Exclusive interview for SPINOFF.COM with Mrs. Ekaterina Bereziy - co-founder and head of business development and Mrs. Elena Pismennaia - project manager of ExoAtlet company
ExoAtlet company is developing exoskeletons allowing people with muscle-skeleton disorders to move freely and enjoy life. ExoAtlet is a medical exoskeleton designed for the rehabilitation of patients with locomotive impairments to their lower limbs sustained as the result of an accident, an operation or illness of the locomotive system or nervous system. ExoAtlet is a motor-operated skeleton fixed on a body helping to walk, sit and rise up independently. For those who have been recently injured and partially have lost the sensitivity of legs it is the way to completely restore the motion functions, and for the disabled in a wheelchair it is an opportunity to visit earlier inaccessible places and an effective means of rehabilitation: usual walking significantly improves health indicators and brings back the feeling of freedom and happiness.
S.O.C.: Ekaterina, SPINOFF team and I are grateful that you agreed to spend this hour speaking with us and sharing your insights about ExoAtlet. At first, I would like you to say a few words about your background and experience.
Ekaterina Bereziy: I graduated from Moscow State University in 2002 and became the Head of the Department of Industrial Design at Lebedev's Studio. I made many projects, among them microwave Samsung, which they sold in the quantity of 150 thousand pieces. I left Studio in 2007 and started working for one of the clients of Lebedev's Studio, who was developing the dealer network of cars. Within 4 years we launched different brands: Mazda, GM, Ford. Four years ago I joined the team of ExoAtlet.
S.O.C.: Tell us about the scientific basis of ExoAtlet. It is important for us because we work only with science spinoffs.
Ekaterina Bereziy: Our scientific base is the Faculty of Mechanics and Mathematics at Moscow State University. The topic of my diploma was a bipedal walking machine. Elena Pismennaia, our project manager, is the founder of the festival Mobile Robot named after her husband Evgeny Devyanin. In the eighties, Devyanin created the first-ever six-legged walking machine with solo operation, which had to fly to Mars. It is a very serious base. All our team and I graduated from Moscow State University. In this sense we are spinoff, but legally we have no relation to it.
S.O.C.: Elena, considering your tremendous experience, we would like to know whether you had other projects? Could you please share the story of their creation and success.
Elena Pismennaia: I have higher education in the development of automatic and adaptive control systems and all the time was engaged in scientific work in the field of robotics, worked as the associate professor, and created scientific groups. When I understood that everything needs to be transferred to a practical level, we arranged the scientific and practical festival of mobile robots, which became a great motivation to study robotics for the students of Moscow State University, they understood how can it be put into practice. We created the models of mobile robots, developed regulations, which were very close to real life. Since 1998 our robots were able to move both on beacons, along the line, drive round the obstacles, and make the joint synchronous movements. During the interaction with the Ministry of Emergency Situations of the Russian Federation, we have come up with the idea to make the exoskeleton, which would help to carry heavy tools, to perform some works without any harm for human backbone and joints. Then in 2011 we applied for the grant from the Ministry of Education and Science of the Russian Federation and started making the exoskeleton for carrying heavy loads. Later we understood that it is necessary to create a useful product for the disabled people suffering from injuries. We understood that we are able to do it, but it is necessary to develop compact drives and create correct movement pattern. Our previous practices allowed us to acquire the experience, which was useful while the creation of ExoAtlet. The complexity consisted in the fact that all the people move in different ways. The patients have different symptoms: foot turns in the wrong direction, half of a body does not work, legs do not work, besides everybody has a different bodily constitution. There are lots of modifications to be considered. We have developed the system of settings, which allows modifying the exoskeleton for every person with the height from 1,55 m. up to 1,9 m. Our brain is very flexible, it has a reserve, but this reserve needs to be awakened and our task is to force the healthy parts of the brain to undertake functions, which were not peculiar to them. We cope up with this task and there are the results already.
S.O.C.: We monitor the whole market and analyze spinoffs. There is a huge number of companies successfully working in this sphere in the market. It is important for us to understand the uniqueness of your product.
Ekaterina Bereziy: We are the fastest startup from those available in the market at the moment. Currently, there are two startups with venture investment in the sphere of exoskeletons: we and ReWalk. ReWalk began their studies 15-20 years ago and they already reached the IPO stage. They are the only analog of a classical example with venture investment, all the other exoskeletons are the institutional stories, which started in the laboratories of large universities, developed their product within 20 years, then were separated into a company, when they already had a ready-made product.
Our story is different. The core of the scientific team is Moscow State University. More than 30 years every member worked in the sphere of robotics in their narrow specialization: electronics engineering, programming, etc. In 2013 me and Mikhail Krundyshev, who for a long time headed the Russian representative office of BBK Electronics, joined the team as manager and marketing specialist and decided to work with medical exoskeletons, created the legal entity, became Skolkovo residents, in 2014 we won start-up and in 2015 involved the first large investments from Biofund RVC. We made 6 generations of prototypes during 2,5 years and in 2016 we completed the certification in Russia, i.e. 2 versions of exoskeletons are already the certified medical products. We have sold about 40 exoskeletons during one year. Last summer we completed medical certification and also opened the representational office in South Korea. Together with our Korean partners, we have completed the certification in South Korea, that is we are already a semi-medical device in the market of South Korea.
Elena Pismennaia: Human body is a very complex multilinked dynamic system. We had to create the control law for such multilinked system, and it was necessary to do so that legs were carried over correctly along the trajectory close to those made by a healthy person. In fact, we train the brain to make movements anew, and proceeding from the fact that we move in the Cartesian space in the systems of coordinates x, y, z, we allow the doctors to modify the movement trajectory. Some patients need to take longer steps, some need to raise their hips higher, others need to start walking quicker. We have solved all these complex tasks by means of mathematics and issued in the form of the patent, which gained FIPS diploma. It was made for the first time in the world. We do not deprive the patients of this very important function of balance maintenance. It is one of the main functions, which coordinates brain with hands, legs and the whole body. We always say to the patients: "Remember, here you have the right foot up, and then the left one…", and the brain and muscles are being gradually trained. But for the exoskeleton creation, we carry out a lot of scientific researches and work in the quality of scientific institute. It allows us to understand further directions for our progress. We carry out the researches with the pilots, who have various disorders and receive feedback from everyone. We are trying to implement their recommendations.
S.O.C.: The potential investors will be curious whether you have already signed the contracts and how many rounds of investments have you completed?
Ekaterina Bereziy: After more than 20 presentations we have collected 10 pre-orders. We have already localized the production in South Korea since it is important to our Korean partners to sell in their clinics the products made in Korea, not made in Russia, and there we have already raised about USD 2 million: USD 1,2 million of private investments and more than USD 700 thousand of grant money. That money is intended for the development of the Asian market. We plan to go to China from our Korean daughter. There is already the understanding with whom we are going to open the office there and this year we will open it and will start the certification process because the Chinese certification is very complicated similar to FDN. Currently, we are in the process of signing the distribution agreement with the Singapore partners from our South Korean company. We are going to have a distributive model in small markets there, which implies that the distributors will be completing the medical certification themselves. In the large markets, we will create our own representative offices and move to the distributive model. By the end of 2017, we plan to open the representative office in Europe and apply for CE Mark. We are going to open it for this purpose.
S.O.C.: Do you require investment at the moment?
Ekaterina Bereziy: In terms of financing the Asian market is closed. USD 2 million there will be enough to open the clinic in Korea and offices in China. For Europe and USA, we respectively need investments and the figure is about USD 5 million, but we already have the investor for the half of this sum. It is the same Biofund RVC, and they are ready to provide further financing. We are their portfolio company. They have the mandate for 50х50 financing. They are ready to give USD 2,5 million. Russian Venture Corporation (RVC) has created several affiliated funds and Biofund is the subsidiary of RVC. Biofund is a non-state money. There state money of RVC is already mixed with the private funds. RVC created Biofund for venture investments with the involvement of participants with private capital, therefore, this fund is under RVC control, but money there is not absolutely state. We are independent of politics. The current investor is non-political structure. It is Russian Venture Corporation. They are ready to be set not in Russia. Therefore we also have opened the company in South Korea. One of the key investors there is one of 4 owners of GS (Gold Star). He owns a large-scale business in Japan and China and we are going to use their resources to make such speed up. It is also important that the founders of ExoAtlet still own the share of about 72%.
S.O.C.: Let's talk then about the contracts in Europe and North America.
Ekaterina Bereziy: We already have the contacts in the USA. There we have a different strategy for an exit. We have been there and started the relations with the biggest private hospital MedStar in Washington. There is the understanding whom we are going to involve. Our strategy consists in spending a little money for opening the office, application for FDA and easy start of the pre-licensure trial, and then we want to raise investment for scaling after we complete FDA. Speaking about the USA, there we need USD 1,5-2 million. That would be great to find an investor there, who will be able to complete FDA and start distribution through the existing infrastructure. Our sales model is distributive and the marginality allows us to let the distributors in, and at the same time to remain competitive in comparison with the existing exoskeletons. It gives us the chance to develop the market quickly. In case the investor has his own infrastructure, then it is possible to recalculate the financial model, to open the office there and to give them an opportunity to do it independently. In case we receive the money from people, who aren't able to complete FDA for medical devices and to undertake the sales, then we will open the office in the USA, start FDA and we will look for the partners, who are able to give us the distributive network. The same situation is in Europe. In Europe, we have already decided to apply for CMart and we are going to look for partners, with whom we will be developing the market because the key story on evaluation will happen after the reimbursement, when the rehabilitation with exoskeletons is included in the obligatory insurance.
S.O.C.: Do you complete FDA in the USA as a semi-medical device?
Ekaterina Bereziy: There is no the concept of a semi-medical device for FDA. In the United States, it is called class 2A. It is just a medical device. We most likely won't need to pass the full clinic, because ReWalk and BioniX have already completed FDA. There are many analogs, consequently, we'll need to provide the existing results of the clinical trials in Russia and in Korea to confirm that we have similar results. It will take us a year.
S.O.C.: For spinoff companies, their intellectual property is a key to success. The investors pay particular attention to it. What key intellectual property does your company have (patents, patents pending, copyrights, trade secrets, trademarks, domain names)?
Elena Pismennaia: We have already patented all the engineering solutions in this design and continue the patenting process of the techniques. We already have the patents for several solutions and have applied for the patents for other solutions. We consider the exoskeleton not just as a product. In order that the exoskeleton was used correctly, we have created the techniques for its use by doctors and instructors. It is one of the most important directions of our activity. We try to use all the known rehabilitation techniques and add the rules of effective exoskeleton usage.
S.O.C. What are the time limits for the investments?
Ekaterina Bereziy: For the next 2-3 years we need about USD 5-6 million. Biofund will participate, by all means, they are going to invest half of the sum, respectively at most USD 3 million is required from the investor. For Biofund we are the top-of-the-line project, so they support us. We won't need the whole sum at once. We plan to enter Europe by the end of the year and we are ready with technical files to apply for CE Mark. In fact, there is nothing to wait for, we will need the investments as soon as we apply for CE Mark. For the Middle East, we are going to need the investments as soon as we find a partner there. We have entered into relations with the Minister of Economic Development of Dubai. In Dubai, they have big rehabilitation centers, but there is only pure distribution. There is no partner for the technology development. We are interested in the large-scale model, where we might create new techniques and convey them in other markets.
In the Russian market, we create aftertreatment from scratch within our project, because it gives the possibility to continue the aftertreatment in the polyclinics, that is called the third stage aftertreatment. The global problem is that the person, who has lost the ability to walk, needs to be urgently put on the legs and start walking. This problem is solved by the exoskeleton and it has to be solved during one or two years. It implies regular exercises. The patients, who regularly walk in exoskeletons, restore the sensitivity, their muscles begin to work and some of them return their own physical activity and start walking without exoskeleton with the support of walkers or crutches. I'm talking about the patients with spine injuries. In case of strokes, there are fantastic results. They start walking without support after 4-5 days. If to come back to what differs us from other exoskeletons, we have a fantastic mathematics. We own the patent for the control algorithm with a very steady control along the trajectory. We invented the law of control, which steadily returns on the trajectory at any external deviations. Thus we can repeat the most natural step of the person with any anthropometric data and it is very important for brain neuroplasticity because at the stroke it is important to walk with the legs of the patient the way he would walk on his feet on the same trajectories. No one of our competitors has this mathematics. We became one of 100 best inventions according to FIPS patent. It is a very good patent. We have an engineering solution, which allows reducing the costs for production at the expense of what there appears the marginality, wherein the distributors go with their 50% of margin. In the next version we start now we have a phase muscle toning, there is a built-in electric muscle stimulator and the muscles, which must place one foot in front of the other are stimulated with electric current. That is the picture of walking is recreated completely. We have engineering solutions allowing to make the version for teenagers with cerebral palsy, and we will make the next version for children suffering cerebral palsy. We plan to create children's models and the models for elderly people. It will be not so much the medical gadget as the exoskeleton allowing them to walk independently.
Elena Pismennaia: One of the major problems are sick children. If the child has problems with their motion function, then the whole life of the family is regulated by their visits to medical institutions. We want to help all these children with cerebral palsy and injuries, but the approach must be absolutely different. It is an absolutely different project because kids walk in different ways at a different age. Currently, we are studying the features of their walking at a different age in order to consider it while the project implementation.
S.O.C.: Robotics is a very competitive environment and many laboratories conduct researches. According to the information, we have at the moment there is no finished product, where a person can walk without an additional support. In your case are people walking without additional standing point or not?
Ekaterina Bereziy: You know, there is some delusion because the standing point while walking in an exoskeleton is an indispensable condition from the point of view of rehabilitation. Rehabilitation begins when the person is responsible for his/her vertical orientation and holds the balance. In order, the person learned to hold the balance while he/she doesn't feel anything from the waist down, for example, and he/she needs the third standing point and uses crutches to learn to hold the balance and this third point is securing the person from falling. Speaking about the rehabilitation, one should consider crutches as a certain security measure, which gives the chance to walk on the surface, respectively the person is developing a clear understanding of the distance to the objects, the pectoral muscle sling is getting involved reflexively and a crutch is the way to secure him\her from falling, it is one more tool to feel like the full-fledged person and in this sense the crutches shouldn't confuse anybody, it is rather a bonus. If we make an exoskeleton where crutches won't be necessary, then we will give it the function of holding a vertical position and deprive the person of an opportunity to be actively restored and take away his/her basic function. When we walk, we hold our vertical position. It is the task of our brain. In order the person learned to walk, he/she needs, first of all, to learn to solve the task to keep vertically and not to fall. Therefore the crutch is for the support and it helps to learn to do it.
Elena, our project manager is working with dynamic balance systems and stabilization, therefore, we understood how to write this control law. We can make so that the exoskeleton provided vertical orientation, but we should not solve this problem if we want that the patients started walking independently. In the next versions, we make possible the regulation of the extent of help. The exoskeleton makes the movement of the legs, and if the person shows own physical activity, we need to reduce the extent of help the exoskeleton provides in order that the patient didn't relax. The person very quickly gets used that his legs are walking as if on their own, and it is actually necessary to learn to make the independent movements at some moment and the extent of exoskeleton's help needs to be reduced. Our task is to create a certain robotic complex, which doesn't perform patient's function for him/her, but helps when the function is absent. The exoskeleton is not a substitute of a wheelchair, but the device, which allows refusing from the wheelchair.
S.O.C.: Could you tell us all current industries and fields of your product application and where do you think it could be successfully applied in the future?
Ekaterina Bereziy: In general we know how to make an exoskeleton for the military sphere, it is obvious. Many times we received the inquiries and we answered that we won't do it, though we understand how to make military exoskeleton. We want to bring the rehabilitation on the international level and to reach the IPO. We consider that it is a very big risk for us to start military development. It is possible to create exoskeletons for industrial use. Exoskeletons may be used for those works, where the loading machines can't be used. It is the same story with active and passive exoskeletons. We need a year and a half to turn the exoskeleton into the product necessary for big retailers and on the assembly lines. We just need to write the design specification and negotiate with the end user. The exoskeletons for elderly people is also a separate story. We might cover the whole Asian market. It is not medicine, it is a gadget the seniors would use with pleasure. Honda and Panasonic look in this direction too, they have already made the prototypes. CYBERDYNE (Japan) have already come to IPO. They have the highest capitalization in the world. Besides, in Japan, they already have the reimbursement. They give the exoskeletons to the patients for the exercises and have already included this service into the insurance compensation. In the USA there are private insurance companies, which buy exoskeletons for their clients and ReWalk (Israel) now promise that in the autumn they will involve the market of Germany and the reimbursement will start there. Their capitalization makes USD 200 million.
S.O.C.: What is the price of ExoAtlet?
Ekaterina Bereziy: It will be an available gadget. It will cost USD 2-3 thousand at most. Elderly people can walk, so they won't need the most expensive parts: powerful drives and engineering design, which lifts the person weighing 100 kg. from a sitting position. To lift a person we need powerful drives in femoral joints and rather rigid design made of expensive materials. As soon as we refuse from the task to make 100% movements for the paralyzed person, we can create a light design with less powerful drives and the price will be several times smaller. At the moment our version for private individuals in Russia costs USD 20 thousand while we produce dozens of exoskeletons. If the production volume makes hundreds of pieces, the price will decrease by 30 percent and the exoskeleton will cost around USD 10 thousand. Respectively if we redesign and replace electronics, sensors and all the rest, then the price will fall up to USD 5 thousand.
S.O.C.: Could you please describe your ideal investor? What aspects are important for you, for instance, is it experience, country, the amount of own private capital or maybe some personal qualities?
Ekaterina Bereziy: The partner in the Arab world be of great interest for us because it is impossible to enter this market without partners there. We need a partner to create the company, develop it and render rehabilitation services there. Rather rich people live there and state funding isn't necessary for them, they are able to pay for their rehabilitation. This market is very interesting and we need the partner in medicine owing a network of hospitals. The exoskeleton is a wonderful product, which may be scaled. There is no necessity to build a hospital to develop it. We can use fitness and wellness centers or create mini clinic for rehabilitation in the territory of a hospital. We need only simple space in the form of wide corridors with mirrors or even pavilions in parks, where people will be able to exercise regularly. In Japan, for example, they have rented a half of the floor in the shopping center, put exercise machines and exoskeletons there and created such mini-club for people, who need rehabilitation.
S.O.C.: Do you mean there is the possibility to make additional franchise model?
Ekaterina Bereziy: Absolutely, we have the teaching techniques about the usage of the exoskeleton. These techniques and certain additional toolkit: bars, mirrors, paths with suspensions allow involving a smaller quantity of instructors. It is an interesting franchising model for those countries, where the patients can pay for their rehabilitation. The Middle East is one of such territories.
S.O.C.: To crown it all, SPINOFF.COM team and I would like to express our gratitude for the interview. I would like to express my respect and admiration to your team. The exoskeleton improves the quality of life of paralyzed people and also makes the emotional and psychological effect, which is no less important. The attitude to the world of the disabled people changes once they can socialize again. I have great respect to the idea of your project and I wish you success!