Smart Smes Market Validation Program

Health Market Validation Health MVP (Health MVP)

Guidelines for SMEs CONTENTS

1. Overview...... 3

1.1 Health MVP Objectives...... 3

1.2 Health MVP Benefits...... 4

2. Health MVP Description...... 5

2.1 Feasibility Study...... 7

2.2 Assessment of Feasibility Study...... 7

2.3 Validation...... 8

3. Intellectual Property developed under the MVP...... 8

4. Funding Arrangements...... 9

4.1 Feasibility Study...... 9

4.2 Validation...... 9

5. Eligibility...... 9

6. Collaboration...... 10

7. Call for Proposal Applications...... 10

Health Market Validation Program Guidelines for SMEs Page 2 1. Overview

The Health MVP is a $15 million competitive grants Health MVP that leverages the power of government-as-customer to achieve innovation-based productivity gains, improved health outcomes and economic benefits for Victoria. The Health MVP is a key initiative of the Victorian Government’s Victoria’s Technology Plan for the Future - Biotechnology, released in 2011. The Health MVP has been designed to specifically address identified challenges currently inhibiting the successful pre-market development of innovative healthcare-related products, processes and services by Victorian small to medium enterprises (SMEs). The Health MVP targets the development of new technologies or the significant advancement of existing technologies that meet the specific needs identified by health-focused public sector entities. The Health MVP is managed and administered by the Innovation & Technology Division within the Department of Business and Innovation (DBI). The Department of Health (DH) is represented on the Health MVP Assessment Panel and provides advice regarding health issues, current health policies, stakeholders and the impacts of new technologies.

1.1 Health MVP Objectives The Health MVP objectives are to:  support greater levels of innovation in health-outcome focused agencies and industry in order to improve health outcomes and/or the productivity of healthcare spend or service delivery  support the growth of innovative SMEs in order to deliver economic benefits for Victoria such as increased jobs, exports, investment and productivity  support clinical translational research as a key mechanism for improving health and/or improving the productivity of healthcare service delivery or spend  encourage clinical trials in Victoria in order to capture the social and economic benefits of a local endeavour  encourage a greater level of collaboration between and within public and private sector organisations.

Health Market Validation Program Guidelines for SMEs Page 3 1.2 Health MVP Benefits For Victorian public sector entities the Health MVP provides support to identify problems and collaborate with industry to develop solutions that will improve health or healthcare service delivery and reduce costs. For SMEs the Health MVP provides a new source of funding to develop products, processes or services and the opportunity to develop and validate new technology in response to a real customer demand. This provides a sound position to secure further investment and/or commercial opportunities. The Victorian community will benefit from:  improved public sector health service delivery and productivity  early access to new and innovative technologies with the capacity to improve the health and wellbeing of Victorians and  more focused private sector R&D, leading to new business ventures, future investment and economic benefits.

Health Market Validation Program Guidelines for SMEs Page 4 2. Health MVP Description In the first stage of the Health MVP, Victorian health-focused public sector entities (Hosts) were invited to submit a Technology Requirement Specification (TRS) outlining the specific health sector problem and the anticipated benefits from addressing the need. TRS were submitted by Hosts and assessed and selected by the Health MVP Assessment Panel against published selection criteria for recommendation to the Minister for Technology for approval. Successful TRS are released to the market as a Call for Proposal. Through the Call for Proposal, SMEs submit an application proposing an innovative solution to the requirements detailed in the TRS. The relevant Host assesses all the SME responses to their TRS and selects, with support from DBI and subject to the Minister for Technology’s approval, an SME to undertake a Feasibility Study of its proposed solution. Successful SMEs enter into a funding agreement with their Host to undertake a Feasibility Study project. At the end of the project, the SME will deliver a Feasibility Study Report to the Host and DBI. Feasibility Study Reports are then assessed by the host, relevant industry and technical experts and the Assessment Panel. A number of projects are selected for further funding of up to $1.5 million over two years to undertake a Validation stage. The Selection Criteria that will be used for assessing SME Call for Proposal applications are: 1.Economic Impact Magnitude of benefit to the SME and wider economy What are the potential economic benefits of successfully developing the proposed technology? Consider economic benefits to your organisation and the wider economy. Where possible, provide an estimate of the size of the potential market for the proposed solution and indicate whether there are additional spill-over benefits (i.e. benefits for other organisations / service providers). 2.Productivity Impact Magnitude of benefit to health agencies and Victoria What are the potential benefits to health service delivery and/or productivity of successfully developing the proposed solution? Consider benefits to the host organisation, the Victorian health sector and broader applications. 3.Health Impact Magnitude of benefit to patients What are the potential benefits to patients of successfully completing the project? Consider direct benefits to patients, quality of life / improvements in disease or condition management, length of stay in health service, morbidity / mortality, improvements in clinical effectiveness. 4.Project Achievability Barriers to success

Health Market Validation Program Guidelines for SMEs Page 5 Can a solution to the identified problem be progressed to a defined end point* within the Health MVP process, grant amount and timeframe? Are there any regulatory or legislative barriers that might affect the project? *It is expected that at the end of the Health MVP process, the solution will be at least in the late development stage and in a sound position to secure further investment and/or commercial opportunities. Feasibility of proposed solution Is the project concept clinically and technically achievable, within the Health MVP process, grant amount and timeframe, as outlined in the Guidelines? 5.Capability of SME Project management and delivery capabilities Provide evidence of demonstrated experience and knowledge, resources and skills to deliver a clinical research and development project, potentially including clinical trials. Name your Principal Investigator and Project Manager and attach CVs for each of them. List any other key personnel who will be involved in the Feasibility Study including any planned subcontracting arrangements of the R&D effort. Describe your access to or beneficial use of any proprietary information or IP to be used in undertaking the Feasibility Study. What rights have you negotiated for use of this IP? Outline any access to records, systems, personnel or other support you may require from the Host in undertaking the Feasibility Study (if applicable). Governance Describe the project governance and management arrangements that will be in place to ensure the project is conducted within business, regulatory or legal guidelines and practices, including your risk management processes. Experience in feasibility studies and R&D projects Describe your company’s previous experience in undertaking feasibility studies and R&D projects in the past 5 years. Attach the names of two referees (not related to the business) who are able to comment on your business’s R&D experience. 6.Investment ready Describe the anticipated plan to attract any subsequent investment needed for the technology to reach the market. Successful SMEs will require approval of the Minister for Technology and will be subject to a DBI Financial Risk Assessment before proceeding. (Information on SME eligibility is outlined at Section 5).

Health Market Validation Program Guidelines for SMEs Page 6 2.1 Feasibility Study The Health MVP Feasibility Study aims to determine and document the viability of the solution proposed by the SME. The study will be undertaken by the SME, and provides the opportunity to develop the partnership between the Host and the SME. In preparing to commence the Feasibility Study, the Host and SME will establish and agree on governance arrangements to support the objectives of the study and ensure that the Feasibility Study Report comprehensively details the activity and outcomes of the study. The main steps in undertaking a Feasibility Study are:

 Appoint an experienced Project Manager in both the SME and the Host’s organisations to manage the project  Develop a Work Plan to detail the study’s delivery time, deliverables etc., including a milestone plan and assigned responsibilities.  Appoint a Project Advisory Group and any necessary external advisors  Undertake the study in accordance with the prepared workplan  Maintain regular communication with the Host and other relevant stakeholders  Deliver a Feasibility Study Report in accordance with the Work Plan – including drafts of the Report as agreed at 10 weeks from inception and a presentation to the Host/Project advisory group and DBI on final study findings. Successful Feasibility Study Reports clearly articulate the scope of the proposed Validation stage to ensure that the project can be delivered within the timeframe and budget set out for the Validation stage. Feasibility Study Reports will form the basis of the next competitive stage for funds to undertake the Validation stage of the technology solution. A Feasibility Study Report template will be available for SMEs to use in preparation for their final report to the Host. Acceptance of the Feasibility Study Report by the Host does not qualify the SME for subsequent funding to progress to the Validation stage. The report is a necessary but not sufficient condition for progression.

2.2 Assessment of Feasibility Study The Host, relevant industry and/or technology area experts and DBI will assess the Feasibility Study Report against the following selection criteria for Validation stage funding:  Economic Impact o Magnitude of benefit to the SME and Victoria  Cost of problem / productivity impact

Health Market Validation Program Guidelines for SMEs Page 7 o Magnitude of benefit to health agencies and Victoria  Health impact o Magnitude of benefit to patients  Project achievability o Barriers to success o Feasibility  Capability of the SME o Project management and delivery capabilities o Governance  Future procurement potential / Investment Ready DBI will engage industry and/or technology area experts and convene an Assessment Panel to evaluate the Feasibility Study Reports. DBI reserves the right to make the final recommendations to the Minister for Technology. The Minister’s approval will be required to progress projects to Validation stage.

2.3 Validation The purpose of the Validation stage is to undertake the research and development of the proposed technology solution in the clinical environment, validating the technology to the agreed project end point as detailed in the Feasibility Study report. Health MVP funding of up to $1.5 million per project over a period of up to two years will be made available (granted from DBI to the Host) to SMEs to conduct the R&D project. Shorter or longer projects may also be considered for selection following discussion with DBI.

3. Intellectual Property developed under the Health MVP The principles for handling Intellectual Property (IP) within Health MVP projects are:  pre-existing IP remains the property of the original owner but the project parties are encouraged to make available relevant pre-existing IP to the other project parties for use within the Health MVP project. This may be covered by an IP or collaboration agreement  new IP generated as a result of the Health MVP project will be owned solely by the SME  the Victorian Government via the Host will negotiate a licence to access the solution developed through the project. (DBI will provide support for legal advice to facilitate negotiation between the Host and the SME of access to the solution).

Health Market Validation Program Guidelines for SMEs Page 8 4. Funding Arrangements

4.1 Feasibility Study SMEs approved to undertake Feasibility Study will enter into a funding agreement of up to $100,000 with the Host to develop a Feasibility Study Report. The funding agreement will include the terms of the funding, monitoring, evaluation and reporting processes required to ensure that the project is well managed between the Host and the SME. The Host will administer and acquit the funding and manage the development and completion of the Feasibility Study in accordance with the terms of the funding agreement. The key milestones for the Feasibility Study are:  the execution of the contract between the Host and SME  the delivery of a draft report at between eight and ten weeks (as agreed in the Host/SME contract)  the submission of the final report at between 12 and 16 weeks including a presentation to the Host and Health MVP staff (as agreed in the Host/SME contract).

4.2 Validation SMEs that progress to Validation will enter into a new funding agreement. Health MVP funding of up to $1.5 million per project over a period of up to two years will be made available (granted from DBI to the Host) to SMEs to conduct the R&D project. The funding agreement will include the terms of the funding, monitoring, evaluation, agreed milestones and deliverables required by DBI to ensure that the project is well managed between the Host and SME. The Host will administer the funding and manage the development and completion of the Validation stage in accordance with the terms of the funding agreement.

5. Eligibility To be eligible, SME applicants must meet the following eligibility requirements:  be located or be largely based in Victoria  be a non tax-exempt company incorporated in Australia under the Corporations Act 2001, with a significant portion of the applicant’s current business activities, employees or assets residing within Australia  have a combined turnover (including each related body corporate) of less than $60,000,000 for each of the three financial years prior to lodgement of the application or have fewer than 250 employees (with 10% variance allowed)

Health Market Validation Program Guidelines for SMEs Page 9  be able to demonstrate that it owns, has access to, or has beneficial use of any existing IP needed to carry out and/or commercialise the product  be willing to undertake not less than 80% of the R&D work in Victoria for the duration of the Validation stage  have the Principal Investigator based in Victoria for the duration of the Validation stage.

6. Collaboration Collaboration is encouraged under the Health MVP and can be undertaken with one or more enterprises, universities or research organisations. All collaborations must be SME-led with one “lead” SME, the applicant, taking responsibility for managing all collaboration arrangements (and sub-contracting arrangements) within the project. For the purpose of this Health MVP, collaboration is defined as any relationship in which partner parties contribute to development of the solution, as distinct from service provision in which the lead SME sub- contracts another organisation to provide a specific service for a fee. While collaboration is at the discretion of the SME and is not limited in number, the proportion of the Health MVP grant spent on research- related activities by collaborative partners (universities and/or publicly funded research institutes) cannot exceed 30% of the total grant funding.

7. Call for Proposal Applications An SME can only submit one Call for Proposal application per TRS; however there is no limit on the number of TRS an SME may respond to. Applicants must complete all parts of the application form available from the Health MVP website at www.business.vic.gov.au/hmvp DBI and the relevant Host will assess the applications and provide a list of recommended SMEs to the Minister for Technology. External expert advice may be sought during the selection process. SMEs recommended to undertake a Feasibility Study will require approval of the Minister for Technology. DBI reserves the right to vary any of the terms and conditions of these Guidelines.

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