The pandemic has been a time of change, struggle and uncertainty. It forced a lot of people to bet on themselves. For CEO Sarah Lee and the cofounders of medical device company Relavo, it forced the team out of the Johns Hopkins bubble and into making their own way in the Baltimore medtech space.
Lee and her two fellow biomedical engineers and cofounders, CTO Tejasvi Desai and Chief Innovation Officer Anna Bailey, set out to minimize the risk of infection in home dialysis with their invention, the PeritoneX. It’s an in-line connection device that aims to internally disinfect dialysis tubes.
Back in March of 2020 when quarantine started, Relavo, like many other businesses, had to leave their space — in this case, it was the makerspace at Johns Hopkins FastForward U — and adjust. Following the shift to remote work, the three founders and a team of interns had to ship materials to people’s homes and work out of their apartments.
“That transition away from a student startup to a fully separate company happened fairly quickly,” said Lee. “We lost facility access, then we’re graduating and we got some funding to pay some salaries. We all committed to be full time. It kind of threw us into the deep end all at once, but we’ve been able to adjust to that.”
The company got a big boost in August 2020, when it won $500,000 from the Kidney X Innovation accelerator. With the win, the prize organizers cited PeritoneX for its capacity to reduce the risk of bacterial infection in home dialysis care that often causes hospitalization in 60% of cases. The goal of the device is to enable more patients with kidney failure to receive quality home care through Peritoneal dialysis.
All three founders graduated Johns Hopkins in the last three years. Desai received her master’s in engineering this year, Lee got her master’s in 2020 and Bailey got her degree in 2019. As young founders, one of the biggest challenges has been finding funding, especially non-dilutive funding or funding that doesn’t give away equity in the company, and establishing legitimacy as a youthful executive board.
“Given the really long timeline of medtech, it doesn’t always fit into a lot of investors’ thesis timeline, because it takes so long between developing a product to getting revenue,” said Lee.
Relavo was founded in 2018. Lee expects the first early sales of product in 2024, based off the timeline for FDA approval, a process in which federal regulators deteremine if a new technology is safe and effective for use. The FDA outlines a five-step process for medical device companies: the device’s classification, prototype development, applying for FDA clearance, the wait for FDA review, and lastly maintaining FDA compliance for the lifecycle of the device.
Relavo is currently in the prototype development phase, and expects to submit for FDA clearance in the middle of 2023, along with doing clinical trials to prove the device’s impact on infection rates. Lee expects it’ll take a year to get FDA clearance from there, with early sales expected at the end of 2024.
Medical devices can be the definition of a long-term investment, from idea germination to first sale. In Relavo’s case, that’s six years, if there’s no hiccups. Many companies apply for federal grants to fund this work, but this is where the youth in their careers kicks in, and becomes a barrier.
“We are a little bit disadvantaged in our ability to apply to a lot of federal grants,” said Lee. “We weren’t previously [principal investigators] of a lab, we don’t have PHDs with pedigrees of [National Institutes of Health] funding behind us. So we need a little more to show that we can conduct this research thoroughly, we can manage this multimillion dollar grant.”
After taking part in resources for student-founded startups at Johns Hopkins, the team is continuing development work in downtown Baltimore. The company is now based at the Maryland Development Center, a Pratt Street space that has become a hub for medtech startups in the city.
“There really aren’t that many spaces we can have a combined engineering and makerspace, combined with a normal coworking and office space,” said Lee. “We were really fortunate to be able to be in that space.”
And the cofounders are excited about the progress they’ve made over the year, with not only the half-million in nondilutive funding, but acceptance into national programs including the MedTech Innovator Accelerator, and the MassChallenge Boston accelerator. Every accolade validates their company and shows that it’s undeniable they have an innovative device and the skills to build a successful company.
“We really tried to compliment our experience with having mentors and advisors behind us and by having people that can advocate for us and our ability to succeed,” said Lee. “But that only goes so far. Some of that will come with time and experience, and it’s just about getting through this early hump.”
Donte Kirby is a 2020-2022 corps member for Report for America, an initiative of The Groundtruth Project that pairs young journalists with local newsrooms. This position is supported by the Robert W. Deutsch Foundation.