EPISODE 96: RUBEN GAITAN ORTIZ, CEO AT ALANDRA MEDICAL

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Episode's transcript

Julio Martínez-Clark: (00:00)
Welcome to the LATAM MedTech Leaders podcast, a conversation with MedTech leaders who have succeeded or plan to succeed in Latin America. Today, our guest is Ruben Gaitan Ortiz, CEO at Alandra Medical. Ruben is developing novel monitoring technologies to save the most vulnerable patients from direct complications in cardiac surgery and critical care. So, Ruben, welcome to the show.

Ruben Gaitan: (00:54)
Thank you very much for having me.

Julio Martínez-Clark: (00:57)
Awesome, Ruben. So, let's talk about your journey to Latin America. How is it that you got involved with the region?

Ruben Gaitan: (01:05)
Absolutely. So, well, first of all, I was born in Mexico, so I am naturally engaged with the region and well, I have a background in biomedical engineering. So right after I finalized my students at university, I joined a sort of company, you know, developing medical devices and trying to bring innovations from the university into the market. This was a small company that was launched by a professor at the university and essentially my role was only in engineering aspects, you know, developing electric circuits and some software kind of in a very geeky way of innovation. After some years, the company was acquired by another entrepreneurial effort, and it received some busy funding at that moment, it was kind of an inflection point because the company sees to be a, you know, like an only academic endeavor, and they start to be like a more professional company. So in that period, we developed our processes with certifications, and we actually started to offer the services to other customers in Mexico and also in the US. At the same time, the company was incubating its own technology. Most of them, originally came from the previous company that I mentioned before and after some time we understood that even if we were having some good traction in terms of getting customers for developing a very specific portion of the devices in Mexico, this was not really creating value for our investors and that's when we decided kind of only to focus into the technologies that came from the portfolio, from an original portfolio of the company. It's been around maybe four or five years in which we have been less focused on developing our own portfolio, as you mentioned during the intro, kind of our start product or our main efforts are, you know, being targeted to critical care and to cardiac surgery. Essentially, the problem that we are trying to solve right now is helping doctors, particularly in these settings, have objective information for the delivery of treatment for the patients. So, for instance, when a patient enters cardiac surgery or a patient is admitted into the ICU, doctors need to have a fair assessment of how likely is for the patient to develop complications, and in that regard, there are a number of technologies and a number of biomarkers that offer some information, but none of them are truly objective. There are some biases in the methodologist. So our device is essentially a gastro tube, you know, is a tube that goes all the way down to the stomach, from the nose or from the mouth and the catheter measures certain genetic properties that correlate with the development of complications. So we have recently completed a clinical trial in Mexico in a very specific patient population, you know, patients receiving elective cardiac surgery, and the results indicate that our technology is capable of differentiating between the patients that undergo without complications and the patients that develop complications and eventually die. So the results are pretty encouraging and now we are using this data to get approval for technology in the Western market, let's say the US, the UK, and of course, Mexico, and we are also putting our efforts in Australia. So that's kind of the natural relationship that I have with Latin America. I am absolutely privileged to have this opportunity to develop this kind of technology here and also kind of serving perhaps as inspiration for other entrepreneurs willing to start this journey.

Julio Martínez-Clark: (04:48)
Yes. Well, congratulations, Ruben. Seeing a startup medical device company from Latin America is a surprise, and I'm proud of it as Latin American because it's not common. I have been in this industry for about 13 years now, and I've seen less than three companies, I will say less than, I mean, it's just a handful of companies coming out of Latin America, and fewer of them with great products like yours that are going in the right path. So, I'm very pleased to see your success and to see something good coming out of your efforts in the region. So let's talk about trends, Ruben, what trends do you see happening in Latin America that are relevant to our discussion about clinical research or commercialization or development of medical technologies?

Ruben Gaitan: (05:53)
Well, the way I see it is that Latin America has usually been a place where companies come to sell their devices or manufacture their devices, not necessarily a continent that creates new technology for the launches innovations. I think that there are good reasons for being optimistic in that because, let's say in the last 7 to 10 years, there have been some very timid efforts to start developing technology. One example, of course, is Alandra Medical, but I have seen that lately, well, first of all, this kind of endeavor was mostly funded by the government in terms of grants and usually the companies kind of were living for maybe about six or seven years before finding financial collapse. What I have been seeing lately is that capital and private money is pouring into this kind of endeavor, and I think that success will naturally attract more and more investment into these kind of projects. I'm very happy to see that, let's say funds like SoftBank or Castech are starting to bet and put money into medical technology, not necessarily, let's say sophisticated medical technology in terms of a monitoring device with an implantable component or something like that. But more into, let's say digital technologies, particularly those which you can install in a cell phone, whatever, and you have like an app measuring biomarkers or measuring fitness and things like that. I think that success will eventually create more appetite within the investment community to fund even riskier projects. In the case of Alandra, well, this is certainly kind of a riskier product, if you will, because we are an invasive device, we're in contact with the patient, and the kind of information that our device produces can have an impact in on the outcome of critical patients. So from that perspective, investment is really not flowing, you know, as much as I would like to, but this is something that actually motivates my team and me, in the measure that we get success with this technology. Other investors will be willing to put the money in there, but regardless of that, I really think that we have seen more and more startups operating in the, let's say, wellness or healthcare environment and I think that is something very nice. On the other hand, well, I think that a major advantage that we have, at least in Mexico is that we are neighbors with the US and this is also creating a very interesting trend, which is medical tourism. I mean, this is completely different from the evaluation part. What I think that is also kind of a massive business opportunity for healthcare companies here in Mexico because if you go to the border, you will see fluxx of American tourists get into a country for receiving, let's say pental care, or even what is called the pharmaceutical tourism, you know, American citizens crossing the border, were getting know the same medication, but maybe ten times cheaper. So this trend is increasingly being capitalized by entrepreneurs and by companies here. Actually, if you go to private hospitals in Mexico City, you'll see Americans looking for cardiac surgery or the kind of procedures to be performed here. Of course, there is some skepticism about, whether or not, healthcare here is reliable but the truth is that increasingly more and more people are coming to Mexico to get affordable healthcare and really our physicians, most of them have received training in the US or in Israel or in Europe. So quality healthcare, I believe can be very similar to what you can get in the US at least in private hospitals but at a lower cost. So I believe that you know, I'm not sure what would be the result of these different parameters. We're certainly excited. I mean, if you have like on one hand, private money pouring into entrepreneurial efforts for medical technology, and on the other hand, you have Americans coming into the country to get treatment. So I think it's kind of interesting for the market. and I would say that those are perhaps the two trends that I see most exciting for Latin America. In terms of clinical trials, well, we have kind of, our population is suffering mostly the same non-communicable diseases than western markets, if you will. So we have diabetes, and we have kind of the same grievances that you'll find in the United States or in the rest of Europe, we have them here, and needless to say, the cost-effectiveness of running a trial in Mexico is very attractive. So that'll be kind of the traditional trend if you will. But I think that the two most exciting trends are medical tourism and private money pouring into local entrepreneurs.

Julio Martínez-Clark: (11:04)
Yes. That's very interesting, especially about the private money pouring into local companies from VC funds. Are you seeing other companies like yours in Mexico with innovative products receiving funds? I mean, have you been a witness to success cases?

Ruben Gaitan: (11:27)
Certainly, yes. I mean, there's a company, I do not remember the name at this moment, the shame of me, but they are screening breast cancer. So essentially what they're using is imaging technology, and they're able to detect cancer or at least tissue anomalies without necessarily needing the traditional mastography. So, having an infrared camera is much cheaper than having extra equipment, and as far as I know, this company has already received funding for developing their technology, and if my memory serves me well, they are already applying for a 510K in the US.

Julio Martínez-Clark: (12:05)
Wow! Nice.

Ruben Gaitan: (12:07)
Yeah. There are some other efforts, I mean, not necessarily in the diagnostic space, but mostly in the wellness space. So, you have companies developing wearables for measuring certain assignments from the body in a way that you can maybe correlate with other data and deliver wellness advice to the patients. So, I really must mention that I have not seen another company developing like biomarkers as we are, but I think there's a very interesting case in Chile, and in this case, I do remember the name I think is Levita Magnetics. They, as far as I understand, they're Chilean entrepreneurs, and they have received funding from the US, what they're developing is a robot-assisted surgery, and in some measure, they're using magnetic fields for control. The robot, I'm not really sure about it, but I think this kind of remarkable example of people from Chile developing this kind of technology. Another company that I have very good in mind is Miraculous. I think they also come from Chile, and they're currently based in San Francisco, and they're developing this fantastic platform for developing laboratory analysis over blood samples and they offer this platform for customizing different laboratory experiments in a miniature platform. I think that they have also received funding not only from Latin America but also from American investors. So I think those two are very inspirational examples for us, for Alandra in a way that it's possible to develop this kind of innovation and get funding not only from friends and family, from the government but also from real VC capital.

Julio Martínez-Clark: (14:00)
Excellent. Yeah, I just texted you here, about another company that I learned about, Itipol from Mexico. They opened an office in Silicon Valley and they got funding from the United States. So, I'm very happy to see all those examples of companies succeeding in Latin America with their innovations because as you correctly said the region is not famous for that but slowly we're gonna get there.

Ruben Gaitan: (14:33)
I was just saying, that I think that all of the companies that some extent have evolved to, let's say a busy stage. I think that besides the motivation, of course having a successful business, also creating success stories in Latin America, I think that should also be an inspiration for us all, you know, because that will certainly bring more interest in the region, not only for manufacturing, for clinical trials, but also kind of for an innovation laboratory, so to speak.

Julio Martínez-Clark: (15:03)
Yes, exactly. That's a great point because the talent available in the United States, in Silicon Valley, is world-class talent but at the same time, it's very expensive, right? So if you wanna develop something using those engineers, Biomed engineers, or software engineers, I mean, you have to pay a hefty price, and I think there's comparable or close to comparable talent in Latin American countries like Mexico, Colombia, Chile, Argentina, Brazil, that companies can tap into to develop technologies at a lower price and combine that with the other talent in the United States so that they can save money, right? And that's the big issue for startups.

Ruben Gaitan: (15:57)
Of course, and most interestingly, I mean, at least in my experience when I've been to Minnesota or to these other major innovation centers, typically the engineering teams combine scientists and engineers from all over the world, right? So, I was in Minnesota thinking, okay, so you're from Mexico as well, but you're here in Minnesota working medical innovation. So, it's kind of, I think that part of the glory of the US in terms of innovation is that capability of attracting talent from all over the world and hopefully we can replicate that in our countries as well.

Julio Martínez-Clark: (16:31)
Exactly. Well, and people like you are making our region famous for medical innovation. Congratulations again. Ruben, let's talk about what you're doing in Latin America. What is it that you are involved in right now, clinical research, or commercialization development? How is Latin America fitting into your plans to develop your technology?

Ruben Gaitan: (17:00)
So, let's say from the Alandra perspective, I mean, as I mentioned before, we're like 100% focused on getting this technology to market. We have already concluded the research and development phase, and recently the clinical validation, and right now we are putting all of our efforts into getting the regulatory process to start selling this technology. First, let's say in Western markets where Mexico is, of course, included, but also the US and Europe. We are facing some challenges for the European market because recently they have the medical regulation and it is not a matter that our technical information is not up to the level required by the EU MDR, but is more a saturation problem, you know, notified bodies in Europe completely more incapable of coping with the demand. So that's kind of the challenge that we have right now but at the same time we are pursuing the approval for COFEPRIS and also for the FDA. They use for getting approval in the US our technology, you know, can feed into a 510 K process. So, we're optimistic about it and we're also putting our eyes on Australia because Australia right now has very interesting incentives. So that's where we are right now. I mean, we have 90% ready our clinical dossier, and together with that we are creating the scientific publications of the results from our experiments because we need to cover all of the aspects of innovation, not only the regulation but also we need to pay attention to a clinical papers and also to the IP and all of that. So we are also making those aspects stronger in the business. On a more personal note, you know, I have some side products with the family, which are also trying to capitalize on the strength that I mentioned before. So we are also working with dermatology and, it's very curious that everything that is related to beauty and to personal care in Mexico is kind of on fire right now. So, let's say whatever from a laser hair removal or these high-end dermatological products that can improve the health of the skin and that kind of thing is also a very interesting trend, you know, kind of the middle class is increasingly having this kind of products. So, that's also a very interesting trend that we're focusing on right now, at least in the closest sphere, which is the family. But in terms of Alandra, we hope to get this approval within the next year. Of course, we already have in terms of Euro Brexit, and then we have the pandemic certain unexpected things have come across, but we are kind of 100% convinced that we can make it and that we can get this approval.

Julio Martínez-Clark: (20:11)
Very good. So Ruben, let's focus for a minute on your experience with your clinical trial, with your early feasibility first in human clinical trial in Mexico, and your experience with COFEPRISS, because I'm sure that's where our audience wants to focus the conversation because that's one of the reasons companies, medical device companies from the US go to Latin America, to test or to validate the safety and efficacy of their innovations. So what's the framework for doing a clinical trial in Mexico? What was your experience finding investigators, and finding sites? What was your experience with COFEPRISS? Could you elaborate on that?

Ruben Gaitan: (21:07)
Absolutely. So, I'll start with the research component of this. So in our experience doctors, particularly young doctors, are very keen on trying new technologies and trying new pharmaceuticals. There are kind of many drivers for that. One of them is that they want to create a reputation for their own. So that's kind of a big driver for them to get involved with this kind of project and on the other hand, kind of the incentives that most of the doctors that work, let's say in public centers is that the more publications that they have, the more likely is that they can grow within the hospital and that makes it, I wouldn't say easier, but I would say it really helps to attract this kind of talent into projects like this. Something that I must mention though is that Alandra has only kind of operated with public hospitals, particularly the hospital for cardiology respiratory diseases, and nutrition, these hospitals are subjected to state bureaucracy, and there are also some unions that are operating there. So that can bridge some frustrations when you are kind of planning and developing a trial and that is something that I will really advise other companies to keep in mind, state bureaucracy is something that exists in the public centers and that may influence their decision for getting perhaps into a private hospital. But in terms of the intellectual capital within the hospitals is absolutely fantastic. In our experience, the patient population is available, at least for our kind of device. I'm pretty sure that any company working with grievances from the Western world will be able to find a patient population for the study here in Mexico. Also, regardless of focusing on private or public healthcare, they will certainly find a hospital for that. So in terms of COFEPRISS, I think that if you have a very good understanding and also very good counseling, you can really get a grasp on the processes and really get a grasp on what is required for having a decent human study here. My advice would be to get a reliable consultant from Mexico and be really diligent in terms of understanding the local relations. I mean, if you tick all of the boxes, you will really not find any kind of problem. As a side note, some people is tempted to recommend that they need to create a certain personal relationship with the officials at COFEPRISS. I will really discourage that kind of approach because, I mean, you can do it by the book, and you can tick all of the boxes and you'll not be in need of any kind of friendship. I'm saying this because in many instances I've heard that kind of advice. So I would really discourage that and I would say that as long as you are really diligent in understanding regulation, all you need is kind of intellectual capital and that's it, that you'll be on the other side.

Julio Martínez-Clark: (24:32)
Okay. So in terms of timeline, how long will it take to get a trial approval in general? I mean, based on your experience and based on what you've heard about other companies doing similar studies in Mexico, what will be the ethics committee approval timeline? What will be the COFEPRISS approval timeline? And in general, how long will it take for a company to from the day they submit to the ethics committee and the day they get the patient on the table?

Ruben Gaitan: (25:02)
Okay, let me put it this way, for the last trial that we executed, let's say from day one, from day one, in which we say, hello guys, we want to run a hospital to day one with the patient, it was 15 months from the very first day in which we were engaging with the physicians and we were developing the protocol to the day we have the very first patient it was around 15 months, give or take and in terms of COFEPRISS, something that I would really recommend then is to go to what is called goodness in English, I can get the name for you but it's kind of preliminary application that you have for your protocol before you file the actual thing. So, that is very useful because COFEPRISS came back to you with some recommendations about some gaps in your paperwork and again, I mean, as long as you understand what the law says about clinical trials here, I mean, you can be pretty confident that you can get your paperwork approved within the timeframes that are advertised on COFEPRISS website. So, that's kind of our experience. I cannot mention kind of clear dates. I mean, to say like, it was three months and then four months, but from day one to our first patient, it was around 15 months. Just for having some parameters, this was a trial on elective cardiac surgeries, you know, very few patients. The check marks that we had to pay attention to in terms of the secular trial were kind of noticeable and my assumption will be that trials with less risky patient populations most likely will require a shorter period of time for getting the trial approved and for getting the first patient. After that trial, we had zero adverse events related to our technology. However, if a patient dies during your study, whether you know it is related to your technology or not, you still need to report it to COFEPRISS and I can tell you that the reporting process was absolutely flawless. I mean, we just sent the paperwork and we had absolutely zero inconveniences in that regard. Also when we notified Cofepriss that our study was completed, I mean, it was just kind of a matter of creating the paper once and sending it over, and it was absolutely fine. So, I cannot recommend it enough to have a good understanding and to have good counseling and you should be able to run a smooth trial here.

Julio Martínez-Clark: (27:43)
Very good. But you mentioned something that is very intriguing. You mentioned something like a pre-submission to COFEPRIS. Are you talking about a "predictamen"?

Ruben Gaitan: (27:55)
Exactly, yes. That was the thing that I was trying to say.

Julio Martínez-Clark: (27:58)
Could you talk a little bit more about that? Is that something that is, because I heard that before the pandemic, it was a real thing "unidades de predictamen" were everywhere in Mexico, but after the pandemic that went away and they're no longer active. Could you clarify on that? I mean, how does it work?

Ruben Gaitan: (28:23)
That's a very good point. I mean, because we submitted that credit before the pandemic and I'm not really sure about how it's working right now because in our case it was very smooth, but after the pandemic most likely it has suffered some sort of disruption.

Julio Martínez-Clark: (28:47)
Yeah, exactly. For the audience here a "predictamen" is something in the Mexican system to approve the new medical device, well, new clinical research studies, pharma, or devices, that allows third-party private entities to review the dossier before the dossier is sent to Cofepris. So this private entity is, of course, certified by Cofepris to review these dossiers and Cofepris trusts the opinion of these third-party entities. After you get the review and the opinion of the third party entity that they'll call "Unidades de predictamen", then you can just attach that letter to your dossier to Cofepris, and you should get a very fast approval because you already have a pre-approval at the predictamen unit.

Ruben Gaitan: (29:55)
Right, and as I said, most likely there's some disruption in there after the pandemic and also after maybe some restructuring inside Cofepris, but I'm taking that away as homework after this call.

Julio Martínez-Clark: (30:12)
Yes. I think that's a great thing that Mexico has also for the registration of commercial devices. They have these, "terceros autorizados" righ? Authorized third parties, which is fantastic. It's a great system but the new government took that away or restructured that because there was some corruption involved in that model. My opinion of Cofepris now, and from what I hear from people, I just came back from Mexico last week, is that Cofepis is really making an effort to to fix the reputation of inefficiencies that he had, making their timelines way better and making their processes more predictable. By the way, I also heard that Cofepris just joined the ICH, the International Console of Harmonization, which is a big deal. I understand it's the only agency in Latin America that is part of ICH for clinical research. So that sends the signal that Cofepris really wants to be competitive in Latin America for the approval of clinical trials. So I'm very happy to hear that.

Ruben Gaitan: (31:51)
Absolutely. I must also mention, that I think that within the very few positive things, if you will, after the pandemic is that I think it was a serious potential goal for all of Latin America in terms that we tried, at least in Mexico, there were various incentives to develop respiratory machines and stuff like that. I think that we'll just see it like a brick wall in terms that you can't build respiratory machines out of the blue. Of course, there were successful efforts to some measure but in general, kind of the scientific community, the engineering community, and the general ecosystem were hit hard in a way that we do not have a robust system for this kind of emergency. I think that will down the road influence politics and influence other stakeholders to operate in a way that we really need to have a robust ecosystem in place for this kind of emergency. So, I really admire the people who went through the process of building this kind of machine, but I think that one of the results is that we are shocked by the fact that our capabilities for responding to these things are not necessarily good. So I think that one of the positive things that we can say after all of this pain is that this will shake the policy around technology development here.

Julio Martínez-Clark: (33:31)
Yes, you are correct on that. I was stuck in Colombia during the pandemic, and I witnessed the development of at least 10 different efforts to create ventilators by local universities and innovation groups, but nothing really materialized. The regulatory agency really had a hard time coping with the demand for reviews and applications for approvals and you could see it because those are public documents, I was reading all of them. You could see that the innovators didn't really know what to do, and the regulatory agency didn't even know what to do either. So there was a lot of confusion.

Ruben Gaitan: (34:18)
This is not a matter of blaming people or kind of, I mean, it's a matter that as a society we do have not the conditions for being able to respond to this kind of emergency. So I really want to be optimistic in the way that this should shape policy down the road for the next pandemic. It's just a matter of time.

Julio Martínez-Clark: (34:42)
Yeah. Now, Colombia's regulatory agency: INVIMA, is a better agency because of the pandemic. I think the digitalization of the agency was fantastic. The new people that they had to put in the committees to evaluate these technologies were fantastic because they had to up their game for this new influx of innovation that came during the pandemic. So it's a win-win for everybody at the end, I think.

Ruben Gaitan: (35:11)
Yeah, absolutely.

Julio Martínez-Clark: (35:13)
Alright, Ruben, I think we're close to the end of the show. Do you have any final words of wisdom or any final thoughts that you wanna share with the audience before we close?

Ruben Gaitan: (35:24)
Well, I just want to express that we can do very nice things here and as I mentioned before, the latest experience with the pandemic and together with these trends of busy monitoring into Latin America and, you know, the size of the market in Latin America, I think those are conditions promissory of having an innovation cluster in here. We should not try to copy models from Silicon Valley, which is kind of this weird thing that everybody talks about. I mean, of course, Silicon Valley works because it developed under very specific conditions. We have different conditions, different society, and whatever. So instead of trying to emulate what has been done in there, I think we should really just study those success stories and create our own ecosystem for innovation. Because I mean, we have fantastic universities, we have fantastic, intellectual capital, we all speak Spanish, and we are a gigantic continent. So I think that there are conditions and I think there are very good reasons for being optimistic and to attract prosperity for our societies.

Julio Martínez-Clark: (36:36)
Well said. Thank you, Ruben. All right. So it was great having you here, Ruben. Thank you so much for sharing your knowledge and I look forward to being in touch with you.

Ruben Gaitan: (36:47)
Thank you very much. Thank you very much for having me.

Julio Martínez-Clark: (36:52)
Bye-bye.