Renee Ryan Transcript

Clint Betts

Renee, thank you so much for coming on the show and talking to us and sharing your knowledge and your journey as a leader with the ceo.com community. First, just tell us about yourself.

Renee Ryan

I am a native Californian, believe it or not, born and raised in California. Actually got educated on the east coast, in undergrad I studied economics and landed in healthcare as my first job undergrad. And I say that was the moment that the healthcare bug bit me and I stayed in the healthcare industry my whole career.

Clint Betts

What is it about healthcare that drew you in?

Renee Ryan

Well, early on, so I went to college very young. I was 16 when I went away to college. So when I graduated, I was looking at investment banking jobs in New York City, and I wasn't even of drinking age yet. And so I thought, "That's not a good idea." And so I came home to California and I was still interested in investment banking primarily because they had training programs. And it was an area where you could continue to learn because really for all I intents and purposes, all I knew was that I was a really good student. And so I thought, where can I go and continue to learn and have someone teach me in terms of the worlds of business?

And so consulting and investment banking were kind of those two areas. And so I landed at a small boutique investment bank in San Francisco where they did healthcare and technology. And to me, the idea of little Renee Ryan, maybe being part of a drug that helps a patient, a medical device that helps better outcomes for patients, that to me was kind of the true north that I got early on in my career.

Clint Betts

So what was your first kind of big job in the healthcare space?

Renee Ryan

So investment banking was my career path for a good 16 years.

Clint Betts

Oh, I see what you're saying. Yeah, yeah, yeah. So you were investing in these companies and in these ideas. Oh, that's fascinating.

Renee Ryan

Well, yeah. So as an investment banker, I was doing deals. So I was a deal person. I was doing M&A and IPOs, and the first initial public offering was a company that had developed the first implantable cardiac defibrillator. So when a patient would go into tachycardia, which is a very rapid heartbeat, it would interrupt that and bring them back into a normal rhythm.

And this is kind of a full circle story going to the end of my arc of my career, I actually sit on the board of a company where that CEO is now the chairman of the board. And it's another neuromodulation company. It's implantable as well. It's unlike what we'll talk about Cala, but kind of a very small world that I started my career way back when in my early twenties. And now sitting on a board with the CEO of that company that I took public.

Clint Betts

What led you to Cala?

Renee Ryan

So Cala is a really unique company and a really unique technology. I actually was the first investor at Cala. So in between investment banking and here at Cala, I was at Johnson and Johnson in their ventures group. So JJDC, which is the venture arm of Johnson and Johnson, the world's largest healthcare company, had investments of over $2 billion across consumer medical devices and pharmaceuticals.

And I met the founder of Cala at Stanford. She was a fellow in their biodesign program and had developed this wearable neuromodulation watch type technology that could still the hand tremors in patients with Parkinson's or essential tremors. And again, I've known of things that were implanted, deep brain stimulation are implanted in your brain with probes into the thalamus to treat conditions like essential tremor and was blown away by the ability to do that in a wearable form factor.

And so when the company got to a stage where they had clinical studies, th had a lot of data that they could support a commercialization effort, I raised my hand, I was on the board, I'd been on the board since day one, and I raised my hand and I said, "Listen, I believe that this technology needs to be commercialized in a different way, and so why not give me a shot?" And the board said, "Well, there's no one who knows the technology better than you since you've been here since the beginning. Let's see."

And so that was four years ago, and here I am.

Clint Betts

How long does it normally take? I'm super fascinated with the healthcare space because it's not like a software company, you put it out there, you have people try it out. But there’s all these trials, there's all these regulations around it and things like that. What's a typical timeframe for building a company like Cala Health?

Renee Ryan

So typically on the more surgical and implanted side of things, it could take seven to eight years before you get an approval, right? You've got to do your pilot, your initial pilot studies, and you go into your more pivotal type stages and you have to lock in your design really, really early.

The beautiful thing of having a wearable non-significant risk device, we could do iterations where we would do a pilot clinical study to test out a waveform to test something that we wanted to evaluate, go back to the drawing board and do some redesign work or whatever, all under the important FDA, the food and drug administration rules and regulations to be able to continue to advance our technology.

So we actually started the company in July of 2014 and had our first FDA approval in April of '18, which is pretty fast in the world of healthcare. And even drugs take even longer. Drugs are 15 years of a journey oftentimes.

Clint Betts

That does seem fast. That's incredible. And you were also, over the past four years as the CEO, you were right in the middle of the pandemic and when healthcare became political, which is probably pretty crazy. So how has that affected things?

Renee Ryan

Well, I kind of became the poster child of how to handle the pandemic. So here in California, we went to a shelter in place on that March 16th or whatever that day was. And we actually manufacture our technology here on site and we ship directly to patients from our facility. And so we sheltered in place for the couple weeks that we had to, but then we had to figure out how to run our business. And so very quickly, we adopted masking policies, we adopted gloves and six feet separation and we had to bring everybody back in.

And so we did it in shifts where we had manufacturing teams that would sit at their benches but six to 10 feet apart. And then they would end their day a little bit early and then the quality team would come in and do all the inspections and then the shipping where folks were in a separate room so they could just ship out and get things off to FedEx.

And so, believe it or not, we did really well during the pandemic. We actually had really nice growth in the business. We were able to, our target physician that we work with is a neurologist and neurologists are very comfortable using telemedicine to prescribe. And so we taught them how to size the wrist because we have a small, medium and large band using Zoom video or whatever telemedicine platform they were using. And we actually had great growth through all of COVID. So we did well.

Clint Betts

Oh wow. That's incredible. And where have you landed a big debate in the overall business and tech and maybe even the healthcare community as well as work from home remote versus in person versus hybrid? What have you learned in this process? Because like you said, you're manufacturing things on site, so I imagine a chunk of your employees have to be on site, if that's true, right?

Renee Ryan

Yeah. So Clint, it's funny, I always said, I don't want to be that CEO when you'd have all the big tech companies mandating people be in the office three days a week or whatever. So what we've kind of settled on is we naturally have a pretty significant remote workforce because we support patients directly. So while a physician writes the prescription, we actually onboard the patient and train them how to use our device with our customer care team.

So we also support filing their insurance claims. So we hired people all over the US, they all work from home. They're my customer care team. They're phenomenal. My sales reps are now up to 13 reps all over the country. And so we've really never had to mandate people be in the office. People really enjoy being in the office, they like being around one another.

So all we've said is work where you can be most successful. And so people do come into the office a lot. Obviously my manufacturing teams and quality teams need to be in to inspect hardware. But other than that, we allow the rest of the team to be a little more flexible.

Clint Betts

One thing that I am sure is super satisfying, again, the difference between selling software or that type of a business versus healthcare is if you get this right, it's life changing. So I don't want to not double click a little bit on the device itself, the response it's gotten from patients and your customers and the lives that it's changed. Could you give us a little bit more detail on how it's going and how people are reacting to it?

Renee Ryan

Yeah. It is life changing and we have an amazing team who supports our patients on the phone or even in person. And we get all the stories. I have a stack of mail on my desk here of patients who have written to me personally to say thank you for restoring their ability to do activities of daily living. These are patients who have severe hand tremors. They've often lost the ability to feed themselves and dress themselves. And so just to give them the pride of going to a restaurant and not making a mess, it may seem trivial.

It's really life-affirming for them and they retain their dignity. So we have thousands of patients that are currently using our device. We have some beautiful long-term data that we're about to publish that shows even after two plus years patients are still using our device four to five to six times a week.

So I don't know about you, but remember when all the colored Fitbits were out and everyone gave a Fitbit for a gift? Because it was a perfect price point. I had six of those in my nightstand drawer at some point. Because I just stopped using them after a couple of months because I had my phone to tell me how many steps I was taking. And so the honor of having someone wear your technology out beyond two, three potentially more years, you've only been in market for just under four years, is really an honor.

Clint Betts

That's incredible. What is growth like? How do you expand from where you are now and grow the company even further?

Renee Ryan

Well, Clint, you mentioned healthcare and the politics of healthcare. It's all about getting access and making it affordable for patients. So we are working on various private commercial insurance. We have a handful of state by state Blue Cross Blue Shield plans that have already contracted with us. We have a couple national payers that are already contracting with us. We have Medicare coding and pricing. We need to work on getting a more established cadence with Medicare.

One of our best customers, actually one of our longest standing customers, has been the Veterans Administration where we've been extraordinarily successful with restoring vets’ ability to function. And it's amazing to me.

One of our great patients was in the Air Force and he left the Air Force and went into a very wonderful professional career. And about 16 years ago, he started getting hand tremors and it got to a point where he couldn't function. And so he retired from his second career, learned about our technology, read some articles about us, and went into his local VA in Texas and said, "I want to have this product." And fortunately, we had already established a policy with the Veterans Administration about six months prior to that so they could adopt the technology. And so he's one of our longest standing customers, and he served our country. It's just an honor to help those patients.

Clint Betts

I love that. That's super interesting. As you were saying that, I realize Cala Health doesn't sell directly to their customers. There's a middle man there, there's a middle entity inside of there, whether it's a doctor, an insurance company, the VA, something like that. So I don't know anything about this world, so I'm super fascinated. How do you get doctors to write prescriptions for your device?

Renee Ryan

That's probably the easiest part of what we do.

Clint Betts

Oh, interesting.

Renee Ryan

In the world of this field of essential tremor or movement disorders, it's pretty common. There's some drugs that are used at first line. They have some poor side effects. So oftentimes patients will fail the drugs. It's pretty frequently they failed the drugs. But then they have this gap in the treatment where at the other end they have things like deep brain stimulation where you're implanting an electrode in the brain in a specific location in the brain to stimulate constantly to reduce the tremor. Or having things like ablative meaning like brain tissue fried out of your brain to stop the tremors.

And so for patients who are struggling with hand tremors, that's a pretty high bar to hit. So very few of them, I think about three or 4% actually go on to surgical alternatives. And so the physicians know that. And so if they can prescribe something that's a wearable, it's non-systemic, it's non-invasive it can be a compliment to drugs that they're already on that they can use on demand to help them gain control when they most need it, they're very willing to do it.

The harder part of our challenge is getting the payers to say yes. And so that is the Veterans Administration, Medicare, our federal government and the insurance companies, partially because it's not a well-known condition to them, they obviously have top of their list things like obesity and diabetes and congestive heart failure, which are very big, costly disease states to the system.

And so essential tremor is not kind of top of their list. And so their reaction is, "Well just take drugs," until you have to get in and explain to the medical directors about this treatment gap. And so that's what our team's been doing. We have a medical director, we have a health economics and outcomes research team. We have a payer relations team, and it's kind of a joint full court press to get in front of these medical directors and to tell our story.

Clint Betts

Yeah, I imagine the sales cycle is kind of long for that. There's all this bureaucracy that sounds like, it sounds like a lot of paperwork.

Renee Ryan

It is, it is a lot of paperwork and I'm not a paper person. So yes, it's a lot of paperwork.

Clint Betts

I wonder also, how has this boom in artificial intelligence and AI over the past year affected your business, if at all?

Renee Ryan

Well, our algorithm today is quite simple. It's a pretty unique technology. So the device is customized to each patient's tremor. So onboard the device, we have motion sensors. I'll actually show you our device. So this is our Cala Trio that's been in market for almost four years. Onboard motion sensors in the stimulator are actually used to read the frequency of the tremor of each individual patient. It then adjusts our waveform to match the needs of that patient.

Then it's programmed or individualized, and then a patient can press the big gray button and start a therapy session. So very intuitive, very simple to use. As we get more complex and we now start to get individual level data sets, then moving into more sort of population level data sets, we begin to see how different algorithms can be used for different therapy options.

That's when we get moving into some more complicated things like AI and ML. But on the flip side, we've also been able to really successfully use some RPA and ML tools in some of our ability to issue claims more rapidly, right? Because the claims that we have to submit aren't just a single form. It's often a lot of the medical necessity and other documentation that needs to support the request for payment for our technology. And so oftentimes you can use and do searches for keywords and simple things like that to make that part of our business super efficiently. So we use it where we need it, I guess I'd say.

Clint Betts

Yeah, that sounds right. What's the best leadership advice you've ever gotten?

Renee Ryan

Oh, listen more, talk less.

Clint Betts

That's hard to do though, right? That's easier said than done.

Renee Ryan

It is. And I, even having known that and that's one of the early things I learned in life. I still to this day force myself to keep quiet and really listen because I think you learn more oftentimes in the gaps when people pause or don't say something than you do by what they're saying.

Clint Betts

And from a manufacturer. Your business is so fascinating. You got the manufacturing side of it, you've got the bureaucracy side of it, you've got the actual healthcare side of it, you got the sales side of it. From a manufacturing standpoint, what is that process like? What is it like to manufacture a device that you just showed us?

Renee Ryan

Well, since I actually ran manufacturing for about four months and I've built devices. This device is pretty complex. This device has, we have a lot of our PCB boards and other instrumentation kind of come in preassembled. We have about 25 parts and some tiny little screws that make up this stem product. The band comes in fully assembled, though it houses some pretty cool dry electrode material that we've developed.

The next gen hardware that we're in the process of launching is a much simpler device. It has about 12 components, and it goes from about a 60 minute build time for this one stimulator down to probably maybe five to 10 minutes. So we've learned a lot. By doing this in-house we learned how we could consolidate some of our boards, use fewer materials, and really designed it for manufacturability. So we learned a lot by being the manufacturer of the device.

Clint Betts

Have you run into any supply chain issues or these other companies that have been running into over the past few years?

Renee Ryan

Yeah, no, we still have a 52 week lead time on one or two of our parts. We feel it's loosening now, but you would see it kind of get better and then all of a sudden it would get worse again. And so we've been doing a lot of advanced purchasing. There's a part, I think in the pre-COVID world, it was $1.40 for a part. And in the kind of gray market it was $70 that we were paying for.

Clint Betts

Oh wow.

Renee Ryan

It was tough.

Clint Betts

How do we solve that issue just more broadly? I assume you're getting it from China or Asia or somewhere over there and shipping it over here. How do we create that in the United States or fix that supply chain issue? I guess if you knew that answer, you'd be president—

Renee Ryan

Exactly. Exactly. I'd have a different job. I'll say this because we're small, we can't be mean to our suppliers. I'm sure there were a lot of bigger players flexing their muscles. And so we've always been very workable and very appreciative, we had a couple suppliers that just stepped up and bought stuff on our behalf. And yeah, the high price. They passed it through, but they were at least able to get volumes. And so when you have sort of everybody helping each other out to get through these supply chain issues, it's been nice to work with some of our vendors.

Clint Betts

What do you think the future of healthcare is? With this AI, it sounds like we're going to have AI surgeries and all these various things. What does the next 10 years look like?

Renee Ryan

Next 10 years? Well, so just a quick note. When I was at J&J in their ventures group,one of the companies that I helped start, which was some technology that had J&J been funding with an outside third party, we decided to stand it up as a standalone company. And it was a robotics company called Verb Surgical that was partnered between J&J's Ethicon Surgical Business, and Verily and Google.

So in my mind, that whole area of surgical robotics or AI surgeries, I think the future of the operating theater is going to be so data rich and it's going to be so improved going forward that I'm super excited. That was my vision for doing that was the ability to take an incredibly data rich environment and then use that data to make things better and optimize, optimize patient care and patient outcomes.

So I'm excited by the future of all these technologies. I'm not afraid of them. I also think the wave of interest in primary care we have to get after some of our massive health issues. Obviously all the weight loss drugs are in all the news reports these days. Obesity is a very real global problem and associated with it is type 2 diabetes.

I think there's just so much we can do in a preventative way before things happen that makes more sense than all of this downstream care that we spend so much money on.

Clint Betts

And what is the future of Cala Health? Where do you see the company?

Renee Ryan

I'm so excited by our future. So when you think about our stimulation platform, we have in working with some of our partners, we've also in-licensed some additional applications. So we've done work in the neurology field, both we have now approval for essential tremor and we've expanded into Parkinsonian tremor, which is very exciting for us. We also have done some work in the migraine area along with some of the inflammation targets.

And so we actually have a median nerves that that's the platform I just showed you a risk-based technology. And we also have an ear based vagal nerve stimulation technology for inflammation targets. And so the future in my mind is a software enabled one because the same kind of, I'll call it our puck, which is our stem puck, the same stem technology is used whether you're at the ear or at the wrist.

And so we have a nice ability to leverage that stem hardware and then use different sensing modalities to have inputs into the therapy, then neuromodulation wave forms to deliver care in different disease states. So if you think about that future, that's kind of all software, back to that software analogy you made.

Clint Betts

Yeah, that's incredible. How have you funded the business so far?

Renee Ryan

The business has been funded by venture capital. And so as I mentioned, I was the first investor from J&J. So J&J and Lux Capital Fantastic Investors did the Series A for the company. We've uniquely raised money from several large strategics. And so we have Google GV and GSK Pharmaceutical company out of the UK and some health system partners that have also been investors in the company alongside wonderful more traditional financial venture capitalists as well.

Clint Betts

That's fascinating. Last question, and again, thank you so much for coming on and sharing your wisdom and your journey and everything you're working on and the life changing product that you've put into market that's absolutely incredible.

Renee Ryan

We're honored.

Clint Betts

We end every interview with the same question. At CEO.com we believe the chances that we take are as equivalent as the chances that we give. And I wonder who gave you a chance in your career if there's somebody that stands out when you think of, because obviously you've taken a lot of chances in your career, but who gave you a chance that's led to where you are today?

Renee Ryan

Oh, I have a lot of people to thank on my journey. I'm going to say my first boss, which is a woman named Nancy Kroll at the Small Boutique Investment Bank in San Francisco. Nancy was both a wonderful human being, but also a wonderful talented healthcare investment banker. And I was the low man on the totem pole. I was the analyst that was supposed to make the books and build the model and do the spreadsheets and kind of stay in my cube and learn the business in that way.

And I am a little bit of an extrovert, and I like being around people and I love to learn and I learn more by seeing and doing. And so I asked her, I said, "I know I'm supposed to stay behind and work on the model and stay in my queue, but will you let me join you at company meetings where it makes sense?"

And she said "Yes." And I think the fact that I so boldly asked, and maybe because we were both female, she gave me a shot. So I got to see what a business like investment banking really is. And it is an apprenticeship business. You can't learn it by reading a textbook. And so the ability to see more required me to work more too.

I would go back to the office and work all night, but I think it was that early chance to see a phenomenal leader interact with our clients, interact with how do you finance a company? How do you do a merger, acquisition and transaction? And to see more or on helped me in those earliest days of my career.

Clint Betts

That's beautiful. Renee, thank you so much for coming on again. Good luck with everything and I'm sure we'll have you on again down the line as this thing grows and grows.

Renee Ryan

Well, Clint, I'm honored to be here. Thank you for having me.

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