ZSX Medical, LLC

Now for the third and final installment in my series on the dismal state of affairs in women’s health. This post addresses the one supposed bright spot in this space, which is federal support for the field. The current Administration has fashioned itself champions of women’s health with the announcement during the March ‘24 State of the Union of a $12Bn investment in women’s health. Such bold proclamations have continued even after President Biden withdrew his re-election bid. Even as recently as Monday, the First Lady announced another $500 million women’s health initiative. Undoubtedly, federal support is better than federal opposition. But as I tell my children when they accidentally bleach my bright clothes, “Help is only helpful if it’s helpful help.” (They don’t actually bleach my bright clothes. I don’t have any bright clothes. But we do tell them that.) At ZSX, we recently earned the best score out of all NIH SBIR grant applications in the women’s health space, but were informed by an NIH contact that their group would not be able to fund any SBIR applications in the current cycle due to administrative hurdles relating to budget. Now I have no doubt that our grant will eventually be funded if our project warrants being funded, but I was a bit taken aback that budgetary issues were affecting funding in women’s health in light of the recent Presidential announcements. Shouldn’t they be looking for many projects to fund in the space? The contact, who will remain anonymous for his or her protection, replied, “Don’t listen to the President. The President doesn’t appropriate funding – Congress appropriates funding. And Congress is not prioritizing our space.” Fact-checking my contact’s words, I looked to whitehouse.gov, and sure enough, the website states, “In his State of the Union Address, President Biden…called on Congress to make a bold, transformative investment of $12 billion in new funding for women’s health research.” He didn’t allocate $12 billion towards women’s health. He “called on Congress” to do so. The President might as well call on Israel and Hezbollah to stop fighting each other. I appreciate that those dollars have to come from somewhere, and $12 billion spent on one important agenda item means that another important topic may suffer from $12 billion less funding. Nonetheless, it’s a healthy reminder to be suspicious when a politician’s lips are moving. Nonetheless, I am not as pessimistic as all that. When government leaders pretend to invest in women’s health, it probably does have a positive impact. The news may convince investors that headwinds are lightening, encouraging real investment. Positive public sentiment in response to the news may trigger government leaders to actually invest in women’s health. And the First Lady did announce a $500 million investment in women’s health on Monday. That’s 1% of the NIH budget, which, though small, is at least helpful help.

Welcome to Part 2 in my series addressing the paucity of innovation in gynecology. This installment considers for contrast a field that developed quite differently – orthopedics. Prior to the 1960s, the top orthopedic hospitals were built on high hills and filled with rocking chair-lined hallways overlooking picturesque valleys because rocking chairs and pretty overlooks were the only treatment for chronic debilitating joint pain. Sir John Charnley’s total hip arthroplasty revolutionized this dismal treatment paradigm, giving patients decades of mobility with a single (and lucrative) treatment– a boon for patients and doctors that saved Payers from housing an invalid for decades. A virtuous cycle developed: orthopods performed surgeries saving money for Payers by treating an expensive disease; happy Payers didn’t pressure hospitals to keep surgical costs low; and happy hospitals let their orthopods have whatever toys they needed to keep them satisfied. While this was going on, other surgeons, seeing Charnley’s success, looked for more ideas and had the leeway to try them. Investors, seeing an emerging field, poured money into those ideas. An industry was born. By the time I entered the field in the late 1990s, the American Academy of Orthopedic Surgeons (AAOS) was already working hand-in-hand with the Orthopedic Research Society (ORS), running back-to-back annual conventions to showcase the best orthopod research (at AAOS) and the best work by full-time researchers (at ORS). By the mid-2000s, there were no fewer than eight orthopedic device manufacturers with market caps north of $1B, based primarily on sales of hip and knee arthroplasties. The contrast with gynecology is stark and painful. There is no Sir Charnley in the gynecologic space. Hysterectomy and c-section, the most meaningful procedural advances in the space, were both initially developed with no new technology, no novel products, and no clear Payer benefit. While no hospital or capable surgeon would withhold these procedures from women in need, Payers had no incentive to pay premium prices for such procedures or to push their broader application. Whether the absence of a benefit to payers has played a role in the shortfall of innovations in women’s health is not clear to me; our colleagues at Blue Cross will answer to their Maker on that score someday. Nonetheless, no company or investor benefited from the development of these surgeries. With the multiple disasters in the women’s health space, there have been plenty of reasons for investors to steer clear, and few success stories to fuel FOMO. All this leads to a field with nothing like the research ecosystem in orthopedics and other medical fields. AAGL is the gynecologic equivalent of AAOS, but while there are a few herculean gynecologists who conduct research while maintaining a clinical practice, there simply is not a body of full-time non-clinical researchers to match ORS. Stay tuned for more bad news about women's health.

Working in women’s health for the past 15 years, I have observed disproportionate headwinds against innovation in this space relative to other healthcare technology spaces, such as orthopedics. Recent headlines tout both venture capitalists and the federal government addressing the historical funding gap in women’s health technology. It's a welcome step forward, but frankly, women’s health faces more headwinds than simply underfunding. This is the first in a short series of posts from me that will describe elements of the innovation landscape in women’s health. I hope this series will uncover some of the challenges the field faces today. I begin today with the history of innovation in women’s health – a history unfortunately littered with technological disasters. The first such disaster was the Dalkon Shield, one of the first intrauterine contraceptive devices (IUDs). Marketing of the Dalkon Shield predated the 1976 Medical Device Amendment, which assigned governance of medical devices to FDA. After many reports of infections and other complications, the Centers for Disease Control (CDC) performed a comprehensive review of IUD use in 1973, finding a correlation between the Dalkon Shield and increased risk of septic pregnancies and other complications. The product was eventually recalled, but not until more than 300,000 women had filed lawsuits against the manufacturer. In 1980, the CDC found a correlation between the novel and wildly popular Rely tampon and a newly identified disease called Toxic Shock Syndrome that had caused the death of seven young, previously healthy women. This tragedy led Procter & Gamble to withdraw the product from the market. In 2013, a Boston woman underwent abdominal surgery involving a tool called a power morcellator. After surgery, it was discovered that she had a previously undetected cancer that may have been spread as a result of the use of this tool. Her husband spearheaded an aggressive media campaign, including a Wall Street Journal video and an article in the New York Times, making the case national news. Many hospitals banned power morcellators, J&J withdrew its power morcellator from the market, and FDA issued a warning about the use of the device. In 2018, Bayer halted sales of Essure, a permanent contraceptive device that had been hailed as a non-surgical alternative to tubal ligation. Long-term follow-up revealed unexpected problems, leading FDA to require additional post-market surveillance. Essure and its associated problems were highlighted in the popular Netflix exposé The Bleeding Edge. This documentary broke the camel’s back, and Bayer ended sales within a week of its public release. Space limits prohibit me describing the pelvic organ prolapse mesh debacle, but you can be assured that it ended as poorly as the others. Next month, expect more on the consequences of these disasters, but for now, appreciate that women’s health has had a disproportionate share of technological disasters. (Links below)

Little late on this month's post... Join us next Wednesday, April 24 5:30-7:30 for an amazing line up of entrepreneurs and investors as they discuss their funding dance. Hear the good , the bad and the inside details from each side. @BroadStreetAngels, Kathleen Brunner and ZSX Medical, Dan Mazzucco Individual Angel Investor and @LivProcess, @Michael McIntyre @Archetype Solutions, @Iain Fitzpatrick and @MedicareChoice Group, @BrendanMiller @HatchBioFund, @Lorenzo Pellegrini and @viTToria bioTherapeutics, @Nick Siciliano Robert Christmas Eric Hacherl Skylar Malone Rachael Pritzker, Esquire

Congratulations to David Anderson, CEO of Cambridge Orthopaedic Labs. Dave was recently presented with the John Nash Medtech Leadership Award by Life Sciences PA. Dave probably doesn't remember this, but it was at a talk given by him at the Union League that I was introduced to Eric Rugart, who went on to co-found ZSX Medical with me. Eric and I had both attended that meeting specifically to hear Dave's medtech wisdom. Dave is also a member of the ZSX Board of Managers (LLC-speak for Board of Directors). I don't know how we snagged such an accomplished and expert Board, but I'm glad that this particular Board Member is being recognized for his many accomplishments in this industry and for his selfless mentorship of entrepreneurs like me. More on Dave and the John Nash Medtech Leadership Award here: https://lnkd.in/eTefm8WW