Pushkin.

Hey, it's Jacob.

Just a quick note before we start the show.

Today, I'm hosting a new podcast in addition to this one.

The new show is called Business History, and it's about the history of business and I think you'll like it.

If you like What's Your Problem, I think you'll like Business History.

The first episode is out today.

It's about Southwest Airlines, which is an amazing story.

And then starting next week we're going to have a series on Thomas Edison, who is really a very What's Your Problem kind of guy, made an incredible amount of technological progress, had a really interesting life, lived at an incredible time.

So the show is called Business History.

You can listen to it wherever you are listening to this podcast, Please check it out.

I hope you like it.

In twenty seventeen, Mike Blue was a vice president of sales at Johnson and Johnson and he went to see a product demonstration at this little healthcare startup that he was interested in.

It was a small medical device company that was hoping to use ultrasound in new and dramatic ways, but the company didn't have any products on the market at the time.

It was in a garage in Ann arbor.

Literally the office was a dozen or so engineers and they did a product demonstration for me on the old system that they delivered this sound energy into a tank of water.

And you see what looks like a hologram.

It's the bubble cloud and it's just suspended in the middle of the tank and it's just millions of bubbles that are colliding and collapsing, and it's just suspended there.

And they can move it faster than the eye can detect.

They can stop it, they can start it, like unparalleled control of it.

They can do anything with it.

And depending on who you are, what your lens or perspective is, I think your mind starts to race as to what that could mean.

I thought, this is gonna be the best damn sales demonstration in the history of the world.

And I thought, let's just assume it's gonna work.

It's effective, and it's safe no matter where we use it.

Oh my goodness, we're going to sell a ton of these things.

I'm Jacob Goldstein, and this is what's your problem.

My guest today is Mike Blue.

He's the CEO of a company called Histosonics.

The company is developing a technology called histotripsy.

So many medical terms are in Greek, and so histo is tissue and tripsy is crushing, the crushing of so it's the crushing of tissues.

So histo tripsy, if you speak Greek, it makes perfect sense.

It's a mouthful for everybody else in English.

Here's what the company has done.

They've taken this histo tripsy technology that was developed at the University of Michigan and built a device that shoots multiple ultrasound waves into the body.

At the spot where the waves converge, they create this cloud of tiny bubbles like the one Mic' saw in that demo.

Those tiny bubbles destroy cells, they crush tissue.

So, for example, you can aim the device at a tumor inside the body, and if everything goes well, you can use the bubble cloud to destroy the tumor.

This could be incredibly helpful, especially for tumors that don't respond well to radiation or chemotherapy or surgery.

And in fact, in twenty twenty three, the FDA cleared the use of the Histosonics device to treat tumors in the liver.

Mike and I talked a lot about the use of the device to treat cancer and how Histosonics got there.

But we started by talking about what was happening at the company when Mike joined in twenty seventeen.

This was before they were focused on cancer treatment, and at the time they'd run a clinical trial comparing their device with surgery to treat men with enlarged prostates.

But the study found that surgery worked better to achieve key outcomes.

So you get to the company that the prostate treatment has failed.

Is it already clear that failed?

It failed to meet its primary endpoint.

That's the great thing about a trial.

It is.

Well, but also it's acceedes or it fails.

I'm sticking with fails.

When I started and was just getting my teeth kicked in trying to raise money, I mean, we were a company running out of money.

I mean I was a bit crazy to take this job.

I'll use your term.

We had a failed clinical trial.

And you've got a technology that, or at least a therapy that is almost too good to be true and unbelievable.

And yes, it's worked in animals, but enough with that animal.

Yes, you've got to become You've got to become a a You've got to grow up and be a real business.

And my sly and primates exaggerate, right, that's the and.

Yes, well said, I was overly confident thought with my sales background and with an amazing therapy, I would come in and just raise money.

I got my teeth kicked in for you know, almost two years.

And the story of histotripsy it's to go back to how we open it.

It's hard to say, like, it's not memorable, people can't remember it, and it's too good to be true, and you've got this failed clinicaltrure.

I mean, it's just it was.

It was hard and so I so we we flipped the script.

We totally changed.

We challenged ourselves to find a story that would resonate, and so we were building an almost autonomous robotic surgical platform.

And if you look at the evolution of surgery, it's gone from open surgery to laparoscopic to robotic to our story became we are developing the future of completely non invasive surgery, which we are, and robotic non invasive surgery.

And the appetite for robotic investments is incredible.

So you changed the story, not so much on the medical side, but on the investor side.

It's not saying so early in the conversation, you don't need to say hist.

To tripsy, just know that we are going to complete the evolution of surgical robotics.

And so that story led to an investment from doctor Fred Moule, who's the godfather of robotic surgery.

He was a co founder of Intuitive Surgical and.

Sort of the model company for your company.

It's the poster child for robotic surgery, and he understood.

Fortunately, doctor Mole understood both the robotics of what we were doing and the therapy.

Was it already clear that cancer was going to be the next sort of thing.

You tried to make it work.

So we're blessed to have this ongoing relationship with the University of Michigan.

So there's just incredible professors and researchers and students who every day get up and work on the next thing with histotripsy.

So at that time, back now almost ten years ago, there was work being done specifically on cancers and tumors and small animals, and what we were learning was that histotripsy is incredibly effective at destroying cancer cells.

And so now I join in January of twenty seventeen and it's you know, Mike, what do you think?

And so we decided that abdominal tumors is where we would start.

They're the most commonly treated with other quote unquote interventional devices today, liver, kidney, lung.

There these are bad cancers to have.

I mean, it's bad to have cancer, but it's really bad to have the worst.

I mean liver, liver, lung, and pancreatic, pancreatic being the worst in terms of five year survival.

So we had made that decision, and then you've got to have discussions with the FDDA, so we you know, to understand exactly you've got to align with them on certain things.

And so what we knew we were going to do is build a robotic platform.

We're going to automate the procedure, democratize the procedure so that you don't have to go to the absolute best in the world, and because it can be used anywhere in the body, We're going to build a platform that can rapidly go from each indication or application to the next, regardless.

Of spect You're not going to build a machine to treat one kind of tumor as well one thing.

We're building a thing we're building a platform that can treat a hundred things.

You just need to do the clinical trials.

And so we began to work with the FDA on a broader approach for soft tissue, which is very common both in interventional devices or for surgical platforms and robotic systems.

A soft tissue indication that allows the physician to treat any soft tissue or solid tumor that they deem medically necessary.

That's a appropriate Well, there was keen awareness of histotripsy and how novel it is, how different it is your liquefying tissue.

There's nothing else in medical device or health care that does.

This could go not as expected, and there's a different way that each organ removes that liquification from the bodies liquified are so in fairness, there's a different risk to each potential organ, and they asked us to at least start in a single organ or for a single application.

So we chose liver based on it.

You said, it's it's still although there's lots of different modalities that are used in the liver.

For liver cancer, five year survival rates are still less than twenty percent.

They really haven't changed, so you're throwing all this new stuff at it, but you're still unfortunately, the majority of patients, great majority of patients are not living over five years.

And then, in addition to that, we want to do in dress because of all the different ways that you can apply a non invasive, non toxic therapy, the opportunity is to use histotripsy in new and novel ways to benefit patients that just aren't being done today.

And that includes the great majority of patients who not just have primary liver cancer, but have tumors in their liver that were caused by their primary cancer.

So you, for this initial test trial that the FDA wants you to do, you're gonna treat tumors that are in the liver, whether they start in the liver or start somewhere else.

You get breast cancer and then it spreads to your liver for example.

That's it, yep, And we're gonna we're gonna treat those tumors and we're going to demonstrate that we can do it safely and we can effectively destroy any tumor from any origin that is in the liver.

And that was the primary objective or aim of the hope for Liver study, which was our pivotal clinical study for the FDA.

Right, so let's talk about that study, the Hope for Liver study, Like, who was it, what was the endpoint, what were the patients?

So, when you're working with the FDA on designing these studies, it is very collaborative.

There are things that you want as a company and propose and work through, and then there are things that the agency ultimately requires a few And because this is a new novel therapy never been done before, especially in a cancerous tumor, they required that we treat patients who were had either failed all other treatment options or intolerable, meaning they just they just they hadn't failed surgery or radiation, they just can't they can't tolerate it be based on their overall condition.

Basically people who don't have any other options, who are typically quite so.

So yeah, and when we set the inclusion exclusion criteria, we had not envisioned that that would be.

Well, that's how they do drugs, right.

If you have a new drug, then the FDA says, well, make sure that patients have already tried the drugs that we already know work.

Right, It seems quite analogous.

Very analogous and in some respects fair and so yeah, so we were required to treat advanced, very advanced stage patients.

The challenge with that is that when we set our safety goal and our efficacy goal, we set that based on the data that's available and on and the data that's available is on much healthier patients, usually earlier stage patients with curative intent.

And we didn't change the the end points were, what the performance criteria was that we had established.

We could only change who these patients were that we were treating.

Why not, Well, that's not you don't necessarily get to site all the rules when you're negotiating with the agency, and so it's just a requirement that we ended up having to live by.

So just the basics of the trial, like how many patients, what's the outcome?

You know, what's the basics there.

So we negotiated a study that would enroll I think it was up to fifty patients.

We ended up I think we enrolled forty four and with pretty acute outcomes both in terms of safety and efficacy.

And what was the result, What were the results?

So they were incredibly positive.

In fact, now we've published our one year data, and honestly, I didn't know that a year out or two years out the data would be very interesting at all.

These were super sick patients and again we're measuring it the performance criterias against healthier patients, and so if you could get anywhere close at one year, you know, I thought we'd be doing pretty good, but I doubted that.

But that's where we ended up.

We just published our one year follow up data on the patients who have local tumor control, meaning meaning it's still dead ninety percent of the time in those patients, which rivals any other therapy that's being delivered in delivered today.

And just to be clear, when you say it's still dead, do you mean the whole tumor is gone.

I mean it doesn't mean they don't have cancer anymore.

Right, This doesn't like these are super sick patients.

You didn't just cure their cancer.

Just to be clear, the aim of the study was to show that we can safely target and destroy a tumor and that that tumor does not come back.

The aim of the study was not to show that we're extending their life, we're improving their overall survival, which is obviously a really important metric in cancer care, and ultimately we will do that.

It's ultimately the one we care.

I mean, I suppose there's quality of life as well, but neither of these is a clinical measure, right.

And I would argue today now that we're a year and a half into our true clinical experience, what I call the real world rout the wild being used in an unbelievable number of different ways and use cases.

Improving quality of life is probably the number one thing that I think we're just so excited about.

It's just it's unbelievable.

I want to talk about that.

I want to talk about a lot of stuff besides the study, but just to finish on the study, Yeah, just the dumb question you're saying, you killed the tumor, why does the person still have cancer?

Because for most of the patients we treated, again based on the requirement that the FDA established, they had lots of tumors.

They had what they call multifocal disease.

So not just two or three, we're talking half a dozen dozen.

Many of the patients had dozens of tumors and the protocol allowed for the treatment of up to three.

So we know most of those patients, the great majority had tumors beyond what we were treating.

The one other endpoint you were monitoring was serious adverse events related to the right.

What was the outcome for that?

Yep, I think there were three grade three or higher ctcas, which is how one of the models they used to score serious adverse events.

So there were three of them out of the forty four patients, which far exceeded our primary endpoint.

And again the primary end point was measured against much healthier patients, so you had far fewer serious adverse events than you would expect and are measured against healthier patients.

So incredibly excited about how safe this procedure is in a sicker patient patient.

I thought it was six.

There were three that were grade three higher.

I don't know the grade three.

I just thought there were six serious adverse device.

The six in total.

Thank you for going into the weeds with me.

Now we can come back out.

Not what I expected.

I love it.

After a break, we'll come back out of the weeds.

So where are your devices in the world now?

Like, are they out there?

Are people buying them?

Are doctors using them in the real world?

Now?

I mean this has been a long, long journey.

A glorious Friday, October sixth of twenty twenty three that we finally had the email come across that awarded us at Denovo grant or a clearance to begin commercializing the Edison system and the use of histotripsy and the liver.

This is the email from the FDA, an email from the FDA.

So we've got a gong in the building that is called the getting Shit done gong, and we hit the hell out of that gong and an awesome party immense upon receiving that letter.

I mean, it's just you know, it is the pinnacle milestone for any healthcare company, and so a first in my career.

Within one hour after that announcement, we had our first purchase order for an Edison system.

The one hour was it just waiting?

Was it?

Was?

It just like you had the contract.

They were waiting.

We had.

We had a very small skeleton crew of sales professionals who are out socialized in the contrast concept of histotripsy and and what it could mean to physicians, patients and hospitals and so uh, the Cleveland Clinic was locked and loaded and ready to claim that they were the first in the world to begin using histo tripsy for their their livertub er patients.

And so how does the University of Michigan feel about getting scooped on its own technology.

Yeah, yeah, it didn't go over so well.

Were they were they number two?

Do they have one?

Now?

They were not number two?

They were they were within the top and now they have multiple within within.

How many of them are out in the world now?

How many of yes?

You know.

A year and a half into commercializing, the thought was it was almost exclusively be in the US.

We're now in the process of a scheduling delivery of our one hundred system.

One hundred okay, so a lot a non trivial number.

You know, if you compare it to other historic commercial launches of a robotic medical device or platform, we're far exceeding expectations.

And the patient demand for this is is like nothing I've ever been a part of and what we had hoped for.

It's sad and that there's so many patients who are told their terminal because now they have tumors in their liver that can't be treated.

They're adjacent to a bile duct, they're just too large there's just too many of them.

There's no drugs that work for these tumors once they're in their liver, and we can treat these patients and we can do it without toxicity, without side effects.

I mean, there is some pain right like related with the treatment.

So they'll there will be discomfort because a lot of times you're treating over the rib cage that they explain it usually as they've done too many sit ups the day before, like that, that sort of pain.

Some of them have flu like symptoms, which is symptomatic of potentially the immune system being revved up.

But beyond that nothing like an invasive procedure or radiation therapy, you can't even compare them.

So if I if I walk into a room where your device is, like, what's it look like?

Like?

Let's just talk about how it works.

What do I see when I walk down the room?

Yep, you see what looks like a medical device system with a It's pretty noticeable.

It's got a pretty large robotic arm that is used to guide the therapy.

It's got a very obvious forty two inch high fidelity touchscreen display.

So you see a cart that's I guess similar to what you'd think of like an ultrasound cart.

That's where all the work is done, and then you've got a robotic arm that comes off that that steers the histotripsy.

Because it's non invasive, it doesn't require a sterile environment, so you definitely don't need to be in an operating room.

It doesn't even require a clean room.

You can virtually do procedures in any room.

And ultimately the vision is it'll be used by an incredible number of specialists or specialties.

So that's what it looks like.

So let's say, so there's a procedure, what happens, there's a doctor, there's a patient, like, where are they?

What happened?

Like every robotic procedure being done in the hospital setting today, the patient usually not always anymore, but usually under general anesthesia.

The reason for that is not pain.

It's about limiting motion.

So, because we're delivering this beam therapy, we don't want the patient moving, we don't want the organ moving, we don't want the tumor.

Moving like you're targeting like a centimeter, right, I.

Mean it's the yeah, the point on a pencil tip.

Breathing, So does breathing mess you up?

Right?

And so where we are today treating in the liver, finishing our study on kidney tumors, beginning our studies on pancreatic tumors.

These organs and therefore tumors move because of the diaph the movement of the diaphragm.

What do you do about that?

Like?

That isn't I mean?

Do you account for it?

Do you predict where it's going to be based on the breath?

Like?

How do you deal with that?

That's why you use general anthesus because the anithesiologists then can absolutely control motion.

Oh so you say to the anesthesiologists, halt the breathing for one second.

I'm going to shoot the beam.

It doesn't have to be completely still.

Almost all of them there's some motion, and we just, huh what they call envelope around that.

So we just create you know, if you've got a one centimeter tumor, you create a two centimeter target so that the motion of the your targeted area still encompasses the tumor, even if even if it's moving.

So okay, so the patient's under general anesthesis, so they don't move too much.

Go on, Yeah, so there's still there's still and then you watch the physician operate on that again super high fidelity touchscreen display.

There is a step to the planning process where we send in planning pulses to seven discrete points within the targeted area, both within the tumor and just outside.

And the reason for that is depending on how much blockage there is, if it's under a rib, if it's under a bow, or if it's completely unobstructed, there's a different level of energy that is needed to destroy different areas within even sometimes the same tumor, but definitely if you're treating multiple tumors, one could be directly under a rib totally obstructed, one could be totally unobstructed.

The variability then between how much energy the system needs the delivers it can be pretty significant.

And then once they begin or initiate therapy, the robot has the ability to dynamically change the energy requirements throughout the treated volume based on that treatment map.

So you watch that, you're literally watching the physician work at the console do their work there, and then there's a button that says enable treatment, and once everyone agrees they've they've set the plan.

The system knows how much energy it needs to deliver and augment, they enable therapy and then it's all visualization.

It's it's just monitoring.

So once they enable therapy, like what happens with the robot arm, what does it do?

And like where's the ultrasound coming out of?

It goes to work.

So it's the workhorse.

It begins.

It's got these amazing it's it's so elegant to watch.

They've got incredibly fine smooth motions that are moving that.

So think of the histo tripsy cloud the size of a grain of rice.

It's super small and it's got to go through a large volume.

So it does all the work moving that bubble cloud until it's completely destroyed.

And just to be clear, it's destroying the tumor at a cellular level, right, the reason you're not spreading the cancer around the body.

It's actually subcellular destruction.

It's if you were to show it to a pathologist, we show or when a pathologist reads that liquefied tissue coming from an app they'll tell you it's unrecognizable.

There's no cellular debris.

They couldn't tell you forget about is it benign, or they can't tell you if it's liver, kidney anchoras brain.

It's just a liquefied acellular debris that is unrecoible go.

It's literally a goo, even more soluble than a goo, A.

Thin, very thin that is.

And then it's done.

And then the procedure is done.

Yeah, they awake from their anesthesia, hopefully they feel like nothing has happened, and they go home.

So you have this indication for any liver tumor.

What else are you working on beyond liver tumors?

We are now realizing the vision of the researchers who invented histor tripsy and when the company was founded, moving as fast as we can into other clinical applications.

And so we've finished in rolling patients in our kidney tumor trial.

We will have the data back from that here shortly and be submitting for histor tripsy of kidney cancer in Q one of twenty twenty six.

We've begun in rolling patients in a pancreatic tumor trial that's being done in Barcelona, Spain.

We are working with the agency as we speak to arrive on a call for the US study treating pancreatic tumors with hista tripsy.

I really do believe it's gonna be groundbreaking.

What are you trying to figure out now?

Like, what is a use case where you haven't kind of quite solved all the things you need to solve to make it work.

There's very little clinically and technically.

It's the challenges that come with such a high growth company and adding so many people.

And I think if you I'll invite you to visit us, I think we'll give you a demo so we can make all this real.

I want the demo.

After you describe the demo.

You have to have the demo.

I think, you know, I'm very proud that whomever is visiting here, they immediately notice the people, the culture of the vibe, the tech permeates throughout.

Super innovative company with great people, smart people but are having fun.

Literally you know, change the world.

And so it's it's preserving that as we grow at a unusually fast pace and at a significant number of people moving forward, is there such an unmet clinical need that we can address.

And as I as I say to our team we've got a town hall tomorrow, I'll you know, I always remind them that I know we said unusually aggressive objectives, and I will not apologize.

There is a patient who is suffering in every one of the diseases that we can impact, and we have to go faster.

It's it's literally it's the first company I've ever been with, right, I feel like we actually have a I use this word a lot, or we have a responsibility the faster we can move and kidney pancreas, prostate brain diary, breast bladder.

There's patients who need us today and we won't be there in time unfortunately for all of them.

So it's our responsibility to go faster.

So that's kind of stuff that keeps me up at night.

We'll be back in a minute with the lightning round.

We're going to do a sales focus lightning round because I know that you spent your career in sales and that was all we could figure out about you.

Is there anything that you had to sort of unlearn from your life in sales to be a good CEO?

Any like habits of the sales mind that don't serve you well as a CEO.

So at one point in my career, before I joined his Tosonics, obviously I really doubted I wanted to be a CEO.

I didn't know if I could get the same gratification statis satisfication.

That's not our word gratification.

I like satisfication.

That's when gratification meets satisfaction too.

Actually, the ginormous of satisfaction.

I just didn't know if I could get that same gratification, like the rush of I love to win.

I love closing a deal.

I love to win.

I hate losing even more.

And that's what you get in sales.

You're out every day competing against your peers, other companies.

So I thought coming into this I would have to temper my excitement for the thrill of the win and the hatred for the loss.

But I think what's helped the company is I haven't done that.

Like, you can apply the same winning and losing philosophies across every function within the organization.

I want to win with the FDA, I hate losing.

I hate needing to renegotiate, I hate the delay.

And you can literally apply that that logic across or dispe It works everywhere.

It works.

Everywhere.

Okay, fair enough, Look you if you bring that to work every day, like you know, like I tell my kids, if you find something you genuinely love a company that you genuinely believe in, and you go out and work your ass off every day and you compete, Like at what I just said.

And then third, and I hope if you were to walk through this building, what you would see is amazing human beings.

Like that's recipe, Like, Yeah, find something you love and you're passionate for a company you believe in what they're doing, work your ass off, compete to win, hate to lose, and you're a genuinely good human being.

And that's how you treat everybody.

There's really nothing else.

There's nothing more to success in industry than that.

What's the hardest thing you ever had to sell?

Well, I think I'm good at selling everything.

I didn't say, what were you bad at selling?

Like?

I just said what was hard?

I will so I will say this, I would make a horrible venture capitalist, like horrible.

Interesting.

Well, in a way, they're on the buying side, right, I mean, I'm sure they're selling themselves to the hot founder or whatever, but.

They're evaluating all these opportunities in which ones they're going to invest in, and they choose one out of one hundred to invest in.

My problem is I always look at them with the perspective or with the lens of could I sell this?

And I'm an overly confident person that I look about just everything and say, oh, I could sell that.

And so I'd be a horrible venture capitalist the heart.

Because you'd invest in everybody because you'd be like, yeah, sure I could sell that whatever, I'll flip it for ten X.

Yeah we could do we could do that.

The problem is if you're not the one doing that, then you're relying on someone else.

You don't have the control of what they're doing day to day.

You know.

I Selling medical technology is hard.

It's just it is.

It's just really hard.

Especially in today's healthcare environment.

Just getting access into hospitals has become so complex.

So it doesn't matter whether you're selling a single use widget or a two million dollar robotic platform.

It's changing the world.

It's by the way, is it two million dollars?

I didn't ask you how much does it cost?

Is the answer?

Two million dollars.

It's not.

It's not two million dollars.

But what we generally say is it compares very favorably to the other high end surgical robotic platforms.

Fine, I just wanted some ballpark.

Call it a million, million, million and a half dollars.

That's fun.

Okay, great, last one.

Uh.

I'm curious as a as a person who knows sales so well, when you're on the other end of sales, when you're a buyer, say, when you go buy a car, what is it like for you?

It's bullshit.

It's like there's nothing worse, And it's everywhere in this world, like literally, just as I view my job as the ultimate sales professional, and every literally almost everyone I touch.

Oh, it's gross, it's gross.

Mike Blue is the CEO of Histosonics.

Today's show was produced by Trinamnino and Gabriel Hunter Chang.

It was edited by Alexander Garretson and engineered by Sarah Bruguer.

I'm Jacob Goldstein, and we'll be back next week with another episode of What's Your Problem.