Outcomes Rocket Podcast Manny Villafaña: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.
Saul Marquez:
Hey everybody! Saul Marquez with the Outcomes Rocket, welcome back to the podcast. It is such a great day today because we’ve got the amazing Manny Villafaña. Hey, did I say that right, by the way?
Manny Villafaña:
Absolutely perfect.
Saul Marquez:
Villafaña.
Manny Villafaña:
…. You speak Spanish, you have to say it like that.
Saul Marquez:
That’s right, that’s right. Manny Villafaña, he has a substantial track record of founding companies that develop and deliver successful medical products to the healthcare market. Medical 21 is Manny’s eighth medical device company, and he has led his previous seven companies to IPO financing. Familiar names to this well-versed B2B healthcare audience, he’s the founder of cardiac pacemaker company Guidant, he co-invented the first long-life lithium-powered pacemakers and defibrillators there, which revolutionized the pacemaker industry. The tech he developed in ’72 is still in use virtually in every defibrillator pacemaker in the world. CPI was purchased by Boston Scientific for $27 billion. Then he went off to found St. Jude Medical, he was the co-developer of the St. Jude Heart Valve, an innovative mechanical bi-leaflet heart valve that dramatically reduced the frequency of blood clots. This is most commonly used in prostheses around the world in approximately 5 million patients. St. Jude was purchased by Abbott for $30 billion dollars, and then Manny went on to develop other companies, including ATS Medical, which introduced new generation ATS open-pivot heart valves, ATS was purchased by Medtronic for $400 million. You know, a lot of people may not know this about Manny, but he was actually born in the South Bronx to Puerto Rican immigrants, Manny quickly showed aptitude as a salesman and in his early twenties went to work for Picker International, a med device exporter. He was selling medical products on behalf of companies like Medtronic, which precipitated his location to Minneapolis. And since, obviously, he’s done just incredible, incredible work. So, Manny, I want to welcome you to the podcast today. Thank you so much for making time to be with us.
Manny Villafaña:
Well, it’s my pleasure to be here, Saul, and I hope that I can catch up with you in person in San Diego so I can thank you, and thank you very much for the fine introduction that you just made. I hope I can answer any questions that you want, that you have, concerning my work in the healthcare industry, particularly trying to identify the work that we’re presently doing at Medical 21. It is an effort that I have worked on for many, many years, something like 30 some … years. We started Medical 21 six years ago to pursue the development of an artificial artery for people who need bypass surgery. And telling people that if you live in the United States and you’ve got 100 people in a room, about 45 to 50 of those people will eventually be candidates for the work that we’re doing.
Saul Marquez:
It’s incredible work, Manny, and just, you know, a lot of companies have tried and failed, but it sounds like you’ve come up, you and the team have come up with an incredible solution. Before we dive into the specifics there, I’d love to better understand what makes you tick, what is it that inspired your work in healthcare, Manny?
Manny Villafaña:
Well, again, every one of the members of my family, that’s three brothers, a mother, and a father, all died of heart disease, all died of a heart attack. Even my surrogate father, which was a gentleman working in the boys club with that I grew up in, also ended up with one of my products and one of my pacemakers. My mother had one of our pacemakers implanted in her. So it’s been a family event to try to keep everybody alive. And once you realize that your family has died of heart disease, you know, I think it might be a good idea to study heart disease, and that’s what I have done, and that’s been my work for the last 45, 50 years.
Saul Marquez:
Just incredible, just incredible. And so you shared your personal story with me, truly resonates. I mean, you grew up in the South Bronx, Puerto Rican immigrants as parents, but you somehow managed to get out of that. You know, what message would you have on that one for the folks listening?
Manny Villafaña:
Well, it’s not uncommon when I’m talking in front of a group, a large group, and stuff like that, and I say, hey, look, if you got any extra money in your pocket, you want to help people, give it to a Boys and Girls Club, a local Boys and Girls Club, okay? Because that’s where I grew up. I grew up in a … Boys club in New York, and the simple thing that they do is take the kid off the street. Once you get the kid off the street, he’s in a building filled with people, staff members, that will love to take care of that child, boy or girl, ok? Teach, train, sports, activities, stuff, keeps them away from the drugs and the riffraff and all the problems that we have in the streets in any part of our country. I’d say that that is the single biggest, easiest way to help kids, and being involved with the Boys and Girls Club, I was involved in a lot of the clubs here in the Twin Cities of Minneapolis, Saint Paul. I’ve been inducted in the Hall of Fame of the Boys Club of America, Hall of Fame. And we all know Jennifer Lopez, right?
Saul Marquez:
Oh, yeah.
Manny Villafaña:
If someone doesn’t know Jennifer Lopez out there, they’ve been living on the other side of the moon. And Jennifer Lopez also happened to be a Puerto Rican girl, grew up in the same Boys and Girls Club that I grew up.
Saul Marquez:
Oh, that’s pretty cool.
Manny Villafaña:
And that gives you an idea. And the club helped her get started in her career. And indirectly, the boys club kept me going when I needed money. And they give me jobs, odd jobs, and stuff like that. Take the kid off the street and you’ll have a better chance in straightening out or keeping that kid going straight.
Saul Marquez:
That’s amazing, and you know, Manny, actually, I went to the boys club too. I grew up in just that side of Chicago, in Cicero. And, man, I’ll tell you, you brought me back to that. Like, I definitely enjoyed it, the arts and crafts, the sports, the just getting off the street, I mean, just incredible. Appreciate that reminder.
Manny Villafaña:
Exactly, I still remember making my first battery in the boys club and we were working with the liquid sulfuric acid. And I didn’t wear the apron that they were recommending, Manny put on an apron, I don’t need the apron. Of course, so when my hands got wet, I washed, dried them on my pants. Well, by the time I was going home, I had to get on a subway to go home.
Saul Marquez:
Yeah.
Manny Villafaña:
My pants were starting to fall off because they were, they were dissolving right in front of me.
Saul Marquez:
Oh, my God.
Manny Villafaña:
The sulfuric acid was starting to eat away at the pants. Fun, fun thing.
Saul Marquez:
That’s great. Well, well, Manny, you know, let’s get back to Medical 21. You know, talk to us about how the company is adding value to the healthcare ecosystem.
Manny Villafaña:
Well, let’s first start by saying that I’m sure your listeners have had a father, a mother, a grandparent, a brother, an uncle, somebody, a relative that’s had to have bypass surgery. That means that the patient has blockages on his or her heart. And the doctor is going to say, Charlie, look, you have too many blockages on your heart, that’s why you’re having chest pains, so we’re going to do a bypass. And typically in a bypass, they will take vessels out of your legs and out of your arms, and off of your breast, all to put them on the heart. It’s a lot of surgery and this particular procedure is done anywhere from 800,000 to a million times per year on a worldwide basis. A million patients per year receive that procedure. Now, when they put the vessels on the heart, it’s, typically, they will see somewhere between three or four vessels, sometimes you see five vessels put on the heart. But we say typically between the average is between three and four grafts up to put on the heart. Now, this is severe surgery, pain, infection, disfigurement, you know. Here’s a young lady with nice legs, well forget about it, she’s going to have scars on her legs, okay?. Alright, why do we need to do that? So over the years, people have tried to come up with an artificial artery to replace that, no one’s been able to do it. We put in new technology, the name of the company is Medical 21, because we’re using 21st-century technology, and later on we talk about financing, we’re using 21st-century type of financing. So we’re bringing everything new to this effort. After six years, we now have developed an artificial graft that would eliminate all of this necessary surgery. That is the second surgery, the first surgery is open you up, and that’s going to work on that. And by doing that, we can save anywhere from $10,000 to $20,000 dollars per procedure, we can eliminate the scarring, the infections, the pain, and we can have a much happier patient, alright? By doing that, we have created a potential of saving for our country, $4 to $8 billion dollars, and that’s only in the USA, $4 to $8 billion dollars in savings to the healthcare system, and at the same time, a much happier patient.
Saul Marquez:
Is that annual?
Manny Villafaña:
That’s annual.
Saul Marquez:
That’s the based off annual procedures? Wow.
Manny Villafaña:
Wow.
Saul Marquez:
That’s insane.
Manny Villafaña:
We know, and we know that we can now reach a lot of people who can’t have bypass surgery. If you’re a diabetic and you know, and you have this thing, they’re going to have a problem doing a surgery on you because they can’t take the vessels in your legs, won’t work. Obviously, if you’ve been a veteran and you have some amputees, stuff like that, you’re missing certain vessels, okay? So this will even grow, that number will even grow.
Saul Marquez:
Incredible, incredible. So, Manny, I’ve got to ask, what is it that others have tried that just hasn’t been able to work? Like, why hasn’t this artificial method worked before?
Manny Villafaña:
Okay, you know, in 1969, we put a man on the moon. And 50 years later, we were celebrating that, the 50th anniversary of Neil Armstrong going on the moon, right? Somebody came up to me and said, man, how risky is this? I said, well, in the same 50 years that we’re celebrating here, we have been trying, all the big companies, have been trying to develop an artificial artery, no one’s been able to do it. The hospitals, the big hospitals of our country, healthcare centers of our country have tried, small hospitals, big hospitals. At any one time there’s probably 10 or 15 institutions trying to do an artificial artery. What we have done is come along and go a different direction, 180-degree turn, go the opposite way. And our solution, our method of designing a graft, which is only like it looks like a straw that you put in your milkshake, you know, a straw in your drink, it looks just like that. And we have developed it in such a way that it allows for the blood passage and at the same time, while we put this graft into the body, the cells, a normal human cells, regrow, reproduce a brand new vessel so that our vessel, our artificial vessel, for the most part, will disappear. And the patient is now left with a graft that has been made with his or her own cells to replace that.
Saul Marquez:
Amazing.
Manny Villafaña:
We’ve been able to do that. We’re doing it.
Saul Marquez:
Wow. So, you know, this is incredible. So it basically dissolves and it replaces, it’s replaced with the cells of the patient forming his or her own artery, that’s just incredible.
Manny Villafaña:
Exactly right, you got it right! You learn fast.
Saul Marquez:
Hey, man! I try every now and then I figure things out. But this is, I mean, you do a really nice job of explaining it, Manny. So you guys have been working on this for the last six years. We learn more from setbacks than often our successes. You’ve had a lot of successes, but I’m sure you’ve had even more setbacks, Manny. When you think about the new product that you’re developing here, what’s one of the biggest setbacks you’ve run into, and what have you learned out of that?
Manny Villafaña:
Well, again, I always, it’s an old saying that is so true, when you’re an entrepreneur, it’s better to have tried and failed than not to have tried at all, because, during your failures, you do have a learning process. Sure, we have failed before. I remember that we were trying to make a different way of doing a heart valve, and people asked me to do a heart valve, and so I started working and we came up with a whole bunch of different designs, and they were failing, they were failing. And even when we ended up with the final design of the St. Jude Valve, this was iteration number 26 and others, we had tried 25 other vessels or other designs, I should say, and they were failing. I mean, it was painful to the point that one of my machinists in the machine shop, I walked in and he was crying. I said, what’s wrong, Charlie? He said, Manny, you realize this is a 26th iteration, which means I’ve set this machine 26 different times, okay?
Saul Marquez:
Yeah.
Manny Villafaña:
And so you have failures when you’re doing these things. Then we finally got it right and everything, but even then they were breaking. The St. Jude Valve would break and our yields were getting so low. And then finally some guy, believe it or not, this is the hardest part, calls me up at three in the morning. One of my engineers calls me up at three in the morning and it’s snowing outside and everything. My phone rings, yeah, hello? And he said Manny, Manny, Manny, I got, I got it, I know how to solve this problem, I know how to solve this problem. I’ll see you at the office at 5:00 in the morning. I said no, you’re lucky if you see me at 9:00, there’s a snowstorm outside. But sure enough, he did, he did, he came up with an idea how to do it. And from then, really, the St. Jude Valve went on and became, as we said the most commonly used prostheses. But we also had a failure in one of our companies in which we were doing our work very well, but we were trying to do it during the last recession, and all of a sudden, as we were going along and we were doing our, an IPO for $50 million dollars and we had all done, all approved by the company, by all the lawyers, you have 10,000 lawyers and the SEC, everybody approved it. And we were going to go effective in a few days, the crash of the Great Recession back in ’10, ’11 crash, and we could not do that offering. And as a result, we finally had to close the company because we didn’t have the money. And that was a very, very difficult time for us. We had to close it down and we had the company make it known, the company didn’t make it. The technology was going along fine and we were pushing the edge of technology, but we had to close it, so it happens.
Saul Marquez:
Wow, that’s amazing. So I have to ask you, Manny, like, what keeps you in the game? Like, you know, like you’ve had these downs, and let’s be honest like people know us for the ups, not necessarily the downs, right? So what’s kept you in the game? What’s the, what would you attribute the one or maybe two things that keep you going?
Manny Villafaña:
Look, I tell everybody and Andrew is here to mark my word. I tell everybody there is nobody in the world that has a better life than me, okay? Over the years I have had many, many downs and the benefit of the downs is that when there’s an up, you really appreciate the ups. You know, someone who was maybe born with a lot of money and has it easy and all that sort of stuff, they don’t ever really appreciates it. Not that I’m against having wealth or anything like that, don’t get me wrong on that.
Saul Marquez:
Of course.
Manny Villafaña:
But it’s fun to make your wealth, it’s fun to make your contribution to medicine, it’s fun to see a fellow citizen or a family member walking around, this is my son’s pacemaker. My mother would go like that and I would say, mom, don’t hit it, okay? And say, this is my son’s pacemaker, all those kinds of things. I mean, I’ve had a life that’s just been fantastic. And I remember clearly one day I was talking to a young MBA student. He was no longer a student, a young MBA graduate from Harvard, and we were talking about some financial things, and he said, Manny, how come you’re not playing golf? Why do you keep doing this? So I told him a story about when I was in Spain and I had never seen a heart transplant, never seen one. And I was talking to the doctors and I said, yeah, I’ve never seen one, can I see one? And they said, well, okay, are you going to be here this weekend? And I said, yeah, I’m leaving Spain on Monday, so I’m going to be here Friday and Saturday, Sunday, sure. And they said, well, we’ll do one over the weekend. And I said, well, how do you know that you’re going to do one? How do you know you’re going to have a patient? How do you know you’re going to have a heart? Blah, blah, blah. So he walked me over to the window at this office, opened up this big window, and there was a plaza filled with motorcycles, you know, little, what do they call it, little pods of scooters, that’s the word.
Saul Marquez:
Yeah.
Manny Villafaña:
And no one was wearing helmets. A very few were wearing helmets. And he said on the weekends, it’s even worse, so don’t worry, we’ll be doing one. And sure enough, calls me up, middle of the night, said, Villafaña, come on down. So I came down to the hospital, very dark, walked in, and there I was, walked in and I stood right at the head of the patient. While the patient is down, I can look over the curtain and see the heart. And there was the chest that was open and the heart, the old heart was beating. Then the guy comes in with, believe it or not, just a plain igloo, a plain little Coca-Cola box, you know, a little icebox, to carry out your picnic, okay, okay, he opens it up and he pulls out a bag. A sandwich bag, you know those Ziploc bags?
Saul Marquez:
Oh, yeah.
Manny Villafaña:
For sandwiches, same thing, right? Little Ziploc baggy. And he pulls out a heart and he puts it on the table, a little towel-draped table right next to it. And there is a heart and there’s the new heart. So, okay, ready to go. And so as they cut the heart out and they put it on the same table, it’s still beating, okay? And then they took the new heart and they’re putting it in. And I’m watching them install, for lack of a better word, put in, so in the new heart, the old heart was still pumping on the table, going a little bit slower. And then finally when everything was done and they opened up the blood to go into the new heart, the new heart started to beat. And at that very moment, the old heart that was on the table stopped. It was this, life went from the old heart over to the new heart.
Saul Marquez:
That’s amazing.
Manny Villafaña:
And I turned around to the young man that was the MBA guy from Harvard and I said, and when golfing is as interesting as that, maybe I’ll take up golf. So again, there’s nothing, I mean, there is nothing out there that I’m, that compares to what I am doing.
Saul Marquez:
That’s awesome.
Manny Villafaña:
You’re talking about helping millions, not thousands, millions of patients a year from the terrible ill, tearing that they have to do, in a normal bypass surgery, legs are going to be stripped open, arms are going to be stripped open, men’s breasts and women’s breasts, they will take vessels off of that to put it on the heart. And I think we feel we can do it, just with an artificial graft that we have worked on for almost six years now. We have animals way beyond what we thought would last and we’re now preparing, most of our work now is preparing the paperwork to do the initial trial, Saul, you have to have paperwork for the regulators both overseas and here in our country. So that’s where we stand. That is exciting stuff, better than playing golf.
Saul Marquez:
I would agree with you 1,000%, Manny. What a moment, you know, you’re there and wow, one stops.
Manny Villafaña:
And the other starts.
Saul Marquez:
As soon as the other one started, just incredible.
Manny Villafaña:
Yeah, that was fun.
Saul Marquez:
just incredible.
Manny Villafaña:
That was fun.
Saul Marquez:
Amazing. Manny, thanks for sharing that, thank you for sharing that. Were you going to say something else?
Manny Villafaña:
Yeah, I mean, there was a guy that, one of my mentors, a guy named Professor C. Walton Lillehei from the University of Minnesota, who did the first open-heart surgery in the world back in 1954. We became good friends and all that sort of stuff. And he used to say to me, his last slide, when he made a slide presentation, the more you work on the heart, the more you believe in God.
Saul Marquez:
Hmm. Hmm. Hmm.
Manny Villafaña:
Think about it. My last slide in typically, my presentations is that, … You must take risks. The greatest hazard in life is not taking risks. Because when you do not take risks, nothing happens. You’ve got to make things happen, and then 99.9%, you’ve got to take risk.
Saul Marquez:
I love that, I appreciate that, Manny. And folks, by the way, I want to pause for a second because you’re listening to this, and it doesn’t matter what part of the healthcare economy you’re in, what Manny just said is so key, whether you’re a provider or executive looking to make a difference in the population that you serve, whether you’re a med device company or a digital health company, if you’re not taking risk, nothing is going to change, and we need a lot to change here. And so here we have Manny Villafaña that is taking yet another risk. He doesn’t need to, but it’s more exciting than golf, so he’s doing it.
Manny Villafaña:
And we mentioned before, the 21st century. I have done seven IPOs. I don’t know if Guinness keeps a record on that, but I think for an entrepreneur, seven IPOs would qualify for the Guinness Book of Records.
Saul Marquez:
Well, and med device too, right? Like seven med device IPOs, which is a huge distinction. Yeah.
Manny Villafaña:
And, but for this particular company, we’re trying a new method of financing. It’s called Reg A, a Reg A+, to be exact, in which the average Joe, the average woman, the average guy, can participate. Before, we used to do companies, in my previous companies, I should say, we would do a private placement of cash, of money, and using a, requiring accredited individuals putting in a lot of big bucks, and we’ve done that. Then we were doing an IPO and people were complaining that when we did IPOs, only the favorite guys of the investment banker would get that nice stock early on and have a greater chance of making some money. And the government was also seeing that with other companies like the Googles and the Apples and the Teslas, where the average Joe couldn’t participate early on. So in 2016 or ’17, the Jobs Act was brought forth and it was geared to allow the average individual citizens of our country who could participate in making small investments, I mean, and be able to buy some stock early on. So we’re doing a raise right now of approximately $40 million dollars, and it’s set up in such a way that both credited and non-accredited individuals, that is an individual who can want to buy a lot of stock or a small amount of stock can participate. And in fact, it’s so funny, we made it so easy that even an individual can use his credit card.
Saul Marquez:
Amazing.
Manny Villafaña:
You don’t hear about using your credit card to buy stock, but we can. So we’ve gone through the SEC, we’ve done all the formalities and everything, all the rules, and regulations. And right now, if you want to take a look at Medical 21, you go to our website: Medical21.com. If you can’t remember that, you can remember Manny, InvestInManny.com, either one. Read about what Medical 21 is doing, all the risk factors are discussed there. And then if you choose, you want to do that, you hit a little red button and then we’ll walk you through how you can buy the stock, you can pay any way you want, including credit card if you want to use that, even Bitcoin if you can imagine that.
Saul Marquez:
Are you taking Bitcoin too, Manny?
Manny Villafaña:
Yeah, so anyway, this is a way of financing the work that we’re doing and we’re Medical 21 with 21st-century technology doing financing in a 21st-century method.
Saul Marquez:
Oh man, I love that. So Manny, I guess, and so, why are you doing this? I mean, you mentioned that it’s about giving access to rather than just a roomful of people in the early investment opportunities. Is that why or is there another reason why?
Manny Villafaña:
Why we’re doing this technology or this method of finance?
Saul Marquez:
The method of financing.
Manny Villafaña:
Oh, the method of financing is very simple, I mean, excuse me, if you pick up the newspaper, if you turn on a TV, if whatever you were doing, you know what the heck is happening in this world. All the challenges with inflation and wars and COVIDs and all that. It’s a very difficult environment, and to do an IPO at this time is also been challenged by the, I wouldn’t say regulation but the new understanding that you must have revenues. Well, we chose a technology that takes a long time to develop, that’s five and a half years, that’s a long time. And then you have a regulatory path that’s going to take us time to get to revenues. We know we can do it, we’ve done it before. I’ve done it eight times before, so it’s not a problem, but I won’t have revenues for a while. So an IPO is not available to us just yet.
Saul Marquez:
Got it.
Manny Villafaña:
But the Reg A is, and it allows the earlier investors to invest small amounts of money, big amounts of money, whatever they want to invest. And this method, including this discussion with you, reaches those types of people.
Saul Marquez:
Fantastic. Love that, Manny, appreciate you level-setting there. An enormous opportunity, folks. We’ll make sure to leave links to the several links where you could consider this opportunity to invest in Manny, Medical 21. Check those out because you don’t want this to be the opportunity that you missed out on. You’ve seen his track record, obviously, there’s incredible work to be done here and you could be part of it. Manny, incredible to have you on the podcast today. What closing thought would you leave to all of our listeners today? And what’s the, I mean, you shared a couple places where people can connect with you, but maybe if you want to leave anything else, where you want them to check out or connect with you would be great.
Manny Villafaña:
Well, the thought I want to leave with everyone is that we are enjoying our work. I have a team of employees here and given the opportunity to help so many people, it’s rare when you get that. Not thousands, I’m talking about millions of people. It’s been tried by so many people, for 50 years people have tried to do this, so now you’re on a very big challenge. And at the end of the challenge is helping so many people. We are having fun. Now, if you want to, again, to reach us, you can go to our website medical21.com, okay? Look at that, then if you want to participate, you can participate right there. You can call me, you can go to LinkedIn, look me up, anything you want, you can reach me, okay? I try to answer as much as I can, of all the people I want to call. But try, if you don’t try, you’ll never, you know, if you don’t take the risk of trying, you’re never going to get anything done. Take the risk, enjoy life. We’re having fun here in Minneapolis and the snow has stopped, so you can come and visit us …
Saul Marquez:
Manny, I want to thank you again for spending time with us. Folks, take Manny up on it. We’ll leave links to get in touch with him and all the information that we discussed in the show notes. Excited to see this product come to fruition, Manny, and really appreciate you jumping on with us. This has been a lot of fun.
Manny Villafaña:
Right, well, thank you. Thank you, Saul, appreciate your help.
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