John Erb, Chairman and CEO, CHF Solutions, Inc.

An Effective Approach to Fluid Management with John Erb, Chairman and CEO, CHF Solutions, Inc. transcript powered by Sonix—easily convert your audio to text with Sonix.

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Saul Marquez:
Welcome back to the podcast. Saul Marquez here, and today I have the privilege of hosting Jon Erb. He’s the chief executive officer and chairman of the board at CHF Solutions. Their specialty is fluid management. And Mr. Erb Has 40 years of experience in the medical device industry and executive leadership and financial management. Today, we’re going to cover the unique way that they’re approaching fluid management within the ICU and beyond to help with critically ill patients in a time that they need it the most. And so, such a pleasure to have you here with us. John, thank you for joining me.

John Erb:
It’s great to be with you. Thank you.

Saul Marquez:
So, you know, obviously a tremendous need for ways of taking care of patients in, you know, with multiple conditions. You guys are hyper-focused in fluid management. And so I’m curious, before we dive into the meeting, bones of the interview and what you guys are doing there, going to learn a little bit more about you and what inspires your work in health care.

John Erb:
Oh, I’ve been in health care over 40 years. All medical devices. And it’s very, very rewarding for me personally, because, you know, I’m working on something that’s helping physicians have better tools to help their patients. And it’s really fun. And you can relate the product you manufacture to helping fear people feel better, get better, get out of a hospital sooner. So very rewarding area that I get to work in.

Saul Marquez:
I couldn’t agree with you more. It’s a great opportunity to add value. And today with COVID upon us, I mean, there’s just so much that needs to be done and rethought. Tell us a little bit about how you and CHF Solutions is adding value to the health care ecosystem.

John Erb:
Well, first and foremost, we’re manufacturing a product that’s making a difference in primarily fluid management. So patients that have too much fluid or have fluid on the lungs or after a surgery where they’ve put fluid on them to take that fluid off effectively and quickly gets them out of the ICU sooner, gets them out of the hospital sooner. And that’s the primary focus of our business. It’s that fluid management area.

Saul Marquez:
So, John, incredible work here. And so the opportunity for fluid management is pretty broad. Tell us a little bit more about it and how exactly you guys are are helping in this regard. That’s different than what’s out there.

John Erb:
Sure. Well, let me take it into steps first. Pre COVID 19. What we’re basically focused on is critical care patients, pediatrics and heart failure. In critical care, a patient that goes through a cardiac procedure that’s on a heart lung machine, maybe having a cabbage procedure or a valve repair or any of that placement. They add like four to five liters of fluid to that patient to take up for the extra volume that’s going through the heart-lung machine. At the end of the procedure, all of that extra fluid goes back on the patient. That extra fluid is actually taxing to the patient’s heart and kidneys as it’s been gone through a cardiac procedure as an example where they need to get that fluid off, that they need to get them of fluid off before they can extubate them or take them off the ventilator. They need to get the fluid off before they can take them out of the ICU. So it’s an important process in reversing and guess that fluid management, but it’s reversing the amount of fluid that’s been put on the patient. In pediatrics, it’s very important because a lot of the children that they’re using aqueducts on, their kidneys are not functioning properly. So you can’t give them dialysis because the dialysis is actually cleansing the patient’s blood. Dialysis requires a fair amount of blood, extra correal, over a hundred milliliters of blood, extra Coile, really one to three hundred miles. And a lot of these little kids, they don’t have that much blood. Their blood content is much less. So they’re using off the decks because we all require 40 milliliters, less than an ounce, less than a shot glass of blood is required to run the equipment. So that’s the value in pediatrics. Now, it jumped to COVID 19. How we’re coping there is that when a patient is on a ventilator, that ventilator affects their heart and their kidneys. And that’s one of the reasons where now they’re seeing that this disease is affecting patients kidneys and now they’re looking for dialysis equipment to come in and support the kidneys.

John Erb:
Again, Dialysis, a fairly robust process, roughly at 300 to 500 milliliters of blood per minute from the patient to go to the dialysis machine. It may take off and may filter anywhere from two thousand three hundred milliliters of blood per hour. So it’s fairly aggressive. COVID 19 patients who are on a ventilator are very sick. And again, it’s very taxing to their heart for that much blood to be extra corporeal or outside their body. With the aquadex we actually only are taking 40 ml per minute and we can filter anywhere from 50 to 500 milliliters per hour. So it’s very gentle way and you can dial in very precisely on what you need to take off. So these COVID patients, they’re on the ventilator because their lungs are filling with fluid. So the lungs aren’t operating properly. That’s why they’re on the ventilator. So they’re also getting drugs. They’re getting drugs, intravenously. So they’re adding fluid to the patient with the IV. So what we’re doing is helping, again to balance that fluid management as they’re putting fluid on. We can take fluid off as they’re really sick. We can take it off more, much more gently than a dialysis machine. So a lot of nephrologists that are treating these COVID-19 patients, they’re balancing between a dialysis treatment and our treatment so that you free up the dialysis machine for another patient so we can take off the fluid. The dialysis machine takes off the waste products when the kidneys aren’t functioning properly. So, again, it’s a tool that they’re using to free up some machines and do it more gently. Also, it’s really important around resources that are required. Typically, a dialysis machine requires one to one nursing support. So basically a nurse is involved with that patient directly while they’re being dialysized. With aquadex our device, it’s a four to one nurse ratio. So in other words, one nurse can manage four patients or four different machines at the same time. Again, because it’s a very gentle, very simple way taking off excess fluid. So Dr. DeVita at Lenox Hill has talked about not only does it save money on resources with nursing, she has fewer nurses exposed to these COVID 19 patients by using the aquadex in between dialysis treatments. That was probably a long explanation. I hope that was straightforward enough.

Saul Marquez:
It was. And the explanation was necessary because, you know, we’re really going through some distinctions around what’s available for fluid management. And it seems like dialysis is kind of an all or nothing thing. You guys fall in a less aggressive way. Is there anything else like it out there?

John Erb:
There is not anything else like it. In other words, we’re considered is the therapy is ultrafiltration. And there is no other device approved in the US that’s just focused on ultrafiltration that can be run by an intensive nurse anesthesiologist, a cardiac surgeon, a hospitalist. They’re all approved to use our equipment again, because it’s very simple, straightforward to use. A dialysis machine or a renal replacement therapy machine can also take off extra fluid. But it requires a nephrologist to run that equipment. So it’s very specialized. And again, the renal replacement therapy machine or a dialysis machine is much more complicated. A lot more blood flow outside the body requires that one to one nursing. So that’s really how we’re differentiated. But to answer your question specifically, there is no other device in the U.S. approved for just ultrafiltration like the Aquadex.

Saul Marquez:
Well, fascinating. I mean, this is educational for me as well, John, because as you know, we talked before the podcast, my mind went straight to dialysis. And so now you’re adding these distinctions. How many people know this even exists? I don’t know. I mean, do people know about it?

John Erb:
Well, there’s a fair number that I know about it. Not near as many as I think could benefit their patients.

Saul Marquez:
Yeah,that’s what I’m thinking.

John Erb:
We currently have one hundred and forty hospitals in the US that are utilizing our equipment. There’s a little over two hundred and fifty consoles that are in those hospitals that are being used. And the product itself is a razor and razor blade model. The concept was a piece of capital equipment, not really expensive. It runs about thirty thousand dollars. And then there’s a disposable blood filter and collection bag that is the razor blade that basically is used once per patient. So one time use is per patient and it’s disposable. So that’s basically how it’s used. And again, it can be used in heart failure, in it’s approved in pediatrics, approved in critical care. It’s now branching into burn and into liver disease and liver transplant living out there. You know, we’re a small company with limited resources, limited, direct sales force, limited marketing budget. We kind of finance it as we go and as we grow. I’d love to have a treasure chest and work. We get much quicker and it would be available, much more available than it is today. But we’re getting there. We’re growing.

Saul Marquez:
Wow! I mean, this just seems like such a great niche. And these specific benefits that you highlighted in the COVID 19 era, you know, we’re dealing with, you know, four to one nurse ratio is outstanding. You don’t have to have your nurse sit there with this patient constantly. And then the usability thing seems super interesting to me as well. I mean, rather than just having a nephrologist be the only one that could conduct this. Now you have intensivists and anesthesiologists and cardiac surgeons. And I mean, this is just kind of a no brainer. And then the last one being, well, it’s less aggressive. So you talked about being able to I guess titrate wouldn’t be the word, but I guess manage how aggressive or less aggressive it would be. Can you tell us a little bit more about how that works and what those parameters look like?

John Erb:
Sure. Again, on the console, the physician, basically the physician prescribes thE therapy and the nurse runs tHE therapy. And on the console, you dial in the rate of blood withdrawal, and that’s anywhere from five milliliters per minute to 40 milliliters per minute of blood withdrawal. As as you’re removing blood from the patient, it goes through the filter. The excess fluid is separated from the blood and the blood is returned back to the patient. That blood is outside the patient’s body less than a minute. So that’s one of the reasons it’s very safe, very small amount of blood. And it’s outside the patient for a very short period of time. And it’s returned to the patient so they can dial in the rate of blood withdrawal. And then they also dial in the rate of fluid with removal from the blood. And that can be anywhere from 50 mls to 500 mls per hour. And they can be very specific on how much blood they’re taking out at a time and how much fluid they’re removing from that patient. And it’s a great tool for the physician to be able to be that specific on how they treat the patient, because every patient is different. Every patient has different needs. You can have a 300 pound man that is overweight, fluid retention. You know, 100 pounds can be fluid retention.

John Erb:
You can be pretty aggressive at the rate you withdraw, remove that fluid. You can also have an 80-year-old lady that weighs 110 pounds and ten pounds is fluid retention, but it’s only in her lungs. Then that’s what causes some breathing distress. And so you want to be very gentle with how you take it off. You know, the standard of care today is diuretics. They use drugs to try to take out that excess fluid short of dialysis. Most everybody would be get a diuretic dosage. But diuretics that you can’t dial in. What? How much water? How much fluid you’re going to take off that patient. You might start with a low dose if you don’t get fluid off. Then you tie traded up and you go up until you start getting something or 30 percent of patients are refractory to diuretics and they don’t work. And those folks, if they don’t go to Aquadex, end up going to dialysis. And most patients, once they reach that point where the kidneys aren’t functioning and they have to go to dialysis, stay on dialysis, it’s really a difficult to deal with just doing it with drugs.

Saul Marquez:
Wow. Yeah. And it just it’s not as precise and you don’t know the effects. What an interesting lay of the land. And, John, thanks for going there with me. I know it’s probably a little in the weeds. And folks, you’re like, OK, I don’t know about these measurements and top and bottom, but for those of you that resonates with,your probably, you know, medical caregiver and thinking, wow, this thing is really useful. And a lot of times when you look at technologies like Aquadex, it takes that clinical buy-in in order for a system to understand its value. And then that’s why I wanted to go down that path. And John, I appreciate you helping us understand the parameters that this technology offers caregivers.

John Erb:
Glad to do it. I hope I didn’t go too deep.

Saul Marquez:
No, it was great. It was great. You gave us exactly what we were looking for. So as we think about, you know, improving outcomes, doing things better, you highlighted the four to one ratio. But is there anything else that maybe you could share about how you guys have helped some of the hospitals you’re already in? You said you’re in 140 plus hospitals.

John Erb:
Yeah. No, not all 140 today, our treating COVID 19 patients. I would say today we probably have 10 to 12 hospitals that are really battling this and looking for that additional help and support. And what we’re doing is we’re not asking the questions, not asking for a purchase order, if they need a console, we ship them a console. We actually today have over 20 loaners out to hospitals to help treat these patients. So that’s one way we’re trying to help is that we’re not.

Saul Marquez:
That’s amazing, John.

John Erb:
The business, although, you know, we figure in the long run, you help people. You get paid back. Yeah. That’s really what we’re focused on doing, is getting the console is available to whoever needs it when they need it. We also recognize that hospitals are under financial constraints right now. You know, a lot of their business is in those procedures which are not considered mandatory that they have to do. So they kind of go on the back burner while they dedicate time to these COVID patients. And we’ve extended payment terms for those that have made purchases and I mean normal. Our day sales outstanding have been excellent at like under 30 days. Hospitals are pretty good paying customers. Some of the best returns up to 120 days, which we’ve extended. So we’re doing what we can. You know, part of the issue we have as a supplier, we have a sales force, not a big one. We have 14 sales reps and we have 14 clinical specialists. So that team of twenty-eight is really what we consider our field sales organization today. They’re not allowed to go into the hospitals. I mean, the hospitals are trying to protect our folks by not letting a man, but also they don’t want anybody breaking any potential COVID 19 folks into the hospital. So the support that we’re providing, we’re doing it by Zoom or by phone by any way we can to support them in getting machines up and running and getting people trained. We’ve actually set up a training session in Zoom where our clinical specialists can train nurses on the equipment with Zoom. So those are kind of some of the extra things we’re trying to do to help out as best we can.

Saul Marquez:
Well, I think that’s phenomenal work that you and your team are up to, John. Certainly a company that I would want to do business with, with then the times. You know, when you have tough times, you see the true character of people and companies. So great to hear that you guys are working the way you are. What would you say? I mean, COVID 19. Gosh, I mean, it’s one of them. But what would you say is one of the biggest setbacks you guys have experienced then? What is a key learning that came out of that?

John Erb:
Boy, you know, as a small company, I wouldn’t call it a setback, but a challenge is financing the growth. And that’s the challenge. We’re a microcap company, so, you know, again, a very small company. So raising money is always a challenge. And we’ve been successful in raising money to keep us growing. But we’d love to have more capability, both from a sales standpoint, training standpoint, clinical specialist standpoint, because that’s really where you bring the greatest value to the hospital when you can get in there and actually train the nurses, talk with the physicians, train the nurses, you know, go through the hospital administration for the capital purchase and all of that. But you have to be part of it and they’re to do a good job. I kind of shifted there a little bit. You know, again, I think that probably the greatest challenges continue financing the business.

Saul Marquez:
For sure. Yeah. And look for anybody listening to this. You have a clear understanding of what CHF solutions, You know what John and his team are up to. Does this fit into your portfolio? Is there an opportunity for partnership distribution, potentially or whatever? John’s open to it, right?

John Erb:
Absolutely. Absolutely.

Saul Marquez:
And that’s why we do what we do here. You know, we get the word out on technologies like John’s that people may not know about. Sleeping billion-dollar company potentially, that, you know, it’s the right time. So John loved that you put that out there for folks and listeners, take action. If this is something you’re interested in, John will provide his contact information. Best way to reach out to him and his team here at the end. What are you most excited about today, John?

John Erb:
Geez. Most excited about building this business. This has been a challenge, but that’s what makes it fun. So we’re helping people. We’re helping physicians there. You couldn’t ask for more reward than what we’re getting by just being available and having a therapy that’s meaningful to these folks.

Saul Marquez:
So, yeah, now that is exciting. It is exciting and so, again, I really appreciate you walking us through what you guys are doing and how you’re doing it. Fluid management to do it in a more fine-tuned fashion is is key. Well, you know, outside of business or maybe it’s a business book. What book would you recommend to to the listeners?

John Erb:
Well, I love books. I buy books regularly. I think I’m Barnes Noble’s best customer. A book I just recently got that I’ve just getting into it, which I’m enjoying at this point. It’s called Successful Aging. And the subtitle is A Neuroscientist Explores the Power and Potential of Our Lives. And, you know, I’m getting up there in age. And, you know, it caught my attention when I thought, well, I’m going to get old. I hope I’m successful at it.

Saul Marquez:
So I love it. That’s a great, great recommendation, John. And folks, you know where to go. Outcomes Rocket got health in the search bar. Type in C. H. F solutions. You’ll find our entire interview with John, the transcripts, the links. And so let’s definitely take them up on exploring this fluid management technology. And John, what would you say your closing thought would be? And then after that, share the best place that the listeners could get in touch with you?

John Erb:
Sure. You know, my closing thought is that we’re all going through a huge challenge right now. 90 percent of our employees are working from their homes. I think successfully, you know, thanks to text and cell phones and zoom, you know, we can stay in touch, but it is a challenge. And it’s more of a challenge for a lot of folks that the economic issues that are present today. You know, we’re fortunate that we’ve lost business during those procedures that are not being done right now. But we’re fortunate that we’re also being able to help by getting product for treating the COVID patients. So there’s a balance there. And I just I think that there’s a bright light at the end of the tunnel. I don’t think the end of the tunnel is that far away. I think we all have to continue to look to better times to get back to normal sometime, hopefully not in the too distant future. And we’ll put this behind us. And, you know, life will be good again.

Saul Marquez:
A great message, John. And so for anybody interested in partnering or even hospitals looking to acquire a piece of your technology, what’s the best place for them to reach out?

John Erb:
Well, you’re welcome to reach me directly. In my email is John J o h n dot Erb e r b at c h f hyphen solutions dot com. Or they can reach the company through our Web site, which is w w w dot chf solutions dot com. So either way, anything we can do to help or provide information or whatever. We’ll be glad to.

Saul Marquez:
Love it, John. Listen. Appreciate the education today and also the opportunity to learn more about you and the extraordinary business you guys are building. Thank you so much for the work you’re doing here to help us all through. COVID-19 and beyond.

John Erb:
You’re very welcome and thank you. I appreciate you taking the time to hear about it.

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