Varun Kalaiarasan, PhD Researcher at University of Cincinnati

Jesus Moreno: Welcome Back to Global Trials Accelerators, the podcast where we dismantle the barriers to clinical innovation and explore the strategies driving the next generation of life-saving therapies. Millions of people worldwide suffer from obstructive sleep apnea, yet nearly half of all patients abandon traditional continuous positive airway pressure, or CPAP, therapy because of the sheer physical discomfort. The engineering to solve this problem often originates inside world-class university laboratories, but taking disruptive medical device out of the academic institution and into the commercial market is one of the most complex journeys in med tech. Our guest today is driving that exact transition. Varun [00:01:00] Kalaiyarasan is a biomedical engineer PhD researcher at the University of Cincinnati and the venture lead for Vortex PAP, a novel device designer to revolutionize the comfort and compliance for sleep apnea sufferers. Working alongside technical lead Dr. Oren and supported by regional venture partners like CincyTech, Varun combines an interdisciplinary engineering background with experience as a venture capital analyst to push this technology through regulatory clearance and onto the market. Today, we're gonna dive into the reality of university IP spin-outs, grant and how early-stage teams plan [00:02:00] their pathway to first-in-human clinical trials. Varun, welcome to the Global Trials Accelerator show. It's a pleasure to have you with us.

Varun Kalaiarasan: Thank you so much for having me. I really appreciate your time

Jesus Moreno: We're, we're very interested in exploring this, uh, idea of how to a technology from the bench to the market. And well, you hold a mechanical engineer background with a focus in, uh, machine learning and biomedical... Excuse me, b-biomedical signals. That-that's accurate, correct?

Varun Kalaiarasan: Correct. Mm-hmm.

Jesus Moreno: Uh, you worked as a venture capitalist analyst as well, which is a, a very interesting background.

It's, it's, uh, it's uncommon to see that in, in such a young, uh, professional. now you're completing your PhD while leading the commercial side of Vortex PAP or Vortex PAP. [00:03:00] Uh, what drew you to step out of the-- onto the venture side of, uh, the space instead of following a more traditional academic route, um, and, and explore this option of spin-outs rather than staying purely in, in research?

Varun Kalaiarasan: Yeah. So, uh, I think the first thing that I could, uh, do is potentially speak to, um, how I got involved in this non-traditional pathway. So as you already know, um, a lot of scientists and researchers prefer to, you know, stay in academia. Although that trend is reversing now, and we see a lot more PhD students and master's students that are in research go into industry, uh, simply because there are more jobs available in the industry.

And, uh, fighting for a faculty position is, is very difficult and, uh, it's very strenuous, and getting a tenured position at a top-tier university is very competitive. But regardless, um, this all started, um, in my [00:04:00] undergraduate degree. I got involved with some biomedical research with the, uh, cardiovascular system.

Uh, we were investigating diseases in the left ventricle of the heart. And right then and there, even though I was in mechanical engineering, I found out that you can apply engineering principles, whatever they are, to biomedical problems Um, so motivated by that, I, uh, then started pursuing a master's degree, um, in mechanical engineering as well, uh, at the University of Cincinnati, and, uh, this was a very interesting master's degree.

Uh, I was doing a lot of coding and machine learning, which was contrary to my bachelor's degree, um, which is a lot more like physics principles, et cetera. Um, and what's really cool is I got to explore, um, a lot of interactions with companies. So my master's lab was very industry-focused. Uh, we worked with, uh, companies like Applied Materials, if you're familiar with them.

They make semiconductor manufacturing equipment, um, and, and, and various other companies. So working directly with industry, I [00:05:00] kind of figured out that they move a lot faster than we do in academia, um, and they have a lot more resources, and I was very motivated by that. Um, and while I was doing my master's degree, I was learning-- doing a lot of machine learning as well, um, and I was working with, uh, UC Health, University of Cincinnati Health.

Uh, that's a big hospital, teaching hospital, that's connes- connected to our university. And I got involved with applying machine learning to biomedical signals. So all of this is going on in the background. This is my technical expertise. Then here comes along this opportunity, um, which was given to me by Patrick Brown, which is...

He works in the technology transfer office at the university here, um, and he knows that I was very interested in, in going into industry and potentially, uh, working on new technologies. So he said, "Listen, we have, um, a venture capital, a seed stage venture capital firm right here in our building, um, called CincyTech, and they are looking for an investment intern to come in and, and [00:06:00] do due diligence on startup companies, advise investment decisions, and kind of learn, um, about the venture capital scene."

So I was like, "You know what? Whatever." So they were looking for mostly PhD students, but I was, uh, only a master's at the time, so I was like, "Uh, I'm not gonna get this," you know. There are students that are more advanced than me, um, that are applying for this. Anyways, I tried, I applied, I went to the interview, and I think what they were really impressed about is how much industry exposure I had.

Uh, 'cause like we just talked about, a lot of PhD students and even master's students are very, like, academic-focused. But my exposure to all these companies and where I'm working on the cutting edge of, like, applied machine learning technologies appealed to them. So I got the job and, uh, interned there for about eight months, and I got to see all these different technologies in, in, in AI, in, in, uh, biotech, um, and I was really fascinated by it.

Um, you know, it turns out that our technical [00:07:00] expertise can be used to evaluate other people's companies and advise if this investment is going to lead to a high return later on. And I loved every second of it. So that's when I knew that I need to be in this space for my career. Um, so fast-forward, my master's degree is completed.

I, I really wanna do a PhD to get more expertise. Um, and also the credentials that a PhD brings along really opens up a lot of doors. Um, and I love research at the end of the day as well. So all those things kind of combined at the right time and the right moments. And then Dr. Oren came along and liked my profile, and then, uh, he talked about this company he's building and this product and how I could do research on for my PhD and also help with the company.

Um, and it just-- it-- yeah, it's like, uh, it's like a eureka moment. Everything came together perfectly,

Jesus Moreno: It

Varun Kalaiarasan: which is not very common.

Jesus Moreno: yeah

Varun Kalaiarasan: So it's not very common. Uh, I think a little bit of luck, uh, came into play for everything to happen at the correct time. But also, [00:08:00] uh, seeking opportunities that most people wouldn't seek, I think played a big role in, in all of this

Jesus Moreno: Mm-hmm. it's, it's this excellent segue to my next question, uh, the tech transfer office.

Varun Kalaiarasan: Right

Jesus Moreno: property out of a university technology transfer office and into an independent commercial venture is notoriously difficult. Uh, from an operational standpoint, what are the primary hurdles, uh, early stage founders face when negotiating university IP licenses and spinning out onto a med tech company?

Varun Kalaiarasan: So I think it's, it's unique, uh, because when you're looking at a university, you're not just looking at like biomedical engineering or biotech. You have different fields, um, other engineering disciplines, other technologies. What's really difficult about a biotechnology company is the regulatory [00:09:00] process, you know.

Um, so we're a med device, so it's a little bit different than like a pharmaceutical company, which might even have an even more difficult time passing through FDA approval. But we need to invest a lot of money in passing all these hurdles before we can generate revenue. Meanwhile, other companies that already have maybe a software as a product or deep tech, for example, they can generate the revenue stream right away while they scale their technology and their company.

Now, as you know, universities are very risk-averse. Um, you know, their job is to protect their capital, um, and recoup the cost that they help you with in terms of like filing patents and, uh, having lawyers, et cetera. So I would say the biggest challenge is having them understand that maybe we can't provide the funds that they request upfront.

We'll definitely be able to provide that, but maybe later on. Uh, once they pass through [00:10:00] FDA loophole-- I mean, uh, FDA hoops and, uh, get the product ready to, you know, be carried to insurance providers and then start generating some revenue, then we can provide like the cost that you sunk into this, you know, for the patents, additional, um, royalty, et cetera.

We can negotiate that. So I think that's the difficult part. It's having them understand that, you know, right now is not the best time to s-- you know, spend that money 'cause we're, we're, we're running tight, right? All the money goes to R&D. It goes to FDA, uh, clinical trials. Um, we don't have, uh, you know, residual funds to kind of give the initial, uh, you know, cost that the university sunk into it.

So I would say that's the, the biggest challenge. Um, and we're, we're working through that right now, and, uh, conversations have been productive. Um, but, you know, uh, the thing is we're not in the East Coast or Silicon Valley, you know, where investors are more aggressive. It's more conservative [00:11:00] here in the Midwest, um, and definitely more risk-averse.

So I think that's the biggest hurdle. Um, you know, it's, uh, the initial cost that they wanna get back out of it. Um, so

Jesus Moreno: Yeah, we, we call that in the med tech industry, the valley of death because it's,

Varun Kalaiarasan: Yeah.

Jesus Moreno: race against, against the clock and against the capital burn and trying to survive that and yet, um, be able to, you know, raise data, um, clinical data that validates and, and demonstrates that it's efficacy and the safety of the device or the technology and, and doing that under the pressure of, of having a v- uh, limited amount of resources, to allocate to the process. help us, help us understand how do regional venture hubs and [00:12:00] startup accelerators help early stage academic teams bridge that valley of death between the bench validation and institutional venture capital when, when

Varun Kalaiarasan: Sorry, you c- I think, uh, you're breaking up a little bit. Let's... Yeah, I think we're good now. We're good

Jesus Moreno: me... Okay, repose that question. So, Vortex PAP has been supported through the sin-SensiTech ecosystem as it moves from laboratory research towards commercialization. So talking about that concept of, of, um, race against the, the clock and capital burn, how do regional venture hubs and startup accelerators help early-stage academic teams bridge that valley of death between validation and institutional venture capital?

Varun Kalaiarasan: So [00:13:00] actually, I wanna clarify, we're not officially funded by, by CincyTech. Um, so although I, I worked as a, as an analyst there, um, we have not received any official investment from CincyTech or their, you know, financial support. However, uh, when we do get to the point where we're ready to seek venture capital funding, they are a, a resource that we could reach out to.

Um, but at the moment, no, we don't have any, you know, venture capital funding or any dilutive funding. Um, so all the funding that the Vortex Pap has utilized, uh, to date is non-dilutive and has come from the National Institute of Health, the NIH grants. Um, so first it was, uh, you know, pilot grants, et cetera, and now we've received a massive financial commitment, um, through the, uh, SBIR STTR, you know, small business, uh, and then small tech transfer grant from the NIH, the phase one part of it to kind of advance this technology further.

But to speak to your question, I think it's really [00:14:00] important to have seed stage, uh, investors in the region, especially CincyTech. Um, and it's really great is that they're located right next to huge academic institutions like UC, uh, the University of Cincinnati, and also, um, and I'm sure you're familiar, but we have, uh, Cincinnati Children's Hospital here, which is the number one children's hospital in the entire nation, and we spin out lots of technologies from there.

So you're absolutely right. You know, the period where the technology is still in the lab and it's working its way out is very sensitive, um, and there needs to be a little bit of capital infusion that happens to kind of bridge the gap to get it from where it's very vulnerable to the point where it can seek bigger institutional backing from bigger firms, uh, and go through a series A, series B funding.

So I would say CincyTech is, is very vital to this region. Um, and they, they definitely understand that. Um, and there are other, you know, seed stage investors in, in Ohio as well. Um, we're [00:15:00] known for our biotech and, and med device industry, so, um, I think because of that need, there's been a lot of these, um, investors that have popped up and are, and are supporting that.

So maybe other places don't necessarily have that, uh, but we need it here, um, in the Midwest, and they are there to provide that support. So I think it works out well for, for both people, you know.

Jesus Moreno: And that, that raises a, another question. Working closely with Dr. Oren on the VortX PAP, how do you strike the balance between dividing your time and responsibilities between development of the technology and the venture commerciali- commercialization of, of the device, uh, to keep the company moving forward efficiently, but, but also develop the technology?

So s- how do you strike the balance between the research and the venture, [00:16:00] to, to put it succinctly?

Varun Kalaiarasan: Um, you know, it's not easy. Uh, it's been... Dr. Oren first thought of this idea around 10 years ago, and 10 years later, um, we're still pushing through and chugging through, chugging forward. Uh, but it's, it's a slower process than if you were doing this full-time. You know, if, uh, Dr. Oren were to, to run the company full-time, I'm sure it would be a lot faster.

Um, but unfortunately, we're also doing a lot of other important, significant research in our lab that's benefiting a lot of patients and people, and I know he's very passionate about being a faculty, uh, and teaching students and mentoring them. So, um, you know, he, he tries his best to divide his time between doing that and then now also trying to scale the company as well.

Um, but at, at this point, I think we're, we're kind of like hitting the, the turn... like the point of no return. So we're, we're very close to be able to finally push forward, um, and kind of get this out of the lab [00:17:00] completely and into a startup company and seek, uh, seed funding. So at that point, we'd be able to bring in additional personnel.

Um, you know, we're looking for a, a CEO right now that can help us raise funding in the future and other critical personnel and engineers and scientists that can really advance this technology faster than it would be if just Dr. Oren was doing the technical side and I was helping with the, the venture capital pitching and investor pitching.

Uh, for right now, I think it's, it's stable, but for scaling up, it's, it's not the, the, uh, most ideal, um, you know, position right now. So once we are finally, you know, ready to take the next big step, we'll get the personnel that we need to finally accelerate. But like you said, it's been a... it's a very slow, long journey to get here with just the two of us right now, so

Jesus Moreno: And with that, I, I wanna circle back to, to your previous comment around, um, non-diluted funding and [00:18:00] how important it is for an early stage, uh, company and, uh, who's basically supported, whose lifeline is the NIH grant. and that's critical for, for the early med tech validation of, of any technology. But how does securing the NIH grant funding impact a startup ability to progress its technology towards first in human clinical trials?

And, beyond the obvious that it provides the resources to do the research, how should founders sequence grants, uh, or other forms of capital, alongside equity financing, any other, let's call it creative financing? what have you seen as, as you've been, you know, and, and, um, doing a deep dive into the financial aspect of [00:19:00] how these early companies manage to pass that initial barrier of, of, of clinical research?

Varun Kalaiarasan: Yeah. So like you said, uh, beyond the obvious financial assistance, um, I genuinely believe it's, it's life or death, you know? Um, without the NIH's support, this technology would have never made it this far. And now, since we're trying to go to the next step and develop a new prototype that is smaller, can be used by a clinician in the sleep clinic more easily, um, and has all the features that our traditional CPAP machine would have, but with our technology for the airflow.

Without the support that NIH gave us, this technology would have just died. Um, it would have never moved forward. It would have never, um, been at this stage. So I think they provide a lot of critical support and, and not just financial. Um, you know, they're-- we have interactions with them, um, on what's, what's really important, uh, for this technology to be scaled out of the lab.

And I think that mentorship [00:20:00] and that guidance is really useful for us, um, especially 'cause it's our first time doing this. So I think they provide a lot of guidance and support, uh, aside from just the financial side of things. Um, but more importantly, I think a startup is kind of like a baby, right? It's, it's an idea that you build from the ground up and giving up equity, it's-- it can be difficult to do, especially for an early stage company when the technology is so high risk that if you go to any venture capital firm or investor or angel investor, they're going to want a substantial amount of equity in the company to justify this high risk investment.

Without the NIH, we would not be able to de-risk this investment. So right now, the NIH is enabling us to reduce the risk to a point where we can go to a VC firm, and they would be able to offer us the same amount of money, but we can justify them having a smaller equity stake 'cause our evaluation potential just increased.

So [00:21:00] I think all in all, this support serves us better to move forward. We can offer up equity without giving out, um, a huge stake in our company and also have confidence that the technology is at a point where we can actually seek that funding to genuinely advance it forward. Um, so yeah, that's just like a long convoluted answer to your question, but, uh, I hope it provides some insights to how critical their support is and has been for us.

Jesus Moreno: Uh, it in several, several different ways. As a, a landmark, as a filter, but then as a supportive structure that helps, as you said, de-risk the, the investment for, for other sources of, of financial, re- yeah, resource. Um, that's, that's wonderful. And, and when, when you're at that stage, when you're moving out of the [00:22:00] bench from the lab into the clinical setting, here is a shameless plug Global Trials Accelerators and, uh, BioAccess CRO, our core is helping med tech startups execute first in-human clinical trials effectively and efficiently, particularly in emerging clinical hubs like Latin America. Uh, in, in that process of moving from the bench to the clinical setting, early, uh, should companies at, uh, planning the first in-human clinical trial avoid multi-year regulatory delays to have access to high quality clinical data? Um, and how, how do you look at that decision?

What are the things [00:23:00] you're looking for? What are the red flags in that selection process? Can you help us understand from that early stage company perspective, what, what is it that you're, uh, trying to find?

Varun Kalaiarasan: I can be very, uh, transparent and honest with you here. So when we first f- you know, developed our working prototype that we took into the sleep clinic and it showed a significant reduction in the apnea-hypopnea index, and it was able to manage obstructive sleep apnea in patients, that thing was, was huge.

It was a huge cart with an air compressor and, and multiple laptops and everything. Uh, it wasn't pretty. Um, and someone had to be there right next to it all night, adjusting the settings, et cetera. So that was our very first prototype. So looking at that, it was nowhere near ready. So the NIH gave us, um, I believe [00:24:00] it was an R grant, um, to take that concept and the technology and condense it into what would look like a, a smaller CPAP-like device/box.

Now, we thought that that would be enough to go ahead and perform, you know, pilot clinical trials for FDA approval. But as it turns out, it's much harder than that. So yes, we condensed the device to like a small rectangular box. However, the biggest issue with it is user friendliness. Um, you know, it tends to sometimes break down, uh, randomly, and it's the electronic parts.

Um, you know, you have your graphical user interface that the clinicians interact with that's not, uh, refined enough for them to be able to do all the adjustments they need in the sleep clinic by themselves. So the point that I'm making is we thought that would be it, but upon further usage, we saw that, okay, look, it's, it's good enough for experimenting with in the lab and improving our design and, and [00:25:00] doing testing, um, you know, on some preliminary patients for the comfort of the device.

It's not reliable, and it's not user-friendly enough for them to do clinical trials for N- you know, FDA approval. So now that we have the SBIR Phase I and STTR Phase I, what we're trying to do is take that condensed box, make it even smaller, and make it user-friendly to the point where you can take this to the sleep lab.

The technicians can use it just like they would a normal CPAP device. And then when we go to our, you know, large-scale multicenter clinical trial where the patients can then take home the device and stick with it for a month and see if they're compliant with it, they can use it freely without worry it's gonna break down or they're confused about something.

So I would say a company that's doing similar things that we're doing in the med tech industry If you give your device to someone to take home or whatever and do whatever, and it's, it's user-friendly, it's [00:26:00] easy to understand, it does not break down consistently, it's reliable, then that's when you're ready to move on to the next big step.

And that's from my experience 'cause I work with it on a daily basis and, uh, it's not easy sometimes 'cause sometimes things don't work and you're just sitting there like, "Everything's plugged in, everything's okay, what's going on?" Uh, so all these lessons have enabled us to further, uh, progress the next iteration of this design.

Um, so really our failure has driven us to improve our design. But we are hopeful that this next big iteration of the device is what's going to be ready to go to, uh, clinical trials.

Jesus Moreno: Mm-hmm. And a follow-up to that, um, talking about the importance of, of having the technology at a such-- at a maturity st-- point or a maturity level that allows for that, uh, clinical stage, clinical environment trial. [00:27:00] Uh, now putting on your venture analyst hat, how, how do private investors evaluate a startup clinical's strategy when deciding whether to back a university spin out? Is that something they look at? Do they have a preference that-- for, for the clinical trial to be out US, in US? Uh, what are the insights that you can share with us?

Varun Kalaiarasan: No, definitely. Um, so if I were looking at the Vortex PAP, uh, as an investor, uh, the first thing I would look at is the market potential. Um, I think you mentioned this earlier, um, you know, around the world, over one billion people suffer from obstructive sleep apnea. And in the US alone, um, our research has shown that it, it represents a hundred and fifty billion dollar economic burden for hospitals to treat this.

And only twenty-five to fifty percent of people are even compliant with their CPAP devices. So when we pitch [00:28:00] this to investors, they take a look at the market, and they see a huge opportunity already. Now, most companies don't have that privilege. Um, they're operating within a small niche. So we're really targeting a wide, you know, range of the population and a large amount of it.

Um, but there have been some concerns about the, the GLP-1 and how weight loss might be improving sleep apnea for some people without the need for, you know, CPAP devices. But, you know, we can't predict how much that's going to impact the market in the future. But for right now, we're not too concerned about that.

So I see a huge market potential in the US and worldwide. And as you know, the FDA in the US has some of the most rigorous standards for medical devices and, and biotechnology companies. So I would recommend that the company first pursues regulatory approval in the US and then go to Europe and then Asia, uh, South America, et cetera.

So since we're doing that, I think we're in a very, [00:29:00] very good spot right now. So, you know, it checks all the boxes from the market standpoint and from the, uh, regulatory approach. But I think the biggest thing that venture analysts and cap- venture capital investors look for is the team. You know, 'cause you can have the best technology in the world, you can have the best resources, but if you don't have the right people to push this technology, accelerate it, and commercialize it, the startup is doomed to fail.

So right now, what we're doing is trying to put together the best optimal team that has the, the experience, you know, it's driven, it's energetic and motivated to bring this technology to patients who desperately need it. So that's the one thing that we're lacking right now, full transparency, but we are working on that.

So once we have all these three things settled, then I think we're looking very favorably, uh, to investors. Or, uh, full transparency, we're working on the third part. The first two, the market and the regulatory, uh, process that [00:30:00] we have put together, we're good. But, um, this third step is what we're working on.

So once we get that from a investor perspective, if I was looking at the company, I'd be very happy to, to proceed. So I hope that makes, uh, some sense.

Jesus Moreno: It, it makes sense. Uh, but specifically about the clinical strategy, like where it's executed, how it's designed, what are the endpoints are, how many endpoints there, there are. Is that at all a factor that, that venture capitalists take into account when deciding whether to back technology or, um, let the opportunity reach someone else?

Varun Kalaiarasan: No, definitely. I mean, I think it's about the claims that the company is making. So for the VortexPAP, our, you know, claim to fame is that we have this new kind of airflow that does not need the vacuum-sealed mask that CPAP devices [00:31:00] need, right? So this new vortical pulsating airflow can be delivered to the patients using, uh, a nasal cannula.

And by doing so, you can wear a mask that are less, you know, obstructive, intrusive, and more comfortable. So naturally, that claim means that patients are gonna be more compliant with this device when compared to CPAP devices. So that's, that's, that's one claim. And the second claim is our device is going to be as effective as a CPAP device in managing sleep apnea.

So those are two big claims. A- and the way that we're trying to address those claims with the FDA i- is twofold. Uh, with the first, you know, clinical trial, we're going to prove that our newest iteration of the device can manage sleep apnea at the same level as a CPAP device. The second larger clinical trial would then have patients take the box home, and, you know, it'll be randomized, so some will have CPAP, some will [00:32:00] have, uh, the VortexPAP, and we'll evaluate compliance to both devices long term.

And if it shows that our device is more compliant, then that's a significant claim for the FDA and for the company. So since we're making those claims, an investor will take a look at how we are proceeding with our clinical trial. And we've already, you know, been through this process with the investors.

That's why we have a clear plan established. But depending on the claim that your company is making, you really have to, uh, tailor your clinical trial plan according to that to support that. If it does do that, the investor is gonna be happy. If it doesn't, the investor will raise some, you know, yellow flags.

Jesus Moreno: Mm-hmm. And how does that map onto the cl-- regulatory classification of the device? And, and how do you go about deciding that, whether it's a 10, excuse me, a 510or a De Novo? Uh, [00:33:00] how, how do you, you know, at this stage in the process where we're still a future, it's a- It's in the future. The, the clinical trials have not begun.

You're, you're still at the planning stage of the process. How does that, um, regulatory classification influence that decision?

Varun Kalaiarasan: Right. So, you know, since I only have experience with our device, which is an FDA Class II, you know, moderate risk, uh, which is what most CPAP devices, um, are classified as, um, I can say that right now that's why we consider our investment high risk because we've only planned clinical trials, right? So to an investor, it's still a high risk.

We don't know what's going to happen. Now, I can tell you that the NIH grant is supposed to get us to the pilot first stage of clinical trials, [00:34:00] where we take our initial d- design that we are working on right now to make it smaller and more user-friendly. We're going to then prove that that new iteration is as effective as CPAP at managing obstructive sleep apnea in the sleep clinic.

So we're going to prove efficacy and also safety that it matches up to CPAP standards. Now, once we do that, um, then that de-risks the technology, you know. So for a Class II device, the safety and efficacy is, you know, substantially reduces the, the risk profile for investors, right? And then when you can back another claim that it's, you know, people are more compliant with it long term, then that further de-risks it.

So for a Class II device like us, you know, each stage further de-risks the technology for the investor and makes it more appealing. But I agree with you, like right now, since we're just in the planning stages, even if we present this to an investor, they're going to be like, "Okay, well, you haven't done [00:35:00] anything yet.

Uh, you've shown that preliminary results look positive and they're promising, but, you know, what do we do now?" So like I said, they're gonna want a substantial amount of equity in the company to, to mitigate that risk. Um, so I hope that kind of, you know, answers your question regarding, uh, the regulatory profile.

But

Jesus Moreno: been... From the regulatory classification, has the team decided what they're gonna pursue, if it's a 10K or a de novo or some other

Varun Kalaiarasan: Yes. Yes. Uh, so, um, our team reached out to the FDA, I think like a couple of years ago at this point, maybe a year ago, um, through a Q submission to kind of interact with them and answer some questions that we had. And, you know, initially we were thinking that this is good enough for a 510. You know, so that our device is, is sufficiently similar to a predicate device, which is a CPAP device.

So we can kind of bypass a lot, a lot of the, the, uh, the hoops that we have to jump through. [00:36:00] Now, unfortunately, the FDA, um, you know, gave us a, a kind of like a summary stating that probably not gonna be a 510'cause your device is, is so novel and the claims that you're making are quite substantial enough that warrants, um, some rigorous testing.

So based off of that, it looks like we will have to pursue the de novo pathway to obtain regulatory approval with the FDA

Jesus Moreno: Okay. That's, that's both a challenge and an opportunity to-- That, that

Varun Kalaiarasan: Right. Right

Jesus Moreno: the, the way you enter the market, and, and that's, that's a good segue to my next question. Looking across the next twelve to twenty-four months as Vordix, uh, PAP moves closer to market entry, uh, what are the primary commercial and clinical milestones your, your team must hit to transition from a [00:37:00] emerging startup into a market-ready med tech company?

Varun Kalaiarasan: Yes. So, uh, we have some very clear milestones that we have outlined for the next one to two years. Uh, over the next one year, our primary goal is to create a new iterate- iterative prototype that is smaller, uh, easier to, you know, move around, um, more user-friendly, and more reliable. So that's our biggest priority.

Now, once we do that, the second biggest priority over the next couple of years is to then take it to the sleep clinic and test on patients and ensure that this new design is safe and effective when compared to CPAP devices. So that is what we're looking at right now. Beyond that, um, I think it's a little bit uncertain.

Uh, we will need to seek venture capital backing to pursue an, uh, you know, a, a massive multi-center randomized clinical trial at, uh, different institutions to test, uh, whether our [00:38:00] device, you know, increases compliance. So that's long-term. For the next couple of years, it's just those two milestones. And I would say a third milestone would be to secure, uh, a competent CEO, um, that has experience raising, uh, massive amounts of funding for med tech or biotech companies, uh, and someone who, who understands the changing, uh, market right now.

You know, it's... With machine learning and artificial intelligence, um, from what I've seen observationally, a lot of the investment is going towards that sector. So I don't know how investors will perceive, uh, biotech or med tech investments right now, where it could be more risky and, uh, there may be potential bigger returns in a different sector.

So someone who understands that changing dynamic and is willing to guide the company through that is critical. So those are our three big priorities for the next one or two months. Um, so the prototype, clinical trial preparation, uh, the first phase of it, uh, [00:39:00] the initial pilot clinical trials, and securing team members that are willing to advance our mission and our company.

Um, beyond that, we will see where the road takes us.

Jesus Moreno: Yes,

Varun Kalaiarasan: Yeah

Jesus Moreno: as you, as you've walked through this process, you've accumulated a wealth of experience and, and insight. Uh, what is the single most valuable lesson you would share with other PhD researchers looking to commercialize their innovations?

Varun Kalaiarasan: I would say don't be afraid to pursue whatever opportunity and idea that you have. Um, I think as a PhD student, um, you're often plagued with insecurity, and you have imposter syndrome. You think you're, uh, pretending to be someone intelligent, but you're not, and that's, that's a lot of PhD students have that issue.

Um, and because of that fear that we're not as good as we think we are, we may [00:40:00] be, um, hesitant to pursue ideas and opportunities. So my biggest lesson that I would give to other students that are in a similar position, whatever idea you have, even if it's-- you think it's stupid, um, whatever opportunity that you want to pursue, even if you think you're not even remotely qualified to get there, turns out you're probably smarter than you think, and your ideas are better than you think.

So you need to just try 'cause if you do not try, you will never know what could have been. So that's my biggest life lesson that I wanna share with other students, other researchers, and even faculty members who might be afraid to step out into the industry or-- and try to commercialize their technology or idea.

Just give it a shot. You have no idea how far you could potentially go

Jesus Moreno: Varun, you so much. I think the take a-- takeaway for today's conversation is clear. Bridging the gap between university [00:41:00] research and commercial reality requires more than great science. It demands a discipline, strategy, smart grant sequencing, and early clinical trial planning. Thank you for sharing your experience, uh, your insights, and the strategy your team is following with us today

Varun Kalaiarasan: Absolutely. Thank you so much for your time and for reaching out to our team with this opportunity. Um, I think it's a great platform to advocate for our position, our unique position, um, in the startup arena. And, uh, your questions are very, very, uh, focused and insightful and detailed, so I cannot thank you enough for your time

Jesus Moreno: I appreciate that, sir. And to our audience, thank you for tuning into Global Trials Accelerators. If this episode help you think or rethink your university spin-out strategy or clinical trial roadmap, share it with a colleague, [00:42:00] a founder, or a research lead that needs to hear it. Subscribe wherever you listen to podcasts, and we'll see you next time. then, keep accelerating