Episode’s Transcript

Julio Martinez-Clark (00:01.381)

Welcome back to another episode of the Latin MedTech Leaders Podcast. The podcast that interviews leaders in the medical device space that have succeeded or have plans to succeed in Latin America. And today we have Dan Stan. Dan is the CEO and co-founder of Sonus Vascular. And Dan has extensive experience

doing clinical work in the region. So Dan, thank you for joining the podcast today.

Daniel Estay (00:35.95)

Thank you for having me, it's a pleasure to be here.

Julio Martinez-Clark (00:37.851)

Excellent. All right, then let's start with your journey. How is it that you got involved with medical devices first?

Daniel Estay (00:45.614)

Sure. Well, I got my start working for my father's business. My mom and dad are both from Chile. And actually my wife is from there as well, although I was born and raised in the U.S. But he had a distribution business for medical devices in Latin America. I started working with him at the company, even in high school and summers, college summers, and then went full time when I graduated from Syracuse University back in, it's been a long time now, 1987.

Julio Martinez-Clark (00:51.768)

Hmm

Julio Martinez-Clark (01:05.423)

Hmm.

Daniel Estay (01:13.934)

and spent nine years working with him. And our role was to represent mostly US manufacturers, some from Europe, some from Asia, and then distributing their products in Latin America. So it was a great experience. learned a lot because in any small business, you're exposed to different functions and you have to wear a lot of hats. In Latin America, I always would say, if you can do business in Latin America, you can do business anywhere because it was a challenging region for

Julio Martinez-Clark (01:14.351)

Hmm.

Julio Martinez-Clark (01:39.418)

You

Daniel Estay (01:42.054)

economic reasons, political, et cetera. And certainly that was the case for the many years I was involved. And we got to work with great companies like St. Jude Medical and Boston Scientific and several others as we built their business in the region. And then from there, I wanted to get experience in a larger corporate setting. And I went to work for Johnson & Johnson. They had just acquired Cortis, which was a cardiovascular device.

Julio Martinez-Clark (02:05.934)

Mm-hmm.

Daniel Estay (02:08.142)

I was brought into to be a part of the business development team. So working on acquisitions and licensing transactions and did that. And then did a few different roles before I ended up working for Abbott for about 11 years. The first five years I was in their business development group, again, working on acquisitions and licensing and strategic partnerships. And then the last six years I was actually based in Tokyo, Japan, managing

their avatarsular device business in Asia Pacific and Japan, which was a wonderful experience, both professionally, but also for the family living in Tokyo six years. then I came back to the U S I was running a medical device business in Seattle for a few years. And then wanted to make our, you we wanted to make our way back to the East coast. So, so, we started consulting for a company in North Carolina and, and, the Chapel Hill Durham area or research triangle park.

Julio Martinez-Clark (02:45.276)

I'm sure.

Julio Martinez-Clark (03:04.686)

Mm-hmm. Yeah.

Daniel Estay (03:07.67)

And as I was commuting here for that, reconnected with a childhood friend who was a surgeon here at the University of North Carolina at Chapel Hill and just got introduced to the area and fell in love with it. So my wife and I decided to move here. It's been about eight years now. And just to finish the sort of the story, in the first year and a half I was here, I came across the technology, which today is the core of SanoVascular. It came out of the joint biometric engineering program between UNC at Chapel Hill and NC State.

Julio Martinez-Clark (03:31.802)

Hmm.

Daniel Estay (03:37.122)

been here ever since.

Julio Martinez-Clark (03:39.004)

Okay, so this is your first medical device startup. I mean, you leading a medical device startup.

Daniel Estay (03:43.662)

Correct. This is the first time from really, really starting it, taking it out of the university in the academic setting, and then getting the initial concept work done. I mean, I've done a lot of things in my career, large businesses, small businesses, a lot of work in the vascular and cardiovascular field, but this was the first time with a true startup from ground zero.

Julio Martinez-Clark (03:50.895)

Yes.

Julio Martinez-Clark (04:07.14)

Fascinating journey, I'm sure. I mean, to create a...

Daniel Estay (04:10.03)

Yeah, it's an incredible journey. It's true what they say that it's not for the faint of heart, it's tough. And you have to be resilient and there's going to be days and bad days. And it is really a roller coaster ride, right? But it's a tremendous learning experience and a lot of fun.

Julio Martinez-Clark (04:16.27)

Yeah. Mm-hmm. Yes.

Julio Martinez-Clark (04:28.154)

I'm sure. right, Dan. So let's speak a little bit about trends in the industry. What is it that you think is making companies go overseas for clinical research? Not necessarily Latin America. We're going to get to that later. But in general, why US companies, US medical device startups like yours, explore options in Eastern Europe, Australia, Latin America?

Daniel Estay (04:56.174)

I mean, first and foremost, it's speed, right? Speed, speed to get into the clinic. And even though I think it's gotten a lot better in the US with the early feasibility program, depending on your indication and where you're at as a company, think certain international markets offer the opportunity to get there very quickly. And so for us, it was about finding high quality clinical sites, but getting there quickly so we can generate data. And that's not so critical today. You know, what's changed dramatically for early stage medical.

Julio Martinez-Clark (05:03.033)

Hmm.

Daniel Estay (05:25.998)

advice companies, certainly in the last decade, is investors are looking for more. Perhaps you go back five, 10 years, there were plenty of people investing or plenty of VCs investing in preclinical companies. That's changed dramatically where now they expect to see, or they would like to see before they invest human clinical data. And so getting there quickly to generate that data to continue the fundraising is really fundamental.

Julio Martinez-Clark (05:38.072)

Hmm.

Julio Martinez-Clark (05:44.174)

Hmm.

Julio Martinez-Clark (05:50.95)

And why is it so difficult to get these clinical data in the United States? What are the obstacles that companies like yours face in the United States? Time-wise? Regulatory-wise?

Daniel Estay (06:05.592)

Yeah, mean, we'll start that process here shortly as we get ready for our pivotal study for FDA approval. But I would say what I heard from our scientific advisors in the US is getting IRB approval can take a long time, particularly at the major centers where they look at this and if you're not a cutting edge oncology drug, you're sort of at the back of the line and it's going to take you many, many months to get approval.

Julio Martinez-Clark (06:21.87)

Yeah, that's what I hear as well.

Daniel Estay (06:34.69)

That's not the case for all centers. think there are some that you can there a lot quicker, but at least our scientific advisory board, their advice was let's go overseas for our first and just for deep pain thrombosis.

Julio Martinez-Clark (06:44.044)

Hmm

Yeah, correct me if I'm wrong, but it's my perception that US hospital systems are large. You don't find in the US independent hospitals like you find in overseas, like in Eastern Europe or Latin America. So you find these large hospital systems and the bureaucracy, 20 meetings to get to the main meeting and the IRB approval and all that, 20 committees to approve the submission to the IRB. think

That's really what you're talking about here. The bureaucracy of the system, navigating this.

Daniel Estay (07:20.494)

That's correct. And again, I haven't been through that process myself, but that's the feedback I was receiving. Now, as an example, our second indication is pulmonary embolism. There we will be going to the US first because just given that indication and the infrastructure that's there to treat that type of patient, it's much better to do that in the US. So there we're looking at doing an early feasibility and hopefully that data we could then roll into the IDE to support the regulatory approval.

Julio Martinez-Clark (07:24.875)

Yes, exactly. That's what I hear as well.

Julio Martinez-Clark (07:42.11)

Okay.

Julio Martinez-Clark (07:48.288)

sure.

Okay, I see. All right. So let's talk about your experience with Latin America. I mean, this is your first clinical trial as the CEO of a medical device startup in Latin America, correct? Okay. So yes, please elaborate on.

Daniel Estay (08:03.69)

Correct.

Daniel Estay (08:08.142)

Sure. Well, not surprisingly, we chose to work in Chile. As I mentioned earlier, that's where my family's from. I spent a lot of time there over the years working and even personal time. And there's a vascular surgeon that my father and I have known for over 30 years. He's one of the leading vascular surgeons in Latin America, very well respected. And so I started talking with him about the objective of doing a study.

Julio Martinez-Clark (08:13.066)

Mm-hmm.

Julio Martinez-Clark (08:20.437)

Yes.

Julio Martinez-Clark (08:25.396)

Okay.

Daniel Estay (08:36.558)

overseas perhaps in Latin America and he told me about the benefits of doing it in Chile. He introduced me to two physicians that he trained when they were all together at the Catholic University Hospital in Santiago. And it just all kind of came together as far as high quality team, a very good site and good patient flow because of course enrollment is important. did my own diligence as I was thinking about Latin America. I talked to a few people that had done studies.

And the one common theme I kept hearing was find the site where there's, you know, good trust, you know, because the key isn't so much the case itself, it's the follow-up, right? And the responsiveness that you're going to get. those relationships that you need to make sure that you can manage the study, effectively, you know, both pre and post, procedures. and I think we're living that now because we have a very good rapport with the site.

not just with the PIs, but with the supporting staff. And we can respond and we can move very quickly as we're going through the study. Going back to the advice I received, I can see that if you don't have that level of responsiveness and trust with the site, it can get very complicated very quickly and really inhibit your ability to execute the study. So that's the one key thing I heard in advance.

And like I said, what we're seeing in Chile is that because of the strong relationships and the trust that's there, we're able to execute the study very effectively and efficiently.

Julio Martinez-Clark (10:10.71)

Excellent. So in terms of execution of the study, Dan, were you able to find help like a CRO, like a CRA, somebody local who was able to put together the data for the IRB and to do the importation? mean, the whole CRO work that usually gets, it's necessary to succeed on a trial like this.

Daniel Estay (10:36.008)

Absolutely. And we did. actually we were introduced to one through the, our principal investigator who had worked with her for many years and is still working with this group with other studies. So that's how we got connected. And you're right. mean, having, having a good CRO supports you that has the local staff, the relationships, the infrastructure is critical to, to, good execution. So they'd been wonderful to work with, very responsive. And they're very much as much a part of the team as we.

Julio Martinez-Clark (10:41.471)

Okay.

Julio Martinez-Clark (10:48.246)

Excellent.

Daniel Estay (11:05.166)

as our team here, as well as the PIs.

Julio Martinez-Clark (11:07.925)

Beautiful, sounds good. like you found a great help and that's absolutely a must when you do business overseas, especially in Latin America where the culture and the language is different. I mean, in your case, you probably speak Spanish, so for you it's a lot easier, but for other companies, no.

Daniel Estay (11:26.094)

Yeah, I totally agree. mean, in the US, we'll plan to use a CRO, but I think your point more so internationally where the communication can be more challenging. I speak Spanish. My VP of clinical speaks a bit of Spanish, but everyone else in the team does not. having someone who can run interference on a lot of these matters is important.

Julio Martinez-Clark (11:31.516)

Yes, of course.

Julio Martinez-Clark (11:38.43)

Yeah.

Julio Martinez-Clark (11:44.285)

Mm-hmm.

Julio Martinez-Clark (11:50.492)

Excellent. All right, so let's talk about Chile, Dan. What's your take in the country as a whole, as a destination for first human medical device, clinical trials? mean, do you think it's efficient?

Daniel Estay (12:10.126)

You broke up there for a minute. Let me do one thing. I'm going to change networks because it might be that I'm getting, so there may be a pause here, but I'll come back in two seconds.

Julio Martinez-Clark (12:12.093)

Yeah.

Okay. Okay.

Julio Martinez-Clark (12:27.955)

All right, we're back. Yes.

Daniel Estay (12:29.246)

Okay, we're back. think that would be better. I'm sorry, can you repeat the question?

Julio Martinez-Clark (12:32.572)

Yes, yes. Let's talk about Chile as a country, as a destination for clinical research, medical device clinical research. Do you find that the country is, the regulatory pathway in the country is friendly to medical device startup companies like yours? How was your experience in the regulatory approval process?

Daniel Estay (12:54.302)

It was relatively smooth. I'd say yes. I think that there is an openness to conduct clinical research in Chile. As you probably know, and I learned this from our CRO, for a few years there was no research ongoing in Chile because there was, I guess the government was trying to put in place a law that would require the sponsor to pay for any healthcare expenditure related to the patient, whether or not it was a part of the procedure for, I don't know if it was for many years or maybe even for life, and that just shut things down.

Julio Martinez-Clark (13:08.402)

Yes.

Julio Martinez-Clark (13:16.389)

Mmm. Mmm.

Julio Martinez-Clark (13:22.269)

Yeah.

Daniel Estay (13:23.502)

free year. But that was never enacted, as I understand it. And again, getting the approvals through what they call ethics committee was relatively straightforward. So you have to choose an ethics committee that has governance over at the national level, over certain hospitals. And then once you have that, we were able to achieve or secure ethics committee approval from the site itself. So there's sort of a two-level process. But I'd say, again, overall, relatively smooth.

Julio Martinez-Clark (13:53.949)

Very good.

Daniel Estay (13:54.208)

And quick and time time wise, it was less than three months. Yeah.

Julio Martinez-Clark (13:58.587)

Less than three months. That's very good. Yes. And what about the import permit? that a smooth process as well to get the devices into the country?

Daniel Estay (14:07.374)

Because again, the CRO managed that for us. but we didn't have any problems in terms of getting the product shipped. went through Miami, the CRO had a freight forwarder there and everything arrived in country in perfect condition and really quick. So, again, that was very smooth. Thanks to the CRO.

Julio Martinez-Clark (14:10.717)

Okay.

You don't have any issues.

Julio Martinez-Clark (14:25.779)

Excellent. I'm glad that happened. Yes, I think Chile has very strong pharmaceutical research regulations, but for the medical device aspect of clinical research, not so much. It's still a little vague from what I understand. Chile is a unique case in Latin America, even for

market clearance of commercial devices. There's only like five class one devices that are regulated where you need to get market clearance before selling the device in the country. The rest of the devices do not need that. It's voluntary. The registration process is voluntary. That's what I meant. So for clinical research for medical devices, I think there's still an opportunity to do a lot of work in Chile.

stronger regulation comes in and probably slows things down a little.

Daniel Estay (15:27.734)

I think that's correct. I think there's receptivity to doing studies. Generally speaking, and relative to other countries, think the requirements are un-destringent, which again allows you to move quickly. We've certainly seen that in country. I think the key thing really is site selection. I'll give you one example. We were in discussions with the site.

And in the end, we did not move forward because the site was looking for us to, again, as a sponsor, to pay for non-procedure related healthcare expenditures for the patient for up to 10 years. And we said, well, that's not fair. No one does it around the world. So this gets back to your CRO. Do they have good relationships? Which of the sites can move quickly are high quality sites, right? Because you want to make sure you're practicing at good clinical practice standards.

Julio Martinez-Clark (16:04.401)

It makes no sense. Yeah.

Julio Martinez-Clark (16:10.417)

Mm-hmm.

Daniel Estay (16:21.326)

But again, knowing which sites are reasonable in their approach as far as what they expect from the sponsor going forward.

Julio Martinez-Clark (16:30.674)

Okay, all right, then let's speak about cost savings. Did you notice cost savings by going to Chile in terms of hospital fees? Is it allowed lower to do procedures in Chile versus other countries?

Daniel Estay (16:45.848)

Yeah, I mean, it's certainly lower than the U.S. If you compare with other national markets, I'm not sure what it costs to do. I know a lot of companies now are going to Eastern or Central Europe. I'm not sure what it costs there. But certainly, as you compare it to the U.S., it's a lower cost setting. Again, it gets back to the site. So we're working now at a government hospital. But we're getting patients from other public hospitals that come to that site.

Julio Martinez-Clark (16:55.419)

Yes.

Julio Martinez-Clark (17:12.101)

Yes.

Daniel Estay (17:14.33)

which is really critical to having a good enrollment speed. But like I said, they've been really, really good to work with, but you got to make sure you choose the right site.

Julio Martinez-Clark (17:17.969)

Sure.

Julio Martinez-Clark (17:31.025)

Sure. So you're overall happy with the budget for your study in Chile. That's really my question.

Daniel Estay (17:37.58)

We are, if I look at the hospital costs, the PI costs, the staff costs, there's the product costs as well, because in our case, we're paying not just for our product, we're paying for all the ancillary products that are required. And that oftentimes depends on the distributor for that product in Chile, in our case, right? Because we're basically buying it from them. But overall, I'd say compared to the US, it's much lower.

Julio Martinez-Clark (17:48.965)

Yes.

Julio Martinez-Clark (17:54.445)

Mm-hmm. Sure.

Julio Martinez-Clark (18:02.531)

Okay, yes. All right. Then any other countries that come to mind for companies like yours when they explore Latin America? Have you heard from your friends, from your colleagues? Any other countries that are good?

Daniel Estay (18:17.164)

Yeah, I know of several people that have very good experience in Colombia. RCRO does quite a bit of work in Brazil and Argentina. And we'll be initiating a second site in Buenos Aires early next year. we've already applied. Actually, I think we secured ethics committee approval. Now it needs to go to the regulatory authority. But the feedback I've gotten from RCRO is, again, anywhere from three to five months for Argentina or Brazil.

Julio Martinez-Clark (18:24.826)

Okay.

Julio Martinez-Clark (18:28.953)

Okay, nice. We're good.

Julio Martinez-Clark (18:44.518)

Yeah.

Daniel Estay (18:45.368)

I'm not sure how long it takes in Columbia, but I've been able to visit those sites in Argentina and high quality, very well-trained physicians. So we're excited to get started there, probably in the February timeframe.

Julio Martinez-Clark (18:59.089)

Okay, very good, excellent. I'm happy to hear that you're...

Daniel Estay (19:01.646)

To your question, as we were going through the process, I've heard good things about Panama, there's Mexico. So I think there's a lot of different places you can go. I had a bias, given Chile. And like I said, going back to having a strong relationship with the PI and trust, this is someone I've known for 30 plus years. It was a bit of a no brainer for us, right? And logistically, Chile is an overnight flight. So even though it is,

Julio Martinez-Clark (19:06.894)

Yes.

Julio Martinez-Clark (19:12.708)

Yes, exactly.

Julio Martinez-Clark (19:28.717)

Mm-hmm.

Daniel Estay (19:30.126)

We typically fly through Delta or even if you go through Miami, it's probably anywhere from eight to nine hours. so it's longer than going to a Columbia or a Mexico or Panama, but they're overnight flights and, it's, you know, most of the time it's the same time zone. Sometimes an hour or two different. So I think that also helps because originally we thought about doing studies in New Zealand. And now that I've been through the process, I look back and I go, I don't know. Yeah.

Julio Martinez-Clark (19:39.184)

Yeah.

Julio Martinez-Clark (19:51.076)

New Zealand, yes.

Julio Martinez-Clark (19:55.972)

Yeah, that wouldn't be a good idea. Too far.

Daniel Estay (19:59.47)

Having lived in Asia and New Zealand was a part of my territory, been there several times, it's a long way to go. And so it's the distance, it's the time change. I...

Julio Martinez-Clark (20:02.159)

Yes.

Julio Martinez-Clark (20:10.725)

Yeah, not only the diesel, but the time difference. That's usually the feedback that I get from people in the industry, especially going to Eastern Europe, you seven hour time difference, or New Zealand, Australia. Yeah.

Daniel Estay (20:26.744)

Yeah. If you know, the, the companies still go there and New Zealand and Australia is a great place to do studies. And there's, you know, not just for early stage companies, but a lot of the larger companies are doing clinical work in those markets. So I think that they benefit from, from that brand. And so if you, if you can say, Hey, I've done clinical work in New Zealand and Australia carries a lot of weight, not that they carry weight in Latin America, but I think it's fair to say that just given the history, you know,

Julio Martinez-Clark (20:49.754)

Yeah, sure.

Julio Martinez-Clark (20:54.532)

Yes.

Daniel Estay (20:55.726)

When you talk to the bigger companies, they tend to be a bit more impressed if say, worked with this physician in New Zealand or Australia. That is changing though. And I think it gets back to who is your PI or who are your co-PIs and what are you working with? How well did you structure the study? I think people recognize that there are high quality sites and centers in Latin America. we felt on balance, we weren't giving up anything in that regard.

Julio Martinez-Clark (20:59.364)

Hmm. Hmm.

Julio Martinez-Clark (21:09.049)

Yes.

Julio Martinez-Clark (21:21.615)

Excellent Dan, I'm glad to hear that you had that good experience in Latin America, right? I think we're close to the end of the episode, Dan. I want to hear any final thoughts or any final words of wisdom that you can give to newer medical device startup companies, newer founders when they're countries in Latin America for clinical research. I what would you say to...

to the founder of a newer medical device company now.

Daniel Estay (21:53.656)

Well, I mean, it's basically summarizing what we've talked about, right? I think it starts with do your due diligence, right? Make sure you talk to enough people, talk to a few CROs, understand the pros and cons. We talked to several companies that had done studies in Chile, as well as with the CRO. So we wanted to make sure that we had good perspective going in as far as what other companies' experiences has been.

So I'd start there, right? And I go back to then when you choose your CRO, when you choose the country and the sites, you know, make sure you're comfortable with the team on the ground. Make sure you have a relationship. Doesn't mean you have to have one like in my case for 30 years, but start building that relationship. Make sure there's ongoing communication because that's really going to be the key to navigate the study. And like any study, know, some things work really well, some things don't work as well. And it's really when things aren't working well.

Julio Martinez-Clark (22:36.706)

Yeah.

Daniel Estay (22:50.082)

that you need that relationship so you can address that issue as quickly as possible. And like you've already pointed out, anytime you're going overseas, making sure you have a good CRO partner that understands, has boots on the ground, as they say, I think those are the key points for me. If you do that, I think you give yourself a really good chance of being successful.

Julio Martinez-Clark (23:01.729)

Mm-hmm. Mm-hmm.

Julio Martinez-Clark (23:06.893)

green.

Julio Martinez-Clark (23:14.606)

Excellent. Thank you so much, Dan, for being in the show today. I look forward to staying in touch.

Daniel Estay (23:21.166)

It's my pleasure. Thanks. Take care.

Daniel Estay (23:43.213)

I can't hear you.

Daniel Estay (23:48.108)

Still can't hear you. Let me...

I can't let me.

Daniel Estay (24:03.054)

Can you hear me? Yeah, I can't hear you for some reason.