The Business of Early Detection: Breath Diagnostics

Summary

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Podcast Summary: The Unshakeables

Episode: The Business of Early Detection: Breath Diagnostics

Date: February 24, 2026

Hosts: Ben Walter (CEO, Chase for Business) & Kathleen Griffith

Special Guests: Dr. Victor Van Berkel (University of Louisville), Ivan Lowe (CEO, Breath Diagnostics)

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Overview

This episode explores the remarkable story of Breath Diagnostics, a Kentucky-based startup aiming to revolutionize early detection of lung cancer and other diseases using breath analysis. Host Ben Walter, co-host Kathleen Griffith, Dr. Victor Van Berkel (founder and thoracic surgeon), and Ivan Lowe (CEO) discuss the scientific innovation, personal motivations, business pitfalls, and high-stakes decisions involved in bringing breath-based diagnostics to market.

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Key Discussion Points & Insights

The Problem: Late Detection of Lung Cancer

• Lung cancer is the leading cause of cancer deaths in the U.S.—more than colon, breast, and prostate cancer combined—mainly because it's often detected too late.

  • Ben Walter [00:07]: "It often grows silently without symptoms. And by the time it's finally detected, it can be too late."

• Personal stories highlight the tragedy of late diagnoses.

  • Dr. Van Berkel [00:24]: "My dad died of lung cancer... we thought he was having a stroke."
    (His father's diagnosis happened only after cancer had spread to the brain.)

Scientific Innovation: Breath Diagnostics

• Idea: A breath test could detect biomarkers for diseases, using technology similar to a breathalyzer but aimed at cancer and inflammation markers.

  • Dr. Van Berkel [06:05]: "A breath test. And that's not to be confused with a breathalyzer test... There’s a lot of diagnostic information that's available there, if you can just trap those chemicals and see what they are."

• Challenge: Breath contains hundreds of volatile organic compounds (VOCs), which are unstable and react easily, making isolation and analysis difficult.

  • The team developed a system to trap and stabilize these chemicals on a microchip and analyze them using a mass spectrometer.

• Significance: Their breath test achieved promising sensitivity and specificity for lung cancer detection.

  • Dr. Van Berkel [07:27]: "We found that with this breath test, we had a really good sensitivity and specificity."

Business Growing Pains: Founders vs. Business Leadership

• Company founded by scientists, not entrepreneurs.

  • Dr. Van Berkel [01:16]: "The people who started this company were me, another thoracic surgeon, the chemist, and the chemical engineer."
  • Dr. Van Berkel [04:29]: "I like thinking about bigger picture problems... Truth with a capital T."

• Early leadership difficulties:

  • Securing IP and patents went well, but business momentum stalled.
  • Debt and poor structure made future financing hard.

The Turnaround: Ivan Lowe Joins as CEO

• Ivan's motivation: Personal loss from lung cancer – both his and Dr. Van Berkel’s fathers died of the disease.

  • Ivan Lowe [14:20]: "My dad was diagnosed with lung cancer... the more I realized that this company solved a lot of the challenges that the breath diagnostics world were facing."

• Restructuring: Ivan personally invested millions to pay company debt and convert that debt to equity, enabling fresh investment.

  • Ivan Lowe [15:41]: "That's exactly what we did... I haven't [taken a salary] for the last two years. And the whole point...let’s get this company commercialized."

• Navigating legacy leadership and technical pivot:

  • Chose to back a new-generation microchip recommended by researchers, discarding years of work on the previous model.
  • Ivan Lowe [17:08]: "...all the new papers that the university is coming out with, using our technology, rely on the new chip...And that was probably one of the oh, shit moments, because now the last three years...all that work is down the drain."

Key Business Decisions & Partnerships

• Internalization of Analysis:

  • Bought a mass spectrometer for nearly $1 million, rather than relying on third-party labs or the Mayo Clinic, which both sped up development and reduced variability but was a high-risk move.
  • Ivan Lowe [21:09]: "We bought one anyway. And I can tell you we have made more progress...in two weeks than we did in the entirety of the company."

• Partnerships:

  • Initial collaboration with Mayo Clinic lent credibility, but inconsistent data led to pausing the relationship to focus on building in-house capability.
  • Ben Walter [24:47]: "That was a gutsy decision. That was them betting on themselves and their idea, which I give them a lot of credit for."

The Technology’s Promise: More Than Lung Cancer

• Platform approach—could screen for pneumonia risk in post-surgical patients, plus other inflammation-related diseases.

  • Ivan Lowe [21:58]: "The ability to predict pneumonia in post op cardiac surgery patients...now, if we can predict it, we can pre-treat it and arguably prevent a lot of those issues."

• Vision for the future:

  • Routine, non-invasive, clinic-based breath tests, potentially transforming diagnostics across medicine.
  • Ivan Lowe [22:25]: "Within five years...everybody at a clinic will walk into their doctor’s office, take a breath test, get baseline levels...and every six months or every year, take another one."

Reflections on Startups and Risk

• Breath Diagnostics made several "bet the company" decisions, trading credibility (with partners like Mayo) for speed and control—an instructive lesson for other entrepreneurs.

  • Ben Walter [25:19]: "If you own a business, there might come these times where you have to make a decision. Is this a bet the company moment? Because it was."

• Critical business advice from Ivan:

  • Ivan Lowe [27:52]: "Be very deliberate about your fundamentals early because they can compound faster than momentum itself. So don't skip structure at the beginning of the company."
  • The goal is to build durable, investable structures rather than optimizing for founder control.

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Notable Quotes & Memorable Moments

On Why Early Detection Matters

"Lung cancer is the leading cause of cancer deaths in the US... It often grows silently without symptoms. And by the time it's finally detected, it can be too late."
— Ben Walter [00:07]

On Personal Motivation

"My dad died of lung cancer... So we thought he was having a stroke."
— Dr. Victor Van Berkel [00:24]

"My dad was diagnosed with lung cancer and he beat it the first time... Eventually, when he caught it the second time... it was too late."
— Ivan Lowe [14:20]

On Scientific Ambition

"I like thinking about bigger picture problems and trying to find truth with a capital T."
— Dr. Victor Van Berkel [04:29]

On Business Challenges

"We had no idea what we were doing from a business standpoint."
— Dr. Victor Van Berkel [07:44]

"I just felt a calling to fix it because the technology was amazing. They just were missing a few components within that."
— Ivan Lowe [15:02]

"I've never financed a company and have the company be upset with the financing."
— Ivan Lowe [16:16]

On High-Risk, High-Reward Moves

"We bought one [mass spectrometer] anyway. And I can tell you we have made more progress on the analytical method development side in two weeks than we did in the entirety of the company."
— Ivan Lowe [21:09]

"That was a gutsy decision. That was them betting on themselves and their idea."
— Ben Walter [24:47]

On Advice for Entrepreneurs

"Be very deliberate about your fundamentals early because they can compound faster than momentum itself... the goal is not to protect control, is to build something durable with the right partners."
— Ivan Lowe [27:52]

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Important Timestamps

• 00:07 — Introduction to the problem: silent progression of lung cancer
• 00:24 — Dr. Van Berkel’s personal story
• 03:27 — Why Kentucky is a lung cancer innovation hub
• 05:22 - 07:34 — Limitations of current lung cancer screening and advantages of breath tests
• 09:14 — Introduction of Ivan Lowe, CEO
• 14:20 — Ivan’s personal connection to lung cancer
• 15:02–16:08 — Ivan’s intervention: restructuring the company
• 17:08 — Shifting technology focus (microchip decision)
• 19:34 — Partnership with Mayo Clinic and why it paused
• 21:09 — Investing in a mass spectrometer for in-house development
• 21:58 — Expanding the diagnostic platform to other diseases
• 25:19 — The 'bet the company' moment and what it means for entrepreneurs
• 27:52 — Ivan’s business advice for founders

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Conclusions and Takeaways

• Breath Diagnostics’ journey underscores the complexity and high stakes of combining world-changing scientific innovation with the realities of the startup business world.
• Early structural missteps can cripple even great technology, while the right leadership can turn a company around—often through personal risk and tough pivot decisions.
• The episode emphasizes the importance of strong fundamentals, deliberate structure, and being willing to "bet the company" when the vision is worth it.
• Most importantly, the hope remains that accessible, accurate, non-invasive breath testing could transform medicine and save countless lives.

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Transcript

[Ben Walter]

Lung cancer is the leading cause of cancer deaths in the US it kills more people than colon cancer, breast cancer, and prostate cancer combined every year. Why? It often grows silently without symptoms. And by the time it's finally detected, it can be too late.

[Dr. Victor Van Berkel]

My dad died of lung cancer. He was a carpenter, and he was working on framing a house one day and. And he dropped his hammer, and you couldn't make his hand pick the hammer up. Like, he couldn't figure out how to pick the hammer up anymore. And so we thought he was having a stroke.

[Ben Walter]

That was Dr. Victor Van Berkel's first indication that his father wasn't healthy. And by the time he dropped his hammer, the cancer had spread to his father's brain. As a thoracic surgeon, Dr. Van Berkel knew there had to be a better way to diagnose lung cancer. So he and his colleagues at the University of Louisville and came up with tech that would capture the chemical compounds in the human breath and test them for cancer biomarkers.

[Dr. Victor Van Berkel]

So we started a company to see if we could get this to a point where it would be a commercial product that we would be able to get out into the community.

[Ben Walter]

There was just one problem.

[Dr. Victor Van Berkel]

The people who started this company were me, another thoracic surgeon, the chemist, and the chemical engineer.

[Ben Walter]

So a bunch of business people.

[Dr. Victor Van Berkel]

Yeah, exactly. A bunch of very, very business savvy people. That is definitely who we are. So we had no idea what we were doing from a business standpoint.

[Ivan Lowe]

The company had debt, had leadership issues, structural challenges. And so I spent a lot of my own money buying a position.

[Ben Walter]

Now the company had an outsider in charge, no experience in medtech, no experience as a CEO. And everything had to change if the company was going to survive. Welcome to the Unshakeables from Chase for Business and Ruby Studio from iHeartMedia. I'm Ben Walter, CEO of Chase for Business. There's nothing small about the impact small businesses have on America. They don't just drive our economy. They define our communities, create opportunities, and inspire the next generation of dreamers and builders. On the Unshakeables. We're sharing the daring moments of business owners facing their crisis points and telling the stories of how they got through it. Kathleen, how are you today? I'm good.

[Kathleen]

I'm good. I'm excited to hear more about today's company.

[Ben Walter]

Yeah, this one's a little science heavy, so I had to brush off some of my high school chemistry. Fortunately, my daughter took it last year, so I had to review some of it. But I did have to bone up.

[Kathleen]

It's for the good of humanity. So a little mental strain over volatile organic compounds is worth it, I think.

[Ben Walter]

Absolutely. But I think I'll let the experts tell us about them. On today's episode, breath diagnostics from Louisville, Kentucky. One of the experts we have today is Dr. Victor Van Berkel, professor of

[Dr. Victor Van Berkel]

surgery at the university of Louisville school of medicine. I'm the division chief of thoracic surgery within the department of cardiovascular and thoracic surgery, which means that I spend most of my time operating in people's chests on lungs and esophagus and things like that.

[Ben Walter]

Victor is conducting cutting edge research out of Louisville, which we're going to talk about on the show today. But you may be wondering what makes Kentucky a hub of innovation for a thoracic surgeon.

[Dr. Victor Van Berkel]

Most people in Louisville still smoke, so there's a pretty high incidence of lung cancer around these parts. And so most of my week is operating on people who have lung cancer to remove it from them.

[Ben Walter]

For people who work on lung cancer day in and day out, it's hard not to notice that the tests for catching it just aren't that great. The reality is that we often fail to diagnose it in a timely manner. Cancer screening is a hard problem.

[Dr. Victor Van Berkel]

Big problem with lung cancer is that the vast majority of people, when they're diagnosed, they're already at stage three or stage four, because unfortunately, most people with lung cancer don't have any symptoms.

[Ben Walter]

Victor did what many of us do when we're frustrated by a problem we keep seeing. He thought, there's got to be a better way.

[Dr. Victor Van Berkel]

And then you start thinking about it and you're like, well, I could do this experiment and that would help. Then you have to figure out, well, how am I going to get the money so that I can do this experiment? And then you start writing grants, and then pretty soon you have a lab.

[Ben Walter]

Victor was used to being in the lab. He had started out in research before he moved into surgery.

[Dr. Victor Van Berkel]

I like thinking about bigger picture problems and trying to find truth with a

[Ben Walter]

capital T. Truth with a capital T. Truth.

[Ivan Lowe]

Yeah.

[Ben Walter]

What does that mean to you?

[Dr. Victor Van Berkel]

A lot of research and a lot of what we're aiming for when we're doing research is finding bigger answers than just the person that's right in front of you. As a clinician, I love sort of smaller t truths of like, okay, this is a person with this problem that I'm going to try to help fix, and I'm going to help get them through this.

[Ben Walter]

Where Victor's big T, universal truths overlapped with little T. Personal truths, was in screening for lung cancer. He knew that if he could figure out a better way, he could not only help individuals he came in contact with, but potentially save millions of lives. Connecticut scans are the current lung cancer screening protocol. And while the scans show nodules on lungs, the scan can't tell you what the nodule is.

[Dr. Victor Van Berkel]

Come and see somebody like me, and I look, yeah, that looks troublesome. So I'm going to cut it out. And you have an operation, and most of those don't end up being cancer.

[Ben Walter]

And then you've had invasive surgery that you didn't need to have.

[Dr. Victor Van Berkel]

Right. And it's tough on the patient. It's expensive for the medical system. And in 96 of the people, never needed to have happened.

[Ben Walter]

Of course, that's for the people that actually do get screened for lung cancer at all.

[Dr. Victor Van Berkel]

People don't want to know what the answer is, especially people who have smoked their whole lives. They sort of figure, well, I deserve this, which is ridiculous. Like, nobody deserves to have cancer, but they feel like, I did this to myself, so be it. That is the real passion of what drives me towards wanting there to be something better than the CT scan.

[Ben Walter]

So what's better?

[Dr. Victor Van Berkel]

A breath test.

[Ben Walter]

A breath test. And that's not to be confused with a breathalyzer test, which I'm sure most of you know, measures blood alcohol content. But the way it works can help understand what Victor's describing. When you drink, some of the alcohol you consume passes through the stomach lining into the bloodstream. That's why we get drunk. As the blood circulates, it takes that alcohol all over the body, including the lungs. So when you exhale into a breathalyzer, you're breathing out a percentage of alcohol, which that machine measures. And if you can exhale alcohol, you can also exhale a lot of other compounds.

[Dr. Victor Van Berkel]

You have hundreds of chemicals that you're breathing in and out all the time. And there's a lot of diagnostic information that's available there. If you can just trap those chemicals and see what they are.

[Ben Walter]

Just like a breathalyzer traps alcohol to measure it.

[Dr. Victor Van Berkel]

The problem is that a lot of the chemicals that are in your breath are very reactive. So they react with one another, they

[Ben Walter]

react with the air, they're volatile, and they break down into other things. So the trick is to capture those chemicals, stabilize them, and then run tests on them. I know that sounds hard, but Victor and his colleagues figured that out. They capture the chemicals on a microchip and look at them with a mass spectrometer, which is a very expensive machine. You don't really need to know what that is other than it measures the chemical compounds. Okay, moving on.

[Dr. Victor Van Berkel]

We found that with this breath test, we had a really good sensitivity and specificity.

[Ben Walter]

That means the breath test that Victor and his team made detected the presence of lung cancer in people who had it. Now they just had to launch the company to spread the word.

[Dr. Victor Van Berkel]

We had no idea what we were doing from a business standpoint.

[Ben Walter]

They brought in a CEO to help them out.

[Dr. Victor Van Berkel]

The first kind of CEO of the company was a business guy here. We did some things that were important for the company, like we secured the intellectual property, we got patents, but was ultimately just not moving stuff along very well. Some of that was a lack of experience on our part, but also a lack of experience in this particular field for him in pushing things forward.

[Ben Walter]

So they brought in another, a very

[Dr. Victor Van Berkel]

enthusiastic business guy, brought in another engineer and a chemist, and the two of them started building more of a commercial prototype of what we would use from a company standpoint. And they were able to get that started and start us on doing the pilot studies here at UofL with the commercial stuff. He had more of a medical background and did a nice job of doing a lot of quality control stuff and

[Ben Walter]

building devices for us, but they weren't able to hook investors.

[Dr. Victor Van Berkel]

And I think he also structured the company in a way that put the company somewhat in debt to him and that also made it challenging from an investment standpoint to have money brought in that would be first going to pay off his debt rather than going to the good of the company.

[Ben Walter]

So this is really interesting for our listeners. We have a lot of people who start businesses and all kinds of structures. So I want to talk a little bit about forgetting the individual and what happens. So now you have a CEO who you think is a wrong fit, who structured the company in a way that makes investment difficult, but you need investment in order to get this thing going. So how do you sort of get around that?

[Dr. Victor Van Berkel]

I would say where things really changed and we started to get a lot of traction is when Ivan came along.

[Ben Walter]

Ivan Lowe, the current CEO of Breath Diagnostics. He's been with the company for a few years now and got the company moving forward. But it was a major undertaking, one we'll hear about in just a few minutes.

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[Ben Walter]

so Kathleen breath Diagnostics Pretty interesting

[Kathleen]

company, I have to say. That is what I love about the show is just as a learner, I have no idea what we're going to get. We're in Breath Diagnostics today.

[Ben Walter]

Yep. I'm always fascinated by companies that are founded by technical experts as opposed to business people because particularly if you're talking about the innovation front, the science matters a lot. Now clearly the business part matters too. But if you don't have the science, then it's just snake oil. It's not the first time I've ever seen a company founded by technical experts but not business people that has struggled in the early days even when the underlying science was quite good. And by the way, I did love his thing about Big T Truth. I want to talk about that Big T Truth thing for a second because we've talked a lot on the show about people's motivation to start a business. And some people's motivation to start a business is to make money for their family. Some people's motivation to start a business is to be able to work their passion every day. Some people's motivation is to just have direct impact on their clients. And he talked about this deeper I want to have impact at scale. That was his big T Truth, a discovery that could help not just two people or 10 people or 20 people, but hundreds or thousands or millions of people. That's a whole class in and of itself of why people start businesses. And it's quite different.

[Kathleen]

Yeah, I'd never heard that take before, but the idea of the individual can be so compelling Right. Because you have such proximity to helping one person, the one to one customer experience, but really thinking about the collective and what that looks like and how you can drive scale and to not get lost at the individual level level.

[Ben Walter]

I also love businesses where the impact is so tangible. There's been a lot of talk lately about how Silicon Valley has lost its way because it's basically spent the last 10 years figuring out how to sell better advertising algorithms to people and keep eyeballs on screens in a way that's rotted our brains and all that kind of stuff. Whereas when you talk about some of the new generation of companies, both in Silicon Valley and not, they're solving manufacturing problems, they're solving healthcare problems, they're solving physical atom problems, not bits on a chip problem. And I think that's really interesting.

[Kathleen]

Yeah. So even with Elizabeth Holmes and Theranos as an example that we've all read about or heard about in the news, breath diagnostics should still be an investable proposition.

[Ben Walter]

I mean, it sounds like, from what he said, they're lucky they made it. When I see companies mounted up with debt early in their existence, it's very hard to climb out of that, especially if the debt holders don't understand that what they really hold is equity.

[Kathleen]

Yeah.

[Ben Walter]

Full credit to Victor and the founders for recognizing early that they weren't business people, that they were scientists and doctors. Now, it's also proof that just because you say this person's a business person doesn't mean it's gonna work. Yeah. It has to be the right business person with the right skills at the right time who does the right thing. And there's a lot of variables in there, any one of which could make that not come off.

[Kathleen]

Yeah.

[Ben Walter]

So that's not a panacea for anything. But I give them credit for realizing it, and they realized it more than once. Okay, Kathleen, let's get back to the story. I think we should start by introducing the CEO who actually did come in and stick around. Joining Breath diagnostics on today's show, Ivan Lowe. All right, Ivan, I'm really looking forward to picking up the story with you. So welcome to the show. What got you interested in this company? As I understand it, you spent most of your time in mining before this.

[Ivan Lowe]

It just so happens that in the Canadian capital markets, a lot of the money that flows into mining things around the world all stem from Canada. The market's doing really well for the Canadians as a result of that right now.

[Ben Walter]

Yeah, exactly. Because you have plenty of it.

[Ivan Lowe]

Yeah.

[Ben Walter]

Ivan was in mining of all things, for years, in what is essentially private equity, he'd made some money and saw deals cross his desk every day. But just like Victor, the work Breath Diagnostics was doing was personal for Ivan.

[Ivan Lowe]

My dad was diagnosed with lung cancer and he beat it the first time. And then just based on the current standard of care, the follow ups became later and later. Eventually, when he caught it the second time and he came back with a vengeance and it was too late and he had passed away. I get deals presented to me on a daily basis. I took an immediate interest, but of course, you have to see if there is actually something there. And the more I looked into how Breath Research was progressing, the more I realized that this company solved a lot of the challenges that the breath diagnostics world were facing.

[Ben Walter]

Okay, so you were pretty taken with this idea. You're not just an investor, you're the CEO. I mean, that's different. So tell me how this went down.

[Ivan Lowe]

When Breath Diagnostics came to the table, they were struggling for cash. I saw an opportunity to step in and help. So the company had debt, had leadership issues, structural challenges, but I just felt a calling to fix it because the technology was amazing. They just were missing a few components within that. And so I spent a lot of my own money buying a position in a healthcare startup, which is what Breath Diagnostics was at that time. So unfortunately, a lot of the capital that we put in, and it was in the millions of dollars, went to debt to restructure the company so it can be financed properly by future investors, which is what it's going to require.

[Ben Walter]

So you essentially turned the debt into equity, right?

[Ivan Lowe]

That's exactly what we did.

[Ben Walter]

Yeah.

[Ivan Lowe]

And so it was skin in the game. I don't take a salary. I haven't for the last two years. And the whole point of it is, let's get this company commercialized.

[Ben Walter]

But it took a while to get the deal done.

[Ivan Lowe]

It was the longest deal I've ever done in my life.

[Ben Walter]

Wow.

[Ivan Lowe]

When we kind of restructured and it took about a year to convince the debt holders to restructure all of that debt, I ended up coming in with a couple of friends and bought out that debt. And we restructured the company from that perspective so that we can make it financeable.

[Ben Walter]

Ivan spent his own money to pay off the company's debt to give Breadth Diagnostics a shot at survival. And some folks weren't happy about it.

[Ivan Lowe]

I've never financed a company and have the company be upset with the financing. There was other investors in the company and These investors invested under the same pretense as I did, wanting to help people. And so I didn't want to crush them to the point where now their investment's nothing and we start over. It would have been the smartest thing to do and the easiest way to do it. But we worked around that and made sure that all the previous investors were protected so that if we're successful, they'll see success. The outgoing management team is going to be pissed off because they've been working at this for many years and they believe it's their company.

[Ben Walter]

One big sticking point was the way they were trapping and measuring the volatile organic compounds. The researchers are always studying and advancing the technology, and they'd come up with a better way to measure it. Over the years, the old management team was moving forward with the microchip they knew worked. But Ivan knew that the researchers had a new, better one.

[Ivan Lowe]

The company spent many years on the old one. Now, the old one still might work, but it's just not as good as the new one. And so we had to make a decision. Do we stick with the old one, where we spent the last two, three years researching and analyzing and finding good data for and creating all these documents for it, or do we go with the new one? And so we made a decision. Well, all of the new papers that the university is coming out with, using our technology, rely on the new chip. So now it's up to us to follow that. And I don't want to spend the next three years determining which is which. At those pivotal moments, you either have to make a decision of whether you go with this or you go with that. And that was probably one of the oh, shit moments, because now, the last three years prior to me joining, all that work is down the drain.

[Ben Walter]

The way Ivan talks about the research is really interesting here because he's not a scientist. He had to absorb all of this when he came on. Some may say that someone with a medical background would make a better CEO of a med tech company, but Ivan disagrees.

[Ivan Lowe]

I think it comes down to the passion. Two years ago, if I were to present this deal to an investor, and I was that investor, I'd say, look, Ivan, you have no experience. You're not going to be able to do this. Medtech is one of the most difficult challenges, but today I think I'm much more comfortable even speaking to the scientists and the healthcare professionals on our pathway. The workflows, the commercialization roadmap. You learn a lot very quickly, especially if you spend every night researching as

[Ben Walter]

Ivan brushed up, he also saw the old leadership of the company phase out. How did that process go? Leadership transitions can be tough for companies. And what did you change versus what did you keep? The same.

[Ivan Lowe]

The management left kind of abruptly. There was a lot of gaps. And then when I took over operationally, I had to look at the landscape of, okay, well, where's the company and what are we going to focus on? We decided that we needed to start doing things internally. That's probably the biggest light bulb moment.

[Ben Walter]

Now when Ivan says do things internally, he means being able to take the chemicals they've captured on their microchips, test them and, and analyze the data themselves at the company. It's a little over my head, but Ivan says that any chemist will understand it. The only thing is that to analyze the chip you need to have a mass spectrometer.

[Ivan Lowe]

These machines are really expensive.

[Ben Walter]

Yeah, okay, so it's capital intensive.

[Ivan Lowe]

It's very capital intensive. So we've worked for many years looking for a third party partner.

[Ben Walter]

He found one in the Mayo Clinic, which is of course the Mayo Clinic. It's been voted the best hospital in the US for the last seven years and is a world renowned research clinic. A partnership with the Mayo Clinic gave breath diagnostics credibility and access to the mass spectrometers they needed.

[Ivan Lowe]

When I joined, part of the selling point was a partnership with the Mayo Clinic. If they're going to help you out, it's going to be a big deal. They had been waiting very patiently for the company to raise capital to move forward with it because they believe in our technology. And we finally did. When I joined and the first set of data showed up pretty inconsistent.

[Ben Walter]

The samples breath diagnostics tests are volatile organic compounds and are highly reactive with anything else they come into contact with. Ivan quickly realized they would need to completely isolate their tests to get solid data.

[Ivan Lowe]

So I went back to the mail and I said, guys, we want to be partners long term and I don't want you guys to keep wasting your resources on us until we figured it out. And so that's when we made the decision to pause that relationship.

[Ben Walter]

And pausing the relationship with the Mayo Clinic meant that the newly debt free company would have to go find a mass spectrometer of its own to be able to complete their pilot studies and prove the technology. I have to ask, how much does one of these machines cost?

[Ivan Lowe]

Well, the one that we have is probably close to a million dollars. Okay, 500 grand on the low side, up towards a million dollars. But then you need the expertise to Run it.

[Ben Walter]

That ain't nothing.

[Ivan Lowe]

It ain't nothing. Especially for a startup that has struggled with financing.

[Ben Walter]

But you bought one anyway?

[Ivan Lowe]

We bought one anyway. And I can tell you we have made more progress on the analytical method development side in two weeks than we did in the entirety of the company.

[Ben Walter]

Wow. Just because you controlled the entire process.

[Ivan Lowe]

We control the entire process. That's exactly it. So I think that's really important, especially when it comes to Medtech, that you do control the entire process.

[Ben Walter]

Are you still a pre revenue company?

[Ivan Lowe]

We are. I think we're going to look to change that next year. I think the amazing thing about our technology is that we can predict the onset of disease. There's all kinds of trials going on where they're looking for inflammatory biomarkers and the drug companies associated with that believe that our technology can capture those much more accurately and repeatably and much simpler as part of a lot of the clinical trials that these pharma companies are doing. So there's a lot of opportunity for near term revenue.

[Ben Walter]

Oh, so for more than just lung cancer, it could detect other things? Yeah.

[Ivan Lowe]

So the ability to predict pneumonia in post op cardiac surgery patients, doesn't that

[Ben Walter]

kill people, like as much as the surgery is when they get pneumonia afterwards? That's a huge number, right?

[Ivan Lowe]

It's a huge number and it's a huge burden to the hospital. It's a huge burden on the surgeons because no matter how good they perform that surgery, there's a chance of catching pneumonia. Now, if we can predict it, we can pre treat it and arguably prevent a lot of those issues.

[Ben Walter]

Wow. So what's the status of your trials now?

[Ivan Lowe]

Today we're in validation mode and we're getting really close to finalizing that for a product that we can use in predicting pneumonia, for example, in post op patients, cardiac elective surgery. From there, we can prove that this breath technology is a platform, meaning we can use it to diagnose a lot of diseases. So my goal within five years is not just to be able to screen for lung cancer and pneumonia, but we know. And I don't know if you've been following the health world like function Health, everybody's paying thousands of dollars for these scans that are not even FDA approved because they want to know there's no better medium to detect and predict diseases than the breath. It's immediate, it's not filtered, it comes directly from the blood, directly from your airways, and we can look at that. So in five years from now, I would hope that everybody at a clinic will walk into their doctor's office, take a breath, test, get baseline levels, and every six months or every year, they take another one to see if certain biomarkers are elevated. And if it is, go see a doctor for a follow up.

[Kathleen]

Ben, the story just gets more and more amazing to me. I mean, he had to take on so much work, pay off all that debt just to get the company up and running. Most people wouldn't have taken that on.

[Ben Walter]

No. In fact, his words. He basically bought his position as CEO. He essentially bought in enough of the company that he's running it.

[Kathleen]

Yeah.

[Ben Walter]

And it was also brave because he's not a medical expert. I mean, he had a lot of medical experts there, but he said they couldn't find someone who knew how to do all this stuff. So it's me.

[Kathleen]

Is there one area that you think of when someone's coming in to determine whether it's an investable proposition that they really need to key in on more than others?

[Ben Walter]

It always starts with, is it a good business idea or not? Because if it's a bad business idea, nothing else matters. Now, there's a broad interpretation of what's a good business idea. You can have a lousy product under a great brand, and if the brand resonates, think how many brands you've seen do well that don't make a really high quality product.

[Kathleen]

Yeah.

[Ben Walter]

As long as it's a good business idea. I think it all comes down to people and finances. It has to be the right business person with the right skills at the right time who does the right thing.

[Kathleen]

Yeah. What I thought really showed a lot of bullishness in this space was deciding to walk away from Mayo Clinic and their machines and invest over a million dollars into their own machines so that they could make significant progress. That was a lot.

[Ben Walter]

Yeah. To pause that partnership is a high risk, high reward move for a small startup like that. There's a credibility that comes from working with an institution like that that they had to give up. And in addition, they had to then go out and spend a million bucks, which is not a small amount of money for anybody or certainly for that company. That was a gutsy decision. That was them betting on themselves and their idea, which I give them a lot of credit for. But still they were trading speed to market and confidence against credibility and cost. So it was like lots of credibility, but slow versus speed and confidence. And that's a trade to make.

[Kathleen]

Yeah. And that's a good one other people can use too.

[Ben Walter]

Yeah. And look, if it didn't come off it probably could have cost them the company. So if you own a business, there might come these times where you have to make a decision. Is this a bet the company moment?

[Chase for Business Announcer]

Right.

[Ben Walter]

Because it was.

[Kathleen]

Yeah.

[Ben Walter]

And they bet the company and it worked out, but, you know, it doesn't always. So credit to them for it working out. And good lesson in terms of like, no going in. Am I ready to make a bet the company moment?

[Kathleen]

Can we talk a little bit about the data versus instinct? Because they've been in validation mode for what feels like forever. They're trying to do it in all the right ways with getting FDA approvals, running all of the right clinical trials to make sure that this has all the empirical evidence it needs behind it. But how long is too long to be validating before you've really tried to bring it to market to these various kind of target cohorts that you were talking about?

[Ben Walter]

Given the background that Ivan gave us and the fact that they had some misfires, it's definitely been too long. That said, in both medical device and drug development, these timescales are not unusual. It's really different than a consumer company.

[Kathleen]

You gotta be patient.

[Ben Walter]

And by the way, a lot of people bemoan this, but that's part of why the margins for the things that do work out are so high. Because it takes years, it's capital intensive and it's high risk. And a lot of times it doesn't come off off. In pharma, they always say the first pill costs $6 billion and the second pill costs a quarter.

[Kathleen]

I get it.

[Ben Walter]

That's the nature of breakthrough development. It's high risk, high reward. When you're trying to find product, market, fit in a consumer good, you can get 80% there and be like, let's push the button and see what happens. That's not a thing in medical devices. Like, you have to go through clinical trials and you have to prove it.

[Kathleen]

I liked his idea about going after the end consumer, going to clinics. Everyone's now getting so proactive about functional health and owning their own health and doing their own diagnostic testing.

[Ben Walter]

Yeah, I think it'll be a good idea. They're going to want to only bring something to market that they think has actual, real clinical value. So I think it could help with their path to revenue. I don't think they would ever be comfortable, therefore shortchanging the validation process. They genuinely are trying to solve the

[Kathleen]

problem and that tells you everything you need to know. When he's investing $1 million in this machine instead of a Ferrari he's serious about it.

[Ben Walter]

Yeah. Another great one, Kathleen. I really hope they make it. I think this is going to be a fantastic company for the world. I hope they pull it off because I think it'd be great for humanity.

[Kathleen]

Yeah, this is a big one. Attacking a huge problem and trying to change the world for the better.

[Ben Walter]

Ivan, I want to ask you one last question. We have lots of listeners who own small businesses or want to start one. What's your one piece of advice for them?

[Ivan Lowe]

Be very deliberate about your fundamentals early because they can compound faster than momentum itself. So don't skip structure at the beginning of the company. It's really cheap. Pay $500 and have a lawyer structure your company properly so that there's clear ownership, accountability and a clean cap table, especially if you're going to be looking to raise capital. So as long as you structure it correctly, the goal isn't to protect control, which I think a lot of founders do. That's all they cared about. But especially for first time founders, the goal is not to protect control, is to build something durable with the right partners.

[Ben Walter]

Awesome. Ivan, thank you for being on the show. This was terrific.

[Ivan Lowe]

Ben, thank you very much. It was an honor.

[Ben Walter]

Thanks so much for listening to this episode of the Unshakeables. If you liked this episode, please rate and review it. In our next episode, we're talking to a veterinarian whose entire life and business was built around one dog.

[Chase for Business Announcer]

I've had this dog for almost 10 years.

[Ben Walter]

I can never tell that part of

[Chase for Business Announcer]

the story without crying. It was truly the moment that changed everything.

[Ben Walter]

I'm Ben Walter and this is the Unshakables from Chase for Business and Ruby Studio from Iheartmedia. We'll see you back here soon.