Manny Villafana: A medical device legend from one era looking to also thrive in this one

I connected with Manny Villafana as he was on the road from Minneapolis to Iowa. He’s seeking to do what he’s always done: contribute to the medical device industry he’s built.

The 75-year-old medical device legend closed his last startup, Kips Bay Medical, three months ago. There’s a potential new one at the University of Iowa; researchers are developing a new type of artificial graft material to replace a vein during bypass surgery, which for the first time would eliminate the need to take a vein from the leg. So he’s hit the road. (After this interview the new company name was decided: Medical 21.)

Manny Villafana will never quit. It might be questionable to some whether or not he recognizes the industry as it is today. In some cases, the current industry might not necessarily recognize him much, either. But while on the road to Iowa, the creator of the lithium iodine pacemaker and St. Jude Medical, among other innovations, shared with me his view of the industry, the challenge of today’s medical device startups and his own future. Excerpts are below.

What’s different for today’s medical device entrepreneur?

The hurdles an entrepreneur has to overcome today are tremendous. We now have the overwhelming pursuit to lower costs. Many times this creates a situation where a great technology may not be pursued because of cost containment.

Also, money needed is difficult to get from people like venture capitalists because of the increasingly long timetable that regulatory situations have created for medical devices. The new entrepreneur has to be cautious and prepared for the affects of this longer timetable.

I give lectures on the trials and tribulations for the new entrepreneur. I say, “Ladies and gentlemen, open up your shirts or blouses” – which, by the way, gets a lot of attention – and I say, “Look to see if there is a red ‘S’ underneath because you’re going to need it.”

If you don’t have that, go home. Don’t even think of starting a medical device company unless you are convinced that you’re Superman or Superwoman.

That may sound discouraging, but I tell them that because they should know that it’s rough.

Did you not have to be a Superman entrepreneur when you started?

Our first pacemaker, from the day we opened the door to the day of the first human implant was only nine and a half months. Today it would take you nine and half months to write down the required regulatory plan on a piece of paper.

My first pacemaker, that I made with my own hands, lasted more than 40 years, which was significantly longer than what was previously made, lasting more like 12 to 24 months.

Later, with regulations, it became more and more difficult to create devices.

Where is the balance between the freedom to innovate and the safety that regulations are designed to provide?

Let me put it this way, I don’t think we could have made the CPI pacemaker better or safer with regulations – same thing with the St. Jude valve.

Would you pursue pacemaker today if you were starting over in this era with regulations in place?

That’s a difficult question to answer, because I know now that the pacemaker was extremely successful, greatest thing since sliced bread, so of course I would pursue it. But you don’t have that luxury when you start out.

You have a belief that something will be good, otherwise why would you do it? You have a dream, but now with the regulation process, it takes so long and it can suck out the energy and money that you have. Sometimes projects now end because you run out of money and the energy that it takes.

Do you believe the height of the medical device industry innovation has passed?

I didn’t have to get up this morning at 3 a.m. Believe me, I could have been sleeping. But I am up this morning because I still believe there are certain things that still have to be done that have not been done. As long as I can use my brain, imagine, put a team together, there are new technologies that address things we still need in medicine.

Things just take longer now, and both entrepreneurs and investors have to be aware of that.

What kind of investors are needed to support today’s companies?

You have to have people who sincerely want to help people in order to do this and invest, not just looking for a big return because it might not be for a decade before you do, if ever.

When we had to close down CABG Medical, I had to tell investors that their money was gone. But they were OK. They said the reason we invested in you was because you kept swinging the bat.

That’s what we do. We wake up in the morning and we say, “It didn’t work. We gave it our best shot.” You brush yourself off and keep going. What are we doing next?

How do you think investors and other innovators regard your status in the industry at this point, considering past failures?

Two of my last three shots, we had to close down the company. But the first one [CABG], when we closed down, we protected the investors as much as we could. We gave them anywhere from 60 to 96 percent of their money back. With Kips Bay, the market crashed right as we started. We were able to pick up some money, $16 million, but that’s a long distance from the $54 million that we needed.

Do you think other people in the industry believe you might be past your prime?

Obviously I’m not 21 any more, but I’m still going after projects now that people believe cannot be done. What am I going to do, say because other people haven’t done certain things then I’m not going to try it? No.

We have new, 21st century chemistry and technology. We have come up with a new idea combining two different technologies for this heart graft, and we’re going to go after it. We are going to try to raise the capital to do this project.

Am I in my prime? Maybe not. But am I still doing it? You bet your ass I am.

Above is a look at some of the influences that impacted Villafana and led him to his position in healthcare today.

Phot0: Screenshot via Kips Bay Medical