Ep6: Incubating Medtech Companies and Improving Stroke Outcomes, with Trendlines Investments and Ceretrieve

[00:00:00] Henry Peck: Hey everyone, it's Henry. Welcome to Emerging Medtech Today by LSI. Today I'm joined by Barak from Trendlines Investments and Maysa from Ceretrieve. Together we discuss the Trendline's lifecycle funding strategy and how they partner with founders from ideation to expansion, and dive deep into their partnership with Maysa and Ceretrieve's unique neurothrombectomy system to improve outcomes in ischemic stroke. Enjoy.

[00:00:28] Henry Peck: Maysa, Barak, thank you so much for joining us today. Barak, let's start with you in a quick introduction to yourself and to Trendlines Investments.

[00:00:35] Barak Singer: Sure. I will be happy to. So I'm Barak Singer, I'm the CEO of Trendlines Investment. We are part of the Trendlines Group. The Trendlines Group is focusing on investing in the medical device sector. We are early stage investor and almost always are the first investor in our companies. We have more than 30 portfolio companies today, and we are quite diversified in the [00:01:00] sector that we invest. We have companies in the fields of orthopedics and spine, urology, women's health, surgical tools, and neuro, like Ceretrieve, that we will discuss today.

[00:01:11] Barak Singer: Our strength is that we are coming, not purely as a financial investor, but also have expertise on the technology aspect, on business development, on financing. So, we provide a lot of hands on support to our portfolio company, and we also spend a lot of time with strategic partners. It's part of our strategy to meet with a global leading player to verify unmet needs and later on to work with them and collaborate with them on the portfolio company level.

[00:01:39] Henry Peck: Thank you, and welcome. Maysa, I would love to have you give a brief introduction to yourself and to Ceretrieve, which as Barak mentioned is one of the companies in the Trendlines' portfolio.

[00:01:48] Maysa Mustafa: Thank you for inviting me. I'm happy to be here. My name is Maysa Mustafa. I am the CEO of Ceretrieve. And as a biomedical engineer, I've been always in the medical device industry. [00:02:00] Before Ceretrieve, I spent 10 years in developing and bringing devices in different areas of cardiovascular and drug delivery to the market. And at some point during my MBA degree, I was introduced to entrepreneurship and it just changed my mindset. And I thought to myself, this is what I want to do.

[00:02:21] Maysa Mustafa: I didn't know what it is exactly, but I know back then that I want to do something meaningful. And in the same period of time, a revolution in ischemic stroke has begun. And I thought to myself, new treatment, probably there's a lot of things to do there. And I was lucky to connect with Trendlines and Dr. Ronen Jaffe and start Ceretrieve.

[00:02:42] Henry Peck: Awesome. It's great to hear about that journey from academia to Ceretrieve's inception. Talk to me a little bit more about the device you're building, the market you're serving, and maybe highlight some of the data from your first in human study to help us understand how big this opportunity is.

[00:02:56] Maysa Mustafa: When we started surgery, we built it in a purpose [00:03:00] to improve ischemic stroke treatment, and saving lives, decreasing disabilities, and improving the quality of life of the ischemic stroke victims. So, when it comes to stroke, each second matters. It's the death of 32,000 brain cells, and which means one minute is close to 2 million brain cells die.

[00:03:21] Maysa Mustafa: And the effect is that part of our brain don't function anymore, affecting our personality, daily functions, and life quality. Not the stroke victim only, but the entire family. And this is exactly what is driving surgeries to provide a device that can rapidly reach to the brain, remove the blood clot in one pass, and completely restore flow to the brain.

[00:03:46] Maysa Mustafa: Ischemic stroke is when blood clot blocking artery in the brain and prevent the blood supply to the brain tissue and our brain tissue starts to die. And on 2015, a revolution [00:04:00] in the ischemic stroke treatment has begun when the mechanical thrombectomy treatment showed a real benefit in clinical outcomes compared to the drug treatment with TPA.

[00:04:13] Maysa Mustafa: And mechanical thrombectomy is extraction of the blood from the brain in endovascular procedure. Either by grabbing and dragging the clot or by aspiration with the aspiration catheter. Or both in combination treatment. The issue that many times doctors today are unable to remove the clot with the device they are using so they add another device, additional device, and sometimes they have to change the whole treatment strategy and replacing the whole devices means starting over the procedure and losing time, which means losing brain cells. And this happen because of tortuosity of the brain cells and very challenging in reaching the [00:05:00] occluded vessel.

[00:05:01] Maysa Mustafa: And sometimes because the clot types. There are different types of clots that are not easy to remove. So from one hand, you want to use big catheter to aspirate the clot with more aspiration power. But from the other side, the bigger the device, the harder to maneuver and navigate. So, today, the doctors are limited.

[00:05:25] Maysa Mustafa: And in Ceretrieve, what we have done, that developing aspiration catheter that track in small profile, all the way to the brain, and by reaching to the occluded vessel, it expands to the vessel size and the clot size, and aspirate the clot entirely without fragmenting it and remove it safely from the brain.

[00:05:48] Maysa Mustafa: So, this is how we, uh, resolve this paradox and now we are having the best of all world. And you can understand that the bigger size of the catheter, [00:06:00] the more powerful aspiration is achieved and we are successful in removing all clot types. And we see that in the clinical data we have today. Today we have done 11 patients successfully.

[00:06:14] Maysa Mustafa: We were successful in removing the clot with surgery device in all of the cases and achieved, in 91% of these cases, a single task per fusion. So 80% of patients achieve significant recovery in comparison to only 50% with the devices today. And we are confident that we will see similar results in larger clinical study in the next step in the adult study for their voluntary submissions.

[00:06:48] Henry Peck: Maysa, thank you for that background and congratulations on the success with the clinical data. Barak, where did your partnership at Trendlines begin with Ceretrieve?

[00:06:58] Barak Singer: So, Trendlines was involved in [00:07:00] the creation of Ceretrieve, which was about seven years ago when we actually introduced Professor Ronen Jaffe, which is a Director of Interventional Cardiology from the Carmel Medical Center in Israel, to Maysa, which we knew with a strong background in cardio and specific interest in the neuro field.

[00:07:16] Barak Singer: So we were there when the technology was just being discussed between the founders. And then we made the initial investment in Ceretrieve and since then we participated in all the financing of the company. As you can see, we are big believer in Ceretrieve, uh, in general, in and also in Maysa as the one that is leading the company.

[00:07:37] Barak Singer: We also provided, as mentioned earlier, we are not only financial investors, so we provided a lot of support to the company, including the technology people on our team, business development, financial, uh, support to the company along the years. And to one of the first financing out of the company, we also brought our main shareholder, Consensus Business Group, CBG group to invest in [00:08:00] Ceretrieve.

[00:08:00] Barak Singer: As we all know, when a company is still in preclinical stage in med devices field, sometimes finding investor could be challenging. And we were pleased that we could have brought the CBG, which is a very large investment group from the UK to invest along us in Ceretrieve and after that obviously the company grew and went to the clinical stage and raised much more funds.

[00:08:22] Barak Singer: And since we were there in day one, it's really exciting to see how an idea that was first discussed in our office between Maysa and Ronen is now in clinical stages with excellent results. This is actually the, I don't know if to call it the fun part, but the exciting part of our work. Because we invest so early, in some cases we see something that was drawn on a piece of paper in our office. And now seven years after we have a company and a device and results in human and hopefully in the next year regulatory approval. So it's very exciting to see how the story of Ceretrieve develop up to this point.

[00:08:57] Henry Peck: And it sounds like that the journey you've been on with [00:09:00] Ceretrieve is indicative of how your life cycle funding strategy works at Trendlines, partnering with founders at the earliest stages through your incubators and continuing to support those companies throughout their growth from your capital. Talk to me a little bit more about that life cycle funding strategy and why you and Trendlines overall have such strong conviction in it.

[00:09:17] Barak Singer: So first of all, this is our model for many years. We are investing for over 15 years now. And from the beginning, we decided that our focus will be early stage. And this is why we have a team in Trendlines which is very diversified. As I mentioned, we have technology people and business development people and financial people for an investment group. Our personnel is quite, is on the high side because we look at all the different aspects, and if I try to think about our strength, there are a few aspects.

[00:09:48] Barak Singer: First of all, our ability to screen technologies and find the real unmet needs in the markets, in which companies have better chances to succeed. As an early stage investor, we see hundreds of new [00:10:00] companies or new technologies per year. And at the end of the day, every year we invest in two or three companies. 98% of what we see, unfortunately, we need to say no, but I think this is one of our strength to pick the winners and the unmet needs.

[00:10:12] Barak Singer: Second is our ability to take something from zero to one, to take something that started with an idea, maybe the founders worked on it for half a year and have something. But we know how to work with the founders that in many cases are first time founders that are going on this journey and take something from an idea to proof of concept. Proof of concept that was successfully tested in the lab or in animals or in humans.

[00:10:36] Barak Singer: But this is part of our expertise to assist companies in this journey. For example, in Ceretrieve, the company started with an initial idea and a few months later, I think actually Maysa came and said, we need to change it a bit. So we know how, when you are in early stages, you need to make some adjustment. And this is part of our strength, our ability to, to take something from zero to one, and also with all the changes that [00:11:00] occur when you are in a R& D field.

[00:11:02] Barak Singer: And the third element, I think, which is very important to companies in the medical field, is our ability to support our companies also with financing and finding investor and finding strategic partners. Again medical devices, this is our sector in the healthcare field, we are not doing a biotech or pharma or things like that. But medical devices in some cases can be challenging to find the investor and this is part of our expertise, we invest our own capital and our shareholders capital and we also attract many investors from around the world to invest in our company.

[00:11:34] Barak Singer: So we are quite the specialization in supporting and providing funding for medical device companies in our portfolio. And later stage, we assist them with connection to the large industry player in the industry. We spend a lot of time with industry players, with the large global companies, US, Europe, Japan, China, because in the end of the day, you want to see companies succeed. And in the [00:12:00] Medtech field, in many cases, it's via the route of exits, to be acquired by one of the largest companies. And we already had 10 exits in Trendlines of portfolio companies that were acquired by large global players and high expectation that Ceretrieve will be one of those in the coming few years.

[00:12:20] Henry Peck: Makes sense. Maysa, talk to me about how that partnership has been from the other side of the table, having started the company alongside Trendlines and partner with them at every stage of the journey, how's that experience been and how might it compare to the journey that other founders go on without a partner like that at the earliest stage? What have the unique value adds that trend lines has brought to the table been in this process?

[00:12:42] Maysa Mustafa: Thank you for asking this. So my experience with Trendlines was very positive because for me, Trendlines is a partner, not the only shareholder. And building the company from zero, from an idea, whoever done that, understand how challenging it [00:13:00] is, and having limited resources, you don't have a lot of room to make mistakes as well in order to reach to fundable milestones.

[00:13:09] Maysa Mustafa: Having this initiation with Trendlines, in the Trendlines Incubator, back then it was very helpful, very supportive, providing all the assistance, mentoring, guidance, technical guidance, and consultancy. And it enabled me and the team to focus on the proof of concept to reach the fundable milestone. This is at the beginning, at the next stage was the initial funding that also was by Trendlines and Trendlines shareholder.

[00:13:43] Maysa Mustafa: Back then it was very risky stage, the device was only a proof of concept. We have an idea, we believe, but we could not have more than that. And having the initial funding from someone that know the company very well and [00:14:00] close to the process it had gone through was very helpful and enabled us to continue to the stage we are now.

[00:14:08] Maysa Mustafa: And if I relate to additional aspects in having, for me personally, what made the difference the most, it was knowing that I felt I had a psychological safety net, which I'm not alone. I'm not alone in this journey, like having a backup with Trendlines. It was very helpful to enable us as doing something new and with the high risk to take the right risks and the calculated risks to advance. It's something that I really appreciate.

[00:14:43] Henry Peck: Well, it sounds like a terrific partnership and obviously the benefit of the Trendlines team experience plays a huge role in their effectiveness as that early stage partner. Barak, as you were saying, it takes a deep and broad team with experience in finance, commercialization, R&D, relationships with [00:15:00] strategic partners, universities, clinicians, and so much more. Barak, when you think about investing in those earliest stages, as you mentioned in Medtech, it can be very hard for companies to find financing. You don't have clinical data, you may not have a defined regulatory pathway, etc.

[00:15:15] Henry Peck: So when you're investing in that early stage, and you're evaluating different opportunities for the technologies that you're seeing, or even those solutions that you conceive, how do you decide where the winners are? What's the process look like for selecting those early stage investments from the big blue ocean of opportunities available?

[00:15:33] Barak Singer: So it's tricky. When you're an early stage investor, the risk, as Maysa also mentioned, are high. There is market risk and technology risk and the risk of the team and everything. But first of all, we try to understand if there is a real unmet need. Because in many cases Founders are coming to us, they have a nice invention, it's not really that the market really needs it. So because we have been active for over 15 years now, [00:16:00] we have a very good network globally. So we speak with physician, and not only physician, we speak with strategic partners because physician has the clinical view but strategic partners are coming from the market. So we try to understand first of all, that there is a need for this new technology. If the market is large enough, because in some cases, if the invention is too small, it will be even harder to raise money for the company.

[00:16:24] Barak Singer: And in the end of the day, it's a lot about the team. Like everyone is speaking about the team, but we see, we have a perspective because people are always speaking about technological risks and things like that. So I can say that many of our companies, we had crisis around technology, not only changes.

[00:16:42] Barak Singer: Some of the 10 exits that we did, we had companies that we had to, in some cases, the initial investment, the device that we were shown was completely changed. We only got the unmet need, but we had to change everything. But in most cases, not always, but in most cases, when there is [00:17:00] a technological problem, we can solve it with the team of the company, with expert, with our team, we can solve it.

[00:17:07] Barak Singer: But if you don't have the right team, you don't have the right CEO that is leading this journey, you have a problem on every aspect. So in the end of the day, you look at unmet need, you look at the market and you look at the team. When the team is strong and devoted, then you have a story and again Ceretrieve is a good example.

[00:17:25] Barak Singer: We had to change things along the way It wasn't always easy to raise money and today the company, with seven years and I believe only eight million dollar that was invested until today, is in a clinical stage, so this is a achievement to the company.

[00:17:43] Henry Peck: And obviously with Ceretrieve being an Israeli based company and your investment teams presence in Israel, you have access to incredible talent to build those teams that you're mentioning. Building on that, I would love to hear both of your perspectives on the Israeli Medtech ecosystem. Maysa, maybe start with you from the operator [00:18:00] side and then Barak from the investor side. I think our US and Europe based community has heard a lot about the strength of the ecosystem, the academic institutions, the technological innovation. What are your perspectives on the Medtech ecosystem in Israel?

[00:18:15] Barak Singer: Most of people know Israel is one of the most innovative countries in the world, for technology in general and for medical in particular. It's a combination of the academia in Israel, which is extremely strong, the hospitals in Israel and the physicians, which are very capable and experienced. And part of the mentality in Israel, the mentality is being innovative, taking risk, which startups sometimes need to do. This is very different from other cases. In Israel, it's part of the culture. Everyone wants to be a CEO. So, one of the way you can become a CEO in early stage, you invent something and you become a CEO. So it's part of the culture. And this is why if you count the number of patents per people in Israel, the numbers are huge.

[00:18:59] Barak Singer: [00:19:00] On the other hand, we have something which is very unique. We have this huge amount of innovation in Israel, but the country itself is very small. No one in Israel is starting a new company with the goal of selling to the Israeli market. The Israeli market is great for the R&D, the hospitals are great to perform the clinical studies, but the markets are always US, FDA, and Europe, and maybe Asia, so it's quite unique that on one hand you have a lot of innovation, and on the other hand you always look outside.

[00:19:29] Barak Singer: The market is elsewhere totally, and this is why it relates also to the investment in the medical field in Israel. Because of this situation, most of the capital that is being raised in Israel in general, and specifically to our companies, if you look at our company, most of the capital that is invested from investors outside of Israel, not local investors.

[00:19:50] Barak Singer: And this is why we spend a lot of our time going to industry conferences and going to investor conferences like the LSI, [00:20:00] which we are attending every year. Because we want to maintain the relationship with the investors, with the strategic partners. Some are old relationships, some are new. But, because in the end of the day, we raise capital and our markets are outside of Israel, the capital is outside of Israel. And so when we bring investors to join us from Europe or the US, again, it's not only getting the financial investment in a company, also bring on board people that are based in the right markets, which are the targets of our companies.

[00:20:32] Maysa Mustafa: I totally agree with Barak. Israel ecosystem is heaven for development, for R&D. And looking at what have we done at Ceretrieve with very challenging area in bringing product for stroke treatment in very limited budget, compared to other companies in the U. S. or Europe, achieving same milestone with more than double or sometimes [00:21:00] five times the fund, it's only possible because it's in Israel.

[00:21:05] Maysa Mustafa: It's doable in Israel because the mentality here is crucial. We know how to move things very fast to get to the right people. Being a small country and anyone in the industry know directly someone who can help or someone who knows someone who can help him. And people are very welcoming and consulting and very cooperative.

[00:21:27] Maysa Mustafa: Definitely at Ceretrieve we've reached to the current stage only because of all these qualities in the ecosystem. And I also, unfortunately, agree with Barak regarding fundraising. It's more limited with fundraising in Israel and we usually target investors out of Israel. From other side, the clinical experience starting in Israel, it's very small country, the number of patients are so limited, especially in ischemic stroke clinical trials, you cannot plan anything.

[00:21:59] Maysa Mustafa: You [00:22:00] just wait for the appropriate patient that having a stroke half an hour or one hour ago and you then check the eligibility to participating in the clinical trials. Being a small country, small population, we must advance and go for Europe and U. S. and other countries for also clinical trials. Many of my work is developing the connections with the key opinion leaders in Israel and out of Israel in Europe and the U. S. mainly. And we are fortunate that they all are very interested and excited about the technology and willing to participate in the clinical study in the next stage.

[00:22:39] Maysa Mustafa: And same with developing the connection with the investors to fund the next stage, the pivotal clinical study, which will be multinational, multi center. And also looking forward to meet these investors at the LSI in Barcelona.

[00:22:56] Henry Peck: Fantastic. Well, we are looking forward to seeing your presentation at the event, [00:23:00] LSI Europe 23, this September. Looking forward to updates on your clinical studies, on the data, and looking forward to getting you in front of the strategic partners and investors needed to fund this next stage of development.

[00:23:10] Henry Peck: Barak and Maysa, thank you so much for joining us today. We're looking forward to seeing you in Spain and have a great day.

[00:23:16] Barak Singer: Thank you, Henry. It was a pleasure.

[00:23:18] Maysa Mustafa: Thank you.

[00:23:19] Henry Peck: Thanks for tuning into Emerging Medtech Today by LSI. Be sure to subscribe on your favorite podcast player so you're automatically notified when there's a new episode. For more about LSI and the Emerging Medtech Today podcast, and to continue exploring our suite of videos, interviews, and other resources, visit EmergingMedtechToday.Com and find the link in the show notes.