Stepping Back to Move Forward
As of August, 2017, after seven and a half years leading the efforts at Proove Biosciences – a company I founded and poured my heart and soul into –I stepped down as CEO and resigned as an employee. I wish I could say that it was because the Company was sold for a great return, or because I wanted to spend more time with my family. Instead, I resigned because Proove has experienced a calamitous 2017 and needed to restructure. In collaboration with Leavitt Equity Partners, Proove consented to enter into a receivership as part of an effort to ultimately sell the assets of the business. This independent third party assumed control in early August.
You may be wondering how a mere 7 months in 2017 could undo the tremendous achievements of the previous 7 years. You’re not alone, as I, too, have agonized over the same question. As CEO, I was accountable and transparent about the tremendous achievements and challenges at Proove. While my position with the company has changed, my position regarding accountability and transparency has not. It is this intention that inspires me to share a small piece of the story that is Proove.
Elon Musk said it best in a recent tweet about his life as an entrepreneur when he said, “The reality is great highs, terrible lows and unrelenting stress. Don’t think people want to hear about the last two.” The “great highs” of Proove have been well-documented, established, and speak for themselves:
- Successful Precision Medicine Technology for Pain Tech Transferred from Leading Academic Centers – Proove collaborated with leading academic centers, such as the University of Utah, the University of North Carolina at Chapel Hill, McGill University, the University of Southern California, and other key opinion leaders to research and commercialize unique, precision medicine profiles that are the only clinically-proven technologies to BOTH show reductions in pain and accurately identify patients at risk for opioid abuse with up to 96.7% accuracy in published, peer-reviewed clinical studies.
- Tremendous Improvement in Pain Patient Outcomes – Incredible patient outcomes, including data from some of the largest IRB-approved multi-center clinical studies approved and listed on the NIH’s National Library of Medicine website, www.ClinicalTrials.gov showing that over 90% of patients experienced a 40-50% reduction in pain within 60 days after clinicians made treatment changes based on Proove technology. This level of pain reduction – moving a patient from severe to mild or moderate pain – has been published by the National Academies (NASEM) to reduce annual expenditures by $3,210 per patient.
- Societal Health Economic Benefits – These incredible outcomes have been demonstrated in multiple patient populations: a study of 5,589 Medicare Part B beneficiaries, a study of 3,557 CIGNA insured patients, and a study of 419 Blue Shield of California patients. Assuming that most of the Medicare beneficiaries are experiencing some type of chronic pain – as they have either “aged-into” Medicare and experience pain due to aging joints, or have been “disabled” and started receiving Medicare benefits due to a physical disability which often times involves pain – the cost-savings of using Proove technology in Medicare equals a reduction of 24.75% in annual expenditures of $160 Billion annually. This data was presented to the senior leadership of CMS in March 2017.
- A Lab Meeting the Highest Level of Scientific Standards – In 2016, alone, Proove performed over 354,000 profiles and collected over $28M in revenue from precision medicine profiles performed at its CLIA-certified and CAP-accredited laboratory in Irvine, California.
- Incredible Business Growth – 7 years of successful growth recognized by various independent third parties, including being listed on the Inc. 500 list (#323) in 2016, the Inc. 5000 list (#724) in 2017, and the Deloitte Technology Fast 500(#69), showing that Proove has been one of the fastest growing technology companies in North America. Proove’s financial statements have been audited by an external accounting firm starting in 2014 and was profitable and paying taxes every year, except 2015.
- Highly Capital Efficient – In 2009, I founded the company and “bet the farm” to provide seed funding. As the Company grew with positive cash flow, Proove raised a $3.5M convertible note from Leavitt Equity Partners in February 2015 plus built a marquee Board of Directors, including the former U.S. Secretary of Health and Human Services, Michael Leavitt. Most companies have to raise tens of millions of dollars to come close to achieving what Proove achieved.
- Young Talented Leaders – Attracting incredibly talented people, including a hard-working technology team that designed and implemented a proprietary laboratory information systems, predictive analytics platform, and innovative test reporting tools; a young visionary leadership R&D team guiding clinical trials, data science, and product development; and countless other loyal, hard-working employees who grew with the business from the early days serving in human resources, operations, commercial, the lab, and many other functions.
- Award-Winning R&D – Proove research received awards and accolades from leading medical societies, including: the American Society of Interventional Pain Physicians, the American Society of Regional Anesthesia, the American Academy of Neurology and others and has produced many peer-reviewed publications, including 8 studies accepted for publication in 2017 alone.
- Partnerships with Leading NIH-Funded Researchers – Collaborations with leading researchers in the field who sought out Proove to buy their company, which had commercial rights to the largest NIH-funded prospective study in pain to further develop new precision medicine profiles to help patients.
Yet, despite these tremendous achievements, 2017 presented unprecedented ironic “terrible lows” as Musk penned. Someone I respect tremendously once wisely characterized irony when he said, “Irony is the hard crust on the bread of adversity. Irony can try both our faith and our patience…It involves outcomes in violation of our expectations. We see the best laid plans laid waste.”
There are many things that I’ve learned from this experience, but if I had to narrow it down to one pearl of wisdom to share, it would be the following: “Don’t keep employees around that should be fired.” I did this too many times, and every time, it resulted in “terrible lows”. Like most people, I love to help and helping others became one of the great missions of Proove. However, and quite ironically, I learned another cliché life lesson – no good deed goes unpunished. Many of the very employees who have tried – and are even now trying – to hurt Proove and my own reputation were given some of the biggest breaks and help, including: providing them with a down-payment on their home, paying to retrieve their car from an impound lot, paying for their child care, paying for their mother’s funeral expenses, paying for their housing expenses for months because they were homeless, etc. In every one of these circumstances, when the individual was eventually terminated, he/she disparaged the company, made false allegations to the media, and/or filed erroneous complaints with the government. It’s difficult to stay silent, upon advice of counsel, when these former employees that you went above and beyond for, are trying so hard to actively hurt a company you’ve sacrificed everything to build. This is especially difficult when you find emails from these ex-employees, in their own words, conspiring to compete against and/or destroy the company.
“Don’t keep employees around that should be fired.”
In 2017, these false allegations have been given a “spotlight” by the likes of STAT News, who jumped on a story with very little support beyond “hearsay” and fraudulent “proof” sources. Proove published a response to these accusations over the summer. However, the unfair and untrue allegations were subsequently picked up and spread through other online news sources and sadly, these allegations from a handful of disgruntled ex-employees and sales contractors have piqued regulators’ interest. As a result, the government opened an investigation into some of Proove’s business practices. Obviously, I continue to remain willing and able to work with all those involved in this investigation to resolve any outstanding concerns or misunderstandings, as Proove has nothing to hide. I can’t help but find it ironic that the very heroes who should be advocating for wide-scale adoption of Proove’s technology to save lives, are now, unfortunately, engaged in an investigation to search for any evidence to support the spurious allegations of a few disgruntled ex-employees and sales contractors who conspired – in their own words – to devise false allegations to harm Proove.
For the few disgruntled employees who have orchestrated this witch hunt, I know that, in time, the truth will prevail and that you will end up regretting your decisions. For the many, many former employees, physicians, patients, and friends who have been a positive part of the Company’s history and success and have expressed sympathy and sorrow regarding the current situation, I say this – thank you. Thank you for believing in the vision Proove had to improve patient care, thank you for supporting me and the Company through all of our ups and downs, and thank you for being a part of a narrative that has saved people’s lives and that, I am confident, will continue to save lives in the future. I am especially grateful to my wife and kids for all they’ve sacrificed to allow me to create and lead such an amazing company. I am grateful for all those I’ve had the honor to work with over the past 7 years and I am incredibly proud of what we’ve done at Proove. No temporary false allegations can – or will – change the facts or history.
I am incredibly proud of what we’ve done at Proove. No temporary false allegations can – or will – change the facts or history.
Right now, I remain available to the receiver in their efforts to sell the Proove assets for the most value possible. I certainly want to ensure that Proove’s life-saving technology is available to all who need it. And, of course, I am enjoying the extra time I have with my family!
Moving forward, I will be the same person I’ve always been – a guy who naively believes he can make a difference. I remain an innovation pioneer for whom improving our world is part of my life’s story. I am passionate about solving profound societal problems. I believe that entrepreneurship unlocks human potential and makes the world a better place. This is what I’ve done for the past 30 years — first as a student activist, and then as a citizen volunteer, loyal employee, social entrepreneur, elected official, and most importantly, as a husband and father. I’ve learned a lot from this experience – both the successes and the failures – and I look forward, with great anticipation, for what the future holds.
 Neal A. Maxwell, “Irony: The Crust on the Bread of Adversity.” General Conference, April 1989. https://www.lds.org/general-conference/1989/04/irony-the-crust-on-the-bread-of-adversity?lang=eng