Fahti Khosrow never planned on becoming an entrepreneur. But now, she and her company, Portland-based CEEK Women's Health, are poised to deliver to the market a new product expected to change the way women receive health care.
The women's health care market has been largely ignored when it comes to innovation. Until Khosrow's company decided to redesign the vaginal speculum, for example, the instrument had been mostly unchanged since it was invented — by a man — 150 years ago. The sector is now gaining new attention, however, for several reasons.
The U.S. health care market, currently a $3.3 trillion pool of money representing 17.9% of the country's GDP, is expected to grow by 5.6% annually for the next five years. Women represent the dominant users of services and products in that market. Forty-five percent of women have chronic conditions and regularly seek medical care to treat them versus 30% of men. Women also are responsible for making 80% of health care decisions for U.S. families.
The medical industry, meanwhile, has discovered that gender is a biological variable for a range of medical conditions, including cardiovascular disease, cancer, diabetes and depression.
In addition, women increasingly are looking to take a more active role in managing their health care, even as they become more willing to talk openly about female-related health conditions such as menopause.
The combination of those factors has led a growing number of entrepreneurs — many of whom are women — to create start-up ventures that are using technology and innovation to find new ways to help women deal with a range of health-related issues.
It isn't an easy path to forge, however. For entrepreneurs to get their products into women's hands, they have to convince venture capitalists — the vast majority of which are men — to rethink the way they choose which new medical products and devices they'll support.
It's a task, however, that Portlanders like Khosrow and Holly Rockweiler say they're more than ready to take on to change the future for companies focused on innovation in women's health care. Rockweiler heads up another Portland-based company called Madorra that's poised to enter the women's health device market.
"I hope someone ... who starts a women's (health care) company 10 years from now won't have to deal with this problem," Rockweiler said.
The power of partners
Women often cite the commonly used vaginal speculum as causing discomfort and distress during gynecological exams. Khosrow came up with the idea to reinvent the instrument after having to endure an examination with the clunky metal instrument.
The more she looked into the idea, the more convinced she became that she was on to something that could change the way women experience their health care. Her research — and talking with Portland-area physicians and nurse midwives — also revealed that the traditional speculum design caused carpal tunnel among the health care providers who often have to manipulate the awkward instruments between seven and 30 times per day in their practices.
Working with a commercial design house rather than a traditional medical device design company manufacturer, Khosrow and her team at CEEK came up with a speculum that both local physicians and nurse midwives agreed was superior to the old-style speculum.
Metal speculums come in a variety of sizes, for example, which require physicians to keep a large inventory on hand. The metal has to be warmed before insertion. The instruments also have to be taken apart to be sterilized and then reassembled, which causes parts to wear out.
CEEK's speculum, however, is made of a material that is temperature neutral. The instrument doesn't have to be taken apart to be sterilized. And one size fits almost every patient, Khosrow said.
The company already has an attachable light and a plastic sleeve that can be used on traditional-style speculums to make examinations easier for both patients and physicians. The new speculum design is slated to hit the market in March, and CEEK already has received orders from at least one large-scale health care provider that Khosrow can't name.
The road to this point hasn't been easy, however.
In order to bring the speculum to market, CEEK raised about $4 million. While the company has some male investors, the majority are women.
"It took a lot of stretching and finding some smart women investors who understood where we were coming from to invest in us," Khosrow said.
Finding those investors, though, was an exercise in patience and persistence. Only about 1% of those Khosrow approached were willing to invest.
"It was really difficult. It took about 18 months, and I talked to everybody, from private equity firms to even a lot of local firms around here," she told the Business Tribune.
It's a situation that Madorra CEO Rockweiler understands all too well.
Being the CEO of a company looking to move a women's health care device to market was never a deliberate part of Rockweiler's plan. Her background is in biomedical engineering.
It was while she was involved in a biodesign program at Stanford, looking for solutions to needs-based health situations, that she and her team began talking to women who were breast cancer patients. They learned the treatment the women received often resulted in vaginal dryness, an irritating and painful condition.
As Rockweiler and her team talked to more women, they learned the condition was common among other female cancer patients as well as women entering and in menopause. The only way of trying to address the problem has been with hormonal therapy or creams, none of which provided lasting effects.
"We thought, 'Holy smokes, this is a really, really big market, and there has not been much innovation here,'" Rockweiler said.
Madorra, the company of which Rockweiler is co-founder and CEO, is a spinoff of that research. The company's product is still in the clinical testing stages, so Rockweiler is limited in how much she can say about the device. However, she describes it as a "home-use, non-invasive ultra-sound device" that women can use to self-treat vaginal dryness symptoms. The ultrasound works to reengage and restart the body's natural lubricating mechanisms.
The solution was readily available, but it wasn't until Rockweiler and her team did some digging that the answer came to light.
"We just connected the dots that were available in literature," she told the Business Tribune. "It's not magic. It's gentle ultrasound that we've tested in women, and they've had great experiences with it — and we're continuing to do testing."
The need for the device may seem like a no-brainer to women dealing with vaginal dryness and to Rockweiler and her team. But not everyone is so easily convinced.
"From the investment standpoint, there are some big challenges," Rockweiler said. "This isn't meant negatively, but a lot of investing is pattern matching, (sticking with) something that has been successful in the past."
Rockweiler and her team covered the cost of obtaining data for initial proof of concept through grants, a mix of large grants from groups like the National Institute of Health and the National Science Foundation, as well as some smaller ones. While Rockweiler says that pot of money was a "huge" boost, it also is difficult to move from concept to actual product on grants alone. So Madorra's team tapped angel investors to help close the gap for that phase.
Now, as they move through the clinical testing stage, they've been courting venture capital investment. It's a new ballgame, one that involves more hits than misses sometimes.
Linda Greub, a health care investor, isn't surprised. She and Corinne Nevinny, who met while they were attending Harvard Business School, started California-based Avestria Ventures specifically to provide much-needed seed funding for start-up ventures focused on women's health and life science.
"We know that 90% of venture capitalists are men," Greub said. "As men, they bring their interest and experience with them when they make investments. Most VCs only make a few investments a year, and they generally want to invest in things that interest them or that they have invested in previously."
That reluctance to stray outside known areas is understandable given the very
nature of venture capital investing. Early start-up companies are a high risk — "a million things can go wrong," Greub says — so investors usually want to stick with products and markets they know and understand. Unless an investor has a medical background, they're not going to understand the market need without some education from entrepreneurs.
Greub's background in health care and Nevinny's investment banking background meant the two women already were armed with that understanding when they created Avestria, which focuses its funding on two "buckets."
The first bucket consists of start-up companies looking to enter the market with new devices and products to allow women to take more control over managing their health. While many of those devices are being driven by women-owned and led companies, male-led companies trying to break into the women's health market also face similar funding challenges at the venture capital level.
The second bucket is filled with women entrepreneurs who are working in any area of health science, not just for women.
By supporting start-ups in those two areas, Avestria is hoping to begin a domino effect among venture capital funders.
"The longer (a start-up) can go, the easier it will get because there is a huge lemming effect in Venture Capital," Grueb said. "If VCs (that other VCs) respect have already invested in a company, it makes it easier for you."
Both Khosrow and Rockweiler agree with Greub that perseverance can slowly move the investment needle in a positive direction for women's health care startups. They also believe that each time they score a venture capital win, their companies are helping pave the way for a future generation of entrepreneurs looking to move into the women's health market.
Rockweiler and Khosrow say they're already seeing more companies looking to bring devices to help women manage their health care to the market. They also are seeing slight shifts in venture capitalist willingness to fund the efforts, which they find encouraging.
"There's definitely an increased focus on women's health and an increase in funding for women's companies," Rockweiler said. "But the fact you have to focus on it is a sign that it's been neglected for too long.
"Having been in this company for five years, it's been really cool to see the change coming. It's slower than we'd like and in smaller numbers than we'd like, but we're seeing a shift.
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