Presented by Cultivation Capital
Veniti’s CFO Catherine Matthes on Clinical Trial Funding
The veins in your body play an integral role in circulation: carrying blood from the different parts of your body back to your heart. But as you get older, problems can develop causing a variety of complications, with one in three Americans over the age of 45 experiencing some kind of vein disease.
Veniti is a medical device company located in St. Louis that develops medical devices to treat vein diseases. Veniti’s CFO Catherine Matthes spoke to us about her path to entrepreneurship, leading Veniti through clinal trials and planning ahead for a product release scheduled for in mid-2018.
Tell me about your career path; how did you get to where you are?
I started out in public accounting working for Coopers and Lybrand, which is now part of PricewaterhouseCoopers. I left after four years to be the Controller for Bock Pharmacal Company, a company focused on marketing branded pharmaceuticals including prenatal vitamins and cough/cold products, which is how I got into the Life Science space.
When I left there, I did a brief stint with Nextel which was not a terrific fit for me due to its size and industry. I really enjoyed the healthcare space, so I joined a vaccine development company called Megan Health, Inc. and served as their CFO for 5 years.
After we sold that company, I started my own business consulting practice, serving as part-time and permanent CFO for startup, venture-capital-backed life sciences companies. I did that for a while until I landed permanently with two of my clients–Kereos, Inc. and Auxeris Therapeutics.
Auxeris was an innovative bone-focused biomedical start-up that had terrific initial backing but struggled to get further funding due to challenges with the science so my tenure with them was shorter. Kereos develops drugs for the treatment of cancer.
I was with Kereos for approximately 8 years. After leaving Kereos, I started another company —Galera Therapeutics, Inc— with some technology we spun out of Kereos, and I remain a partner in that company today.
After we got Galera on sound financial footing, I became head of new business development for Solae, at the time a joint venture between Dupont and Bunge [where] I was once again reminded of my love for the startup life science world and how I was a square peg in a round hole in such a behemoth organization.
So when I was recruited to become CFO of Veniti it was a very easy decision for me. I have been with Veniti now for over 5 years.
Talk about medical device entrepreneurship versus drug development entrepreneurship.
It’s different. Drug development takes a lot longer and is a lot more expensive. While the path isn’t easy, usually the development timeline isn’t as long for a device.
There is less that can go wrong with a medical device. There are tons of regulations in my industry, but devices don’t have as many phases of development as drugs do.
Drug trials have to do a safety study, then phase 1, 2 and 3. For a medical device, we might do a safety study then one major trial. Some devices even get approved by the FDA with no trials by referencing devices already on the market.
Clinical trials are expensive per patient. How do you approach this strategically, since it is so costly?
Because of the high costs and length of time it takes to conduct a trial, it is every startup company’s goal to test the product on as few patients as can be reasonably estimated to represent the safety and performance of the product. I cannot disclose how many patients we are testing, but I can say that we are not allowed to set how many patients we test.
That is determined by the FDA. We submitted a proposal to the FDA including the number of subjects we planned to test. The FDA reviewed our proposal, we underwent a collaborative negotiation and came up with the number.
What has been your experience in the St. Louis medical device space and startup community?
St. Louis is trying really hard to develop an infrastructure: buildings, labs, people and money. Those are the four tiers you have to have for a successful startup community.
I’ve had varying degrees of success and failure on all of those fronts. It’s difficult in the medical device space, which is much smaller than the IT and pharma sectors in St. Louis.
And it’s tough to get people to come to St. Louis; there are some challenges due to lack of critical mass. It’s a “chicken and egg” sort of thing.
You need people to build the community but you need a community to attract people. Further, there are certainly issues in money-raising…
We are still challenged on getting the coastal venture capital firms to pay attention to the Midwest, but it is getting better and better every year. There’s a funny rule: if it isn’t one flight away, they don’t want to invest in the company.
Where we have succeeded in St. Louis is with the facilities, there are lots of great facilities for startups.
Entrepreneurship is a risky proposition, and women are by far the minority. What is the secret to your success as an entrepreneur in medical devices?
I don’t know that my experience as a woman CFO is any different in entrepreneurial space than in any other space.
Women don’t occupy the C suite for some real reasons. Until men have babies, we’re limited in what we can do.
There is always that trade-off: do I stay home or devote my time to my career? That’s an anguishing thing to go through. It’s not exclusive to entrepreneurs.
It takes intestinal fortitude and adaptability. In the life science space, with pharma or medical devices, every day is different. There is no predictability.
If you think you’re going to accomplish something when you go to work, throw that out the window because something else will get thrown at you. It takes a lot of energy. There are never enough employees, and extremely long hours.
What’s the next step for Veniti?
There are a few possible paths. Any entrepreneurial company has to worry about the next dollar until revenues are enough to pay the daily bills.
So funding the company is always the next step.