dirk probst
TRANSCRIPT
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Commercialization and development
roadmap for healthcare biotech products
Bio Malaysia 2011, Nov. 22nd
Dr. med. Dirk Probst, MD,PhD
D2 Bio Solutions Sdn Bhd
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Key question for smaller
healthcare companies
Technology development ?
or
Technology commercialization ?
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Answer
• Biotech companies are specialists inTechnology development
•
Big Pharma or Big Medical Device companiesare specialists in technologycommercialization (Marketing & Sales)
Biotechnology is the technology driver , butevery New Technology must create additionalvalue
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Commercialization
stages
The more advanced the product the higher the
purchase price and your profit, but…
0
50
100
150
200
250
300
350
400
450
500
I II III IV
deal price
Investment
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Commercialization
stages
The risk of development and failure is also increasing-
Only 12% of compounds entering the clinical phase
will make it to the market
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1
2
3
4
5
6
7
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9
10
1 2 3 4 5
risk for purchaser
risk for seller
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Key success factors
for commercialization• Valid IP
• Proper Product development
• Early Business development
• Regulatory check
• Cooperate versus compete decision
• Deal structure
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IP Management
Build up strong IP
•
The freedom to operate (make, use orsell products)
• The provision of a "technology fence"
•
Controlled access to a market niche• Licensing opportunities
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IP
The power of licensing
• Quickly capitalize on new technologies
• Using technology for competitive advantage
• Global business participation
•
Maximizing profits from deals
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chemicalsynthesis
preclinical
clinicphase I
clinicphase II
commercialization
Idea
clinicalphase
IV
clinicalphase III
registration
/approval
From R&D to
Commercialization:
IP – patents,
etc.
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Parallel Commercialization
Pathway
Who is translating R&D results to
commercialization ?
Invention
How does theInventor bridge
the gap?
Market
What is themarket?
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Commercialization
roadmap
• IP
• Scientific product development
• Business Development
• You can start to commercialize at every
timepoint in product development, If you take
into account the critical components for
commercialization success
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The 4 driving forces
Technology& IP
Market
Management Financials
the product being assessed
compared to existing
technologies, including
the medical or
market need for
your product
what is the future market potential
for your product,
regulatory hurdles
what management
capabilities are
available and what
will be needed
what expenses are
expected during thewhole process of
development and
commercialization,
what financial resources
are available,
how can the ROI becalculated
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Critical components for
commercialization success
What are the precondition for marketing a
healthcare product ?
• Regulations – all healthcare products are
regulated in terms of market access. Are you
aware of them ?
• Regulatory Requirements – what are the
specific requirements for your product ? Do
you meet them ?
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Critical components for
commercialization success
Regulatory Approval
• All product development plans have to reflectthe regulatory requirements
• Making expensive mistakes in the beginning,that turn out to be dead ends in productdevelopment cannot be corrected at the time
of application for product approval.• Talk to regulatory experts or officials before
you start !
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Commercialization
Roadmap
• Do you have strong IP ?
• Where are you in product development ?
• What are the market needs ? competition ?
other innovators ? – Business Development
• Timelines for development
• What are the regulatory requirements ?
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Critical components for
commercialization success
Technology &Science Market
Management FinancialsFundraising
Business
DevelopmentLicense
Agreements
Strategic or
distribution
partners
IP protection
R&D
Development
plan
Market
research
Company
valuation
Manpower
Manufacturing Regulatory
ApprovalTimelines
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Commercialization
Options
• Compete or cooperate
• Distribution vs. licensing out
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Compete or cooperate
Return on investment tends to be higher for acooperation strategy than a competitionstrategy when one or more of three
conditions exists for the start-up company.These conditions are the following:
The firm has a high degree of control overits intellectual property rights
The firm enjoys low deal transaction costsThere is a high sunk cost requirement forthe firm to compete in its industry
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Compete or cooperate
Start-ups benefit more from cooperation strategiesthan compete strategies when they:
• possess strong intellectual property rights,
• utilize brokers to facilitate trade,
• leverage the assets of established firms tocommercialize their innovation.
In these situations, a start-up can earn higher returnsby acting as an upstream supplier of innovation rather
than as a horizontal innovation-oriented competitor. Inother words, by participating in the market for ideasrather than in the market for products, new companiescan make the best use of their innovations.
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Distribution vs. licensing
and other options
Decision base:
• Capital requirements
•
Manpower requirements• Time Needed to Access the Marketplace
• Accessibility to Worldwide Markets
• Liability & Exposure to Risk
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Licensing-out
How Much - Setting the Royalty Rate
• There is no such thing as a typical or standard royalty rate.
• Licensor : 20% of the total benefits , licensee: 80% of the
profits
• Royalty result: 2% to 10% of gross sales.
Major factors include:
• The inherent quality of the technology,
•
The market potential of the technology,• The fit with the licensee's business,
• The ability to assure the licensee protection for unauthorized
use of the technology
• The risk involved in the agreement (technology, business etc.).
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Commercialization &
Development Roadmap
• Build strong IP
• Start proper product development planning
• Execute product development based on – market needs
– regulatory requirements
•Start Business Development at an early stage
• Commercialize at the earliest possible stage