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 now and what’s next in our industry.

I’m speaking today with David Satchell, Principal at Satch Medical Consulting, LLC. Satch Medical is a medical device consultancy that addresses product development and operational strategies.

David, thanks so much for joining me today.

David Satchell: Thanks for having me, Steph.

Stephen Hess: David, you’ve had such a successful career in the IVD industry. You’ve been a major contributor in large and startup companies, both from a commercial and a technical perspective, which gives you a really unique perspective in our industry.

Let’s start with the large company view. When you think about how large companies approach risk and processes in their development portfolio, what are some of the areas that you feel they should focus on to speed their time to market?

David Satchell: Well, that’s a tough question. It’s one that the large companies have been dealing with for a long time. I think that the diagnostics industry in general has seen a shift or bifurcation of the customer base. The large companies have largely focused on the clinical labs, and that continues to be an important part of the diagnostics space.

But more and more, I really believe the drive is towards more near-patient testing and I think the large companies need to, if they aren’t already doing so, they need to recognize that and begin investing in being able to be competitive in that part of the marketplace.

Stephen Hess: It’s not an easy transition. What do you see are some of the changes that they need to make, besides understanding the marketplace, but just how they develop products?

David Satchell: There’s lots of players now in this space because the entry barriers on the Point of Care (POC) side are much less than the clinical world.

I think the large companies have a choice. They can look to acquire or to license technologies from these small companies, or they can try to emulate that internally. If they want to do that internally, they may have to separate the POC business from their clinical business, because it’s different; both from a customer standpoint and also maybe from a product development standpoint.

These are very quick-developed products, so the traditional product development timelines that would apply for a clinical box would be way too lengthy for a POC device.

I think it’s going to largely depend on how the company is set up, but I do think the startups are probably showing us how best to meet those needs. Can we emulate that in a big company? Yeah, that’s the goal.

Stephen Hess: Is there anything in their current processes that keeps them from developing faster?

David Satchell: I think a lot of the innovation in this space, certainly with the pandemic and all the EUA (Emergency Use Authorization)-approved tests has come from smaller startup companies. They’re obviously leaner, they’re willing to take more risks, and maybe some of their compliance practices aren’t as mature.

I think if a large company can move themselves into more of an innovative space, if they can create a culture where they can do that, that’s going to be very powerful. That’ll be very successful. It’s certainly not easy and it’s probably company dependent.

But being able to set up a culture where innovation and creativity are rewarded with the proper amount of compliance control, but there’s a more concerted effort to focus on innovation, I think that’s a huge opportunity for the large companies to come in and fill that space

Stephen Hess: You mentioned the startups. What do you feel that’s different in a startup when you’re thinking about POC product development?

David Satchell: I think, first of all, they’re willing to accept a much narrower view of the customer base. They’re not looking to solve a broad-based, “Oh, we need 25 assays on our menu,” type of thing. They could be looking at single assay systems and be quite happy with that. They’re more happy with walking, not running, initially.

Again, does that translate as well to large companies? Maybe, but certainly the startups tend to be willing to accept a much smaller piece of the pie, and as a result, they’re quite willing to innovate in a very narrow space.

I think that that’s led to a number of breakthroughs and a number of assays and a number of companies that have been stood up in the last year, within the pandemic framework, that otherwise wouldn’t have been here, because they are willing to try and explore different opportunities and different approaches to solving older problems.

Stephen Hess: Ultimately, these new products, whether they’re done by a big company or a startup, they still have to go through the FDA (U.S. Food and Drug Administration) and receive 510(k), and then the assay is considered a valid assay.

What are some of the lessons learned in product development, that you see going forward, that work for both startups and large companies, in terms of best practices for getting to market quickly, but yet still having a safe and repeatable product out there?

David Satchell: Yeah, that’s a tricky balance. In the last year, the COVID situation has allowed many of these startups to focus on EUA approvals, which are obviously less rigorous. I think that’s been healthy for the industry, because the incredible compliance hurdle that a full-blown 510(k) would involve prevents players from jumping into the marketplace, because they simply don’t have the time or the energy to be able to meet that initially with a small startup, with a single product.

I think the obvious answer to your question though is, you need to be thinking about compliance right from the get-go. You need to be documenting early on. Startups tend not to do that. They tend to push that off and say, “We’ll do the documentation just before we file,” and try to put the toothpaste back in the tube. That doesn’t always work.

On the other hand, you know, you don’t want to stifle creativity, you don’t want to stifle the company with a bunch of overhead that prevents them from actually developing the product. That’s a tricky balance, one that’s being struck all over the industry every day.

But I do think that the EUA situation today with COVID, and in the past with Zika, does offer some opportunity for startups to really get in the game without having too much compliance focus early, to where they don’t ever get to market.

This is a unique opportunity and ideally it won’t happen again in the future, but it’s likely it will. I think that as startups react to the ongoing changes in where the healthcare needs are, they should pay attention to opportunities such as the opportunity that the COVID pandemic has presented to them.

Stephen Hess: Let’s stay on the topic of startups though. How have you seen the landscape for startups changing, in regards to raising capital and getting started over the last year or two?

David Satchell: Over the last year, I think there’s been incredible focus. I live in the Bay Area, so there’s lots of interest and lots of focus on diagnostics as a whole.

The initial press on the pandemic and how it was being managed here in the U.S. was really focused on availability and access to tests, to diagnostic tests, so I think the investment community followed that.

They reacted to the gap, if you will, that we had in this space in the U.S. That gap has largely been closed now, but the availability and the amount of startups that were able to get funded through their focus on COVID was really, really high in 2020.

I see that declining now a little bit, but it was a great opportunity for a lot of new players to get started in the marketplace. I think as these startups whittle themselves down and some of them make it and some of them don’t and some of them get to expand their menus, I think it’s going to be overall very good for the industry that we’ve had this sort of renaissance of awareness in the diagnostic space, and subsequent funding that came with it.

Stephen Hess: David, I agree with the awareness piece. Before COVID my friends and neighbors knew nothing about diagnostics. You talk about that and their eyes glaze over and now, there’s a real new-found awareness.

David Satchell: The New York Times and the Washington Post and all the media out there has made our worlds, which were maybe a little bit in the background, much more in the mainstream.

Stephen Hess: Do you see this as the trend going forward, this POC development and getting closer and closer to the patient? Or did this just meet a short-term need? And even though there’s an install-base out there, post-COVID, are we going to go put the genie a little bit back in the bottle again and go back to pre-2020?

David Satchell: No, I think that in the developed nations, in Europe and the U.S., maybe China, the large labs are going to continue to be very relevant. But I do see, in those developed markets, and certainly in developing markets, a trend that’s not new, that more and more near- patient testing will be the expectation.

I think the integration of digital tools, iPhones, mobile devices into this space, in terms of communicating the results and being able to share results with caregivers, this is a trend that’s not going to stop.

The patient base is very much more accepting of having the opportunity to be participating in their healthcare. I don’t see this trend of testing moving towards the patient changing.

I’m hopeful, but I don’t know for sure, that because of the 2020 focus on diagnostics, maybe more of the healthcare pie will be devoted towards diagnostics, because there’s been a recognition of the importance of diagnostics. I’m hopeful that that continues as well, in that diagnostics receives its better share of the overall healthcare pie.

Stephen Hess: I couldn’t agree more with you, David. If people want to get in touch with you to learn more about Satch Medical, where can they find you?

David Satchell: I’m on LinkedIn, under David Satchell. I’m certainly open to discussions about these topics, or any others in the medical device space.

Stephen Hess: Great. And finally, for the second half of 2021, what word or phrase would you use to describe your outlook?

David Satchell: Like many Americans, I’m really hopeful, actually. I think, both in the diagnostics world and in the general world, I’m looking forward to being able to get out and travel a little bit and see diagnostics development continue to go forward in a real positive way.

Stephen Hess: Excellent. Well, that’s the tea. David, thanks so much for joining me today. It’s been a pleasure speaking with you and it’s been great hearing your perspective on medical devices in the IVD industry.

David Satchell: Thank you, Steph.

For more information about Satch Medical Consulting, get in touch with David Satchell on LinkedIn.