Several months after announcing the departure of CEO Todd Fruchterman, M.D., Ph.D., after he’d spent less than two years in the top role, Butterfly Network has finally chased down a new leader.
Taking over from interim CEO Jonathan Rothberg, Ph.D.—Butterfly’s founder and chairman of its board of directors—is Joseph DeVivo. The company’s Monday announcement noted the C-level switch-up is effective immediately.
DeVivo most recently served as executive chairman of Caption Health, a maker of artificial-intelligence-powered guidance software for ultrasound exams. Caption, which was acquired by GE HealthCare earlier this year, partnered up with Butterfly in 2021 to add its AI to the latter’s own hand-held ultrasound platform.
In an email interview with Fierce Medtech, DeVivo said he plans to use lessons learned from his time at Caption—and, specifically, his observations of Caption CEO Steve Cashman in action—as he takes the reins at Butterfly.
“[Cashman] opened his aperture to understand the impacts AI could have that other device manufacturers were not yet capturing, and he uncovered opportunity for value-based care providers,” DeVivo said. “One outcome of that was mobilizing healthcare professionals who had no prior imaging experience to be able to do cardiac ejection fraction measurements in the home, using the Caption AI algorithms on Butterfly iQ+ devices.”
He continued, “I believe Butterfly can make a similar impact with our AI, and even see potential for a new revenue stream ourselves in value-based care.”
Before his year-and-a-half-long stint at Caption, DeVivo logged nearly six years first as CEO of InTouch Health and then, after the telehealth services provider was acquired by Teladoc Health in a $600 million deal in 2020, as president of hospitals and health systems at the telehealth giant. Other highlights from his career include a handful of CEO and president roles at AngioDynamics, Smith & Nephew and more.
As he settles in at Butterfly, DeVivo said in the interview that his first order of business is simply to listen to both the company’s workforce and users of its technology.
“I want to become immersed in the history, learn from it and collaborate to push ahead into the future,” he said. “Equally important will be listening to the customers to identify the best opportunities to make their experience continually easier, drive more adoption and help them help more patients.”
Once that immersion is complete, DeVivo’s focus will be on advancing Butterfly’s mission to democratize access to ultrasound imaging—“not only achieving the vision for every caregiver to use our probe as commonly as the stethoscope, but also achieving the ‘final frontier’: patient self-scanning in the home,” he said.
That mission—and its “massive opportunity” to improve lives around the world—is particularly exciting to the new chief executive, he said, as is the potential of the probe itself, which relies on AI and semiconductor technologies that are ripe for “continual and rapid innovation” to keep simplifying medical imaging.
“When you work in healthcare, you hope to maximize the opportunity for impact and drive societal change. Butterfly is doing that,” DeVivo said. “I’m so excited to join Butterfly because it can bring millions of patients greater access to early detection, enable caregivers to help patients sooner and, ultimately, forge a path to significant reductions in healthcare spend. It’s the right place to be to do right by society.”
DeVivo’s predecessor Fruchterman left Butterfly at the start of this year, after he and the board “mutually agreed” that he would step down from his roles as CEO, president and board member once 2022 had drawn to a close, the company announced in early December. Fruchterman—formerly the head of 3M’s medical solutions business—had joined Butterfly in early 2021, shortly before it went public in a $1.5 billion SPAC deal.
His departure less than two years later came as Butterfly embarked on a series of cost-cutting moves. The first round of attempts, announced in August, included layoffs of about 60 workers, or about 10% of its workforce, and other “improved efficiencies,” as Fruchterman said at the time, which were estimated to save the company about $3 million per month once complete.
Butterfly extended those cost-cutting measures earlier this year. In a January filing (PDF) with the U.S. Securities and Exchange Commission, the company said it would lay off another 25% of its workers and shave off operating expenses in other areas.
In a full-year earnings report released at the end of February, Butterfly tallied total revenues of more than $73 million for 2022, a year-over-year increase of more than 17%. Meanwhile, its net loss reached nearly $169 million, more than five times the size of the previous year’s $32 million loss. After the two rounds of cuts, however, Butterfly said in the report that it’s expecting to reduce its losses by about $60 million this year.
DeVivo said in the interview that achieving “consistent revenue growth and a predictable timeline for profitability” are top of mind as he steps into the new role.
“The innovator’s dilemma is always that, when blazing a new trail, you have to do the necessary market development work to get the appropriate adoption,” he said. “So, we’ll focus on our fundamentals, continue building our market one step at a time, and if we do that successfully, the revenue and profit will follow.”