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Capital plan to clear FDA with medical device

We have a patented medical device but our capital plan calls for $40K funding for clearing the FDA.

Do investors invest in companies that are pre-FDA in medical devices?

11 Replies

Dennis Franczak
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Dennis Franczak Entrepreneur • Advisor
President and CEO, Fuseideas
Eric Rogness
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Eric Rogness Entrepreneur
Technical Product Manager
Vinit, the short answer is YES. However, I only know that second hand. If you tell me a little more about what you are doing, I can introduce you directly to my friend, the CFO of Spartan Bioscience, who received funding pre-FDA, received approval, and are now in-market. I can be reached at [removed to protect privacy].
Michael Barnathan
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Michael Barnathan Entrepreneur • Advisor
Co-Founder of The Mountaintop Program, Google Alum
Certain investors do, but not all.
Eric Rogness
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Eric Rogness Entrepreneur
Technical Product Manager
Perhaps a solution is to drum up initial sales in an unregulated (international) market to prove demand? Just speaking off the cuff.
Michael Barnathan
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Michael Barnathan Entrepreneur • Advisor
Co-Founder of The Mountaintop Program, Google Alum
Or market the device for a secondary application that doesn't classify it as a medical device, and use that to demonstrate market fit and bootstrap the medical application. 510(k) filings represent a regulatory risk, and you'll need to overcome that when you pitch to most angels or VCs.

Also, speaking generally, doctors are skeptical as all heck, and you'll want to make sure you get a lot of feedback from them before you think about marketing anything that needs their buy-in. Chances are you'll need to do a lot of peer-reviewed studies with multiple institutions before you'll be taken seriously by that group.

It's a really good idea to get people who are well versed in medical devices onboard, as this is honestly a very hard field to break into. Healthcare-focused accelerators (e.g. Rock Health) may be worth reaching out to - if they incubate you, they'll probably give you enough seed to get past the regulations, and even if they don't, they might have good intros to people who can help you through the process.
Vinit Modi
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Vinit Modi Entrepreneur
Co-Founder Campusly | Mobile Web & User Research Consultant | Strategic Leadership
Thanks Eric. Will reach out over email.

The CEO of our company is a Respiratory Therapist from Kaiser and we are looking to bring to market a patented (granted) inhaler/spacer to market. We have the design and first rev of the prototype.

510(k) is what we want to go after. We already have ad-hoc feedback from several doctors about the device as well as some early interest from distribution partners.

We need the funding for 510(k) and ramping production.
Candice Hughes
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Candice Hughes Entrepreneur • Advisor
CEO & Founder Hughes BioPharma, AdapTac Games, Digital & Mobile Health, Biotech, Technology Scout

To get FDA clearance you will need VC investors willing to invest very substantial amounts. I have not done a 510K, but full scale FDA clearance costs $1billion. The 510K being less, I would still expect you are going to need in the $100M range. But you should be able to research and network with other people who have succeeded with device approvals.

You may be able to obtain grant funding via NIH to begin work on the product.

This is not the type of company that can be self-funded so you need an extremely convincing story to get investors to buy-in without a marketable product, which is not easy.

Michael Barnathan
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Michael Barnathan Entrepreneur • Advisor
Co-Founder of The Mountaintop Program, Google Alum
510(k) filings don't cost $100m; it's closer to the $50k budget that was originally specified. The risk aversion of VCs does apply, though - which is why you'll need to find some that are experienced at making medical device investments and comfortable with the field's risks.
Candice Hughes
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Candice Hughes Entrepreneur • Advisor
CEO & Founder Hughes BioPharma, AdapTac Games, Digital & Mobile Health, Biotech, Technology Scout

I just noticed your comment about $40,000. I can't imagine that being close to enough to run clinical trials needed for approval. I've worked on regulatory submissions for over 10 years at major pharma and biotechs including overseeing regulatory documents forapproximately 1,000 clinical trials including working first hand on several hundreds oftrials and on submissions.

My suggestion is to begin talking to device industry people to get their input on costs.

Regulations are very strict and you need extensive documentation, investigators, clinical trial monitors, statisticians and numerous other staff.

Candice Hughes
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Candice Hughes Entrepreneur • Advisor
CEO & Founder Hughes BioPharma, AdapTac Games, Digital & Mobile Health, Biotech, Technology Scout

Here's an article that states the average 510K is $24M. http://www.mddionline.com/blog/devicetalk/how-much-does-510k-device-cost-about-24-million

It really depends on what other devices are already approved similar to yours because you can sort of piggyback on their work. That is what makes the 510K cheaper than a full scale approval.

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