Confronting EtO sterilization with Phiex Technologies CEO CL Tian

EPA shutdowns and a mammoth plaintiff settlement against Ethylene Oxide (EtO) created a logistical nightmare for the medical device industry. Phiex Technologies co-founder & CEO CL Tian and her team are on a mission to change all that.

Most medical devices and supplies are sterilized before they get to the hospital, during or after manufacturing, and for half of the market (20 billion devices in the U.S. annually, according to the FDA ), sterilization is performed using Ethylene Oxide (EtO). The U.S. Environmental Protection Agency (EPA) designated EtO as a human carcinogen in 2016, and began flagging sterilization facilities across the country for higher-than-acceptable EtO emissions , leading to several shutdowns since 2019 – and numerous lawsuits. That created a logistical logjam of huge proportions. In September, the first lawsuit to see trial ended with a guilty verdict against one of the largest EtO providers , resulting in a $363 million settlement for the plaintiff.

Phiex Technologies , which recently won MedTech Innovator’s top award at AdvaMed’s MedTech Conference, from a field of more than 1,000 of the world's best emerging companies, was founded in 2020 to address this huge problem. John Compton spoke with Phiex co-founder & CEO CL Tian about the scope of the challenge, how Phiex addresses the problem, and her advice for up-and-coming entrepreneurs.

John Compton:? Thanks for joining us today, CL.? Can we start by having you give us the big picture?

CL Tian: At a macro level, our industry is reliant on a dangerous and outdated method for sterilizing medical devices – half of which without any alternative – and a rapidly disintegrating supply chain. It's a huge problem for our industry and quite threatening to the future care of patients around the world.?

Our technology eliminates the bottleneck and environmental hazard of EtO sterilization. The current approach involves either replacing EtO with another gas, in the same off-site, third-party facility, or utilizing expensive capital equipment. Phiex materials can be deployed in the manufacturing line, without capital equipment. It saves time, it de-risks the company, and it's environmentally compatible, both from the sterilant standpoint and reducing freight and logistics for off- site sterilization.

For us, the Medtech Innovator Final presentation wasn't just a competition. It was a unique opportunity to speak to the 400 or so leaders in medtech who will be our partners, future collaborators, current and potential customers. We understood that we'd need to create a movement.

Since that presentation, we've seen a huge jump in demand. It's been quite an honor for our team to work with medtech's brightest and most committed leaders. We have a number of strategic projects ramping up, and half of our current customers are publicly traded. It's also a very busy time because we’re closing a round of funding and looking ahead to the first commercial launch of our technology by the end of 2023.

John Compton: How do you define success for you and your team?

CL Tian: The reason our team is together, and why we continue to work very well, is that we're all committed to making an impact. How often is it that you get to participate in fundamentally shifting a business paradigm? We are changing sterilization so that it's more sustainable, more profitable, and healthier overall for the industry and our neighbors. This is what gets us up and moving. In the short term, we define success as the adoption of our technology for the critical categories of medical devices. After that, we’ll look to scale our solution to address the billions of devices that will need to be sterilized on an ongoing basis.

John Compton: What challenges lie ahead?

CL Tian: There is no lack of enthusiasm or desire to find an alternative to EtO. But for decades, sterilization has been a formula of, “How many pallets can we fit into a chamber, and how many units of your device can we fit on the pallet?” That equation is changing. Now, we can deliver the sterilant and a drastically improved process customized to the specific needs and volume of a specific product line. Packaging is sitting down at the table with Sterilization, who is sitting down with Supply Chain and Manufacturing and Operations (and also Finance, and Regulatory & Quality). We’re collaborating internally with our customers in ways they haven't done before, and that’s leading to the best solution for each customer. It requires a total shift in how we think and believe in what is possible, from a sterilization perspective.

We’re proud of the strength of our team and our company culture. Our leadership brings decades of experience in medtech and packaging, having worked for some of the category leaders, so our solution was developed with an appreciation for the unique challenges and opportunities facing our industry. I am particularly excited about two of the core values of Phiex culture – questioning the status quo and mutual respect. Our best solutions come from spirited debate from diverse voices, on the foundation of deep respect for each other.??

We are excited and thankful for all of the support from the industry. Phiex Technologies is serving as a key partner in the solution to an industry crisis and we don’t take the responsibility lightly.

John Compton: What advice can you offer to other founders, who are early in the process?

CL Tian: When I first became an entrepreneur a decade ago at 24, I had no formal business training and was actually quite shy. So a lot of what I've learned is through trial and error,? finding out new things the hard way, and through the generosity of mentors. The fundamentals of business have stayed the same. As founders, we tend to be an impatient bunch and want things to happen yesterday. What I've come to appreciate is how, through the power and strength of relationships, and building a strong network, you can bend time in your favor and get to success much more efficiently.

And so, every moment, every coffee meeting, every time I've set aside time to either help or ask someone for advice, it has always mattered. I focus 100 percent on the relationships we're building. It's such a small industry, so goodwill and relationships will make a huge difference on our ability to impact the industry in a scalable and efficient manner.

I’d also be remiss if I didn’t recommend that early-stage founders join one of the leading innovation communities. We were a part of MassMEDIC’s IGNITE program , and also MedTech Innovator . Both were exceptional, but for different reasons. MedTech Innovator gave us access to the broader medtech industry community and an amazing platform to support the growth of Phiex. We’re grateful for the generosity of Paul Grand, the MedTech Innovator team, and the greater innovation support structure.?

Stay tuned for our next Disruptors interview with BTech CEO and Founder Wendy Stone, Ph.D., who just won top honors at the UMass Lowell M2D2 Impact Awards. And we’ll be back in January with another installment from Third Rock Ventures Chief Talent Officer, Chris Robinson. Until then,

Happy Holidays and stay safe out there!

John Compton

President, Agile Search Inc.

New, notable and other announcements:

Agile Search ?is conducting a priority search for a?Business Development Executive ?to join?a rapidly expanding international company with a disruptive technology in POC diagnostics. This is the first commercial leadership hire for the U.S. and North America.?Contact us ?to learn more.

Applications are now open for the?Medtech Innovator ?2023 cohort! The deadline is Jan. 31, 2023.

MedWorld Advisors , a leading International M&A advisory firm dedicated to healthcare, has been making noise this year, notching successful?transactions ?and?strategic partnerships ?in the U.S. and abroad. To learn more about how the?MedWorld Advisors team ?can help you reach your goals,?contact?Estelle Black .

S2N Health , a strategic services and software provider to medical device innovators, is excited to announce the release of the RepSignal app on the Salesforce App Exchange.?RepSignal ?is an AI-powered customer targeting and market insights platform built to power med device sales teams. With the integrated?RepSignal App , commercial teams can now harness the power of RepSignal directly within their Salesforce environment and workflow.?Contact? Haley Woloshen ?for more information.

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