Become a Creator today!Start creating today - Share your story with the world!
Start for free
00:00:00
00:00:01
Laying the Groundwork for Digital Health Solutions, a Conversation with Kal Patel
115 Plays1 year ago
Like AWS and Azure did for cloud, BrightInsight is building the infrastructure needed for digital health solutions. Kal Patel, CEO of BrightInsight, joins Frederic Laurier at Alantra to discuss digital adoption within pharma and medical device companies, how digital solutions help reduce patient churn, FDA regulations regarding Software-as-a-Medical Device (SaMD), and BrightInsight’s spending strategy in the current fundraising environment.
Recommended
Transcript
Introduction to Bright Insight and its impact on Pharma
00:00:06
Speaker
Welcome all to another episode of Crossroads by Elantra. I'm Fred Lawyer, and I lead the firm's digital health practice. We have the great pleasure of hosting Cal Patel with us today on our podcast. Cal is the founder of Bright Insight. They're the creator of a platform that helps expedite the application development process for Big Pharma and MDC, medical device manufacturers, when it comes to patient-facing applications.
00:00:32
Speaker
In this episode, Cal will elaborate on how his firm partners with pharma and MDCs to bring to market applications that not only improve drug efficacy and adherence, but also ultimately lead to better patient safety. He'll also discuss and touch upon how clearer FDA regulations for the software as a medical device or SAMV sector has been a boon for his business and other off-the-shelf platform like his that need to meet way more stringent security and privacy requirements.
Cal Patel's Journey from Medicine to Entrepreneurship
00:01:03
Speaker
Welcome, Cal, to our podcast. We're grateful that you accepted our invite. We know that it's a bit of a role reversal for you as you host your own. So thank you again for accepting. Before we jump to the thick of things, let's spend a few seconds on your bio. You initially attended medical school and took an early pivot into the corporate world, initially at consulting firms and then did a couple of stints, fairly long stints at Large Pharma. Have you ever practiced medicine, by the way?
00:01:33
Speaker
I did not practice medicine and went to medical school thinking that of course that was the original intent but i got so enamored. Around the driving impact at scale and so that desire to drive impact at scale really drove me into pursuing the NBA and ultimately moving to the business. Some extent entrepreneurship was a calling for you wasn't it. Yeah.
00:01:55
Speaker
It was because what I noticed in medical school was just the complete lack of technology getting leveraged appropriately. Actually, on the education side, it was very well leveraged. But once we got into the hospital, it was really arcane. So experiencing that hands on really had a big impact as well.
00:02:15
Speaker
You spent many years at Novartis in sales and marketing and also in account leadership. You then moved to Amgen
Digital Health Innovations at Amgen
00:02:21
Speaker
and two years into your stint at Amgen, you founded your digital health unit. That was about 10 years ago.
00:02:28
Speaker
Fast forward today, we're seeing a plethora of vendors addressing various pain points, not only pain points for physicians, but also for patients and consumers. Back in the day, you didn't see that. What I saw anyways was most of the applications were targeting basic pain points, clinical and operational pain points for the most part.
00:02:51
Speaker
such as EMR and RCM applications. Oh, I have your experiences at Novartis and Amgen help you shape bright insight to what it is today. That's right. I did a few different roles at Novartis and then at Amgen was three very different roles, had a corporate strategy and then global marketing lead for one of their main drugs, Enbrol. Then, as you mentioned, I found and led what we call Amgen Digital Health, one of the early
00:03:14
Speaker
Digital technology focus groups within big pharma tech and our focus was how do we leverage. Technology to improve the real world performance of drugs what i saw my own experience in those roles.
00:03:28
Speaker
It was really not a digital technology gap. It was an application gap. Even 10 years ago, tons of amazing digital technology existed, but we weren't applying it within the context of our therapies.
Technological Advances in Drug Delivery
00:03:41
Speaker
If you could effectively do that, you can drive tremendous improvements in clinical outcomes. To give a couple of examples, most drugs have a major adherence problem.
00:03:53
Speaker
And if you put Bluetooth into a drug delivery device, let's say you have an injectable pen, now the patient's permission, you can know if, when, where, and if appropriate, how much drug the patient's taking. With that knowledge, you can now drive personalized adherence to help somebody be reminded in a way that's appropriate to them in the sort of the right time, right way.
00:04:14
Speaker
to help them stay adherent to that therapy. That ability to drive personalization, which we experience in basically every other aspect of our lives, was not happening in pharma. And so that was really the impetus for starting that group for me really pivoting my health career towards digital health. I think to your point around how the world is changing, fast forward from then to now, and basically every single pharma company and medical device company has some type of digital either center of excellence,
00:04:44
Speaker
Or even better i would say has really integrated the digital side into a single organization because i recognize that's not two separate things but an integrated view of the world capability.
00:04:55
Speaker
Many companies now moving into looking at how we improve the real world performance of our drugs through leveraging digital. And for example, at our company Bright Insight, we look at the portfolio of drugs. We recently estimated this. It's about $35 billion of peak sales that that represents, right? So my guess is a decade ago, that number was probably close to zero. So a lot more to be done by the industry for sure. Clearly, folks are recognizing and beginning to see the value
00:05:24
Speaker
What is that $35 billion made of? The peak sales of those drugs. So as a example, with CSL, we're working, this is a public one, so we're working with one of their flagship drugs, Hyzantra, which helps patients with primary immunodeficiency and has another indication as well. And so if you add up the sales of that drug, for example, and then all the other drugs we're working with, that adds up to about 30 simple and ended sales.
00:05:49
Speaker
Pharma has been leveraging tech or using tech for a long, long time, but mostly to promote, protect their brands using fairly rudimentary CRM applications for brand managers and sales rep. Apps now do much more than that. They help improve drug adherence. We discussed it earlier, efficacy, and also just create a more bespoke experience, a bit like what we find in other parts of our daily lives, like banking or
00:06:16
Speaker
for daily purchases. Patient data now that is collected can also help create somewhat of a direct feedback between the R&D teams and the patients themselves. To some extent, you and your peers do act as a transmission belt. It is definitely a large opportunity dollar-wise. 100%. I think that's what the industry is beginning to realize. If you just take one stat as an example, right?
00:06:40
Speaker
Last year in the US pharma company spent almost seven billion dollars on direct to consumer advertising that is very ri driven spend there doing a lot of analytics to support that investment that's basically helping drive awareness find patients get them into the health care provider's office and ask for their therapies.
00:07:00
Speaker
If they're finding that kind of ROI in there, now imagine get that patient in the doctor's office asking for the prescription. Where we come in is, how do you now go from that prescription written to helping that conversion actually happen and give the person on therapy? And now once you have them on therapy, I don't care what industry you're in, the worst thing you can allow for is your customer to churn.
00:07:19
Speaker
In the case of pharma, you have somebody on expensive therapies, you spend all this effort and money to get them onto your therapy. And of course, some patient come off of it because it doesn't work or they've effectively been treated and don't need it anymore. But for the majority of that churn,
00:07:34
Speaker
That turn is avoidable turn. And that's where we come in and work with companies on things like how do you understand key pay points and address those with digital. So just sticking with the Isentra example, that brand team recognized that there's a very complex dosing regimen that patients have to follow and to track. And that means rotating injection sites on someone's patient's body. Patients were keeping a paper journal to try to remember where they had last injected and where before that.
00:08:02
Speaker
We've digitized that whole experience, both tracking the recording, et cetera. It's just one pain point that the app solves. And as a result of that, without really much marketing support, 20% of the user base in the U.S. is using that solution. Something like 89% continue to use it at 12 months. So it's clearly a delivering value for a huge subset of the majority of those patients. You know, CSL has just recently launched that app in Japan.
00:08:28
Speaker
and are looking to take it more broadly to key markets. To your point, like if you have a multi-billion dollar therapy and you can assist the patient in this case to have a better experience as a result, be more engaged with therapy, stay more adherent, that's going to drive better clinical value, but again, tremendous commercial value. However, they don't have to be mutually exclusive, do they? What we've found out through our own deal-making activity is pharma and MDCs, they want to control patient interactions.
00:08:58
Speaker
But regardless, those insights, they need to be digitized one way or another.
Bright Insight's Role in Pharma and MDC Collaboration
00:09:03
Speaker
Those same pharma and MDCs that build their own software, development, and data sciences teams, how do those groups or teams feel about you and your peers potentially competing with them? First, before I directly answer that question, just to your broader point, what we're finally seeing is the shift where
00:09:21
Speaker
the pharma and medical device industries are going from, I used to sort of talk about this on panels and stuff where it's hard to find an industry that didn't try harder to know less about their end customer.
00:09:32
Speaker
Like pharma literally did not want to know who's the person using my therapy. How's it working for them? How's their experience? Is it working? Is it not working, et cetera, right? It's been a slow journey and it's still not complete, but to your point, like did it begin to be like, well, actually there's a tremendous amount of clinical and business insight to actually know the end user and their experience. And we shouldn't be afraid of that, but we should figure out how to embrace that.
00:09:56
Speaker
And that's where we come in to your question directly. We're a complete compliment to those teams because we're at Bright Insight.
00:10:04
Speaker
global infrastructure that helps pharma and med tech companies build regulated digital health solutions. So what does that mean? That means you want to build a digital solution or you want to take a device, you want to digitize it. You want to bring this data back into your environment so you can see the data, you can crunch the data, you can get insights, you can build algorithms, you can figure out ways to drive more clinical and business impact. Then you want to deploy that back out.
00:10:28
Speaker
Well, you need compliant infrastructure to do that. That's meeting all the regulatory requirements, meeting all the privacy requirements, all the security requirements, et cetera, right? And Brian said, we provide that out of the box. So all of these teams, they really are going to leverage us as partners. They don't want to be home-growing this kind of infrastructure, right? That would be like somebody saying, yeah, I don't really want to use AWS or Azure or Google Cloud. I'm going to build my own cloud infrastructure. That makes no sense. Keep in mind, a decade ago, that's what the industry was doing, literally.
00:10:57
Speaker
Big Pharma was building and running their own private clouds. Right now it's a question of, okay, which cloud are we going to use or which ones we're going to have strategic partnerships with? Why? Because you can't do security. Thousands of Google cloud security people who all day long are working, how many can you hire and do to keep your cloud secure or AI or whatever tools, right? And it's the same thing with what we do, building infrastructure that can really scale across products, across geographies,
00:11:22
Speaker
can keep up with constantly changing security and privacy and regulatory laws. You want to have a partner to do that. And that's really the role we play. So we're really enabling infrastructure for them.
00:11:32
Speaker
This applies not only to pharma, but really to any industry. We see buyers all the time facing the same dilemma. Shall we buy? Should we build? Some capabilities, our core need to be internal, but some probably would gain in terms of efficiency by being outsourced. There's also the question of speed to market and cost, right? That comes into the equation. Are you seeing less pushback now than you were earlier on from pharma in terms of partnering with you?
00:12:00
Speaker
Yeah, for sure. So the kinds of other partners that a pharma company, med tech company was looking at four years ago were the likes of systems integrators, the accentures of the deloids or the cognizance of the world. We basically never come across them. I can't think of the last time any of those names came across, certainly in the pharma context.
00:12:19
Speaker
Medical device companies, frankly, still have a bend towards wanting to home grow. That will pass because, mark my words, they will fail at that because every industry has proven over and over and over again. If you try to build your own end-to-end infrastructure, unless you've successfully built an entire ecosystem around that, you're not going to be successful at it. So med tech companies will still turn occasionally towards partners to try to home grow this type of infrastructure. But yeah, over the last four years, totally different mindset.
00:12:48
Speaker
That's fairly consistent with what other people in this tree are telling us, especially clients. So really no surprise here on your website. You mentioned that some partners using your platform have accelerated time to market by up to two years. That's very, very significant. Can you elaborate some? Yeah, that's exactly right. Again, to your earlier point.
00:13:09
Speaker
When you are talking about a pharma, drug, or medical device, ultimately there's an area under the curve, right? Your patent life is going to drive that and the competitive landscape is going to drive that, right?
00:13:20
Speaker
period of time where you want to maximize sales and drive value. If you are going to drive a digital solution that's going to drive more market share or keep patients on therapy longer, etc., why would you want to take two years to bring that innovation to market if you can cut off 18 months working with our platform and our products? That value story becomes very compelling, especially when
00:13:44
Speaker
typical drug is multi-billion in sales. A lot of drugs are multi-billion in sales. And so to your point, you start moving the needle faster even to create way more value than taking that extra time. So just the top line and profit value is so big. Forget about that. It will obviously cost you more to build something for two years versus work with us and move faster. Switching gears a bit, let's talk about the FDA, the role they're playing.
Navigating FDA Regulations for Digital Health
00:14:09
Speaker
They've been very active over the last few years trying to put safeguards around ML and AI. There's even an action plan that was published by the FDA in 2021 around Sam Deep. Can you please put in layman terms what it means for the industry and for folks like you?
00:14:27
Speaker
Yeah. So let's sort of start at a higher level and then kind of come into a little bit more of the specifics, right? So the FDA, they're regulating medical drugs and devices. It's very safety oriented, right? To ensure that there's a very clear understanding of potential harm.
00:14:43
Speaker
So in the case of this category of software with its medical devices, they really come in when there's a medical or clinical intent of the software, right? So let's say someone's wearing, as an example, glucose monitor, continuous glucose monitor on their arm or in their body, and that's sending that glucose reading to a phone. It goes to the back-end cloud, and then it displays for the patient. It says, oh, your glucose reading FDA doesn't care about that because they're going to look at that and say, really, what you're doing is you're digitizing a paper journaling exercise.
00:15:14
Speaker
But now you take that same data flow of glucose readings, and let's say you have an algorithm in the cloud, and that algorithm is looking at that and it's saying, oh, based on this data and potentially other data, I'm going to recommend now to the patient how much insulin they should take. So say, hey, Mrs. Smith, you should take 20 units of insulin.
00:15:32
Speaker
Now you go from FDA, quote unquote, does not care to being at the highest level of regulation requirements. My example, I would imagine is a class three, which means the highest level of risk software's medical device algorithm. Why? Because if anything in that algorithm, but really that entire system fails, the patient could end up in diabetic coma in the ICU. So that's kind of how the FDA thinks about software is like, what's the intended use of the software?
00:15:57
Speaker
What's the associated risk of that software? Clearly a benefit, right? Helping somebody personalize drug dosing their insulin is a massive clinical benefit. And I look at that benefit side, but also the risk side. These are relatively new categories, of course. And so just like the industry, the FDA is trying to evolve and be responsive to enabling this innovation while at the same time trying to ensure safety. What we're seeing from the FDA in general is they're moving to trying to move towards clarity.
00:16:27
Speaker
For example, the final guidance that came out in October here is that it's more stringent compared to the previous one, meaning that more of these clinical decision software tools will fall under the category of medical device versus sitting outside of regulatory purview. So for our customers, that certainly means that they're happy they're working with us and treating these as medical devices because otherwise they could be outside of compliance requirements. To the FDA's credit, they're actually also investing time and effort to want to learn directly from industry.
00:16:56
Speaker
So it'll be an iterative progression, and I think not just FDA has a role here, but industry has a very important role, including companies like ours, because we have to have a bidirectional communication pathway, which we do, that sort of informs what are we trying to achieve in helping our customers achieve, and for them to say, okay, well, how do we help try to ensure patient safety while enabling this very valuable innovation?
00:17:21
Speaker
What's the impact that this may have on approval timelines? You feel that standardized platforms like yours will actually expedite that process? I think what it'll mean is more clarity and clarity leads to faster execution and approval. Because faster approval can be interpreted as how does the FDA just give more freedom to operate and people can kind of do what they want to do and get approved faster. I don't think that's the right way to think about it. I think the way to think about it is let's do what's right for the patient.
00:17:51
Speaker
But let's translate that into clarity. And then clarity is what enables decisions and speed, right? And when there's a lack of clarity, that's when people are kind of churning. Do we need to do this? Do we don't need to do this? Should we do it this way? Should we do it that way? And that sort of is what sucks up the time. Let's say a more liberal view, but it's the clarity of the view that that enables it. Cause we can, and we already do support customers to build
00:18:18
Speaker
highly complex, highly regulated software and do that quickly and compliantly. So I'm not afraid of the FDA setting a high bar. It's just the lack of clarity that then is what slows things down.
00:18:30
Speaker
Understood. One last question and then we'll let you go, Cal. Markets are not as good as they were when you raised your round with Insight Partners. What has been the impact of those market conditions on your short-term decision making and longer-term planning?
Future Focus and Economic Challenges for Bright Insight
00:18:47
Speaker
Let me highlight kind of where you finish, which is our approach is all about
00:18:51
Speaker
the long time we navigate short term within that context of the long term, right? So Bright Insight's objective is to be the de facto platform, regulated platform for biopharma and MedTech, right? So if you're a biopharma and MedTech company anywhere in the world, we want you to be building your regulated digital health solutions on top of Bright Insight, right? That's how we see accomplishing our mission of leveraging digital to improve clinical outcomes globally. So we're playing for that long and that means that the majority of every dollar worth spending
00:19:21
Speaker
Our largest category of spend is actually R&D. Last year, let's just keep it slightly ringing. We put 40% to 50% of every dollar we spend, including our COG spend.
00:19:32
Speaker
into R&D, into our platform, into the in vitro diagnostic and disease management solution that we're building on top of our platform. That's our focus. Why? Because we want to have the most robust platform and we believe that's how we become the de facto for the industry. And we look out three years, five years, 10 years. So now with that said, to your point around the economic environment that we're in right now, of course, capital is harder to get and more expensive to get.
00:19:57
Speaker
So we're just very prudent about that. So we're very thoughtful about every dollar we spend. Would we do more R&D if money was easier to get? Yes, we've tightly managing our expenses. And so we stretch out some things like some of our product development pipelines. And that's, I think, just prudent and very reasonable way to operate. So it doesn't take our eye off the long term objective. We're incredibly well capitalized. We have multiple years of runway.
00:20:22
Speaker
I'm constantly being pinged by investors that are wanting to learn more about what we're doing. And so as CEO, one of my main jobs is to ensure that as a company, we control our destiny, right? And a big part is to have a financial balance sheet to go do that. That's always top of mind is we're making choices on our investment. When we look at benchmarks, we're way above on R&D spend for a company of our size. We're way under on sales and marketing spend, because
00:20:50
Speaker
That's a very conscious decision. We have a handful of, for example, frontline sales folks. Why? Because again, we're playing for that long game and so we don't believe that what we want to do is just take what we have and then sell the heck out of it. We don't think that's the right answer for the industry and certainly for patients. So we want to keep skewing towards R&D investment.
00:21:11
Speaker
having more of a methodical compounding ability to grow the business. And then we'll dial up sales and marketing over time in a much more gradual way as the business grows. But if we can keep growing with a very lean sales and marketing organization, that's the best way to do it.
00:21:25
Speaker
Hey Cal, as always, it was very insightful talking with you. It was a great discussion. Probably my key takeaway from today's discussion is how pharma has become more receptive to platforms like yours. Sounds like it was not always the case. Initially they intended to build their own private cloud, some extent, or private cloud infrastructures.
00:21:48
Speaker
They kind of pivoted away from that and I understand why. Now they can turn to third-party platforms like yours that provide a much more affordable and efficient way to build applications. End result is patients have a more enjoyable experience and ultimately leads to better outcomes for the patients themselves. Thank you so much again for taking the time. Looking forward to our next discussion, Cal. Enjoy your day, man.
00:22:24
Speaker
you