Business Problem Solvers with Eric Alspaugh, Episode 02 

In this episode of Business Problem Solvers, Eric Alspaugh speaks with Niv Caviar, a seasoned expert in life sciences. Based in California, Niv brings extensive experience from his work in biopharmaceuticals and medical devices, providing in-depth insights into the challenges and strategies within the regulatory and business development spheres of life sciences.

Tune in to the episode to hear about:

• The evolution of FDA regulatory pathways and strategies for life science companies to navigate them effectively.
• Tips and considerations for raising capital, including the importance of having a clear regulatory strategy and leveraging international opportunities.
• Experiences and anecdotes on conducting clinical trials internationally, including the specific advantages of countries like Australia.
• The current trends in life sciences investment, particularly the rise of AI and targeted oncology, and how companies can align themselves with these trends for success.
• Personal anecdotes from Niv’s extensive career, offering a rare glimpse into the complexities of international business negotiations and contract enforcement.

Learn more about Niv Caviar:

• Connect with Niv on LinkedIn: https://www.linkedin.com/in/niv-edward-caviar

Disclaimer. The information provided in this podcast is for educational and informational purposes only and should not be construed as legal advice. Consult with a qualified attorney or legal advisor to address your specific legal needs.

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About Business Problem Solvers:

Welcome to Business Problem Solvers Podcast, where legal insight meets entrepreneurial innovation. Are you a startup founder navigating the complex legal landscape of entrepreneurship? Are you seeking practical advice, actionable strategies, and expert guidance to propel your business forward? Look no further. In each episode of Business Problem Solvers, seasoned attorney Eric Alspaugh takes a deep dive into the intersection of law and business, bringing you insightful interviews with a diverse range of industry experts, thought leaders, and successful entrepreneurs.

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Read the entire transcript of this episode:

Introduction to Business Problem Solvers Podcast
Voice-Over: Welcome to Business Problem Solvers Podcast, where legal insight meets entrepreneurial innovation. Are you a startup founder navigating the complex legal landscape of entrepreneurship? Are you seeking practical advice, actionable strategies, and expert guidance to propel your business forward? Look no further.
Eric Alspaugh is a seasoned attorney. Based in the vibrant startup hub of California, and he’s thrilled to be your host on this exciting journey. In this podcast, we’ll dive deep into the intersection of law and business, bringing you insightful interviews with a diverse range of industry experts, thought leaders, and successful entrepreneurs.
From intellectual property and contract law to corporate governance and regulatory compliance, we’ll cover the essential legal topics that every startup needs to know. Our guests will [00:01:00] share their wisdom, experience, and practical tips to help you navigate legal challenges, seize opportunities, and build a thriving business.
In today’s dynamic marketplace. So whether you’re a seasoned entrepreneur, a budding startup founder, or simply curious about the intersection of law and business, join Eric on business problem solvers podcast, as we explore the legal insights and entrepreneurial inspiration that will fuel your journey to success.
Meet Niv Caviar: Life Science Expert
Eric Alspaugh: Hey, Niv, welcome to the business problem solvers podcast.
Niv Caviar: Hello, Eric. Great to be here.
Eric Alspaugh: Thanks so much for joining me. We’re in, our second episode here, and it’s great to have a great friend, Niv Caviar, who I’ve known for well over 20 years, and I really, I love being with him.
Niv Caviar: Eric, we met when we were 14 then, right?
[00:02:00] Yeah,
Eric Alspaugh: we’re 14. That was great. We were kids. And, so Niv is a life science expert. he calls himself a generalist. I’d call him a specialist. He, worked with me over 20 years ago as the vice president of business development, in a pharmaceutical company. But since then, he’s gone on to work at, very large companies.
He’s been CEO of public companies. And really what’s been fun working with me for the last 15 years has been his focus on small and midsize companies to tackle their unique problems, especially in the medical device space and life science. biotech and just It’s been fun to watch him raise capital and have some successful exits and i’m hoping that Niv will share some [00:03:00] tips and tricks for the entrepreneurs that might be listening to this podcast or watching this podcast Great happy.
Oh Thanks Niv and also for for street cred Niv, graduated from the United States Air Force Academy and, served in the Air Force, achieving a rank of, Captain, I believe. Thank you for your service. As well as, being a NASA scientist, an actual rocket scientist or engineer, he also graduated Harvard, with an MBA.
And so, he’s got all the street cred, and I Always learn something when I hang out with me. So that’s the intro need. Thank you.
Niv Caviar: Thank you. And you know, Eric, Eric and I have gone back a long time as Eric indicated, I knew him prior to his legal career, when he was a research scientist. [00:04:00] And then after he got his law degree, we reconnected and he’s worked with me at, I think four or five companies now, two, I think two of them as, IP counsel, and then I think two to three as external counsel on general corporate matters.
So, you’ve been great to work with. Thank you, Eric, for your time and help over the years.
Eric Alspaugh: Awesome. Thanks. Thanks, Niv.
Navigating FDA and Regulatory Pathways
Eric Alspaugh: So, there have been a lot of changes in the FDA and regulatory space, and we can change gears anytime, but I like to focus on FDA related medical device topics, but I think, you have some insight in the regulatory pathways and some interesting things that you’ve done recently in different areas.
class two, class three medical devices in the U. S. And Europe and, trying to get clinical data. So it’d be great to get [00:05:00] some insights from you on that. And then maybe, some tips or tricks, and insights on raising capital. What are the things that entrepreneurs, CEOs or inventors can might not know that they don’t know and, how they can either form relationships or set themselves up for success in raising capital.
Voice-Over: Okay. Very
Eric Alspaugh: good.
Niv Caviar: Yeah. Happy to help. yeah, on the FDA, topics. So once again, my, my background is both big pharma originally, then, med tech and, and biopharma kind of spend my time equally amongst it. And during the, almost 25 years of working in the life sciences. Now I’ve seen the FDA move in different ways.
just like any organization or political system, they have different emphases, one, [00:06:00] one year, and then they change. But I think generally speaking, the FDA has gotten a little bit easier to work with with over the years, but it’s highly situational, which department you work in. Okay. Which, life science segment you’re trying to get an approval on.
And some are easier than others. And I think the first step is just kind of knowing the regulatory pathway you’re pursuing and the challenges.
Eric Alspaugh: Okay. So you’re, you’re advocating, for life science entrepreneurs to get there, get a hold of a good grasp of the regulatory pathway at the very beginning. I mean.
As soon as you’re thinking about an invention, you’re thinking about a market, you have to be thinking about your regulatory pathway.
Niv Caviar: Yeah, and it’s almost as I would say the top three things a new [00:07:00] company entrepreneur needs to do. is, you know, characterize, you know, as best as possible your, your asset, whether it’s a, you know, new chemical entity, try to get, besides the basic physical chemistry, some characterization data, and maybe an in vivo in vitro system, or if it’s a medical device, you know, create the spec, the product profile.
Second, second item is, you know, ensure that there’s an IP path for it. The third item, is which is often overlooked is get some preliminary regulatory readout regulatory strategy. That could be at minimally having in depth discussions with two or two or three regulatory specialists, whether regulatory, attorney or regulatory expert, and ideally have a pre sub meeting with the FDA because, you know, there’s some paths through the FDA that are a little bit easier than others.
Like FDA has actually made it easier because they recognize the need for life saving [00:08:00] drugs for class two medical devices. Mhm. The FDA, Office of Drug Evaluation is actually pretty reasonable for class three medical devices. The FDA’s general perspectives and requirements are quite onerous. So you almost have to figure out early on what’s the feasibility and requirements for the FDA for regulatory path and use that as an input into your strategy.
Eric Alspaugh: Got it. Got it.
Strategies for Raising Capital
Eric Alspaugh: something that you mentioned is, the, the three, three issues is make sure you have a clear, description of the asset, have an IP pathway. You’ve got to, own patents and, and have a strategy there licensing or developing it on your own. And third is this regulatory, which is. quite unique to FDA regulated [00:09:00] products that I, I think that the life sciences are regulated.
I don’t know, like the oil and gas industry, the government has to monitor every aspect of it and make sure that we’re being safe when anyways, what are some resources or where could we find, or do you have any tips for finding the right kind of Consultants or specialists for regulatory pathways.
What, what strategy do you use to find the right people?
Niv Caviar: Well, there, there’s no dearth of, seasoned regulatory experts and, consultants out there usually just using through an entrepreneur or through, you know, one, two levels of connections. You’re going to meet the right person, person to guide you.
And the big advice I would give is, you know, just don’t rely on one expert, get the advice of two or three people. Then [00:10:00] you, you know, generally you’re going to have to come to one of two decisions. Do we have a pre sub meeting that creates some definition on this? Or do we spend some time and effort?
developing the technology and then go to the FDA. There is a third path, which is try to look for a surrogate and see what another company has done going forward, whether it’s a drug or a device. and kind of get a sense of what the regulatory strategy has been through the FDA through one of those three.
But that’s really the path forward. So I think identifying a regulatory person, an expert, a guidance wasn’t that difficult. but then it’s really trying to make that hard decision. On do you kind of spend some capital and time advancing the technology or do you go early into the FDA? And I’ll give you an example.
I was working [00:11:00] on a class three medical device and, we had, pretty strong preclinical and, feasibility study human data that we had done in a different country. and we were going to use that preclinical data. and also that human clinical data and go and have a dialogue with the FDA about doing a pivotal study path, right?
When we spoke to a few regulatory advisors and we didn’t just speak to one, we spoke to a couple of regulatory advisors who are non attorneys and then we got referred to a regulatory attorney who had expertise with this group in the FDA. Basically, the consensus was You can go to the FDA, but you’re going to hear about a very difficult clinical and regulatory path requirement, and then it’s going to be documented in FDA minutes.
You probably don’t want to do that, [00:12:00] right? So then the course of action was, do we gather more information? Do we give up on the technology or do we find another path? And in our case, we decided to try to pursue the development in Europe. So that’s another dimension. It doesn’t always require necessity to do everything in the US, right?
Some of your studies, preclinical, clinical, or even your pivotal studies. can be done elsewhere. And, you know, many, for example, drug companies might do an early human feasibility study, phase one phase one clinical in another country, and then come to the U S for their proof of concept studies. So these are all the things that you need to think through and a good regulatory advisor.
And, an experienced management team should be able to guide, guide a company in this regard.
Eric Alspaugh: Very helpful. And, you know, I just, was at a meeting [00:13:00] with device alliance and I ran into a lot of regulatory folks, who are from Oprah, the Orange County Regulatory Affairs Association, big group, well connected.
And I think that we are surrounded by lots of great regulatory folks here in Orange County. So. My market is primarily Southern California, but for those of us out outside of Orange County and looking for regulatory specialists, look, look to regulatory affairs groups in, I don’t know, Minnesota, in Boston, in San Francisco.
I’m trying to think of the places that are. well known for medical device in the U. S. Even in Memphis for orthopedics. so the regulatory pathway thinking about when the [00:14:00] pathways difficult in the U. S. Entertain opportunities to, get clinical data, human clinical data outside the U. S. And then how did people leverage that those studies from outside the U.
S. to get into the U. S. or Do you use that as a pathway? to meet milestones Increase the value of the company and talk with strategic partners get an exit try and do another capital raise I know i’m throwing out a lot of different. yeah,
Niv Caviar: that’s good.
International Clinical Trials and Regulatory Challenges
Niv Caviar: That’s a good question So oftentimes let’s start with the ex us studies Even if your eventual market is the us, which almost 95% of the case, when you see, US-based companies, US-based entrepreneurs, the ultimate goal is to get an FDA approval.
Whether it’s, you know, A-A-P-M-A [00:15:00] or a new chemical entity, NDA approval, it’s to get to the, US approval just because, you know, the pricing in the us. outside maybe some select countries like Japan or others is so much higher than anywhere else. the risk reward our way profile is a U. S.
Business model. Now, having said that, oftentimes investors and capital providers, one of the key de risking elements they look for is human data. And the preference, obviously, is to have U. S. Data generated through an FDA study. But if that FDA study is going to be, you know, twice as long, three times as costly as getting human data elsewhere, there might be some, some benefit.
I can talk to you about, you know, numerous [00:16:00] companies I’ve worked on both on the drug and device side have done some studies, in other countries and some of X countries you first got to make a decision, am I open to developing world country? Or do I want to be in kind of a first year, we’ll call it Western level medicine country.
And there’s pros and cons of each, for as an example, Australia is a first world nation with an advanced medical system comparable to the United States. And they’ve created a facilitated regulatory path, both for drugs and devices. Thank you very much. feasibility and phase one studies to be conducted in Australia and they give tax credits and there’s many advantages, to working there.
They have a facilitated regulatory pathway because the government of Australia has made a kind of geopolitical decision that they want to attract this industry to the U S. [00:17:00] So for, we, we did some early studies at some of my previous companies in Australia and And some of which would meet the standard of an input for FDA.
Some of it was just, you know, peripherally interesting for the FDA as a support primarily for safety application, but for investor purposes, it showed a dramatic, showed an improvement in an efficacy profile. and a safety profile and and oftentimes investors your first 10 20 patients as the study is done to e I.
R. B. Standards, FDA s
Eric Alspaugh: Very, very, interesting. And I, I liked that a lot, just being strategic and meeting a, some sort of a milestone [00:18:00] to, you know, objectively raise valuation or have the opportunity for, an increased valuation and maybe a different round from friends and family to a, a, Is there some sort of, you know, round numbers to, to help us people outside who don’t know the space going to Australia to do a safety first in man or get some clinical data?
Is this, tens of thousands of dollars, hundreds of thousands. How many millions of dollars versus something in the United States or versus in Europe? Is do you have a way of quantifying that or getting? Okay,
Niv Caviar: I do. So I’ll give you some ballpark numbers. First of all, the generalized assumption is that your preclinical [00:19:00] package whether it’s, you know, the encompassing information on Biocompatibility Manufacturing scale up that your production processes were based on, GMP, you used good laboratory practices for your, for your in vivo and in vitro data.
You had, you know, a an an F-D-A-G-L-P, vivarium conduct your animal model testing. You’ve run through the ISO compatibility studies, and you’ve done all the relevant preclinical work necessary either for an IND or an IDE, similar to what you would do, maybe not to the exacting standards of the FDA, but that the preclinical package is, is robust.
Then with that assumption in place. If you were to go somewhere to, let’s [00:20:00] say, another Western medicine location to conduct your studies, such as Australia or Europe for a phase one or a pilot study, a device pilot or a drug phase one, I think you can probably conduct a study of around 10 patients. at two to three sites for probably a million to two million total external cost.
And what I include in that, that is the CRO fees. Those are the hospital ethics committee and IRB fees. Those are the required in company, in country registrations, right? they would also, those fees or those quotes that I’m including also cause some transportation, logistical requirements. in country insurance and related.
so the [00:21:00] European, Australia, other we’ll call first world medicine countries will probably be, my personal experience, half of what the U. S. would be. Okay. Now, you can go to developing world nations, that’ll be much less, but then the data is suspect.
Eric Alspaugh: Okay. Yeah, of course. Of course. Interesting. So that’s really interesting with your experience in Australia.
Do you have any, I don’t know, pitfalls, funny stories, on obtaining clinical data, any anecdotal stories that are warnings for people? And I’ll give you a funny one that I experienced. in 2007, I, I had worked with a company and we were approached by, some people who purchased a class three [00:22:00] medical device and, under a, a CE it was approved in, in Europe and they’ve used it in, an Asian country and they had data on over 40 human subjects and how they did it, I don’t know, they just.
Created data on their own, and they approached the company and said, Hey, we’ve got clinical data on on 40 people. Would you like to buy this information? And we just kind of all hit the brakes. And we’re like, whose idea was this? And this was done sui sponte outside of the company. Absolutely, no one in the company had anything to do with this.
And it was just a opportunistic, clinician in a foreign country thought, hey, I’m gonna buy this product, I’m gonna use this product, and then I’m gonna generate data, and I’m gonna see if I can sell it back to the company. And it was without any [00:23:00] ethics committee. It was an approved product, but it was shocking to me that outside the U S this was some sort of a, a business strategy.
And so I’m bringing this up as a warning to folks that, you know, keep track of your, your product and all of your shipping and, and maintain controls and be aware that there’s unscrupulous people. Who don’t necessarily have a bad intent, but don’t have any idea about the impact for future regulatory outside of their country where they, where they have an approval.
Cultural Nuances in International Business
Eric Alspaugh: do you have any experience or anecdotal stories, pitfalls or, or risks that people don’t know they don’t know about?
Niv Caviar: Well, in relation to ex U. S. And whether it’s in the R& D [00:24:00] stage or the commercial stage, and commercial stage could be either using a distributor or direct selling. You know, you carefully reflect upon the The fact that not all countries in the world have the same rule of law and protection of IP trade secrets and, same sacrosanct view of contracts that the United States has.
And what we might take for granted and, you know, establishing a service relationship with maybe either a hospital or a CRO or distributor. it doesn’t work that way elsewhere. And in some countries that I’ve experienced, but particularly Some Asian countries, recognize that even though you sign a contract, doesn’t mean that the money is going to be exchanged, turn the terms of [00:25:00] contract, or they’re going to adhere to that.
And the, you know, the golden rule of course, is particularly for business done in China. you have to get the money up front, right? a kind of contingent, payment or recognition. It is just, it’s neither right or wrong. That’s not their necessarily interpretation of contracts, it’s relationship. So I had a funny experience.
Where I was a CEO of a life science company, this was a while back and we had done a binding term sheet. So we hadn’t signed a contract, but with a, an Asian company and, you know, I think I can say this. It was a, it was a Chinese company. And I, they had insisted that I make a visit to visit their manufacturing facility and their hospitals.
And I thought it was a perfunctory meeting to just sign the contract because we already had a binding. term sheet. I show up [00:26:00] at their main offices, which was adjoining a hospital. They had this red carpet. They had this little band. The whole hospital was lined up as if I were a head of state instead of this, you know, little struggling startup who is making sales and just got an approval.
And, I treated like the head of state and it was wonderful. They had all these events. And then I said, okay, where’s the contract? Should I, where should I sign? And they’re like, it became apparent. I was there to negotiate a transaction and it took me a few hours to realize that, and then I said, no, no, no, we’ve already agreed on all the terms.
We have a binding LOI, our term sheet is in place. We’re just here to work out some of the legal boilerplate. And that was a shock. They wanted to negotiate and modify all the terms that I thought were already [00:27:00] existing. And make a long story short, we had another day or two of fun events, but I didn’t sign any contract.
And I kind of went back to the United States with my tail between my legs, trying to explain to the board what happened. Right. So as you work elsewhere, It’s critical you get international counsel who has a linkage to on your American counsel on how laws and regulations and interpretation of contracts actually work there because, some places respect contracts in the same way that America does.
Others do not.
Eric Alspaugh: I, that’s a hilarious story to be named. And I actually, had a very similar story. I, I was counsel to a medical device company that, and it coincidentally, it was China. But I work with, companies that work all over [00:28:00] Europe, Middle East and Asia, and, the CEO blew over to China. And essentially had a red ribbon a cutting of the ceremony and he he too thought he was just showing up to sign this five million dollar contract and It wasn’t his Expectations were they we’ve got this loi i’m flying over They’ve got this huge ceremony Everybody’s in their outfits they’re cutting the ribbon and we’re doing this joint venture in china You And, after the pomp and circumstance, he’s like, okay, great.
Where’s the, where’s the contract? Where do I sign? And, you know, he, he Skypes me at, you know, some, some hour, 15 hours ahead of time for me. And I get on this call and he’s like, [00:29:00] they didn’t have the contract ready. What’s going on. And I, you know, was a little bit surprised. He’s leading the negotiations. And, so that’s a very important lesson when negotiating outside the U.
S. to, have a good contact, a legal contact, a cultural education to understand the, the norms of negotiations. And different countries have different reputations. Not just there are some countries that you signed the agreement and then after you send the check, that’s an invitation to start negotiating again,
Voice-Over: right?
Eric Alspaugh: You hit it on the head, so I’ve seen that, and I think that’s a valuable lesson for entrepreneurs who have not gone outside the U. S. Yet to, engage with people and learn about the culture. [00:30:00] And negotiation styles and strategies because they are very different outside the U. S.
Voice-Over:
Eric Alspaugh: any other so that we’ve talked a lot about regulatory and how it tangentially can affect finance and that kind of a strategy.
what about maybe some, I don’t know, personal tips or skills? How do you, you’re very engaging. You’re a great listener. You always, have insights on what people are asking for that I don’t catch the first time around. And so in approaching, An investment strategy. What are some things that you can teach or give tips?
Because some of it is experience, right? And, and education and [00:31:00] understanding and messing things up and learning. But what are some, some easy tips or, or pitfalls that people in approaching not friend, maybe friends and family, but also venture capital or private equity in, in raising money to, start this very capital intensive medical device or pharmaceutical company.
Niv Caviar: Yeah, great question. you know, it’s funny as I, I often tell people. the, you know, I think about industry, at least it’s called life sciences and to most people think about in the segmentation of medical device pharma therapeutic area, but I really think about it more on, you know, kind of capitalization and stability stage where there’s [00:32:00] revenue generating companies and companies that are imminently about to get, a FDA approval and then companies that are more in the research and development or early clinical stages.
It’s really the most natural segmentation in, when you think about health care capitalization and fundraising, because, you know, the former category, they’re either public or if they’re not public, they’re generating enough revenue that they can get venture debt. Or, you know, private placements pretty easily essentially collateralized or securitized by their income and revenue streams.
The early stage companies, it’s all about constant capital raising. Now as you think about that initial formation of the idea and getting going, you’ve really gotta identify where the trends are and where, what, where [00:33:00] the both venture, private equity, high net worth individual family office offices are and their on their thinking on that kind of industry segment.
So I remember when I first got into, biotech and med tech. 15 years ago from, big pharma, you know, if you were in research, if you were in genomics, if you were in anything innovative in R and D, that was where the money was going. There was lots of money. People wanted big ideas. now it’s kind of gone the opposite.
Everyone wants a late stage idea, something close to liquidity event within two or three years, and or something that could generate revenue, or a very strong regulatory pathway that’ll get you to either an exit or an approval. So I think one has to think [00:34:00] about that very clearly. and almost avoid businesses and ideas that don’t have that path of liquidity or an FDA approval within some reasonable time period.
You know, the next thing is when you think about this, there’s a lot of art in fundraising. It’s more art than science and I reflect upon my business school career. The only class and you take all the fundamentals, marketing, finance, accounting, microeconomics, macroeconomics, there’s no class in fundraising that that concept alien, you have to pick it up.
And there’s a lot of tricks of the trade. You learn the hard way. First of all, fundraising is much, much easier if you have an institutional investor, in your cap tables, created funding, provided some initial capitalization. If you don’t have an institutional investor that you can anchor around, it’s harder.
[00:35:00] So generally one trick of the trade is try to get some reputable, you know, institution. It doesn’t have to be Kleiner Perkins or, you know, Essex Woodlands or some big name. It could be just some local private equity VC company or a family office. But having that anchor really does help, right? I think the other thing is It’s difficult when there’s a perception that the founders and investors haven’t actually put in capital themselves.
I think people who invest in money, whether they’re seed friends or family, want to know that the investors have put more or the founders have put more than their just time. So that’s another thing to think about. As the, if you’re the CEO or CFO and you’re trying to raise money, I’ve also found it very difficult if you’re trying to go point A, which is you as a [00:36:00] CEO or the CFO directly to an investor at point C, And make a pitch for capital.
Generally human nature being what it is. Investors want to get the deal credentialed through some intermediary. And even if they know you as the CEO or the CFO or board chair, they want to get an introduction through someone else they might know, because then they’re hearing it from someone who isn’t as biased, but they’re not.
And ideally that addition, that intermediary is also investing in the company. So there’s around a dozen tricks of the trade that I’ve learned the hard way. about trying to raise your, your capital and, that that’s that, I will also say, you know, there’s pros and cons of being a public company versus being a private company.
And I’ve spent my career kind of halfway in both. [00:37:00] even though the requirements are much more difficult in terms of maintenance of standards as a public company, It’s the way to go. because there’s an old adage in, biotech medtech, which I think of all after all these years is the most relevant.
No life science company ever fails. They just run out of money,
Voice-Over: right?
Niv Caviar: Think about that if you’re a public company. You can always do an ATM or a follow on or a pipe or register direct, you know, and you’re going to have ease of executing those assuming you have a, you know, competent management team.
Primarily because even though you’re a struggling private public company, you have liquidity for the investors. Private companies don’t have that.
Eric Alspaugh: Okay, [00:38:00] that’s, that’s excellent, excellent advice. I learned something about capital strategies from you. Very valuable. gosh, I, I wish you had something that would, would, excite entrepreneurs to get out there.
But I’m hearing, you know, it’s tough. You’ve got to have, it’s not a great idea that gets funded. It is relationships and capital that brings a product to market. It’s, it’s. It’s not just a great idea or a great clinical idea that can actually help save lives.
Niv Caviar: Yeah, Eric, you know, you said it very well and, apropos, you know, the, probably the most, unfortunate paradox about the, the life sciences is There are many companies [00:39:00] with great, great technologies and ideas that don’t get to the surface.
And then there is other companies and technologies that are quite honestly mediocre, but they get powered through a clinical study and get on the market. And it’s not, and it’s probably the single biggest misconception. of entrepreneurs and new, new company formation is if I just have a great idea, I have a great technology, I have a patent and there’s a market, I should be able to get there.
And unfortunately, doesn’t work that way. it’s often about your connections, your access to capital. Are you able to navigate a regulatory path? And, the single best thing I always advise, young companies to do is, you know, surround yourself with a menagerie of experts and different skill sets and different perspectives and, to help navigate that.
So have someone on your board who is a great net [00:40:00] worker, might not have a lot of knowledge about the life sciences or, you pharmacophore, but he has connections to capital markets or high net worth individuals. Have someone on your team who is a good regulatory person, have someone on your team who has experience in general management, have someone on your team who has expertise in that industry segment.
So this diversification of knowledge functions, abilities are really what’s key because you Nivr know what’s going to happen and having that spectrum of expertise and capabilities on your board, advisors, companies. is what’s needed.
Eric Alspaugh: Wow. That’s excellent. I completely agree with you. I’d like to, I know we’re running up, we got a few minutes left.
Final Thoughts and Future Episodes
Eric Alspaugh: I want to change gears real quick. I was hoping you would say something like, well, the neurovascular or the kidney space or point of care there, there’s government [00:41:00] subsidies and people are throwing money at these. industry segments rather than, separating the funding levels and saying this is the stage of the company a couple of years from profit or I’ve reached milestones in the regulatory pathway.
I was hoping you would say something like, here is an industry that has a lot of growth, people are pouring money into, and, and I’ve seen it in other industries for raising money in software. It used to be Internet of Things, then it was, crypto or ledgers, some sort of a technology with, yeah, Bitcoin or related technology.
And, and now we’re, we’re looking at, AI or general [00:42:00] artificial intelligence technologies. Is that impacting. the healthcare space, point of care, has it made its way into those industries yet? Or are, is there any area that you’re familiar with right now where there’s lots of opportunity and people are putting capital in?
Niv Caviar: yeah, that’s a good question. I mean, you know, the short answer is yes. You mentioned a couple of them. AI is hot. prior to that, it was orphan diseases and targeted oncology therapy. You know, part of this are trends. You know, there’s always different trends that are flowing around where capital is hot.
You know, in life science, there was genomics for a while. And, you know, new target development, then it was kind of, 510 [00:43:00] K devices, then it was kind of dermatology and aesthetics, then it was targeted oncology, then it was, you know, Carty and orphan. Now it’s, of course, a I talking to a private equity friend of my partner at a private equity firm.
And he says, literally, every company that comes through says they’re an A. I company, whether they’re I. T. They’re in drug development. They’re in commercial stage. There are medical device. Everyone’s an A. I company. So everyone’s trying to get on these trends. You know, so it is probably right now, AI related technologies, cancer is always going to attract money and capital just because, you know, fundamentally our healthcare system is broken and as part of our broken system, the government and payers reimbursed for specific drugs and devices.
And in a different manner than others and for, you know, orphan [00:44:00] and small population diseases and cancer, you can still price. at, you know, 100, to 100, 000 a year therapy and other technologies you can’t or because there’s a high procedural code, you know, something like cardiovascular, cardiac failure, whether it’s, for heart valves, you know, LVADs, et cetera, you can price at very high levels, So part of what’s hot to answer your question is somewhat what the government and our health care system will reimburse.
Because if you kind of extrapolate on your budget and plan and you get to the profit and loss post FDA approval, a large part of that component is not traditional volume. Or market share its price and the price is dictated essentially about what the government is going to reimburse. So as you [00:45:00] think about what’s hot, you should first think about what can I price at a adequate level to recoup all these development costs and certain therapeutic segments allow you to still price high and therefore they’re hot.
And others are not.
Eric Alspaugh: I agree. That’s, again, entrepreneurs, you’ve got to start off your process from the perspective of an exit and reimbursement or, you know, the cost of goods. The, the, the sale price less the cost of goods and, not, man, that’s, that’s disappointing, but you really have to look at this, a business from the end, not just the beginning.
And I like looking at all the opportunities at the beginning, personally, but, um. Do you see anything, are [00:46:00] there any industries or trends that you, are an advocate for or any, any opportunities you want to share with people and things they should be looking for in the near term?
Niv Caviar: Well, and I, I’ve got to apologize.
I only have a few more minutes, but I would say that, The main, the main area that one should to look for besides just pricing and big markets is, you know, thinking about the cost to get there is usually the capital requirements to get to, new drug or device development are so onerous. It’s critical to plan that out.
but that’s one of the worst things one could do is expect to get from the current preclinical IDE or IND stage to approval is some fraction of [00:47:00] what it really costs. So there, there’s almost an opportunity in smart, you know, budgeting and planning to get there. but the other areas, as I indicated, I’m, I’m still a big proponent of dermaesthetics markets.
I think there’s a lot, large way to go and, and a lot of opportunity in targeted oncology. And I think it’s unclear where AI is going to help healthcare. But I think certainly maybe claims processing, physician support, providing physicians assisted, support, and maybe also some, culling of data prospectively of what patients are at risk, but you have to have access to kind of the health plans and the health IT, the health IT groups have to have access to some sort of database to cull that data.
So that’s my view, and I just want to let everyone know I’ve worked with Eric now for 20 years. He’s a, he’s a great IP and contract attorney, but what really makes him [00:48:00] unique amongst many attorneys I’ve found is he’s a problem solver. He just doesn’t, Eric, what’s been wonderful about you when I go to legal situations is you just don’t always give me the most conservative answer, which is no or put your head in the stand, but coming up with real kind of legal to business solutions.
So you’ve been great at that. Thank you for all your help over the years. And, glad we had a chance to talk.
Eric Alspaugh: Thank you, Niv. Appreciate you. And, we’ll, we’ll connect real soon. Is there any, what’s the best way for people to reach out to you if, they want to get ahold of you? Are you, are you open to people reaching out to you?
What’s the best way?
Niv Caviar: Probably LinkedIn, probably LinkedIn or, through you. Those are probably the best ways to send me a LinkedIn message or, or through you.
Eric Alspaugh: Awesome. I’ll, I’ll make sure that, people can reach out to me and find out how to get ahold of you. Thanks so much, Niv. Have a great day. [00:49:00]
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