clearing commercialization hurdles, 2.1.12

Clearing Commercialization Hurdles February 1, 2012

J. Greg Davis Founder & CEO, MedCelerate



My Device Background

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Fundamental Questions

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Do We Have Compelling

Idea?

Is Our Device Safe in

Humans?

Do We Have a Product?

Can We Supply in Quan>ty?

What is Reorder Rate?

Should We Seek US Approval?

Product Development

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Lessons Learned  Start virtual, run silent, be capital efficient  Learn how to iterate and fail quickly  Study long-term trends in healthcare and impact on your technology  Identify up front how your product will save health care system money

Do we have a compelling Idea?

Key Ques>on Major Ac>vi>es

• Conduct preclinical research • Animal studies • Establish IP • Develop Business Case fundamentals

5 ©2012 MedCelerate LLC, All Rights Reserved.

FIM/CE Mark Clinical Study

Lessons Learned  Lay solid Quality System foundation early  Know and understand regulatory requirements  Consider using European CRO with relevant device experience  Continue staying lean and focused


• Design freeze • Design controls, GCP • Align thought leaders • Trial design • Study site management

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Is our device safe in humans?

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Going to Europe First - Is “Juice Worth the Squeeze”

Pros: • More predictable regulatory pathway

• Demonstrate clinical acceptance/commercial viability

• Recognized quality of clinical research

• Valuable product development input

• Transfer learning to US submission/launch

• Early look at market development & learning curve

• Revenue generation

Going to Europe First - Is “Juice Worth the Squeeze”

Cons: • Deciding which markets to pursue is not obvious -  27 unique healthcare and reimbursement systems

• Attracting top talent is difficult - Less entrepreneurial, employment contracts, expensive

• Price sensitive markets

• Product adoption impacted by limited clinical data

• Management of distributors

• Revenues – yes, positive cash flow – doubtful

Post-Market Clinical Studies

Lessons Learned  Build clinical experience to gain understanding of product limitations  Customer usage may lead to another product iteration  Will inform about market development and physician training requirements  Despite limitations, clinical data is powerful


• Study design • Assign PIs • EC approvals • Study management • Publish data

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Do we have a product?


Supply Chain Scale-Up

Lessons Learned  Making 50 is not the same as making 500 or 5,000!  Weigh pros & cons of in-house vs. contract manufacturing  Consider using EU-based contract manufacturers  Limit number of partners – must be profitable for them as well


• Identify CMOs or scale in-house mfg.

• Improve yields • Additional CE Mark • Logistical support

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Can we supply in quantity?


OUS Commercialization

Lessons Learned  Start with basic question: “What are we trying to achieve?”  Your exit potential heavily tied to account level product adoption  Stay focused on limited number of countries/accounts  Resist temptation to add new markets opportunistically


• Build S&M organization • Decide countries/customers • Approach to customers • Pricing & promotional elements

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What is reorder rate of end customers?


U.S. PMA Approval

Lessons Learned  Expensive, time-consuming, potentially risky  Enrollment will take longer than you project  Strategic acquirers happy to stay on sidelines  Assess investors’ dry powder to reach PMA approval

Key Ques>on

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Should we seek US approval?

Major Ac>vi>es

• Pre-IDE discussions w/FDA • Bench & animal data • Trial design • CRO partner selection • Patient recruitment/FU • PMA module submissions


Final Thoughts

•  Think about economic impact to HC system day 1

•  CE Mark does not mean you have product

•  Start with what you are trying to achieve OUS

•  Experience in Europe is valuable but expensive

•  Selecting right manufacturing partners is key

•  Understand sales process before expanding

•  Focus on account level adoption

•  Have ability to see FDA trial to completion


GOOD LUCK!