Neil Daly, CEO of Skin Analytics: Helping detect skin cancer using a phone

0:00Hello and welcome back to the Scaling Europe show. I'm Seb Johnson. Today on the show we've got Neil, founder and CEO of Skin Analytics. How are you doing today, Neil? Very well. Thanks for having me. Really looking forward to having a conversation. The pleasure is all mine. Thank you for taking the time to kick off. Maybe for those who don't know you and what you've built, could you give us the quick pitch? What is it that you're building? Yeah, absolutely. So Skin Analytics is a company that has built AI algorithms that are able to identify malignant, pre-malignant and benign skin lesions from an image of that lesion.

0:32We take that technology and we then embed it into various different healthcare systems to make more efficient skin cancer pathways with the goal of trying to make sure the patients get better outcomes, but also make sure that the health system is able to generate savings, which it can then reinvest into better care for its populations. Amazing mission. It's like a really classic, you know, sort of like tech AI for good example. How did you get into this? Like, how did you start building this business and why? Well, I was very naive, is the answer, and thankfully so, I think. But it was way back in 2011, 2012.

1:10I started the business in January 2012, and I spent most of 2011 kicking around the idea, calling up every professor of computer science across the country, trying to get someone to believe that we could build this computer system to be able to diagnose skin cancer, and eventually found a professor up in Cambridge. the late Bill Fitzgerald, who said, yeah, let's do it. Let's crack on. And I think we can make this work. And that was really the genesis for the company. But I had previous to that just been absolutely captured by the idea of computer vision systems, as they were called back then, from an article I'd read in some journal.

1:48I can't even remember which one these days. But it really just captured me as a huge opportunity to try and solve one of healthcare's biggest problems, which is that really to be able to treat people for various diseases, we spend the vast majority of our time speaking to healthy people, trying to pick the needle out of the haystack. And it just felt to me like the perfect place to apply computing technology to try and make that haystack significantly smaller and then allow the health system to focus on getting sick people healthy. And how has it changed since we've seen this sort of explosion of AI?

2:22In many ways, you were very, very early trying to use the algorithm, the computer systems before AI really exploded. How did that moment change things for you in the business? Yeah, I think there's been four waves of AI explosion, if you like. And the previous ones have ended a little bit sadly. This one feels a little bit different, I would say. And I guess the markets would say as well right now. But the truth is that we were so early on the technology, the capability wasn't there. And so we've been both unfortunate to be that early, but also very fortunate because we've been able to make all the mistakes in building and deploying this technology and figure out how to solve them, which is really the key part of why we've been able to build something that has so much utility right now is sort of being there at each of those big jump points as the technology matured and knowing its limitations and knowing how to build around it with real world data.

3:16But what I would say is that actually we've been very fortunate in the last little while. Each time that AI starts to become something that people are believing in again, we've seen a corresponding jump in the belief in what we're doing go along with that. So specifically when ChatGPT exploded on the scene, we had been pushing very hard for hospital systems to adopt our technology and were finding it slow going. and immediately we saw an acceleration as people started to believe in what ai could do and in the power of the technology and suddenly it didn't seem so fantastic that you could diagnose skin cancer with these technologies because people were starting to see all the crazy things you could do with these technologies that's really interesting so it's sort of like the the market has caught up with where you were in in many ways and can you talk about um some some of the interesting stuff that's happened recently like i you know there was an announcement in june this year about DermZero, which I think was like a real milestone for the company.

4:11Can you touch on that? Yeah, there's been a couple of really big milestones for us in the last little while. I mean, firstly, just to give a little bit of context, it'll make a little bit more sense if I explain. We started the business focusing using a dermoscopic image, it's called. And that's a relatively low cost lens, cross polarized lights and a magnification that can clip onto a smartphone and you can then capture a high quality image. And we focused on that because that was the gold standard of what dermatologists would be doing. And there's just more information in that image to be able to identify the difference between malignancy and very complex benign lesions.

4:47And so that formed the basis of our business for a good amount of time. But all the while, while we were doing this, we're also collecting images from just the smartphone and constantly comparing, can we get the performance from just a smartphone close to the dermatoscope or the dermoscope, depending on which part of the world you're in, and always finding that there was a gap that was huge and not sort of acceptable in clinical practice. So the first thing that we achieved was that we managed to get a European clearance for the dermoscopic version of what we have, which allowed us to be able to sell our technology into different European markets as a decision support tool.

5:24And that was something that we decided we weren't going to prioritize as a business. We were going to focus on what we're doing in the UK. and then we got to an autonomous level where the AI was allowed to make the decision with the dermatoscope on its own without a clinician in the loop and that really accelerated the things that we could do in the UK and we started to look again at Europe and then probably the most exciting step was one that happened just recently as you mentioned we launched it in May and that was that we were actually able to make a huge technical breakthrough to get the smartphone only version of the diagnostic tool to work at an incredibly high level.

5:58And so we now have regulatory clearance across the entirety of Europe to turn every single smartphone or the vast majority of smartphones into a diagnostic tool that's allowed to run autonomously without a clinician in the loop to try and find and rule out cancer across the entire European population. So it was a huge moment for us that really opened up both a large amount of opportunity, but also a lot of questions for us as a business to think through what do we want to or how do we want to bring this technology into the market across Europe. And we can talk a little bit more about that, but we've, up until this point, focused entirely on helping hospital systems solve their problems.

6:36And increasingly, we're being approached by other care providers that operate around these markets to try and augment their offerings. I mean, it's amazing technology, right? To be able to get to that breakthrough moment must have in itself been, I mean, you've been working on this business for like 12 years now or longer than that like what was that moment like where either you started to see the data or you kind of crossed that threshold or approval like what was that moment like yeah it was a super exciting moment the thing was i had been going up to to the board who'd it's a natural thing to ask when can we just use the smartphone when can we just use the smartphone and and as i said we've been collecting the data from the very first deployments to to show it and i've been telling them for years look there's just not enough information in the in those images to be able to make a sophisticated decision at the level that we operate as a business.

7:25It's just, there's not enough. I said it maybe a hundred times to them. And then Jack, who leads my AI team, the researcher who's behind all of this innovation came to me one day and said, yeah, I think you should have a look at this data. I think I might've made a mistake in some of the calculations, but I've checked it a couple of times. I just wanted to show it to you. And I was looking at it going, oh my goodness, like if this is right, the potential for this technology is just phenomenally large. And it was a moment where it was both hugely exciting, but also we were convinced for a long time we'd made some sort of mistake in the calculations.

8:01So it took us a while to unpick those before we kind of got too excited. But it was a good moment. It's phenomenal. It's really cool. And then, yeah, maybe talk about the deployment. What does this actually unlock for the business and for people across Europe who are now, yeah. And how would they get access to this, I guess? Yeah, so that's what's really exciting. I think that one of the things that Europe is very strong in is that we have one regulatory regime that governs the entire European landmass. But we also have very different healthcare systems operating across these areas, and there are local market requirements.

8:37And so it's probably not quite as simple as having one clear as being able to turn on all these markets and enter them at the same time. But I think that why this is so powerful is it does two things that I think are critical. One, it opens up a huge range of business models so that a lot of these complex healthcare systems that weren't as obvious for us to be able to support now become candidates. And let me explain what I mean by that one. in the uk because the healthcare system is all publicly funded if your technology like ours is able to help identify cancers and in doing so reduce the number of dermatology appointments it takes to find those cancers so those dermatology appointments can be reapplied to the waitlist that exists there's a significant benefit to the health system of doing that one you've got reduction in in sort of dermatology visits, which unlocks costs.

9:31And then two, you can start to reduce a lot of the waitlist clearing initiatives that many trusts are relying on, which are costing the UK somewhere around about 80 million pounds a year just in dermatology. And so there's an immediate unlock of value. When you get into other healthcare systems where you've got separation between primary care and secondary care, anything happening in primary care that reduces secondary care costs, the accounting starts to fall apart. and so by having this new technology, you can take a lot of the cost of delivering our system, our tests out of the system and then you can change the sort of the way the economics work and be able to support more different business models.

10:09So that's the first thing. It really does change the way that we can sort of approach these different markets. The second thing is that it dramatically changes access because all of a sudden, you know, a little bit of hardware that costs three, 400 pounds to send out to someone doesn't sound like a huge problem. And in fact, we run models in the UK where we hold that inventory and send it out to patients and get it back from them and help run these skin checks. But if you take that away and all of a sudden you say, look, every Samsung phone, every iPhone, a whole bunch of other phones that are in operation across Europe, you download an app and all of a sudden it's now a diagnostic tool.

10:43That is a real step change in how you can access people that previously just weren't accessible. And in the healthcare system, we've got two challenges. One, it's too expensive to service the people who are coming into the healthcare system. And two, we're not actually servicing all the people that need to be serviced. And so if we can change both those dynamics, reduce the costs so that we can make healthcare systems more effective and dramatically change access, that can really take us to that mission that we set ourselves at ScanAlytics in that we want to make sure that no one dies from skin cancer.

11:13And those are the two levers that we need to pull to get to that point. So a huge, huge moment for us. Amazing. And what's been the reaction, I guess, either from both consumers, but it's like end users or patients and then clinicians, you know, can they quite believe this? Yeah, so it is very different. So I think the first natural question is, well, why don't you just put this on the app store and let it go crazy and make it access completely open. And it's just, as a company, we've always had the belief that our job is to make sure that patients have the next step in the health journey already arranged or that our partners are able to deliver it.

11:51So I don't want to put a smiley or a frowny face on an app and say, oh, bad news. We think you have cancer. We need to make sure that they have access to a care system, could get access to a biopsy, can get the treatment so that we can solve that problem. And so we're committed to deploying within site healthcare systems in innovative ways, but just making sure that that patient doesn't get left without a way to access to solve their problem. But that sort of opportunity of dramatically improving access does open up all these sorts of different ways we could support the healthcare system as long as we can meet that test.

12:29And so that's kind of our focus right now is we're working with a whole range of different providers across Europe that are coming up with these great new ideas of providing access to patients. And we see our job as being the specialists that can power that for them, but making sure that we have that bar of making a better outcome for the patient is the core central theme. And you mentioned that the real mission of the business is to build a future where nobody dies of skin cancer. What does that roadmap look like? And maybe actually share some stats on the results that you've had to date, because the technology has been used for hundreds to thousands of people.

13:08It's detected loads of cases. Maybe share a bit about that and then talk about how can we get to that mission? What does that look like? Yeah, so we have now found more than 25 ,000 cancers across the NHS. We've seen more than 300 ,000 patients and we've done that at a pickup rate of around about 97-98 % for cancer, which compares very favourably in the literature to any other way you could try and find skin cancer. It's a very, very high performance. And so we now know with a really great degree of specificity exactly how the technology performs at scale across entire populations, across all the different regions of the UK, with all the different demographics that we have in the UK.

13:56So really, really strong performance data that sort of shows that the technology, There's nowhere to hide it, right? We publish this every quarter or every six months. We publish the performance data, warts and all, and it's incredibly strong. We let people sort of evaluate it. That has helped build up confidence in clinicians because they realize that being able to interrogate the data, they can see a level of information that they can really get the confidence that technology does work the way that we say it does. And I think that there's been a lot of trust that we've been building up of the six, seven years that we've been working across the NHS so that I was surprised at how ready a lot of our clinical partners were willing to have the conversation around using a smartphone alone because that's a big jump but I think we've built up that trust over the years.

14:47In terms of how do you translate that potential of finding cancer into trying to make sure that no one dies of skin cancer there's two really important things to know about it. Skin cancer like almost every other cancer in almost every other disease, the earlier you find it, the more effective the treatments are. But skin cancer is one that's particularly interesting because it's visible on the surface of the skin before it starts to spread throughout the body. So if you can find it in its earliest stages, the survival rate's about 98, 99 % is almost perfect. And so that becomes the goal for skin cancer, find it at its earliest stages.

15:23But just like every other cancer, to find any of them, you have to see a lot of healthy people. And so in the UK, in the urgent skin cancer referral pathway, so once you've gone from primary care, been sent into a dermatology team for suspected cancer, the pickup rate is somewhere between six to 8 % of those referrals are cancer. And the vast, vast majority of the patients on those pathways, more than nine and 10, have absolutely nothing wrong with them at all. And so when you put those two things together, the only way you can possibly go out and see all of the people that you're going to need to see to find the cancers early is to deploy a technology that doesn't take a 15 to 20 minute dermatologist appointment because dermatologists are rare and expensive.

16:06And so putting all those things together, that's why we're super excited about trying to make sure that we find every cancer in those earlier stages and then making sure that no one dies from it. And I think that for the first time since I started the business, we had this big vision. This is something we always wanted to be able to do. and now it's so tantalizingly close that we're really excited about it. Amazing. I think it's such a phenomenal job that you're doing and an amazing mission. I think one final question, right? You raised a Series B last year. You've had these amazing milestones since you raised that round.

16:38What's next? What's next on the immediate priority list? What takes you from where you are today to that next stage of your journey? yeah i think that the secret for us right now is is to make sure that all of these really exciting opportunities that we're talking to care providers across europe are deployed and we show that across a number of different models our technology can really support those outcomes rather than just being focused in the uk we're able to show that it works across europe and of course the us is a huge focus for us and so translating that technology making sure that we are able to unlock value in the US for the healthcare system.

17:17That is a very different problem. I think that we all know that the US approaches healthcare in a very different way to the way that we do across Europe. So those are two big things for us to focus on right now. And I think that, you know, we're growing really, really well at the moment. We're able to really sign on more and more partners. We're just about to announce something in the coming weeks and months that is pretty exciting. And then we'll continue to build on that, build on that, build on that across Europe and eventually we hope to be the number one way to solve skin cancer across across the globe.

17:49I love it well look Neil thank you so much for taking the time I think it's a really cool what you're doing and I look forward to kind of following on your journey and seeing you continue to go from strength to strength. And thanks very much Seb really appreciate the chance to chat to you and share a little bit more about what we're up to.

18:12Thank you.