Episode 2 – SBIRLand Interview with Kathleen Pizzuti from Transmural Systems (Transcript)
Dr. Garland: Hi, this is Eva Garland with Eva Garland Consulting, and I’m very excited to be hosting this interview for SBIRLand.com with Kathleen Pizzuti of Transmural Systems. Founded in 2014, Transmural Systems is developing new medical devices to address unmet needs in the cardiovascular space. I was fortunate to first meet the founders of Transmural Systems, Nasser Rafiee, and Kathleen shortly after they founded their company and were seeking initial seed funding through the NIH SBIR program. Since that time, Transmural Systems has grown from a true startup housed in Nasser and Kathleen’s basement to a clinical-stage company with a 7,000 square foot laboratory facility and two products currently in early feasibility studies. The vast majority of funding for Transmural’s research and development has come from the SBIR program totaling over $10 million in phase one, phase two and phase two B awards to support preclinical and clinical work. Kathleen, thank you very much for joining me today. I’d like to start by asking you what motivated you to start your business.
Ms. Pizzuti: Well, first, thank you, Eva, for this opportunity. We’re really proud of our business and how it’s grown. And so, thank you again for this chance to speak with you. The business actually was founded by Nasser. He worked at Medtronic for 10 years and headed up a new technology group. So it’s been his passion for many years in the medical device market, that space to develop leading edge unmet needs for the cardiovascular space. And as an entrepreneur, he has that passion, that drive. And basically, we made a family decision that said, “Let’s start.” We started off in the basement where he was leveraging his knowledge and looked for ways of making connections and to better understand where he might focus. I at the time was working at Microsoft and we decided, like I said to forge this opportunity, but it was really Nasser who drove it for a number of years and we thought we would just take that chance and see where it went.
Dr. Garland: What are the greatest challenges that you faced in growing the business?
Ms Pizzuti: Yeah. So I think probably the biggest challenge that we faced was the technology decisions and the product decisions that we were initially starting out with are in fact not the ones that we have now and making sure that you stay positive and optimistic in our ability to kind of see something through, I think in the early stages. You tend to wonder, “Well, how long will I really be in this?” But you know that you’ve got that long-term vision and you continue just to be able to shift and be flexible enough to keep things moving forward. Because of the early stages, it’s easy to say, “Well, I haven’t invested much. So maybe this isn’t the right avenue. Maybe I should go off and go back into corporate America.” But little by little, if you keep plugging away and you have that vision in mind, we were fortunate enough and we are seeing a lot of that vision come to fruition now.
Dr. Garland: And how important was the SBIR program in sort of helping you through those initial stages of whether it be doubt or trying to find the right product, and moving that initial idea into actually realizing the product?
Ms. Pizzuti: Yeah. So that actually was the turning point for the company because Nasser had built a relationship with some of the physicians at the NIH and in his early conversations and looking at how the SBIR program could benefit the company. He was learning a lot about it, understood how there was alignment. I think it’s really critical. Also, you need to make sure that you’re aligned with where the NIH initiatives, SBIR funding initiatives are, and I think that there was alignment there. So it was very critical and it really was the turning point for the company.
Dr. Garland: So what was the experience going through your first SBIR application? Can you describe that for those who are listening, who might be thinking about their first application?
Ms Pizzuti: Yeah. Well, I would say that the first application was probably a good learning experience because it was one that had not been awarded. And we had attempted to bring some folks in to help in writing that first application, but we’re relying on the system and there are a lot of tools that are available. It’s hard unless you’ve gone through it once to really understand the process and the level of detail and the systematic kind of approach that you need to have when you’re filing your application. So the first one, actually, was not awarded, and that led, again, that perseverance, but that led Nasser to talk to his physician advisor and try to understand what might be a way to better learn and understand how to submit the application, and that’s when Nasser was given a book, which was How to Write SBIR Grants by Eva Garland. And so, he shared that book. We had both read it, there again, that was really the turning point. And I will just say that conversation, even after we read the book, we were trying to determine how we were going to bring resources in to help do the filing. And I suggested at that time that he reach out to you and that contract that he had set up with you was really the first real major investment that we had made, which actually reaped significant benefit for the company.
Dr. Garland: Now, thank you so much for that. I can’t believe seven years have passed, isn’t it?
Ms. Pizzuti: It is hard to believe.
Dr. Garland: We put together that first application, and so, fortunately, from there, you obviously had a ton of success in getting us their funding. Could you talk a little bit about those past seven years from getting that first funding, what it enabled you to do and how you were able to strategically use that SBIR funding to really advance that technology?
Ms Pizzuti: Well, it’s absolutely a great opportunity to do early design, taking a concept and bring it to the prototype phase. Especially phase one, it really allows you to spend the time and develop the innovative approach and further develop into to that prototyping phase. It’s actually, I think a very broad program, it offers a lot. So, I mean, sometimes you think of it as just taking a concept and further designing it, but we’ve been able to… It takes us right through the submission of an FDA application, depending on how you want to approach your clinical phase, but we’ve been able to do all the testing necessary for that to prove out that technology. We go through the design verification testing, it allows for us to do the preclinical work through animal testing as well. And as I said, with phase two, you can take it right through and submit your FDA. In this case, early feasibility study applications. So it’s really very comprehensive and we’ve been able to leverage it and really bring that technology to the next level.
Dr. Garland: That’s great. And can you talk a little bit about the product itself and what you’ve developed and the unmet need that you’re addressing?
Ms Pizzuti: So we have a platform of technologies and we actually, through the SBIR program also do what we can to leverage one program from another. So that’s really been a great benefit for us as well. We have, in particular, one of our devices is for repairing the mitral valve, is a percutaneous device that is treating heart failure, but it’s also helping to reduce the mitral valve annulus. That is a device that we have taken to early feasibility study. We are in currently in a clinical trial for that. It’s going very well. It’s allowing us to begin to better understand who is the patient population and do the analysis around, where is it really benefiting patients? So that’s a Transmural Cerclage is, really, I consider that to be our flagship product. We have had other devices, our Transcaval closure device is also one that we have taken to early feasibility study as well. As we move forward, we’re learning more about how that can augment and be applicable in a number of different areas, helping with transcatheter aortic repair and we see other applications for it as well.
Dr. Garland: So what advantages do you think a small business might have in taking the lead in developing these specific types of products? As opposed to just assuming that one of the large medical device businesses out there would take it on. Where do you see the small business really kind of playing a key role in the development of those devices?
Ms. Pizzuti: Well, I certainly think the agility of a small business allows for the proof of concept phase and the ability to have a design, a prototype. I think with a small company, you’re really able to focus where you’re not caught up in with large… Which large enterprises have gone to market with certain devices. It’s very difficult for them to be able to put enough time and energy into getting new innovation approved and considered because many times companies are really looking at their revenue and their income stream. And not that we’re not, but at the same time, it’s a small company, you’re very agile. Also, the benefit of working with the NIH. We have a lot more real time feedback because we can use their preclinical facilities and resources. So as a small company, we’ve got that strong relationship and collaboration to the extent that we can ask for their feedback, they see how they like the product, or they like the device. And I think it enables us to have a greater efficiency and at least getting through that proof of concept and prototyping phase.
Dr. Garland: Yeah. And I think we hear that quite a bit from SBIR companies is that they’re really able to be more agile and products that address clear unmet needs, but for various reasons would be difficult to develop under the infrastructure and potentially the red tape of a larger business. So I think it’s very exciting to hear the Transmural story and the success that you’ve had in that area. What’s next for Transmural?
Ms. Pizzuti: Yeah. And also, just on that point as well, I’ll say one more thing, Eva, that even in the pediatric market where large companies don’t see there to be a large market, it’s very high risk. That’s another opportunity for a small company. So yes, I mean, it’s important to getting technology developed more quickly, but also if there’s a market that’s underserved because large companies just really… it’s not profitable for them. They don’t see that large market. Small companies are able to go after that. So we also have some work underway on a pediatric device. So I think there’s been another opportunity that where small companies, small business can really have an impact. So what’s next for us? Now, we’ve spent the past year being more focused in developing those relationships though with large companies, we are pretty proud of the fact that we have remained undiluted and we think we’ve got a very strong value proposition for large companies who now can… We’ve been able to advance our technology to early feasibility study. We’re seeing good outcomes and good results. So we’re now engaged in those discussions about how we might work together to further those devices. And so, we are open to raising capital in many areas, certainly through venture funding if necessary, but it’s been an interesting kind of transition for us to work a lot more closer now. We’ve got the attention of some large companies who really see that there’s some value and how they can help move things forward. So we’re really hoping to kind of cement some of the discussions that we’re having right now in hoping to raise that capital to take some of our devices to the next level.
Dr. Garland: It’s a really exciting milestone to have reached, to definitely be on the radar screen of the big companies and the big investors. That’s great.
Ms. Pizzuti: It really is.
Dr. Garland: So is there anything else about the Transmural story that you’d like to share?
Ms. Pizzuti: Well, I think, what’s also been critical to the success of the company is that we’ve been really fortunate to have a great team. Many of the people who are part of our staff have joined because they worked with Nasser at Medtronic. Many of these folks, they’ve worked together for many years, so they have the same passion and drive, and it’s really important to have a strong team. I think it’s critical and we are really fortunate right now that they are committed and we’re all working together with the same mission in mind. A great thing for us personally, but also for the company, you can’t do it without having good staff.
Dr. Garland: That’s great. It sounds like you’ve moved out of the basement, but you haven’t lost the family type of culture that I think is very important.
Ms. Pizzuti: Yeah. Very true. Actually, many of them said, “I don’t want to work in the basement all my life.” So they were right there to help, kind of build a plan and help with this journey. So that’s been really rewarding. It’s great.
Dr. Garland: That’s wonderful. Well, is there anything else that you’d like to share?
Ms. Pizzuti: No. I think we are very fortunate and we are very happy to talk at length about the SBIR program. It’s been really, I think very rewarding for us and we hope to continue with it for many years. And thanks, Eva for this opportunity.
Dr. Garland: Well, thank you, Kathleen. It’s just been so great to be able to watch your journey over the last several years and how you’ve been so successful in starting a company literally from the very beginnings, and how to use SBIR funding. But also, put in place the rest of the infrastructure and the team and all that hard work that I know goes into where you are today. So congratulations to you. Thanks for letting us be part of your story and really appreciate your time today.
Ms. Pizzuti: Thank you. We are happy to also help any business, who’s interested to understand how we were able to leverage the SBIR program and offer our experience. If it will help them advance their initiatives.