By Milt Capps Last updated 9:52 a.m. Feb. 9, 2010
Published Monday, February 8, 2010 11:05 am
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For five years within startup Pathfinder Therapeutics, Chief Operating Officer Jim Stefansic has seldom spoken publicly.
In a recent exchange with VNC, however, Stefansic seemed ebulllient as he shared some thoughts from inside one of the most interesting ventures to reach escape velocity from the Vanderbilt University campus, where the technology was born.
Pathfinder enables surgeons to execute potentially life-saving cancer surgeries on abdominal organs and tissue, using an image-guided navigational system.
Nearly 18 months after $5.2 million in much-needed capital was secured and a heavyweight CEO was recruited, co-founder Stefansic may be breathing a little easier.
Responding to a VNC query about the state of Nashville's health technology sector, he reported what he sees.
Stefansic said that while Health IT in Nashville probably presents some new wrinkles for long-time Nashville operators and investors, "given the focus on research like electronic medical recording (EMR) and the federal Stimulus funding available to those academic and private organizations developing these systems, Nashville is well-positioned to take advantage."
He added, "I suspect that this technical side of healthcare in some ways provides a different sort of revenue stream than Nashville start-up healthcare companies have developed in the past, so there are and will probably continue to be some growing pains – these growing pains include finding the right technical talent and the right investors who clearly understand what the companies are developing and how they will make money. But, Nashville has and will continue to made great strides, given the expertise of so many individuals in town and their willingness to work together."
Stefansic is less sanguine about Nashville's entrepreneurial readiness in the arena in which Pathfinder lives. When it comes to medical devices, he said, "unfortunately Nashville is not very well positioned."
He explained, "There are many more regulatory and development hurdles that need to be cleared to bring a medical device to
market versus a 'healthcare IT' product. I know you have heard this many times, but here in Nashville, we need to create a core, educated med tech workforce, as they have done in Memphis."
He continued, "It certainly helps to have larger public companies like BioMimetic Therapeutics and Cumberland Pharmaceuticals to make this happen, but much more is needed on the start-up end. My hope is that the TNInvestcos partnering with other local and regional VC firms will make this happen in the next 5 years, along with successful med tech start-ups that graduate to the next level (i.e., a sale or IPO) and start all over again. All 15 of us [employees] at Pathfinder are working very hard to be one of those success stories."
In any event, Stefansic said, "The experience for me personally over the last five years has been exhilarating. I cannot believe I get to do what I do every day. I’ll be the first to admit that I have made a lot of mistakes along the way – but, as COO I have always tried to minimize the risks so our great employees can focus on doing their jobs to create the best image-guided systems that help people suffering from abdominal cancer and our investors continue to have confidence in us.
"I like to think of this strategy as learning to trip and fall gracefully – although painful, you don’t break any bones. Managing a venture-backed company is risky, but there are ways to mitigate the risks, have little successes every single day, and always feel that you can overcome the next major hurdle that is presented. Although I spend much of my time focused on creating value and running day-to-day operations, I try and spend at least a few minutes every day thinking about how our products can better help cancer patients. The bottom line is (literally and figuratively) – without effective products, we will not succeed," he added.
Stefansic acknowledged there have been precarious moments: "We have been fortunate to get financial support it seems always at the very last minute when we needed it, which I think has allowed us to not lose any momentum. Nothing is worse for a start-up than hitting a brick wall because of lack of funding."
In line with that, he credited a host of investors and supporters who helped Pathfinder survive the early days "and get us to a
point where a more experienced medical device VC (Clay Thorp at Hatteras Venture Partners) was able to confidently lead our Series A round." Subsequently, he added, CEO Skip Goode (right), who joined the company less than a year ago, has proven to be a "calm, stabilizing force..."
Stefansic handed-out plaudits to Co-founder Bob Galloway, a Vanderbilt professor and pioneer in image-guided surgery; Director of Product Development Brian Lennon; Sid Chambless at Nashville Capital Network; Stuart McWhorter, Matt King and Nazy Jouei at Clayton Associates; Christopher Rand, then at Vanderbilt technology transfer and commercialization and now with TNInvestco-certified Tri-Star Technology Fund.
Stefansic added that Belmont University Professor Jeff Cornwall provided crucial support to Pathfinder. He said Cornwall "helped me weather many a storm and is a true mentor, in that he always 'tells it like it is', while providing emotional and intellectual support to push your entrepreneurial venture forward. I know he would disagree – but, we would not be where we are without him."
Stefansic also expressed appreciation for the Small Business Innovation Research (SBIR) program, which provided Pathfinder a $3.4 million grant, in which Stefansic is principal investigator.
Before co-founding Pathfinder in 2004 and joining the company full-time as COO in 2005, Stefansic worked as a research assistant professor in the Departments of Psychology and Neurosurgery at Vanderbilt University, where his R&D efforts were focused on functional neuroimaging and image-guided neurosurgery.
He earned his doctorate in biomedical engineering in 2000 at Vanderbilt, and his MBA in 2005 from the Jack C. Massey Graduate School of Business at Belmont University. He and his wife reside in Nashville, with their young and growing family. ♦