Evan Luxon, Centese - Transforming Surgical Drainage | LSI USA '24

Evan Luxon  0:04  
Evan luxon, co founder and CEO of Centene peace, where we are developing autonomous surgical recovery, I just want to jump right into this and focus on our value prop out of the gate, because to me, that's the most important thing we're doing is having a clinical impact. And so it's an t. So we've developed a device that reduces the incidence of post op afib. In cardiac surgery by 40%. This is the number one complication in cardiac surgery with about one in three patients developing it, and it's very costly to manage. And so this also saves hospitals a lot of money by reducing the incidence, like we've done. We've also developed a device that reduces length of stay in thoracic surgery by a full day. And that's also a huge cost savings for hospitals, because those procedures are reimbursed as a DRG basis. So any savings on the length of stay is direct cost savings for the hospitals. This is actually from the same device, by the way, which is part of the reason why we're so excited, and so excited to walk you through the rest of the story. First, to take a step back, we're focused on CT surgery, so heart and lung surgery. And here you see a very typical scenario for a patient recovering after they've had an operation on their heart or the lung. They're in bed, and they're hooked up to this device, which is a chest drain to remove fluid from around the heart and the lungs. And to quantify the drainage both the fluid output, which is a graduated cylinder, basically with a sharpie marker on the side, and air leak for lung patients who've had a resection of their lung, they'll monitor how much air is leaking from the lungs by watching how much air is bubbling through this very old school analog device. And so what we've done at CentOS is we've developed a system that totally automates this process for the nurses and provides a lot more information for the surgeons. And that's what thorough guard is. So thorough guard is a digital replacement for the chest drains in use today. The reason that we see the impacts that we see clinically are the first of all were more effective at draining the chest, the fluid that accumulates around the heart often leads to post op afib. And so by getting it out more effectively, we're able to see that 40% reduction. And then in lung surgery, what we're doing is quantifying the amount of air leak with numbers on the screen that they can track over time. And so it gives the surgeons a lot more confidence to make earlier decisions to pull these drains and send the patients home. And that's how we're seeing the wonder of reduction in length of stay in thoracic surgery. So this device really excels in two key areas. The first is on the actual performance of the drainage. So there we have autonomous drainage, our system has its own proprietary chest tube that goes into the patient's chest. And we have a mechanism that automatically clears that with sterile air every few minutes in order to keep the tube draining as well as it should. Now this device is also much better for patients because they can get up they can walk around, the suction is built in. It's battery powered, which is not true of the existing devices. And then the second thing is that our data is so much better than what they're used to seeing. It's very precise, we have continuous measurements of the drainage volume and air leak for lung patients. And we're also incorporating decision support with AI where our device is actually monitoring the key variables that the surgeons care about and reporting on those in real time. So they get the earliest notification that the patient is ready to have the tube removed. Our business model is pretty straightforward. It's a razor razor blade model where we have a capital piece of equipment we sell for $3,000. But we really focus on driving volume for the two disposables. And so we have a canister kit that is used on every single patient and a catheter kit that is used when the surgeons want to enable the automated cloud clearance, particularly in cardiac surgery. We also see some supplemental revenue opportunities with the upgrades for new features and subscription for remote patient monitoring, which I'll talk about in a minute. This is a huge market that we're going after just our beachhead of heart and lung surgery is about a billion dollars. And that's based on the number of procedures in the US and Europe and our pricing. We're starting there because there's a lot of tailwinds. Surgeons are looking for devices like ours. There are specific recommendations to use devices like ours, and so we think we will capture that market rather quickly. From there, we plan to expand out into other chest markets, things like trauma and pulmonology. And then beyond that, we see opportunity to apply our core technology to a lot of other applications as well. Basically anytime a drain is required, you could use what we developed in order to improve the functionality. We're at a very exciting stage that centerpiece where we've spent the past couple of years generating a lot of clinical evidence our device has been used on over 6000 patients at some of the countries Top centers like NYU, and Stanford and Mayo Clinic, we've been charging these centers to use our device, even though the focus has been clinical. And so we're up to the point of around $2 million in revenue from these, these pilots. But really, the focus has been on the clinical data. And so here you see the post op AFib number that I talked about. The reason we see that is because we're more effective at getting fluid out of the chest, which you see here, first, our almost twice the volume. And that's done with a smaller tube actually, because of our automated cloud clearance, which means there's less patient pain, which was also published on in the same paper. And then when you look at our data, not only have we reduced the length of stay down by a full day, the surgeons that are using it, particularly at NYU are compressing that even further, they're pulling tubes within 12 hours. And actually, they're starting now to pull tubes in the ER, based on the data coming off of our device. That was totally unheard of before we came to market. And it's going to push thoracic surgery to become outpatient procedure in a lot of situations, we believe. And that's really the vision of our surgeons as well. If patients don't have their air leak resolved quickly, they are also being sent home with this. And this is something that we see as a massive market opportunity going forward to further save on cost for the hospitals. We have a couple of things in our product pipeline that we're working on. The first is ongoing integration of data and AI in order to really provide more decision support to the clinicians, give them the confidence to make the quickest decisions they possibly can. And then we're also going to be launching remote patient monitoring with functionality that we call Smart View where we take our device, put the data into our cloud in the report that back to the surgeons and into the EMR. When it comes to the competition in the space, there's not a lot going on. There's the market leader getting a which has all the issues I described earlier with the plastic box and the bubbles. We have two main competitors on our value props. One is medalla. This is a Swiss company. They're mostly known for their breast pumps. But they've taken their negative pressure wound therapy product and repackaged it as a chest strain. So it was a nice genuine attempt at this, but it has some functional limitations. And we've gone into their accounts and converted them. So we know when. And then clear flow is a company that has a catheter with a guide wire that goes inside of the tube. And this allows the nurses to basically rake the clot material out of the internal channel of the tube without having to break the sterile barrier. But it's very manual, we see it as sort of a band aid solution, you still need the plastic box to generate the suction. And so we believe we're really well positioned to be the new standard of care. And so that leads us to why I'm here today we're raising money $10 million Series B round, we had an initial close on this in November of 5.7 5 million. So we're looking to bring on some more. And it's really to fund primarily the sales and marketing. we're executing on that now having raised the funds. And so I'm happy to talk in more detail about that if anyone's interested after the talk. And then it's also going to fund some of the r&d that I described the SMART Check Smart View as well as ongoing margin improvements. And then last, now the team is very experienced. I myself have been in met early stage medtech my entire career. primarily on the engineering side. I've got graduate engineering degrees from Johns Hopkins and Stanford. Randy Preston is our Chief Business Officer has also spent his entire career in early stage med tech, more on the business development side and sales and marketing. And so he's heading up our commercial operations. And then Dan Burnett is on our board. He is a serial entrepreneur. He's a physician and engineer. And he is on our board provides a lot of high level input on our direction. And that's it. Please reach out if you have any questions. Otherwise, I'll be around through an update tomorrow. Thanks