Pathway Medical Learns Lessons During Tougher Than Expected First Year on Market
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doctors that its tool is the only one versatile enough to cut through every kind of blockage in the legs at once—from rock-hard calcium deposits, to a squishy type of blood clot called a thrombus. Pathway says it is able to do this without raising the risk of having the drill puncture the leg artery and cause dangerous bleeding. The company’s device is also the only one with a vacuum feature, which sucks up tiny particles that can get dislodged and flow through the bloodstream, potentially causing strokes.
Shortly after he took over as CEO, Buckman told investors some compelling field anecdotes in January at the JP Morgan Healthcare Conference in San Francisco. He said one doctor used it to clear out blocked leg arteries in a 91-year-old woman in less than an hour. Before the Jetstream device came along, the physician was reluctant to operate at all on such a patient, given how fragile she was, and how it would have taken seven different tools, 14 onerous insertions of catheters, and about $20,000 of equipment to do the same thing with other methods. The versatility and ease of use of the Pathway tool were clearly going to make it a hit—or so the story went.
But Pathway has learned through experience this year that its tool is not a one-size-fits-all answer to peripheral artery disease.
Without getting too technical in the engineering lingo, the original Pathway device was compatible with an 8-French diameter sheath needed to mount it into the patient, which some doctors weren’t comfortable with for all patients, Buckman says. If Pathway was going to be successful, it needed to make a follow-on product with a narrower 7-French sheath that some doctors prefer. That narrower version came out in August.
The Pathway cutting tool is made to work in vessels that are 3 millimeters in diameter or larger. That’s important to know, because basic anatomy of leg arteries says they aren’t all the same width, and with the current product, “we participate in about half of the market, and we didn’t fully appreciate that at first,” Buckman says. Pathway now has two new devices scheduled for market introduction in 2010—one larger and one smaller—that will allow the company to treat the entire leg, Buckman says.
“We are rapidly improving the product to address more patients,” he says.
The other big challenge is a fundamental change that many device companies are seeing in how hospitals buy new equipment. The hurdles for all new products are higher than they were a couple years ago.
“It used to be at most hospitals that if a doctor wanted to use a new product, you would just go to the [catheter] lab manager and say, ‘Order the product,’ ” Buckman says. “Those days are gone.”
Now it’s more likely that the doctor who wants the product will have to go before a committee and argue that the new technology is superior to the standard of care, or a more cost-effective way to treat a serious condition, Buckman says. That takes time. “Instead of booking revenue in a couple of weeks, it’s more like three, four, five months. It delays our revenue ramp,” Buckman says.
It would be tempting for a CEO in such a situation to dial up the pressure on his sales force, or maybe try some discounts or gimmicks to move product out the door to boost quarterly numbers. But Pathway’s reps need to spend time training physicians on how to use the device properly, and Buckman says cutting corners with training is not the way he wants to go.
By offering a more diversified product line, and sticking to the fundamental benefits of its product, does Pathway think it can still reach its goal of turning profitable in the first half of 2011? Buckman didn’t want to go out on a limb to answer that, saying it’s “hard to project.”
“I want to get the company profitable as soon as I can and do the right things to build the business the right way and make customers happy,” Buckman says. “We want to make sure hospitals have a good experience, and the patients have a good experience.”