Long Journey in Healthcare: Canadian Entrepreneurs Matthew Sappern and Emily Hamilton of PeriGen (Part 3)

Sramana Mitra: How many hospitals, for instance, were you able to sell your product to in that early phase right after getting the prototype?

Emily Hamilton: Almost all of the hospitals in Montreal. We have two medical schools here. I had colleagues in many of the hospitals who were former students or colleagues for many years. Montreal is a city of about three million and we have five or six hospitals. People were very interested in efficiency and high value healthcare delivery. It became quite evident that we needed to do more.

There’s a problem in labor, which is analyzing the baby’s heart rate because that’s what we use to estimate whether or not the baby is tolerating labor well. Many people have tried to develop fetal heart rate pattern recognition algorithms and they couldn’t. With this team, we were able to do that quite successfully. I’ll just jump ahead because I think it was the culmination of those two. The litigation settlements can be so astronomical. That began to attract the attention of US entities.

Sramana Mitra: When you were selling to these Montreal hospitals, what were the deal sizes? How were your pricing the product?

Emily Hamilton: The first ones were practically given for nothing because we wanted people to try. In fact, we did some clinical trials. At the end of the clinical trial, they would acquire that software for a nominal sum. That would have been the first few hospitals. After that, the next hospitals were in the range of $50,000 to $100,000.

Sramana Mitra: What point in this progression did you hit upon the insight or the nugget that US hospitals were bothered by the amount of litigation issues that they had to tackle?

Emily Hamilton: I think that was apparent at the onset. The economy in general is much different in the United States. Hospitals have much more capital. These medico-legal pressures are felt in a different way such that hospitals are responsive. We always knew that the US market would be our prime market. However, we had to prove beyond proof of concept with real customers before there would be of any interest in the US. 2008 came around with the stock market downfall. That made life very difficult.

Sramana Mitra: How do we jump from 1998 to 2008? Were you only selling in Canada in that timeframe?

Emily Hamilton: We were selling in United States. In fact, we had developed a relationship with a large provider of electronic medical records to integrate our software. This is one of the painful lessons that I’ve learned a couple of times now. Integration of two disparate software is far more complex than you anticipate at the beginning. We probably had 40 or so clients. That progression was coming along much less quickly than ever anticipated.

Sramana Mitra: In 2008, what was the revenue level?

Emily Hamilton: About $5 million a year. It was increasing beautifully. Then 2008 happened. Basically, my Board of Directors said that they would sell the company and that they won’t invest further. They thought it was too risky. Enter Perigen.

This segment is part 3 in the series : Long Journey in Healthcare: Canadian Entrepreneurs Matthew Sappern and Emily Hamilton of PeriGen
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