question.
In the U.
S., many hospitals have whatthey call a stat lab, which sits
between, uh, the, uh, E.
R.
and the I.
C.
U.
Uh, so that's a very quickexchange.
You know, we found that we, inour, our.
Our work, we get a result backto the physician in about an
hour and 40 minutes.

(51:05):
However, in Europe, uh, they'reusing it, they're actually
putting the instrument, youknow, right in the I.
C.
U.
or the E.
D.
and there, uh, then, uh, youactually have both nurses and
doctors that are actually doingthe test itself directly
themselves.
That is very useful for them forfast turnaround, but for us as

(51:26):
far as training and everythingalong those lines, we have to
train a lot more people to beable to administer that versus
a, a med tech.

Pat Kothe (51:34):
Yeah.
the other thing I was wonderingabout is it's in the machine for
an hour, so you may needmultiple machines if you're in
an ED that has multiple patientsin there too.

the, um, instrument itself is, uh, uh, as
a footprint, a little bit largerthan a pc, a standard, uh, pc.
And, um, there's a, a consolethat goes with it that can drive
eight.
Uh, instruments at one time, wethink, you know, typically a
customer and customers that wehave have, uh, two to three

(52:06):
instruments.
And so those are random accessat that point in time.
1 is 1 is running another sampleto come in.
You can load that up and getthat going as well.

Pat Kothe (52:15):
So, Raleigh, rolling out a diagnostic like this has
got a couple of challenges withit.
You have to educate the peoplethat are in the lab.
They're making the decision,they're the decision makers for
it.
But then training people toorder that, uh, order that or to
understand that that test isavailable is, is another part of
the sale as well.

(52:36):
So what kind of challenges haveyou seen in rolling this product
out?

Well, uh, well, 1st challenge was, is that, um,
we launched, uh, the pandemicwas still ongoing, you know, and
so, uh, and obviously 2022getting access to the hospital
was very difficult.
I mean, you could not get faceto face with people as we
typically would try to do.

(53:01):
And, uh, you know, the issue isthat in sepsis is really sort of
a, uh, as you say, it's aconstellation of symptoms, but
it's also a team sport as far asyou have, uh, both, uh, either a
critical care doctor or, uh, anemergency, uh, department, uh,
doc, doctor, infectious disease,critical care nurse, uh, and

(53:25):
then you have the laboratory.
So it's really important to beable to have education for all
of those different disciplines.
We have CME courses that, uh, wehad for critical care nurses for
describing sepsis and sepsismanagement and then how our
tests, uh, could beadministered, uh, society for
critical care of medicine, uh,is one where we have, we have

(53:48):
collaborators that are, Um,that, uh, one, our clinical
trial sites, but then also nowwe're adopting as customers, uh,
uh, provide uh, webinars andseminars, uh, in, uh, in, in
that regard.
Recently the CDC has come out,uh, with sepsis guidelines and
one of their, their findingswas, is that there's no single

(54:10):
sort of owner of sepsis.
Some hospitals have a sepsiscoordinator, many, many, many do
not.
And it's really, uh, importantto have somebody to have
ownership.
For us if there is a sepsiscommittee, then that's who we
want to get in front of, youknow, because that brings all of
those different disciplinestogether because they're,

(54:30):
they're the ones who puttogether what their sepsis
bundle is and what they're goingto apply that for

Pat Kothe (54:36):
I was recently, in the hospital with a friend of
mine who had sepsis.
And, for those of us in, in thebusiness, we forget about what
it's like to be a patient andwhat the patient's questions
really are and who's managingthat patient.
Go into the ED.
have a preliminary diagnosis,same exact thing as we talked

(55:00):
about.
I think it's probably sepsis.
Don't know, won't know for 24hours, but just the amount of
physicians and PAs that arecoming in.
There's not one person.
There's a group that managesyou.
So you're trying to figure outwhich person you're going to see
that, that person is now off forthe next two days, now you got a

(55:22):
new person from that groupcoming in.
who's in charge of the PT?
Who's in charge of the medicalcare?
From a patient standpoint, it'sreally difficult to do that.
but also it's who's driving theboat here?
who's in charge of this?
Because you get different peoplein charge of different things.
That ownership of whateverdisease it is, is just so

(55:46):
important and it's alsoimportant that the patient knows
what it is.
That's the practical side of it.
The medical side is, you know,is kind of what we always focus
on, but the practical side is aswell.
So having that one owner as,who'd you say CDC is

really pushing that.

Pat Kothe (56:01):
putting it as an issue?
Yeah.
Having that one owner is reallyimportant.

Well, it's a real challenge for, you know,
the, um, um, hospital, you know,clinicians, you know, uh, just
in general.
With the pandemic, I mean,there's been a lot of attrition,
uh, as well, and many, uh, EDsand ICUs are actually short
staffed as a consequence ofthat.
Introducing something new,whether it's our product or any
other new product into and intothat backdrop is, is, is a

(56:33):
challenge.
And so it has to be a meaningfulproduct for them to be able to,
um, to, to, to adopt, you know,one thing you can have, like
these sepsis owners and thesepsis committee and the larger
systems have that, uh, but whenyou think about the a hundred
bed hospital that is out there,uh, where they don't have the,

(56:54):
that infrastructure at all, andwe're seeing, there's a lot of
interest in our tests andsaying, look, we just, we don't
have all this residentexpertise, you know, we need, we
need, they're, they're veryfocused on the patient, you
know, and, and make in thatdetermination, uh, you know, for
us to make the call on sepsis isdifficult for us to do.
So.
A test like ours can be quitebeneficial, you know, uh, for

(57:16):
their, for their management.

Pat Kothe (57:19):
What has the response been?

As you look at for, for, uh, customers for
innovative medical, there'salways going to be the, the, the
ones, uh, who are moreentrepreneur and are interested
in, in new technologies andevaluations of that.
Uh, for us, uh, you know, we, wehave customers in the U.
S., and in Europe.
Many of them, even though it'sFDA cleared, you have clinical

(57:43):
trials, want to be able to seehow the tests are, works in
their systems.
So we've got a number of, uh,uh, the processes.
Evaluations, you know, andbecause this is in a CLIA lab,
they have to meet their CLIA,standards.
And I think that it's, you know,the diversity of hospitals, but
also there's a diversity ofneeds, and you need to be very

(58:05):
sensitive to, you know, what,what, what is your sepsis
problem?
Do you have a sepsis problem?
What is it?
and certain institutional sayit's our inpatient.
So these are actually patientsthat are already in post
surgery, things along thoselines where we have a lot of
difficulty.
Uh, so therefore, um, what sortof studies do you have in that

(58:26):
regard?
Which we've published on.
Others are about screening.
Uh, This is not a screeningtest.
I mean, this is where I mean,there's something, something
going on there.
Uh, so it's not like screeningeverybody who comes into the
ED., For us, it's really, ifyou're thinking of doing a blood
draw for, uh, that patient,that's when you really need to
be looking at this test.
But use cases are veryimportant.

(58:47):
And so, uh, and differentinstitutions have different
needs.

Pat Kothe (58:51):
The benefits of a technology like this are so
great.
you think about the decrease ofmortality alone there, but then
you've got length of stay,you've got antibiotic usage,
you've got you know, antibioticresistance.
You got a whole host ofdifferent benefits that kind of
come in here.

(59:13):
Who is the main decision makerwhen it comes to this?
Is it the CEO who's, or the Clevel people who are looking at
the cost side of it?
Is it the medical managementpeople?
Where's the greatest benefit?

Well, I mean, there's, there's clearly a cost
benefit for reducing length ofstay, uh, has, uh, to, to your
point.
The critical care, um, uh,physician and critical care
nurses, I think are central to,to this.
They need the tools and theythey, they have to have that.
From a finance standpoint, Imean, we have a unique, uh, ICD

(59:52):
10 code specific for the test.
And, you know, if you look at,uh, the single largest clawback
from Medicare and insurers, uh,for reimbursement.
Uh, are related to the sepsisDRG codes, of which there's
about 20 of them.
And, uh, just back in, um, uh,before the pandemic, there was

(01:00:13):
an audit, uh of, of threestates, and the clawback was in
the order of 280 milliondollars.
Uh, you know, and that's out of,out of pocket.
The other is, if you look atsepsis is the leading cause of
readmission.
Uh, um, of a patient to ahospital, um, within 30 days.

(01:00:34):
And if that happens, then it's,uh, the hospital eats the cost
of, uh, care of that patient.
CMS or insurers will not dothat.
So making sure that a patient,um, may not still have residual
sort of sepsis, so to speak, atdischarge is very, very
important, uh, in that regard.

(01:00:55):
So, uh, as we talk to c-suite,CFOs really zero in on that, so
do CEOs, uh, in, in, in thatregard.
And CMOs is very much about, youknow, improving quality of care.

Pat Kothe (01:01:07):
Business model.
Let's just quickly do that.
So we've got a couple ofmachines are going to go into
the lab and then you've gotcartridges that, you know, I'm
assuming you're charging per,per, per cartridge for this.
Scope me about how much are wetalking about for these pieces
of equipment?

Rollie Carlson (01:01:28):
Well, the instruments are roughly about
50, 000 each, and the cartridgeprice range between 175 and 225.
And, uh, I'd say that, you know,it's usually an early adoption.
There's many, many cases wherethere's going to be a lease or

(01:01:50):
rent of the instrument.
Uh, and then that would be, uh,done at an upcharge for, for,
for the cartridge.
Uh, and then as you get moreadoption, then that, from my
experience, you see a transitionto where you get more direct
capital purchase.
Uh, from a capital purchasestandpoint, that, uh, you know.
That is something that doesn'tnecessarily fly under the radar,

(01:02:11):
but doesn't really hit thecapital review board, so to
speak.
So you're not in that sort ofannual cycle, so to speak.

Pat Kothe (01:02:22):
Is the, uh, is that business model common within
the, the, uh, diagnostic spaceto have a cartridge to have
capital equipment?

Yes.
Yeah.
Very much so.

Pat Kothe (01:02:34):
Okay, great.
Well, thank you so much forsharing this information.
Just a fascinating area, an areawhere diagnosis can make a huge
difference in patient outcomesas well as correct use of
medical care.
To kind of wrap things up, Iwant to ask you a little bit

(01:02:55):
about within our space.
Um, you've got, some milesbehind you as, as do I, and I've
seen a lot of changes, not onlywithin how care is delivered and
how medicine is practiced, butalso how companies, have
functioned and how, we're all,different than we were years
ago.
So if you're going to pick out acouple of things, in your

(01:03:17):
experience that have, We'vereally been, extremely positive
changes to either medicine, howmedicines practice or how us, us
as companies, uh, serve themedical community.
What would be a couple of thosethings?

Personalized medicine is becoming more of a
reality.
Um, and I, I think that's,that's something that was an
aspiration, I think, when I was,uh, in, you know, early in my
career overall, but really notpracticed as, as much.
And I do think that if you seesome of the breakthrough, uh,
drugs, particularly like in, in,in, in cancer, for example, if

(01:03:54):
you look at Uh, you know, CMLmanagement for leukemia, how
now, I mean, basically, uh, inthe beginning of my career, you
had a situation where, uh, ifyou had that diagnosis, the
likelihood of mortality within,you know, within three years was
extremely high, uh, now, becauseof one, good diagnostics,

(01:04:16):
understanding the genetictechnologies, and one reason I
enjoy molecular diagnostics and,and targeted, uh, molecular
therapies are the fact that uh,you understand the mechanism you
can be able to try to, uh, onediagnose, uh, in this case, that
was BCR able, uh, fusion gene,uh, that actually, uh, had a

(01:04:36):
damaging protein as aconsequence.
And then Novartis was able totarget that specifically with a
drug Gleevec, uh, and that justchanged, that just changed
things around.
Um, you know, the dilemma ofvalue that diagnostics, uh,
brings and the cost ofdiagnostics relative to

(01:04:57):
interventions and therapy hasn'tchanged.
And quite frankly, is if youlook at it, where, you know, the
costs of diagnostics are 10percent or less total health
care costs, but they drive about90, 95 percent of what is the
downstream.
Um, you know, decision makesand, and, and intervention, um,

(01:05:19):
there's a disparity there.
And so what has not improved is,is, is reimbursement quite
frankly, uh, for the value ofwhat, uh, diagnostics, uh, uh,
have brought to the table and,uh.
I had one example, though, whenI was at Vysis, and I was
mentioning PathVision andEuroVision.
At the same time, we were tryingto get improved reimbursement

(01:05:42):
through CMS for this technologythat we had.
And we were quite successful indoing that.
And in doing that really helpedreally drive adoption of those
products, which were phenomenalgrowth.
That's not the case in on a, ona broad, broader basis.

(01:06:03):
We talked about this from acompany standpoint, the view
that large companies were safer,so to speak, to be able to, uh,
and you have a whole careerthere.
Uh, I think that as we asevidence over the past two
years, uh, and even before that.
Uh, that's not the case, whetherit's large or small company.
So I do think when you see, uh,you do see a lot of the, uh, of

(01:06:27):
employee migration, you know, asa consequence, not only a
reduction in force, but the factof the matter is a quote,
unquote, loyalty to a company,uh, is, is one where I believe
that you really have to have,uh, Uh, and employee believing
in the purpose of what they'redoing.
Uh, and, and that's much moreimportant now, uh, that it's

(01:06:51):
meaningful that what you'redoing is making a difference.
And they feel that they'remaking a difference, uh, as
well.
And I think that's a positive,quite frankly, that's, that's,
that's really, really useful.
And then if they're building theskill sets, as we talked about
earlier, you know, and in thebroadcast, I think that, you
know, if they develop Um, Theirown equity, uh, that's going to

(01:07:12):
benefit not only their careers,but I think that benefit, um,
healthcare overall because youhave better products and better
management.

Pat Kothe (01:07:23):
Leaders can come from any discipline within a company.
I was really glad Rollie sharedhis journey because there's a
lot that could be taken from it.
And, and can be applied to, toour journeys as well.
A few of my takeaways.
First cross training.
You benefit, you learn, youlearn a lot about yourself and

(01:07:44):
other parts of the company andhow to make things, uh,
successful with it within acompany.
You also make yourself morevaluable to the company.
And the other thing it does, ithelps a break down or prevents
the formation of silos within acompany.
So cross training can be areally valuable, uh, thing for

(01:08:05):
both you and the company.
Second the R and D function.
And we spent a lot of timetalking about different,
different topics within R and D.
Uh, Raleigh talked about thepercent of our versus D big
companies.
You know, 20% are 80% D but muchsmaller with smaller companies
when you have a mission to do,and not a lot of cash to do it

(01:08:27):
in.
So that, that 20, 80.
Uh, it doesn't really apply whenyou start dealing with, with
startups.
And he discussed the feasibilitythreshold.
Uh, you need to make sure thatyour product.
Uh, idea is feasible to do soproof of concept.
And he said, if, if you can'tget there, you need to kill it,

(01:08:48):
change it, or merge it withanother, uh, another idea.
The other thing.
It discussed in this R and Dfunction is incorporating people
outside of R and D intoresearch.
Traditional R and D actuallyextends out beyond the people in
the R and D department.
The final thing was diagnosticdevices.

(01:09:10):
So many of us are in therapeuticdevices, but the diagnostic
market is so important.
The impact on patient outcomesand overall costs is greatly
influenced by the ability toquickly and accurately diagnose
the situation.
Yet as, Rollie said,reimbursement is in this area

(01:09:30):
has been lacking.
Well, it's really time to givethis issue some emphasis.
Thank you for listening.
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Medical Device podcast.
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Also, please spread the word andtell a friend or two to listen
to the mastering medical devicepodcast as interviews like

(01:09:52):
today's can help you become amore effective medical device
leader.
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