Key Commercialization Activities, Resources and Partnerships

Ofer Reizes, Ph.D Director, Skills Development January 17, 2019 1 Research vs. Innovation

Research: Transforming knowledge into information Innovation: Transforming knowledge into products to create value for the consumer • Medicinal Product Innovation: Chemistry (structure/drug class), Method of Synthesis (process), Formulation, PK/PD, Pharmacogenetic, Device design, … • The Consumer: Patient, Physician, Third Party Payer (health-care systems, government)

2 Innovation-Novelty

Novelty and “Newness” are distinct concepts • “Newness” implies a new creation (i.e. a new chemical entity) • Novelty can be a NCE or it can be a new use for a known compound, or a new method, formulation, etc. • From a patent standpoint, it must be something that is “non-obvious” to someone skilled in the Art • Novelty/Newness is a key component of Innovation

3 Innovation-Usefulness

Unless an invention is useful, it is not innovative

4 Discussion Points

• Commercialization Activities • What does it mean? • How do you prioritize? • Resources • What are they? • How do you identify them? • Partnerships • What is the purpose of partnerships? • How to do you seek them?

5 Key Activities, Resources and Partners

Value Customer Proposition Segments Key Customer Activities Relationships Key Partners Key Channels Resources

Costs Revenue Streams

6 How Do You Create Value?

• Understand to whom are you creating value? • Patient, Hospital, Physician • Investors • Regulators, etc… • Designing experiment or choosing the commercial activities that provide the highest-possible evidence supporting your value proposition? • Describe your value proposition and one commercial activity that would create value.

7 Commercialization Activities

Core Question: What key development and validation activities are required to deliver your value propositions? Value Customer Proposition Segments Key Customer Activities Relationships Key Partners Key Channels Resources

Costs Revenue Streams

6 Key Activities

• Activities are related to de-risking your program to achieve a successful market adoption. • What is “de-risking”? • Examples of commercialization activities: • Filing strong IP to protect your asset • Generate data: • Bench, pre-clinical, clinical • Define a robust regulatory path • Understand reimbursement • Keep in mind the value proposition (improve clinical outcome or reduce cost)

9 Navigating the Pathway of Translational Science Understanding your ecosystem is critical for your activities

Medical Device Product Development In Vitro Diagnostic Product Development

Needs Invention & Pre- Product Basic Preclinical First in FDA Filing/ Clinical Regulatory Identification Prototyping Clinical Launch Research Development Man Approval

NCAI* NCAI*

Biomarker Clinical Prototype Sterilization Regulatory Acute Human Selection Performance Iteration Non-clinical Clinical Review PMA/510(k)/ Testing Testing Mechanical Feasibility Regulatory de novo Bench Testing Studies Testing Review (IDE) Chronic Simulated Non-clinical Prototype Analytical Clinical Use Testing Testing Assay Performance Validation

1 Tissue Testing Biocompatibility Analytical Testing Validation Therapeutic Produc*Nt CDAIeve Projeclopmentt Activity Areas *NCAI Project Activity Areas

Target Lead Pre- Phase 1 Lead ID … ID Validation Optimization Clinical Clinical Studies

NCAI*

Medicinal ADME Two Species Chemistry Efficacy Studies Efficacy Pharmaco- Studies kinetics Large In vitro Animal Toxicology Toxicology In vivo Toxicology Pre-IND 1

*NCAI Project Activity Areas 9 Pre-clinical Models – Can you show…

• Disease modifying mechanism of action • Benchmark against competing programs • You are competing against everything including generics and pre- clinical programs • Generate and evaluate • Highest quality therapeutics or optimal design of your device • Metrics need to be understood from day one and constantly reviewed • Your expertise must be the best in the world

10 Clinical Trials are a Critical Activity

11 Minimum Viable Product

• Generate prototype to demonstrate problem-solution relationship. • Articulate a problem definition based on your understanding/experience • Provide High-Level Engineering Specifications • Understand the minimum feature list

• Prototype  Customer Segment  Value Proposition  Prototype’ • Bench testing to demonstrate solution • Simulation to aid engineering specifications (e.g. stent design, fatigue testing,…) • Pre-Clinical model for safety and efficacy (acute & chronic models)

• Generate data to substantiate your claim and test hypothesis • What are you trying to prove? • To whom are you trying to prove it? (customer, VC, FDA or regulatory body) • Think feasibility ($) versus statistical significance ($$$)

13 The Critical Three Elements

Compelling Intellectual Clinical Property Need Compelling Intellectual Clinical Property Need Technological

Solution MVP

Technological Solution

12 Goal of MVP Prototype

• Show-n-Tell” to your stakeholder and help envision product features and discuss product-market fit. • Articulate the main idea and could point-out to design risks. This is important for Reg. activity of dFMEA for instance. • Helps you in choosing your product features and iterate prototype to determine the minimum features needed and not dilute your value proposition. • Question = What should your M.V.P prototype look like?

15 Commercialization Resources

Core Question: What key intellectual, physical, human, and financial assets are required for your value propositions? Value Customer Proposition Segments Key Customer Activities Relationships Key Partners Key Channels Resources

Costs Revenue Streams

6 Key Resources

Resources Are Put to Work within a Business Model • What does it mean to have a Business Model? • A business model describes the rationale of how an organization creates, delivers, and captures value, in economic, social, cultural or other context [Medical]. • So, what are the Most Important Resources required to make the Business Model work?

17 Questions

• How much will your activities/milestones cost? • Resources should match your critical activities • NIH, Foundation, DoD, philanthropic, SRA, etc. • Do you need to acquire or partner with others to obtain funding? • What commitments must be made to obtain support? • What human resources will you need? • What equipment resources will you need? • For Clinical Trials – will you need to identify a physician to collaborate with? Do you have Clinical Trial Design training?

16 Early Determination of Regulatory Pathway is Critical • 75% of all money raised will be spent on clinical studies and regulatory approvals • Major factor in getting financed • Major factor in Product Market Fit and strategy • Customer Discovery and Interviews can help • Identify the data set necessary to show that your invention does or does not deliver the hypothetical value in humans • Identify clinical trial design options • Regulatory approval often involves the opposite of IP goals  similarity to existing approaches versus novelty • Identify path of least resistance in getting regulatory approval

17 Financial Resources

• Venture Capital • Corporate Funding • Venture Debt • Bank Financing • Lease-lines • Venture Capital • Factoring • High Net Worth • Vendor Financing • Angels • SBIR/STTR • Self-Funding • SBA. • Friends • Family • Crowdfunding • Angels • Grants Lower Magnitude High Magnitude

20 Technologies Need to Generate Scientific Evidence (Data) • The system for ranking the quality of clinical evidence is known as “Evidence-based Medicine” • Demonstrating Safety and Efficacy of therapeutic requires hard data with clear endpoints • The highest level of evidence (and most expensive) is a prospective, randomized, placebo-controlled, double blind trial (RCT) published in a peer review journal • The value of your company and technology will be bracketed by the strength and clarity of your data • Major risk to getting funding: Equivocal Data

19 Typical Development Program

Nonclinical • Animal data usually surrounding safety but efficacy might be added in POC Clinical • Phase I Usually safety, SAD, MAD, PK/PD, very short term • Phase II Efficacy signal studied, dose ranging, may include PK/PD Longer than in phase I, some safety data accumulated • Phase III More robust, larger numbers, and longer duration, would serve as pivotal trials for approval NDA/BLA • * POC proof of concept; SAD single ascending dose; MAD multiple ascending doses; PK pharmacokinetic; PD pharmacodynamic; NDA New Drug Application; BLA= Biologic Licensing Application

20 So will anyone pay for your technology?

21 Commercialization Partnerships

Core Question: What strategic engagements are required to deliver the complete value proposition? Value Customer Proposition Segments Key Customer Activities Relationships Key Partners Key Channels Resources

Costs Revenue Streams

6 Why Should You Seek Partners?

• Building a business is not a silo-process. • There are dependencies to access Key Resources and Key Activities, that might not be readily available to your current business. • Goal is to: • Improve business competitive advantage, and/or • Reduce cost when acquiring commodities or service. • It needs to make sense to both parties: • Economic (e.g. supplier-type relationship) • Strategic (e.g. access to customers) • Know-how (e.g. unique technology) • “1+1 = 3” (e.g. joint venture, co-development, etc…)

25 Why Have Partners?

● Faster time to market

● Broader product offering

● More efficient use of capital

● Unique customer knowledge or expertise

● Access to new markets

Which is most important to you as a pre-clinical therapeutic?

24 Types of Partnerships

Joint New Strategic Business Coopetition Alliances Development Efforts

Key Supplier Joint Relationships Ventures

25 Types of Conventional Partnerships

• Key Suppliers and Clinicians - the type most likely to matter • Strategic Alliances - often less crucial for early adopter customers • Can complement your core product • Training, installation, services • Strategic investment - big advantages / big disadvantages • Joint promotion of complementary products - sometimes • Coopetition - sometimes • Can be important to define an emerging industry standard specification; controlled by large(r) companies • ADVAMED; MDMA • Joint Venture, Traffic Partners - Least likely in medtech

26 Successful Partnerships

• Shared vision, Right people, Clear plan • Established performance standards within a certain timeframe • Get out of the building to find these partners • Find the partners that give an unfair advantage over the competition • Remain positive, your partners can be a potential acquirer • Partnership could be strategic to your business and they are definitely integral to your commercialization plan.

29 Takeaways: Partner Strategies

• Find partners who give you an unfair advantage

• Figure out what’s in it for both parties

• Don’t confuse Partnerships with strategy • You are not a peer • It is a temporary relationship

• Timing plays an important role • Partnerships aimed at mainstream customers are usually more important than partnerships aimed at early adopters

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