IEEE Pulse Industry Corner Live Interview with AngioDynamics CEO Jim Clemmer

Hi, Chad. Thanks for the invitation. Happy to be with you.

Yeah, so Chad, my pathway was unique and fortunate though. I started in 1989 actually as a sales rep for a small privately held medical device company based in northwest Illinois. So I got to learn the business from our customer side first. After a few years in the field, I moved into the home office to learn how to really interact with R&D, manufacturing, put together strategic planning and run a business. So I'm really lucky. Got to work in a small privately held company. Then I worked for a really large multinational global company called Covidien. I got to run one of the two operating companies for Covidien from 2007 when we spun from Tyco as Tyco Healthcare up until 2015 when Medtronic acquired us to build a larger Medtronic. So I got to run a multi-billion dollar company within a multi-billion dollar company. Seen both angles. Then shortly after that, I was contacted to join AngioDynamics and serve as CEO and really to become a change agent to help this company change and really become more of a science-driven technology company, which has been my mission since I've been here.

You know, it was a challenge. AngioDynamics has a proud legacy. Founded serving the interventional radiologist was our primary customer. But when I got here, I looked at our bag. We had some products that were over 30 years old. And at one point, they may have been specialized, but really got commoditized in our customer's view, which was true. So, we had a couple thoughts though that we could really change our company. It took active portfolio management, which is easy to say, hard to do. So, we divested some assets that actually provided revenue and profit for the company. It's hard to do that, but we really knew that was not our future. We had a couple ideas how we could be a science-driven technology company focused on two key areas which are the largest causes of mortality in the globe which are cancer and cardiovascular disease. So, that was our mission and again went through a series of some divestitures of products that really belonged in someone else's bag. We could then invest in the two areas that we thought were really strategic for us and we did so but it took a lot of learning for us and bringing new technology inside and new talent to our company to help us on this journey.

You know, it's a really good question. You've got to follow your customer and in this case, the interventional radiologists are really important customers for us and they provide excellent care to patients. But over time, hospital systems had given them less authority actually over the patient care. And more of that authority was being driven by interventional oncologists or interventional cardiologists that would really have more access into how the patient would be treated and cared for. So we needed to shift to make sure we'd be relevant with those populations of people who are driving outcomes in patient wellness. So that was part of our thesis behind changing our portfolio. So when we focused on these two areas in cardiovascular disease, we focus on venous disease, venous thromboembolism, we won't try to spell that. And then we focus on peripheral arterial disease with two different sciences that are really special. And then interventional oncology, we have a really unique science called NanoKnife and we're really really focused on solid tumor cancer treatment.

Well, it's kind of fun. I threw my R&D guys a curveball and said, okay guys, we're a company with a laser science here. We treat endovascular disease with a laser approach to treat venous disease. But we also found we wanted to be in the peripheral arterial disease market and treat arterial disease. And we found a science started in Israel where it uses a different type of laser delivered through a catheter into the arterial wall and it could break up the calcium or plaque safely and effectively but not risk the vessel wall perforation as some mechanical devices can do. So we're actually a company today with two different laser platforms. That's a challenge for anyone. So our R&D guys had to really keep up. Our bioengineering team and our field servicing teams. It was a great challenge. But we now have two unique sciences. We understand this science really well. How to deliver energy safely and effectively through our catheters and into somebody's body. And let that energy do its job. Breaking up calcium or plaque, opening up vessel walls for safe blood flow again. So that was a really really important piece of our journey and also along the way we had to bring new people in who could help us and grow with us and teach us how to also take that technology further. Today the platform that we call Auryon that treats PAD we think can do other things in the future. So, we're actually investing in other ways to get regulatory approvals, other ways to prove that science and to give access to physicians to use this unique device to treat other conditions over time.

Yeah, so Chad, here at AngioDynamics, we've actually had two thermal ablation technologies, an RF technology, which is really the first generation of thermal ablation tools, and a microwave technology as well. And those can be used in certain organs that can take heat and take thermal energy to try to destroy the tumor and survive that process. But not every tumor, not every body part can take that level of thermal energy. So we have a science here that we call NanoKnife which uses irreversible electroporation which is a fancy way of saying we'll deliver electrical pulses of energy through our probes. We'll bracket the tumor we want to treat with four to six of our probes that create a small electrical field around the tumor. The physician would use image guidance to get the target right. Then we'll allow the probes and deliver energy around that tumor. And what the probes do is electrical pulses of energy break down the cell wall of that tumor creating nanoized particles in the cell wall letting that cell die naturally within the body letting the body flush out those dead cells naturally. The really amazing part of NanoKnife is it also keeps the other organs intact doesn't destroy other healthy tissue. So we think it's an ideal solution to be used in hard to treat organs or areas that have a lot of other vascular or complex structures around them. So it's unique science. It's hard to understand. And we had our challenges with the FDA. We'll talk about in a minute about getting it approved to be used because it's so unique and special. But we know what this can do. We know how it can benefit caregivers and patients. So we're really really excited about its future.

We did. We embarked on a study a few years ago called PRESERVE to show that the product can be used safely and effectively to treat men with intermediate risk prostate cancer. So about 300,000 men are diagnosed annually here in the US with some level of prostate cancer. We're going to focus on 40% of that population. Men who are really given a Gleason 7 score. If you're familiar with how prostate cancer is scored, these are men who kind of are stuck between low-level where people are told, hey, go home. We're going to do watchful waiting. You're going to live with that slow growing cancer in your body. And some men don't like that. Or on the aggressive side, you might need a radical prostatectomy. The doctor might say, we really got to take your prostate out. And with that surgery, sometimes even with a robotic element, you still have a high risk of side effects that are undesirable for those patients. So we wanted to give the population between that another option to be treated using our NanoKnife, which our study proved could treat the organ, control the cancer, and reduce the chances of men having incontinence or impotence post treatment almost to zero. So really unique science. We think there's a lot of interest now in the patient community, men like myself or my age that may be identified one day as a potential patient that want to learn about their treatment options and also the urology community that's looking for other ways to give men a treatment option. So we think that this is a really important device getting on label which was done almost a year ago. Our study was approved by the FDA or indication was given last December. So, we've taken the last 12 months really educating and creating awareness in the physician and the patient community.

Yeah, it's really amazing. We have a team in Israel of really amazing R&D guys and engineers that took a challenge. There's been two ways to treat PAD using atherectomy which is a way to get into the artery and to break up the calcium. And about three or four other companies use little grinders, mechanical ways to break up the calcium. There's always a risk there of vessel wall perforation. You have to be really careful on how you treat, what you can treat. There's another company that's had a laser out for many years, but the laser is limited in what it can do. And for years there was a study actually done at MIT that said if you could use a 355 nanometer wavelength that would be ideal to treat plaque and calcium in a format to break down the problem in the leg, but it would be so powerful it would degrade the catheter and couldn't really be used. So our team at Israel took that as a challenge. Said, wait a minute, we can figure this out. And they did. So they found a way to harness that special energy, deliver the pulses of laser energy to that problem area in the artery, deliver that safely through our catheters, and then get the patient healthy, keeping the catheter intact. So the doctor could do the treatment safely and effectively, the patient could then have healthy blood flow back in that diseased artery. So, it's a really really great story of science, perseverance, and really great people who are just dedicated to finding a way to use this powerful tool in a safe and effective manner.

Yeah. Auryon, when we bought this company in 2019, we found this device and it was an Israeli based startup that had really no commercial expertise. So, they had done the work to get it on label, get it FDA approved. So then we were able to acquire the company with our commercial expertise, build a business around it, take it to market, which we did in 2020 during the pandemic, built a new division. We learned a lot. It was when hospitals are also telling everybody stand down a little bit. We've got to treat people now during the pandemic period, but we launched this product, a small company. We compete with five other really large companies that all of us know in the space. And we were the sixth entrant in. And now five years post launch, we're already taking a number three position in market share, past three of those really big powerful companies. We're number three and growing faster than the rest of the market. So we learned a lot. Our team is good. And along the way, back to your point, Chad, we've also done other studies or some of our customers have done studies to prove it can be safe and effective in maybe other organs over time and open up its clinical expansion and regulatory pathway expansion around the globe and treat more people with more conditions.

Yeah, it's interesting. Most of what we do and we sell are disposable single-use items. We started as a catheter based company years ago here. And a lot of the products we sell are still catheter based, but the two products we just discussed, Auryon for PAD and NanoKnife for solid tumors, both are a capital disposable component. In NanoKnife, we have a generator generating electricity that generates out through our probes. And Auryon uses a laser energy system to generate the laser energy through our catheters. So each of those cases, we want to get the hardware, the capital on site in the hospital and we find ways to do that with our customers. Some people want to purchase the capital one time from us, own it, have it on site. Some would like to rent it, lease it, or do other ways to acquire the capital and really are focused on treating patients and buy the disposables from us over time. But those are the two models we do have that are kind of the razor razor blade model. But it's really important that we can integrate both the generation of the energy, whether it's laser based or electricity based, and then the safe and effective way to treat it through the body, deliver energy, and pull ourselves back out and make sure the patient is healthier once we remove ourselves from the care continuum.

Yeah, you know, it's a really good question. As I mentioned earlier before I joined Angio, which is a smaller company, I was able to work at Covidien for a while and understood as you just described some of the muscle you can have and some of the opportunities you have to get larger within your customer. And it's okay for those companies to bundle. That's a way to give people buying incentives to buy more things from you. And we knew that and understood that. We knew that would be a hurdle we'd need to clear. But we were confident that our device was so unique and special, which it is, and we'd have to be really good at our communication to the potential customers about our value prop, which we got to. We had to learn a bit, but we got really good at it. But along the way, your point is valid. The other companies we compete with do have a lot of power and presence in some of these labs we compete. And so the fact that we're able to get to a number three position already and we'll still grow that is really based upon the science that we have and our team that's committed to safe and effective treatment of PAD. But it is a challenge. Really good point especially for smaller companies and you know a lot about that as well. Small companies got to really be committed to your science first, then your business plan, understanding the hurdles you'll have and find a way to really break the bundle and really to show how you can do that. Patients have a need, physicians have a way to treat that need and physicians also are data driven they want to see proof the only way you'll get their attention is by proving efficacy proving safety having data to support that so we married those all together made sure data did prove our science it was safe and effective we had a great team and a good communication plan when we did that here we are and so we've learned a lot still more to learn but you're right that's a challenge for any company that doesn't have that size and scale.

Yeah, it's a great question. A little bit of everything you said. What we decided to do here at Angio, we had a couple sales forces with really good people here and some of those folks actually were looking forward to joining this new division that we bought. And at the outset, I kind of said, no, stand down. I'm going to hire people who know the space out of the gate. So, I had to tell our employees, stand down. I'll give you a chance to be promoted in that division one day, but I've got to get the division off the ground first, knowing we had tough competition. So, I hired people that had some credibility with that user group and knew some of those doctors. And then I also found that the five physicians that helped our company do the R&D work, the Israeli team do the R&D work. There's some really good established physicians in the US that helped them collect data to support the FDA submission for the 510k that was awarded. So I visited those physicians myself and told them how serious we were, why we bought the company, our approach towards this market, how we would support them differently, those really big companies, how we would listen and learn and act more nimbly being small. I took our size as an advantage and communicated that showed how serious we were. We wanted to earn their trust and their respect and we did that. But you have to use more than just words. You got to follow that up with actions and our team did a really really good job doing that. So, you know, it's not easy to do. It takes an amazing device and it takes a really committed team that it also takes a company to adjust. We didn't get it all right. We had to learn on the fly. Just to be nimble enough and not to worry about being wrong, but adapt when you are wrong and focus on how you can be right more often.

Agreed. And for our case, a lot of it was, we had physicians who kind of heard of AngioDynamics or said, oh, you guys make that cool catheter I used to use. We said, we're that company, but we're also science driven now. And give us a chance to show you this device, earn their trust and their respect. We also did that through a series of scientific forums that we sponsored and a way to get involved in the community, earn their trust and respect. And I just attended one we sponsored about five weeks ago. And what was really unique, even though we're small and trying to get seen, we sponsored the event. Then we turned it over to these physicians who took time of their, flew around from around the world to come to our weekend, take times away from their families to come to our event and share data, share their experiences with their colleagues on work they had done and data they collected. So there was no AngioDynamics person selling our products in those points. We sponsored an opportunity and we stood down and let these physicians run it. We sat in the back of the room. Sometimes they talked about our competitors' products that had good outcomes. We're okay. But by sponsoring these forums, getting involved, learning how to meet new doctors that really mattered. I think it established some credibility for us early on that showed that we're really here for the long term. This is a company that's going to have a long future based upon how we develop these physician relationships and the pipeline we have in our product portfolio over time. So, we wanted those two things to merge. Our opportunity that we saw in our pipeline and building and cracking that way to get in. We're not the biggest company, but we're the ones who are going to listen the most, respond and care. So, again, not an easy journey, but we learned a lot about it and we're getting that respect now and it's showing in our results.

Yeah, Chad, you're dead on. We talk about it here all the time. And we've had to add kind of market access teams in a few different specialties with healthcare economics and then reimbursement specialists to work with our regulatory and clinical teams guiding us through the product development cycles. So, it's a challenge and I'll go back to the NanoKnife for example. It was about a year ago, last December, we got on label and FDA gave us the indication approval. Well, about two months earlier in October, they actually approved our CPT-1 code, which takes effect January 1 of '26, really close to now. That was amazing. I've been doing this over 30 years. I've never heard of a company that actually got their CPT-1 code approved before their even 510k was approved. But that showed how effective our teams were. We had two teams working on parallel path. One of the product 510k FDA work and one with the healthcare economics teams working on getting that done with the AMA and other user groups that were very interested in our product. So they really supported us. So I'm really proud of the work we did here. We learned a lot. So here we are today with a device that we think can really help this market. Well, now we can talk about it. We're on label and January one physicians will get paid for using it. But it's not even still that easy. We have access now a CPT-1 code will kick in but the work is still on our plate. You still have to work with the different MACs of the Medicare groups that work with all the Medicare kind of sub regions around the country. You got the private insurers that follow a lot of that and you've got to do value props to them not just clinically but also economically how it'll fit the patient benefit and the hospital caregiver benefit. So, it's a really challenging thing, Chad. It hasn't gotten easier in my years in this business, but you're right. It could be a disabler for a company that may be just focused on technology and not looking at market access. Market access can be really, really challenging and teams need to really think that through and have a really good strategy as they're developing what they may believe is a significant product.

Yeah, you know, we debated it in the process and our teams really thought to get the usage that we thought we'd get. We wanted to go right to a cat one code. We know it can be challenging, but we really wanted to make sure there was significant physician reimbursement along with the facility reimbursement together, get that alignment together. And there are other companies and other technologies that have been introduced in what's called the focal therapy market. When you treat the prostate by keeping it in the body, you're treating the tumor, not taking the prostate out. That's the focal therapy market that we want to be a major player in. And the other companies haven't really taken ground there yet for one reason or the other. We really thought our device is so unique and special. We knew the outcomes would work. We wanted to really shoot right for the cat one code to give it the respect it needed on that side. Give us the chance we need to align physician and facility payments over time.

Agreed.

Yeah. Well, you know, it's a work in progress, so we're still learning it every day. Years ago, even when we knew we were shifting this company, I was taking it in a different strategic direction. We even shifted some of the thought leaders that we have that help us. I added some new people to our board of directors that could help us there. Somebody who's really really experienced, a person who has run a former CEO of health insurance companies and she's been really helpful for us giving guidance to an area that we didn't have a lot of specialty in. We also brought on a physician who was a CEO of a really major hospital in a large city in America soon too that had done everything from being a caregiver, a surgeon. He was actually the CMO for a really large company and the CEO for a really large hospital. Just his wealth of knowledge of the whole care continuum from the patient to the caregiver to the payment side and the facility side has been helpful. So really getting advice from people like that who are really really interested in our journey and helpful. They don't have all the answers either. They can usually open up doors or give you access to other people to get good information from. But you know Chad, it's a really challenging area for our company and any company in the space. But you're right. Giving people the idea you need to think about market access because a great device isn't all that you need here. You need to have both.

Yeah, agree. When I joined the company, I kind of rebuilt the R&D process that was here and brought in a different process that we made sure we integrated more cross-functional teams early on in the feasibility planning schedules, part of the process so everybody kind of could see the workload ahead and make sure we had the right people on our teams. So, it wasn't just a couple really smart R&D guys working on it or marketing guy with an idea. We wanted to have some cross functional alignment in our company or find gaps where we need to fill those gaps with some cross functional experts and I think the R&D process and looking at it and not being stuck and being flexible enough to say we've got to adapt our process actually to the needs of where we're going and our company kind of leaving more of that supplies commodity space going to high-tech we knew we had to take a look at that process and bring in more expertise. So, Chad, for us that was important as well. Not only to guarantee our products would work, but also we be ready for the market access challenges along the way.

So, Covidien had 41,000 employees.

We have about 700 employees. So, a little different scale, right?

You know, a couple things. First of all, to our credit we managed it. We may believe we were small even though we had 41,000 employees, had some muscle, had some scale, we acted as if we didn't. So we try to keep a sense of urgency alive and keep some entrepreneurship within our company, letting people have some access to our ideas but fill in those blanks with kind of an entrepreneurship approach and that was helpful and I think it kept us a little more nimble than maybe some other larger companies and I tried to bring that here as well where we are actually smaller and could be nimble but I think we didn't have the ideas to rally around yet. So we had to kind of recreate this company. Once we did, created a new strategy and direction, I think it really empowered our company then to be nimble, use our small size to move quickly. So you really got to take a look at what the situation is, figure it out and see what you want to be. And along the way, that word that we all say and no one wants is change. You know, I had to change this company and people had to be ready for change. And it's not for everyone, but we found people who wanted to change and wanted to be a part of change. And that's always really important along the way.

You know, I really enjoyed our time to speak about it and our company is one of many. Our industry is filled with really really great companies who have done amazing things and also stories where things didn't work for whatever reason. Some great ideas and great products didn't always make it commercially. So, I think what you're doing is opening up this conversation for others to really learn how to do it and get better at it because it can be complex and hard. So kudos to what you're doing.

Yeah, it's a great question. We all have our stories. I guess I would say looking back, it's easy to look back and say, boy, I wish I was bolder sooner. I wish I moved faster sooner. But the example here at Angio which became real when I joined the company the NanoKnife project was really focused on treating people with pancreatic cancer which is a terrible disease. Stage three pancreatic cancer patients don't have a great outcome usually but we knew our product could help those people but we were wrestling with the FDA. The FDA wanted to have a randomized control trial to prove that it could be safe and effective. Any doctor that was going to use NanoKnife to treat a patient with only about a three-month life expectancy was probably going to treat him with the device, not going to randomize anybody. So, we kind of thought we'd keep wrestling with the FDA and arguing, tell them how wrong they were. It's not going to work. So, we had to kind of shift gears and said, okay, guys, we'll do what we can. We developed a registry approach and we're going to share that data soon to the world to show we think we can do to help those patients open up access to a new form of care. We may never get on label but that's okay. But we shifted that gear to prostate said let's go find somewhere to use this science to help men who need a new way of treatment. It may not expand quantity of life but it'll help quality of life and it gives our company something else to rally around and do and add significance to our size and scale and we had to do that. So I wish I did it sooner. Wish I thought about it, but we had to really shift gears into something that was important to us for the lifeblood of the company long term.

You know, we did. We agreed with the FDA. It's called the DIRECT study. You can see that published soon. We'll get it published soon, but we're never going to fill the RCT. You know, no doctor's going to do that. So, we're going to show the results of our registry, which I can't wait to see them myself. I know they'll be impactful. I think we're going to show that we can impact the life of these people that have been treated. We're going to share that data with the FDA and say, hey, can we have a conversation around this? I'm not expecting they'll grant us an approval indication for that specific organ. But it's okay. We want to publish the data, let people know there is an option that could be used. It's up to physicians at that point how they want to use products like ours in that format. We'll stand back and follow the rules of the road regulatory process. We'll follow those, but we do want to share the data. It's scientific and it's important.

Yeah, we'll see. Thanks.

Thanks, Chad, for the opportunity. I had fun getting to know you. It was a great conversation. Thanks again.