This is Spilling the Tea, a video series where we interview diagnostics industry leaders to get their perspective on “what’s now and what’s next” in the industry.
In this episode, Invetech’s Stephen Hess is joined by Steve Lufkin, CEO of Selux Diagnostics to discuss:
- Lessons learned from 2020 [0:42]
- Building a company culture during a pandemic [3:00]
- Shifts in diagnostic product development as we move beyond the pandemic [4:30]
- Changes in the antibiotic susceptibility testing (AST) market [5:50]
- The current fundraising environment and changes to how capital is being deployed in the diagnostics space [8:00]
Watch the 10-minute video to hear about these and other trends in the diagnostic industry.
Stephen Hess: Hi, I’m Stephen Hess, VP of Business Development at Invetech. And this is Spilling the Tea, a video series where we interview diagnostic industry leaders to get their perspective on what’s new and what’s next in our industry. Today, I’m fortunate enough to be speaking with Steve Lufkin, CEO of Selux Diagnostics. Steve, thanks so much for joining.
Lessons learned from 2020
Stephen Hess: Steve, as we think about this past year as we’ve been impacted by the pandemic so much in many ways, what are some of your biggest “aha” moments or lessons learned from 2020? And how does it affect Selux and how you’re approaching AST?
Steve Lufkin: I think sometime in their career, everybody’s had to manage to a global crisis or a global pandemic. So these are just unprecedented times, and they’re impacting everybody in just unforeseen ways. I think probably the biggest “aha” moment for us is really when we think about our employees and the people who work for Selux. We’ve been very fortunate that we’ve really hired to a high standard of people that have been able to manage themselves and be very self-motivated and driven.
I think one of the things that this COVID crazy time has shined a light on is just really how important hiring the right people are, and people that are truly self-motivated and that can manage them themselves. Because they’re being faced with an environment that we have to adapt to that nobody could have ever imagined.
And you think about it from – we’ve got young people that are coming right out of school and getting into their first job and trying to integrate into a culture of an organization in a remote environment, to people that are trying to manage elderly parents that aren’t sick yet, but they’re in fear of getting COVID. Or you’re trying to get your kids through homeschooling and still trying to work. And the challenges and the need for people to be able to adapt is just so, so important today than it’s ever been. And even on the company, our need to adapt. So I’m not sure that the idea of hiring highly motivated people is a new idea, but I just think it’s really exacerbated in this environment.
Building company culture during the pandemic
Stephen Hess: You talked about building culture, Steve, as you’re hiring and working remotely. How do you keep that company culture alive and how is that manifesting itself at Selux?
Steve Lufkin: Frankly, it’s really hard, and we’ve put in a lot of tools to try to do it. We’re very fortunate that the two co-founders of Selux, Eric Stern and Alek Vacic, established a really strong cultural foundation of the way they worked and the way they communicated and the way the team functioned. And so we had a good base to start from. But as we started working remotely, we’re looking at things – our Monday all staff meetings that used to be in the kitchen are now over Microsoft Teams.
When everybody would gather around at the end of the day on a Friday, it’s just not that way anymore. When we have coffee catch-ups, and they’re over Teams, and we’re doing social events and trying to do the best can. We had a tremendous, enjoyable holiday party that was put on by a few of the folks at the company. It was fantastic, and it was all done over Teams and Teams chats and trivia. It’s definitely not as good as we have when we’re in person, but the team’s making the best of it.
Moving past the pandemic, are there shifts in product development you can see?
Stephen Hess: So what shifts in product development do you see going forward, Steve, with this new paradigm?
Steve Lufkin: I’m not sure there’s going to be big shifts in the process. I think people are still going to need to work through the science and then work through the engineering or the implementation of that science, and work through the pieces that get wrapped around it in order to do product development. So I don’t think that the steps change a whole lot.
I think the strategy is going to be different, and I think a lot of that is related to how people use tools. I probably was one of the most reluctant users of tools like Teams, and more out of, I just I didn’t see a need for it, “I don’t understand why you need this”. And then once I started using these tools, you realize the value of it. And then you get laughed at by the software team who’s been using these tools for the last two or three years. But it’s part of the way you play catch up.
What changes are there in the AST marketplace?
Stephen Hess: In terms of AST, what changes are you seeing and how are you addressing the AST marketplace?
Steve Lufkin: I think that what we’re seeing is early data from the challenge of managing COVID patients is if there’s a large number… I saw a report the other day that said some 70 some odd percent of COVID patients were inappropriately put on antibiotics and there wasn’t a clinical reason for them to be on antibiotics. What that has the potential to give rise to is multi-drug resistant infections. So it’s like pouring gas on the fire. I think that that’s one challenge.
I think the other early indicator from that shift is that the hospital associations are already beginning to petition CMS (Centers for Medicare & Medicaid Services) for a reduction in penalties related to hospital acquired infections. And I think that’s a leading indicator of the challenges that infection management is going to have in the foreseeable future.
I may have already mentioned it, but the World Health Organization already believes that deaths from multi-drug resistant infections by 2050 will outpace cancer deaths, and this is just an accelerant. And I think that we’ve been spoiled in an environment where we’ve been fortunate to have some very powerful antibiotics. And the more multi-drug resistant infections become prevalent, the more challenge we’re going to have finding antibiotics that will actually work.
Stephen Hess: AST is definitely the epidemic within the pandemic, as Dr. Osterholm said this week, right?
How is capital being deployed in the diagnostics space today?
Stephen Hess: As you think about the fundraising environment and where we are today versus where we were just 10 months ago when everything pulled back in, how are you seeing capital being deployed in the diagnostics space?
Steve Lufkin: It’s a great question. We’ve been very fortunate that we’ve been supported both by private equity capital and with RA Capital and Schooner and Northpond and Sands Ventures, and along with public money through BARDA (Biomedical Advanced Research and Development Authority). So we’ve been very fortunate so far and as we go forward.
And if you look at when the COVID crisis started, I think the immediate reaction was – everybody circled the troops. How do you manage cash? Nobody knew where this was going to end and everybody was in a state of fear. And rightfully so, because it’s something that we didn’t understand and I think we’re still trying to understand. And I think that once people got over that hump and understood what we were facing, I think people settled into a better visibility of the future.
Now, with that said, I think one of the other things that’s been very positive for the diagnostics space specifically is that people are realizing how important diagnostic testing is in the treatment of disease. And I think that has resonated with a lot of investors that may have been a little bit on the outside.
And I think the last piece is that frankly, the diagnostic industry has been very profitable through COVID. And those that have been in the COVID space have done very, very well, and those that have adapted to it have done very, very well. So there’s some very strong balance sheets. And it’ll be interesting to see where the strategics choose to place their capital going forward.
Stephen Hess: Steve, if people want to get in touch with you or learn more about Selux, where can they find you?
Steve Lufkin: They can go to our website, seluxdx.com.
Stephen Hess: And finally, for 2021, what one word or phrase would you use to describe your outlook?
Steve Lufkin: Optimistic.
Stephen Hess: I am too. That’s the Tea, Steve. Thanks so much for joining me today. And as always, I love hearing your perspective and view of the industry, as well as Selux’s view on this new world we’re in. Thanks so much.
For more information about SeLux Diagnostics, visit seluxdx.com or follow SeLux Diagnostics on LinkedIn.
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