Rob introduced to me to Ken Londoner at the Roth Investment conference last month. Had the pleasure of sitting next to him for dinner that evening. Also met several other members of their team that evening. First impression is very favorable.
I’m a business owner in California and an electrical engineer. Our company’s 50th anniversary will be next year and I’m the second-generation owner.
While my degree had an emphasis on integrated circuit design my knowledge base of all things electricity is very diverse. My expertise however is not in engineering related to medicine.
While doing my due diligence my curiosity drew itself toward their technology and what makes the Pure EP system marketable. What’s its “Unique Selling Proposition” that will drive sales and revenue growth?
I started peppering Ken at dinner with all sorts of technical questions to which he replied “you need to talk to Budi he’ll be able to answer your questions”. Budi Drakulic is their CTO and inventor of the PURE EP system. He is located at their R&D facilities in West LA. Rob hadn’t been there either, so we arranged a visit with them that occurred yesterday.
We arrived at their offices at 11AM. We met with Budi and Dr. Barry Keenan, VP of Engineering for just over two hours.
They shared the genesis of the product and why the need to address the quality of signals used to perform ablation for Atrial fibrillation and other electrophysiology needs. Having done some background research on current technology it was apparent from the start that the operating room where these procedures are performed is about as “electrically noisy” as any environment can get. None of the instruments and machines in that room were designed to work together, or protect themselves to a significant degree, from the inherent RFI and EMI present in the room. This isn’t unique to the medical industry and something I’m very familiar with.
What is frightening to realize is the doctor performing the ablation procedure is picking the spot in the heart to ablate using signals that are extremely distorted from this background noise. It’s his experience and keen eye that allows him/her to estimate where the heart needs to be ablated. In some cases, the electrical signals causing the issues are so small that they can’t be seen with current technology. At that point it’s either untreatable or a best guess attempt to address the errant electrical signals.
The PURE EP system uses hardware that allows for higher frequency recording of these signals, think orders of magnitude higher resolution, and sophisticated signal processing software combined with real time comparison to a huge database of previous ECG data. The PURE EP system not only gives the doctor the higher resolution visual signals but can also flag signal patterns that have been identified in past ECGs. Then the software can tell the doctor, with a degree of certainty, if he has the catheter in the correct place to perform the ablation.
They provide Rob and me a real time demonstration of the system using real human data. Its truly remarkable what this machine is capable of. Budi also provided me print outs of comparative signals using the PURE EP system and a conventional ablation instrument. This data was from the Mayo Clinic where they had just spent the prior 3-days. The signal resolution was remarkable. 100’s or maybe 1000’s of times more resolution. Unreal. Budi’s and Barry’s enthusiasm were unmistakable. They have built a better mousetrap.
IMO, and it’s just my opinion, many of these advancements are protected by IP rights owned by BioSig.
- Even higher frequency detection capability coming. Higher than their current capability and orders of magnitude higher that currently available from any technology. Which means even more data resolution capability.
- Higher resolution means even more effective and accurate ablation for electrical signals from the heart’s chambers that are not possible to detect with current technology.
- Ability to analyze small signals quickly after a larger cardiac electrical event. The recovery time from a large electrical signal in current systems misses the smaller subsequent signals due to analog filtering.
- Very applicable to Electrophysiology treatments for other afflictions. Think bladder control, IBS, brain illnesses. These are all possible medical afflictions to be addressed down the road.
- Data capture and ability to detect repeatable electrical signals from the heart in real time allowing the cardiologist to ablate exactly in the right location.
- Signal filtering and comparison to real time and archived databases enhances the certainty of the ablation location/effectiveness.
- Capturing all data and using analytics to recommend ablation locations in future procedures. Will allow more cardiologists to become more efficient and effective MUCH quicker. Think more procedures by more doctors all done quicker and more acutely. (ROI for the purchaser!)
- Mayo Clinic, with which they have a 10-year collaboration agreement with, is assisting in identifying important data and signal conditioning needed for more effective ablation procedures.
- Educating the users. Will initially require BioSig personnel on site during procedures. I see many possibilities to address this challenge but could spread them thin if production ramps quickly.
- I’m comfortable with the ability to scale manufacturing. They have a main and backup supplier for their hardware requirements. The above is a bigger challenge especially if the procurement ramps very quickly, but again I’m comfortable this can be addressed.
- Reverse engineering by competitors. IMO, circuit boards are not difficult to reverse engineer by a competitor. The software, custom filtering, real time data capture/display and data analytics would be a high cost of entry for a competitor. In other words, cheaper to buyout BioSig, and their 10 year collaboration with the Mayo Clinic, than reinvent the wheel so to speak.
- Monetizing the back end. The reversely compatible software/hardware will be key to cost effective, i.e. profitable, upgrades. I’m convinced they’ve addressed this.
I’ve been given a very unique privilege to look behind the curtain. Thank you Rob! I will continue to add to my position. Wish the stock wasn’t so thinly traded. Makes it very hard to establish a significant position.