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Exec Chat: How Verb Surgical Will Deliver On Surgery 4.0

Executive Summary

The digital revolution looks to be sweeping across different industries, which are now fully embracing technologies around connectivity, big data and artificial intelligence to drive innovation and better outcomes. Health care seems to have come late to this party, but changes are happening as medtech companies make a concerted effort to incorporate the advanced computing capabilities needed to turn devices into smart machines that are constantly learning and adapting. Surgery is one area that will benefit from these smart technologies and Scott Huennekens, CEO of Verb Surgical, tells Medtech Insight how the J&J/Verily joint venture aims to make this happen.

The advent of laparoscopic surgery in the 1980s heralded a new wave of surgical techniques – dubbed "Surgery 2.0" – that allowed for safer procedures and better outcomes compared to previous-generation open surgery. Robotic devices, led by Intuitive Surgical Inc.'s da Vinci, rang in Surgery 3.0, which allowes even more precise and controlled procedures and, in turn, enables surgeons to treat ever tighter anatomical spaces and, potentially, more conditions. (Also see "Ever Decreasing Dimensions, Snakes And Origami: The Next-Gen Surgical Robots" - Medtech Insight, 28 Feb, 2017.).

Over the next few years, we will see yet another category of surgical solutions to address the limitations of today's robotics surgery and mark a new chapter – Surgery 4.0 – in this evolving sector. That's according to Scott Huennekens, who heads the firm that hopes to lead the charge.

"Intuitive Surgical ... believes robotics is the solution, while we're saying, we are a surgery company and what are the best solutions to improve surgery? That could include robotics, machine learning, advanced visualization, data analytics -- all those things are important," Scott Huennekens, CEO of Verb Surgical, says.

This next generation of surgical innovation, called digital surgery, is not about incremental improvements to current robotic systems, but will bring in elements of advanced computing that other industries are already embracing, Scott Huennekens, CEO of Verb Surgical, told delegates at the Asia-Pacific Medtech Forum held Nov. 8 in Singapore.

Huennekens asserted that Verb, the joint venture formed two years ago between Johnson & Johnson's Ethicon and Google's Verily, is not a developer of surgical robotics device. Robotics is just one of the five technology pillars that form the company's digital surgery platform, he points out. The other four technological elements: advanced surgical instrumentation, enhanced visualization, connectivity and data analytics & machine learning.

"The hospital operating room has not maintained the pace of capitalizing on digital innovation as with other areas of health care," said Huennekens. The introduction of surgical robotics might have its advantages over non-robotic surgical techniques like open or laparoscopic surgery, but there are also limiting factors, he stresses. In particular, the high cost of capital equipment and the large footprint of the systems, mean it still represents a very under-penetrated market – only 700,000-plus procedures have been performed using surgical robotics – and a very US-centric one to boot.

There are five billion people in the world who are unable to access surgical care and around 143 million surgeries that need to be performed annually. Low-skilled surgeons have three times more complication rates and five times the mortality rates compared to highly skilled surgeons, Huennekens pointed out. The vision for digital surgery is to build a smart system that applies machine-learning capabilities with semi- and fully autonomous features, and make the system smaller, modular, intuitive to use and cost-effective. The ultimate goal is to "democratize surgery" and globalize of the technology, the CEO said.

This won't happen immediately – it's more likely be 20-30 years down the line, Huennekens acknowledged. But, he says, companies like Verb are taking steps in the right direction. The company now has a working prototype of its digital surgery system and plans to launch it by 2020.

The first iteration of the platform will focus first on building capabilities that provide surgeons with actionable information via dashboards and reports. In an additional three-to-five years, it plans to introduce semi-autonomous features that leverage machine-learning and pattern-recognition capabilities, and, then, 7-10 years down the road, the system could boast autonomous closed-loop feedback features to provide even more guidance to the surgeons and ensure better outcomes.

Medtech Insight chatted with Huennekens following his APACMed Forum presentation to find out more about the positioning of Verb in the vanguard of the digital-surgery movement, what his plans are for the company once it launches a product, and what lessons he learned from his prior experiences at other innovation-leading companies.

Medtech Insight: You made it clear in your presentation that Verb Surgical is a digital surgery company, and not a surgical robotics company. Do you think that message is getting through and the medtech industry is understanding that differentiation?
Scott Huennekens: You're right, people still bunch us with robotics. And at conferences, I say "no, we're going to speak last" because we're different from that Surgery 3.0 world – we do things and view things differently. We are going to deliver on [this new generation of] Surgery 4.0, but it doesn't exist yet; we're creating a new category. We're beginning to talk about it and so is Medtronic. [Editors' note: Medtronic is co-developing products in this area with Israeli company Mazor Robotics to combine respective expertise in surgical navigation and implant systems and surgical planning].

Intuitive Surgical is a robotics company. It believes robotics is the solution, while we're saying, we are a surgery company and what are the best solutions to improve surgery? That could include robotics, machine learning, advanced visualization, data analytics, all those things are important. Some elements are more important for certain steps and cases, whether it's to improve outcomes or optimize costs. If you can do a step of a procedure with the same quality without a robot, don't use a robot, do it laparoscopically. But if something can be done with a higher quality and half the time, at the same cost, it's with the robot. Make the right decision – but it has to be always there and always on in order for you to do that.

With my prior [intravascular ultrasound] company, Volcano Corp., we integrated the system into every single lab and that's what we're going to do with Verb's technology. When it's always there and always on [rather than having to wheel it in each time], the economics change – the time to set up and use goes down dramatically. And because you're using the system, the procedure takes half the time and cost-per-case goes down.

One very integral part of your digital surgery architecture is the cloud-connected surgeons' portal where they can share their experiences and also access data pre-, intra- and post-surgery and this portal will help deliver this end-to-end experience you want for the surgeon. Can you elaborate more on this and if there are any regulatory issues in terms of having to integrate these apps or its many other software components into your system?
Huennekens: It's an open platform. Just the same thing with Apple. You can put an app on an iPhone and make it a medical device. That software app to do your blood pressure and blood glucose monitoring has to get its own regulatory approval. The phone is agnostic. So, our system is agnostic – you can develop a software package that rides on it that does anatomic identification for a particular procedure, like a lap hernia, or specialized software that allows you to do it robotically better. So, there will be software made by third party software developers and they will have to get own approvals for those apps. You may have to work with the vendor to get access -- we would work with a third party to get it validated, like how Apple validates software that goes in its App store.
There are still a lot of people out there who view your technology as a "nice-to-have", rather than a "must-have." What's your response to those who question the accessibility of your digital surgery platform, especially for patients who are in resource-constrained Asia-Pacific geographies?
Huennekens: It will take time and scale of a market to allow you to drive costs down. Out of the gate, we will be focused primarily on the larger more developed markets but then we'll evolve into the other markets over time.
You did acknowledge that your vision of Verb Surgical "democratizing surgery" through its digital surgery technology won't happen overnight and it will take about 20-30 years to realize. So, if we were to break down the time period from now until then, into more bite-sized pieces, what are the milestones you've set yourself? You've already got a working prototype of your system and aim to launch it in a few years, by 2020. What are your expectations after that?
Huennekens: From the time of launch in 2020 or earlier, by 2030, our hope is that in any advanced economic first-world countries, 80% of their ORs have a digital surgery platform – whether it's with our system or Medtronic's or Intuitive's. And Surgery 4.0 should be well on its way at that point in time. It basically is going to future-proof that OR to allow you to do all the things to get that S-curve to continue and improve outcomes. And with more and more volume and capability, you will be able to drive costs down as well.

For example, in 1984, when I got my first IBM PC, I paid $3,000 for something that had a RAM of 286K and then, look, five years later, you can pay $1,000 for a lot more RAM and features. That's what's going to happen in robotics. Today, is the beginning of robotics across multiple industries [and] that's going to drive down all these manufacturing costs. The controls and brakes, all these elements will become cheaper and cheaper and you'll be able to make these robotic arms very inexpensively. And with an arm being inexpensive, everything else is going to be cheap. Ten years after our system is released, robots are going to be less than $100,000 per OR, and we're probably going to move towards most of them being provided free of charge and you upcharge on the instrument. If you go to a Cleveland Clinic, and they have 14 ORs, and they are doing $15m of disposable instruments, you're going to make sure they have your robots in each OR, so you can drive the disposable revenue. It's the razor/razorblade model. And as you go into the secondary and tertiary markets, the costs will be much lower and you can also bring in all the learning from the millions of procedures that have been done with your system.

You've got a long background in the medical device industry. You ran Volcano before selling it to Philips and you've also been involved with several other companies that you grew and took to the public markets. What are the most important lessons that you learned from your previous experience that you've found most useful when working with Verb?
Huennekens: Innovation in general is a mindset. A mindset of saying "things are not impossible." The grit, the persistence. One of my favorite sayings is, "There are no bumps in the road. That is the road." And there are going to be those when you innovate and creating what's next and you've got to figure out ways to overcome them. What I've found, whether it is Verb Surgical or Digirad [where I was president and CEO], or Endochoice [where I was chairman], you've got to be focused and have a small team built around great culture and have the best people who will figure out how to get it done.
Just do it?
Yes, it's not that hard. You want to sound smart but part of it is showing up and believing and doing it. I mean, how do you run a marathon? One mile at a time. It's the discipline to get up to train and work at it so that you can do 26 miles when race day comes. For a lot of startups, they might think "Jeez, that's a lot of work to try and achieve in five years" and it can be overwhelming for a lot of people, but for me, it's about breaking it down into small increments; tackle those small increments, drive them, get them done, celebrate after doing it, and then onto the next challenge.

The other thing to remember is change is the only constant. You see with a lot of startups where the founders fall in love with their idea. For me, it's not about the idea; it's about the success. So, with every startup I've been involved in, I've learned that you've got to change. You've got to be willing to adapt your business model, you've got to be willing to adapt your partners – if it makes sense to merge with something, buy something, who cares? The goal is success and this leads to another one of my favorite sayings: "I'd rather be effective than right."

From the editors of Clinica

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