The home dialysis developer’s CEO discusses leadership, leaping before you look and making medtech for the home and hospital.
Eight years after becoming the CEO of Outset Medical (Nasdaq:OM) and two years after going public, Leslie Trigg says the medtech developer is finally at the starting gate for home dialysis.
It hasn’t been easy. The COVID-19 pandemic made it unsafe to train nurses in person, even as hospitals used the Tablo hemodialysis console in hallways and waiting rooms to clean patients’ blood. The pandemic also disrupted Outset’s supply chain. For example, it increased transportation costs for its single-use cartridges made by a contract manufacturer in Southeast Asia.
Last year, Outset had to put new shipments on hold while working through a submission review with the FDA.
And when she first got involved with the company, Trigg — who’s not an engineer or a doctor — didn’t know much about dialysis. But that worked in her favor, she said at our DeviceTalks West show. The October 2022 event in Santa Clara was near Outset’s San Jose, California headquarters.
“Trust your instincts,” she told the hundreds of medtech insiders in attendance for her interview with DeviceTalks Editorial Director Tom Salemi. “Often, it is the greatest advantage to sort of have that beginner’s mindset because you will ask those sort of why and why not questions and be open to the answers that you find on your own.”
It’ll take a different mindset to disrupt the dialysis space, currently controlled by DaVita and Fresenius Medical Care. Outset’s results under Trigg’s leadership show what she’s contributed to the company and the future of dialysis treatment, MedTech Innovator CEO Paul Grand said.
“Dialysis is definitely a pretty insular space. There is a lot of innovation happening, but it’s still largely controlled by only a couple of players,” Grand said. “You need people who are going to come in and deliver some significant improvements in not only the patient outcomes and the economics, but also the experience. You’ve got to have a reason for people to either switch or for people to want to adopt a totally new modality in terms of dialysis at home.”
“It just requires a different kind of thinking,” he continued. “And it sounds like Leslie has done a good job of bringing that to the company.”
With Outset at an apparent inflection point, Trigg discussed leadership lessons she’s learned. She also spoke of the promise of the company’s dialysis technology — and making medtech that works as well at home as it does in the ICU.
Starting at Outset with a beginner’s mindset
When Trigg started working with Outset in 2013, the company only had four employees. She was an executive in residence at Warburg Pincus, the private equity firm that held Outset in its portfolio.
Eighteen months later, Trigg would officially become CEO. One Friday night, she was in her backyard and got a call from Warburg asking if she was interested in taking charge — and giving her until Monday to decide.
“I had 48 hours to think about it. … But I absolutely leapt before I looked,” she said.
Up to that point she hadn’t thought about becoming the CEO, hadn’t done a structured market analysis, or given it deep consideration, she said.
“I guess I was just moved probably more on a primal level emotionally,” she said. “And I knew we could vastly up-level the [dialysis] experience. And I knew we had the capacity as a group of technology people to do that.”
For years after that, her top criteria when hiring people was whether they also were willing to leap before they look — partially out of necessity because the company’s failure was a strong possibility, if not a probability, Trigg said.
“When I’m interviewing somebody, I’m always looking for a blend of a thinker, a doer and a believer,” she said.
Even as CEO, Trigg said she wasn’t the right fit for the job at that early stage, given that her expertise was more in commercialization than development or engineering. But that beginner’s mindset was valuable.
“I was brought into that company way too early, and I didn’t have a lot to add to many meetings other than curiosity and common sense. Now I happen to think that those two things count for a lot,” she said. “I hope that I added some value because I definitely knew what the end part was going to look like, to hopefully help guide some of the decisions around scope in the early stages of Tablo, because I did have a very clear view of what was going to sell.”
Today, Outset Medical is a publicly traded company. It sells its FDA-cleared Tablo Hemodialysis System, used by tens of thousands of dialysis patients. In 2022, Trigg became chair of Outset’s board as well as chair of the Medical Device Manufacturers Association.
Outset Medical has yet to post a profit as it invests in R&D and sales efforts, but its recent revenue gains make it one of the fastest-growing companies in medtech and in the world, ranking 33rd on Deloitte’s 2022 Technology Fast 500 in November.
Outset Medical founder and former CEO Michael Baker remains an investor in the company, though he’s currently focused on his medical informatics companies, Cori2 and QView Health.
“I’m very pleased with the performance of the company and that the vision for the technology and user interface have been maintained and improved since we first invented the system,” he told Medical Design & Outsourcing.
Outset Medical’s Tablo system
Outset Medical’s Tablo console is a compact hemodialysis machine used at home, in clinics, nursing homes, hospitals and even intensive care units. Formerly known as Home Dialysis Plus, the company won its first FDA 510(k) clearance for Tablo in 2014.
At the time, NxStage Medical was the only company with a home hemodialysis device, which won FDA clearance in 2005. But the Outset Medical team thought they had an opportunity, deeming the NxStage System One as too complicated to operate. NxStage Medical’s device had also failed to move many dialysis treatments out of clinics and into the home.
The more Trigg learned about the dialysis business, the more opportunity she saw to make a profound difference in an industry “frozen in time.”
“What I saw really did shock me,” she said. “I saw a very stale care delivery model where everybody was just sort of herded into the assembly line environment of dialysis clinics three times a week. It’s going to be: Show up, sit down and shut up. I saw devices and technology from the 1980s … like I was digging out a time capsule.”
She spent time in clinics and spoke with patients, learning how they might spend hours of travel time because they had little or no choice in which dialysis clinic they would visit for treatment, let alone which chair they would sit in or which tech would stick them with needles.
“It is absolutely the classic definition of learned helplessness. They’ve done it brilliantly. Being in that clinic communicates to you in every way that you are not capable, you’re not smart enough, don’t touch that. Alarms are constantly going off,” she said.
And then there’s the smell. Dialysis clinics have water treatment rooms for purifying water and making the dialysate to pull toxins out of the blood.
“I had a physician tell me, ‘You can smell a dialysis clinic before you can see it.’ … It smells like chemicals. And to be honest, it kind of smells like death. You are surrounded by people who effectively are dying — ESRD stands for end-stage renal disease,” Trigg said.
Home dialysis, on the other hand, lets patients stay in control and keep their confidence and sense of self-worth, dignity and identity, she said.
Home dialysis machines need to be easy for a patient to operate and small enough to fit inside a home. The Tablo console is about three feet tall to make it more approachable and less intimidating than the dialysis clinic machines that loom over patients.
Instead of water treatment rooms and plumbing systems, the Tablo console hooks up to a kitchen or bathroom sink with a hose to draw tap water. The device then filters, purifies and automatically turns the tap water into dialysate according to a nephrologist’s prescription. A touchscreen display, automation system and a single-use cartridge for the arterial and venous bloodlines make setup quick and easy.
Engineers designed the system so a person could operate it even if they had only one hand, said Manish Khemani, Outset’s senior manager of systems and test engineering.
“We have actually 70 sensors in our system, which is unheard of in a medical device,” he said. “We wanted to monitor every single performance that we could, and we could improve the performance of the system over time. We could learn what the system is doing and eventually use machine learning and AI to help improve in real-time.”
One controversial design decision was adding a door, an idea that nurses hated, according to Outset’s market research. The nurses wanted to see inside the machine to spot blood clots or leaks. Why not solve those problems, Trigg thought, and spare patients from watching their blood circulate through the device?
“There’s a lot of good thinking and clarity around who is your consumer, and now we have conflict. And it’s really interesting because as the vision evolved from home, it expanded to hospital,” she said.
Over successive iterations and FDA clearances, the team added features for hospitals and ICUs. There were also new capabilities such as wireless communication for cloud connectivity. Connecting with the cloud enables nurses and Outset techs to check on machines remotely. Plus, the machines can remotely report performance metrics.
“Data is priceless,” said Binny Chatrath, Outset software test director. “It helps us learn and understand to train and most importantly, improve users’ experience. … During COVID, we really had to figure out how to get the training to the virtual cloud so anybody can do training in their home.”
The TabloCart accessory for hospital use adds more maneuverable wheels. There are also optional features such as a storage drawer and water prefiltration.
“We couldn’t suddenly make this so that only nurses could use it,” said Amy Kerdok, Outset’s former director of product management. “We still needed patients to be able to use it. So we solved that problem by splitting the software into two personalities. We had a professional care kind of mode that could do all these advanced treatments, open up alarms, open up the ability for nurses to troubleshoot, but we still kept the patient side or the self-care side so that a patient could utilize it at home.”
Tablo’s patient-focused design showed promise. Patients using the device at home in clinical studies stayed on them throughout the trial versus a 25% dropout rate for the incumbent device. And patients reported fewer symptoms and more energy after their treatments rather than feeling drained.
“Patient after patient after patient talked about actually physically feeling better,” Trigg said.
The FDA cleared Tablo for home use in March 2020. The device was used by a patient at home for the first time post-clearance in July of that year. Outset went public through an IPO that September, with its stock popping 125% by the close of its first day on the Nasdaq exchange.
In 2021, Outset opened a console manufacturing facility in Tijuana, Mexico, through a partnership with outsourced business administration service provider TACNA. Later that year, Outset entered into another Mexican outsourcing agreement, qualifying a second manufacturer for its Tablo cartridges.
Machines on hold
In June 2022, the company froze shipments of its at-home devices while the FDA reviewed a new 510(k) submission with changes made since the first March 2020 at-home clearance. The company’s stock had already been slipping, but the news sent the share price to new lows.
The FDA wanted Outset to re-run its human factors study for the latest changes and later asked for a third run of the study.
“We reran this human factors study twice,” Trigg said. “Never because of the data, by the way — lesson for everybody [in medtech] — it was the protocol, and the depth and the breadth of the protocol. Our data was pristine.”
The study originally submitted by Outset tested about 1,000 tasks, Trigg said, but the third study that the FDA accepted tested more than 7,000 tasks.
The FDA’s reviews likely took longer than they would have before the pandemic due to turnover at the agency. Outset’s 2020 submission for at-home clearance had five FDA reviewers over 10 months, while the 2021 review had at least three reviewers, Trigg said.
Outset held shipments for eight weeks, waiting for FDA to clear the latest submission.
“We are back,” Trigg said. “We have been back since Aug. 1.”
Home dialysis tailwinds
In November, the company increased its revenue guidance for 2022 to a range of $111 million to $113 million, which would be 8-10% growth over 2021. As of mid-December, the company’s stock was trading at pre-shipping-hold prices, but still less than half of the IPO day’s close.
“We’re finally at the starting gate on home,” Trigg said. “… Within the dialysis space and within renal, all of the stars are finally aligning.”
The COVID-19 pandemic has accelerated the development of telehealth technology and got patients to accept and in many cases prefer treatment at home. Meanwhile, the Centers for Medicare & Medicaid Services has implemented new financial incentives for dialysis clinical and nephrologists to support at-home treatment.
“What I’m the most excited about is finally actually delivering on the original mission and the vision,” Trigg said. “I want to see 100,000 patients at home. All-in and including peritoneal dialysis, which is a different modality of home, we’re probably at 70,000 patients [in the] home. How do we get 100,000 on Tablo? I think that’s largely going to occupy our imagination for quite some time.”
It’s a new beginning for Outset and Trigg — and that’s exactly the mindset she wants.