An informative weekly newsletter that focuses on medical devices used in the field of obstetrics & gynaecology. It explores new innovations in the industry, how these products were developed, and the inventors behind them. It also provides an inside look into building a medical device business from the ground up and successfully exiting to a large player in women’s health. Hope you enjoy the first issue!

A brief note on the author - Nish Varma

After several years working in finance (investment banking - equity analyst), I partnered with my father, an obstetrician who invented a medical device (Fetal Pillow) to solve an important clinical problem in his field (more on that below).

While building our business, my role spanned across commercialisation, sales, marketing, finance, operations, and international expansion. Over this time, I built a large network of clinicians, hospital systems, and strategic partners. This provided a great commercial understanding of the industry and how to bring a product to market.

After initially launching into the UK market in 2011, several years (and clinical publications) later, Fetal Pillow was cleared by the FDA in 2017. One of the biggest milestones in our company’s history meant we could now take on the US market.

I spent the next few years building our US business and in early 2021, our company (Safe Obstetric Systems) was acquired by CooperSurgical, a leading global player in Women’s Health. I spent one year post completion working for the company training their US sales teams and implementing their global launch strategy.

It was a 10 year journey to commercialise and bring the product to market - we were able to prove our business model in the US and that garnered interest from some of the key industry players.

Since the company sale, my father and I have started developing a new obstetric product and hope to bring this to market in the near future. I also consult for early stage medical device companies looking to expand their operations internationally.

Let’s get into the newsletter!

Weekly format

The format will take the following shape, with the caveat it might deviate if there is an important topic to discuss in any given week.

1. A short profile - an individual, device, or company innovating in the field of obstetrics or gynaecology.

2. One interesting analysis - this might be a clinical publication or a commercial transaction in the industry.

3. One insight into our journey - how we successfully commercialised our obstetric product, expanded internationally, and ultimately exited to a global player in Women’s Health.

The newsletter takes a commercial rather than clinical angle. At times where there is a deeper look at clinical evidence or references to a clinician’s personal experience in using a product, I will speak with or interview professionals in my network to get their clinical opinion. Let’s get started with this week’s newsletter!

Dr. Rajiv Varma, the Inventor of Fetal Pillow

In 2006, Dr. Rajiv Varma, an obstetrician with over 40 years of experience, invented a new innovative medical device to improve the safety of cesarean sections, which woul be called Fetal Pillow.

It was a tragic case in his hospital that motivated him to find a better way. One evening, he was called into his hospital - a resident (registrar here in the UK) was facing difficulties during a c section, after a failed instrumental attempt. They were unable to deliver the baby due to the fetal head becoming impacted (stuck) in the maternal pelvis. They eventually delivered the baby using force and manipulation (an assistant manually using their hand to push the baby’s head up).

My father received another call telling him all was under control and the baby had been delivered. He decided to continue on to the hospital to check on the mother and baby. The mother had suffered severe uterine extensions (tears of the incision) and needed immediate surgical attention as she was losing large amounts of blood (she needed multiple blood transfusions).

After repairing complications for the mother, Dr. Varma received a call to inform him the baby did not survive the delivery, due to multiple skull fractures sustained when attempting to elevate the head out of the pelvis. Dr. Varma had to inform the parents that the baby could not be delivered safely, despite there being no complications or risks during the pregnancy.

It was a harrowing case that ultimately led Dr. Varma on a journey to prevent anything like this happening again. He dedicated his spare hours to look for a better solution, the question he asked himself: could a medical device be created to safely elevate the baby’s head in these difficult clinical scenarios? 

You can hear him talk through the case below.

Fetal Pillow took many years of design, development, mechanical and clinical testing before it could be used in a real clinical setting.

Following European regulatory approval, the device was initially launched into the UK market in 2011. Over the following years, Fetal Pillow expanded into multiple countries. It became clear that these deliveries were a challenge for obstetricians globally. Over this period, several institutions and clinicians would publish results of their experience with Fetal Pillow, including randomized controlled trials.

The extensive literature being published meant we were now in a position to approach the FDA - a couple of years later, in 2017, our device achieved a major milestone, FDA clearance. We launched Fetal Pillow into the US market in 2018.

Major milestones over a 10 year period:

• 2011 - First device sold into the UK market

• 2013 - Fetal Pillow winner at the Building Better Healthcare Awards

• 2014 - Australian subsidiary opened due to interest in ANZ region

• 2015 - US patent granted

• 2016 - First Randomized Controlled Trial (240 patients) published

• 2017 - FDA clearance for Fetal Pillow granted

• 2018 - Fetal Pillow launched into the US market

• 2019 - Rapid adoption continues, with 10,000 units sold that year

• 2020 - US RCT published (Brigham & Women’s Hospital) in Green Journal

• 2020 - Editorial published in OBG Management

• 2021 - Fetal Pillow acquired by CooperSurgical Inc

• 2022 - Post acquisition earn-out achieved in full

We took a device from concept to commercialisation and achieved international expansion over a 10 year period, leading to the eventual exit of our company.

As a small team, we were limited in how far we could take Fetal Pillow - it would make sense for a larger player to take it forward. Dr. Varma envisioned this as the fastest path to make Fetal Pillow available to mothers and their babies globally.

We will discuss the above milestones in further detail over the coming weeks and share some of the commercialisation strategies we used. In the end, thanks to Dr. Varma, we were able make a lasting impact on the field of obstetrics.

The JADA System for Postpartum Hemorrhage, a fascinating commercial story with parallels to that of Fetal Pillow

During a recent trip to New York where I met with several OBGYNs, the Jada System had been recently implemented at many of the hospitals visited. This is a relatively new obstetric device used in the management of postpartum hemorrhage (PPH) and has gained much attention in the past few years. Although only FDA cleared recently, the company behind it were also on a 10+ year journey navigating the regulatory and commercial complexities of bringing an emergency obstetric device to the market.

Postpartum hemorrhage - a leading cause of maternal mortality

To provide a brief overview - severe bleeding after childbirth, PPH - is the leading cause of maternal mortality world-wide. Each year, about 14 million women experience PPH resulting in about 70,000 maternal deaths globally. Even when women survive, they often need urgent surgical interventions to control the bleeding and may be left with lifelong reproductive disability (Source - WHO).

Cases of postpartum hemorrhage are on the rise even in the developed world, occurring in an estimated 3% of deliveries in the US, or more than 100,000 births a year. These are alarming numbers, especially given that postpartum hemorrhage is a leading cause of pregnancy-related deaths.

A recent study from the CDC Foundation notes that hospitals may be able to prevent up to 70% of hemorrhage-related obstetric deaths. This means that, with the right strategies and tools, one of the leading causes of maternal mortality can very likely be reduced.

A range of devices are available to manage PPH - vacuum-induced devices are a relatively new tool

Uterine balloon tamponades have been the most commonly used over the years, with the most widely used and studied being the Bakri tamponade balloon. The collapsed balloon is inserted into the uterus and when filled with fluid, the balloon adapts to the configuration of the uterine cavity to tamponade uterine bleeding.

Recently, intrauterine vacuum-induced hemorrhage control devices have been developed with the goal of rapid and effective control of PPH. The rationale is to use negative pressure within the uterine cavity to create contraction of the uterine vessels and therefore reduce blood flow rapidly.

First real-world study of the Jada System published - September 14, 2023

Obstetrics & Gynecology (“The Green Journal”) recently published results of a first real-world study, which used the JADA system to treat abnormal postpartum uterine bleeding and PPH.

“Appropriate management of abnormal postpartum uterine bleeding is critical to minimise the potential clinical consequences of PPH and its associated severe maternal morbidities, such as the need for blood transfusions, ICU admission or hysterectomy,” said the study’s lead author Dr Dena Goffman.

The Study which included 800 individuals being treated with the device (530 vaginal births, 270 cesarean births) concluded that: “…for births in real-world settings complicated by PPH, rapid, effective, and safe control of bleeding was achieved with an FDA-cleared intrauterine vacuum-induced hemorrhage-control device. This study provides further evidence that the device is an important new tool for managing a leading cause of SMM and maternal mortality, and timely utilization may help to improve outcomes.”

Commercial History behind Jada, and Organon’s acquisition of Alydia Health for $240m

Founded in 2010 with a vision to make childbirth safer for all mothers, Alydia Health is a commercial-stage medical device company focused on preventing maternal morbidity and mortality caused by postpartum hemorrhage (PPH) or abnormal postpartum uterine bleeding – a challenging condition to manage and a growing problem in the U.S. and globally. Alydia Health’s novel device, the Jada System had been developed over several years (you can read more about the interesting backstory here where development was initiated by Cal Poly biomedical students).

Navigating regulatory complexities around trial design was no easy feat and it wasn’t until 2017 that Alydia, the FDA, and clinical trial sites had agreed a protocol to study the device in a clinical setting.

In 2020, 10 years later after the company had been founded, Data published in Obstetrics & Gynecology, showed Jada was effective in 94% of the hemorrhage cases, controlling bleeding in a median time of just three minutes.

That same year, Jada received FDA clearance. And in March 2021, Alydia sold for $240 million to Organon, a women’s health-focused company that was being spun out of Merck, the American drugmaker.

Organon placed a substantial valuation on a device with FDA clearance less than a year prior, suggesting they held a firm belief this could become a cutting edge and leading solution for the management of PPH.

Perhaps it reflects a wider recent trend in medical device innovations in women’s health and pregnancy - a field that has historically been underserved, with device innovations few and far between.

Are larger industry players now willing to bet on the value propositions offered by new technologies in the women’s health space, with a potential market of millions of women a year?

From an outside perspective, with no visibility over the financials, what could be some of the value drivers that justified the $240m price tag?

• First intrauterine vacuum induced hemorrhage control device on the market - a novel solution for management of PPH and if shown to be more effective than the current tools available, this would create an opportunity to capture market share from existing players. With up to 5% of US deliveries being impacted by PPH, this implies a market of >100,000 cases to be targeted. With the right commercial strategy and pricing structure, financially this would be a significant opportunity.

• Clinical data demonstrates efficacy - the initial data published in 2020 showed Jada was effective in 94% of the hemorrhage cases. This was a critical value driver that would provide confidence for the real-world study that would follow.

• Global focus on PPH as a leading cause of maternal mortality - an emergency obstetric device that worked quickly, would only need to be in place for a few hours, and was effective in controlling PPH means we would be one step closer to solving a critical obstetric problem.

• Reduce the financial burden on hospital systems - the cost of PPH per case would likely run into the thousands of dollars. Units of blood are expensive. The price of a single Jada device would likely amount to the cost of one unit of blood, but those suffering PPH would usually need more than that. From a commercial standpoint, significant cost savings offered to a hospital would mean less resistance through Value Analysis Committees.

• Potential market size would have been a focal point during due diligence - assuming a conservative 3% of all US births suffer PPH, that implies in excess of 100,000 cases each year in the US alone. At a price of $1,000 per unit for a single use device, the addressable markets stands at > $100m. A commercial benefit is that the market already exists - capturing, rather than creating a market would have been the driving force to build value and generate a return on the investment (by Organon).

• Unit financials of a high value, single use device - cost per unit data (I would assume) is not publicly available, but I would take a guess at gross margins in excess of 75% per unit. At an average selling price of $1,000, profitability on each unit sold would also have been an attractive story for any potential acquirer.

In our experience with Fetal Pillow, an acquirer’s global salesforce, marketing resources, and clinical network were a game changer in bringing our product to a wider market. The same would clearly apply with the Jada System being rolled out by Organon, and would provide a commercial benefit for many years to come.

Watch this space - the Jada System could become the standard of care to control PPH and reduce associated morbidities in the years to come, until of course another device to contend with it comes to market. Maybe one is already in the pipeline.

Once our device was cleared by the FDA, how did we bring it to market?

In 2017, 6 years after Fetal Pillow was brought to market in the UK, we received FDA clearance for use in the US. It was the biggest milestone in our company’s history, but also meant our greatest challenge was ahead of us. What were our options to start building a market with limited resources (no external funding raised) and a small team.

Direct sales - the first strategy that comes to mind is building your own salesforce, through employing local sales reps and regional managers. This would allow direct entry into the market, but would be costly from a resource and time perspective. As a UK business, we would need to effectively manage this direct team oversees and the HR complexities that come with it, often with varying policies across states. Ultimately, there would come a point where we would need local presence and oversight from a regional perspective (managing local reps or distributors for example). We decided that once we had recurring sales in the US market and proof of the business model, this would provide resource and funding to bring on direct-hires and support continued growth. We saw rapid adoption of our product in the US and one exciting development was the approval of Fetal Pillow in the Kaiser system on the West Coast. This led to our first contractor being employed on the West Coast to support distribution partners managing these accounts. It was a great commercial decision as we saw the benefit of this direct presence immediately.

Distribution model - another option would be to build a national network of independent distributors with their own sales reps and local relationships. They would purchase stock from us and sell directly to the end customer. If they already had relationships in the obstetric market, this would provide immediate access to key customers and could lead to rapid adoption (assuming that the distributor performed well, not always the case!). This would be a lean approach for our business - no upfront direct hire costs, distributors would cover their own marketing budget, and would make a substantial margin if successful. Fortunately, over the years attending US conferences, we were able to develop several key strategic relationships and found suitable potential partners who could distribute Fetal Pillow. These partners were all very excited to be selling such an innovative product that could save lives, and enjoyed being part of the Fetal Pillow journey.

Partner with a national player - we considered a national distribution partner or the option to license our IP to a large player (with a full sales force) to ensure rapid adoption. With greater bargaining power for a national player, this might mean margin pressure on the deal structure. The contractual terms would need to work for us and we would need to retain some level of control over key marketing decisions. We explored this route and entered discussions with a handful of national players. We decided the pricing structure was unfavourable for us and we felt (perhaps stubbornly) that we could do it on our own.

Ultimately we decided on the independent distributor model but retained a few key territories as direct markets. We worked with 7-8 independent distributors nationally (each with 5-7 sales rep) which provided national coverage. I personally built a direct market on the East Coast and introduced Fetal Pillow to the major health systems in New York. This provided excellent reference sites to build momentum nationally.

By retaining a lean business model, ensuring margins were maintained, and building market share rapidly with the right partnerships, were able to position our company for a successful future exit. Much more on this to come in future issues!

(Picture below from 2017 when we were getting demonstration devices ready for our very first US customers!)

Thank you for reading

I appreciate you taking the time to read this week’s newsletter. We’re just getting started - the world of medical devices in women’s health is ever evolving in a historically underserved market. I look forward to sharing many more insights into the innovative technologies being developed, the companies and individuals at the forefront of these advances, and how we were able to make a lasting impact on the field of obstetrics.

Any questions, comments or feedback, you can email me at: [email protected]

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Have a great weekend!

Nish Varma

Cofounder - OBSolve Ltd

Consulting Services - OBG Access Ltd

Previously - Safe Obstetric Systems (Fetal Pillow)