This project tracks the development of coronary artery disease interventions, ranging from early method of cardiac bypass to balloon angioplasty to the development of biomedical stents. Analyses of the competitive climate in the biomedical stents industry is discussed. New market and technology strategies are proposed for a regional MNC to leverage domestic industry infrastructure within emerging economies accompanied by a projected 30% growth in CAD due to increased consumption trends and lifestyle factors, e.g. smoking.
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1. The Coronary Stent Revolution A MT 5007 Project
2. SNAPS Group Members Chan Kah Inn, Darryl Choo Jun Quan,
Stefan Bjorn Mattias Lindfors Phua Geok Bee (PanYumei) Tan Chye
Huat Tang Shu Ling Soon Yew Boon
3. Presentation Outline Introduction to Coronary Artery Disease
Evolution of Technologies for disease treatment PTCA as Disruptive
Technology to CABG Coronary Stents: BMS, DES, Bioabsorbable stents
Evolution of Stent Design Stent Industry Overview & Market
Analysis Introduction to Abbott Vascular & SWOT analysis
Challenges & Managing the Innovation
4. What is Coronary Artery Disease? A type of heart disease
which occurs when the coronary arteries become narrow due to the
build-up of fatty deposits called plaques Coronary arteries supply
the heart with oxygen and nourishment
5. Disease Prevalence Grim Statistics Leading cause of death
globally Estimated 17.3 million died in 2008 By 2030, almost 23.6
million will die yearly 80% of deaths occur in low and
middle-income countries Source: WHO report Global Atlas on
Cardiovascular Disease Prevention and Control, 2011
6. Distribution of Economic Wealth Blue Circled Areas on World
Map Denote where current healthcare interventions are focused
Strong Co-relation between Cardiovascular Diseases and Low per
capita GDP
7. Drivers for Coronary Revascularization Technologies
Evolution Demographics Ageing Population Increase of cardiovascular
patients (Lifestyle changes) Demand for Technology Enhance
Lifestyle Save life, Decrease pain, Improve health Lower morbidity
and mortality rates
8. Evolution of Coronary Revascularization Technologies 1960s
1977s 1987 Today Coronary Artery Bypass Grafting (CABG) Invasive
surgical procedure Arteries or veins from elsewhere in the
patient's body are grafted to the coronary arteries Surgery is
usually performed with the heart stopped, necessitating the usage
of cardiopulmonary bypass
9. Evolution of Coronary Revascularization Technologies 1960s
Percutaneous Transluminal Coronary Angioplasty (PTCA) 1977s 1987
Today Minimally Invasive procedure PTCA involves only a small
incision through which a balloon-tipped catheter is threaded Upon
reaching the point of blockage, the balloon is inflated to restore
blood flow However, less effective compared to CABG Higher
revascularization rate of 21% (CAGB 6%)
10. Performance - Lower restenosis rate Procedure rates /1,000
population, age 45+ S Curves for CABG and PTCA PTCA At the start,
PTCA s efficacy is below that of CABG BUT CABG PTCA Market demand
CABG Time PTCA has important key attractions Minimally invasive
Fast recovery from procedure, short hospital stay Costs less PTCA
was welcome by patients & adopted rapidly by cardiologists as
gold standard for CAD treatment Incremental improvements eventually
rendered PTCAs performance acceptable by main market
11. How does PTCA affect conventional medical practice?
Disruptive in job scope of cardiologists Need to learn new skills
and techniques Steep Learning Curve: Cardiologists specialized in
coronary intervention Knowledge conversion Internalization: From
Explicit to Tacit knowledge Learning & acquiring new tacit
knowledge in practice
12. Evolution of Coronary Revascularization Technologies 1960s
1977s 1987 Coronary Stents Today Stents are tiny mesh tubes that
are left in coronary arteries to keep blockages from recurring.
Stents significantly reduced post-BA complications of
restenosis
13. Evolution of Coronary Revascularization Technologies The
success of Stents has subsequently bolstered it to become the
dominant design in the coronary revascularization industry Battle
for the stent market shares 1960s 1977s 1987 Stents WARS!!
Today
14. Stent Design Race to develop the Ideal Stent: flexible
trackable low unconstrained profile; radio-opaque;
thromboresistant; biocompatible; reliably expandable; high radial
strength; circumferential coverage; low surface area; hydrodynamic
compatible.
15. Evolution of Stents Design Stent Prototype (1985)
Establishment of Stents Radical Design (Early 1990s) Created from
copper wire and solder by Dr Julio Palmaz [Innovator] J & J
[First Mover] No Experience 1st COMMERCIALIZED Design Numerous
Stent Designs Palmaz-Schatz Stents Construction Slotted Tube
[Dominant Design] Wallstent Wiktor GR Flex-Stent Palmaz/Palmaz-
Schatz elgiloy tantalum stainless steel stainless steel Form wire
wire wire tube Fabrication braid bend bend EDM Geometry braid
helical rings clamshell slotted tube Material
16. Evolution of Stents Design Flexibility = Deliverability or
Contourability New Fabricating Technologies Photochemical (PC)
etching --Addition of flexible connector [Incremental Innovation]
Improvement Flexibility (1995) Laser micromachining Now preferred
fabricating technique Improvement Geometry (1997) Open Cell /
Closed Cell Stent Design Palmaz-Schatz stent and its successor, the
Crown by J & J (A) Closed Cell = Inflexible = Not Good
MultiLink stent by Guidant (E) Open Cell, Flexible = Good , Leading
the Market for 5 years
17. Breakthrough appearance of stents eluting antiproliferative
drugs Overall reduction in restenosis rate of between 70% to 85%
Addition Drug Eluting Coating Modular Innovation
18. Image obtained via World Wide Web at
http://www.art-stent.com/Images/Img-003-Big.jpg on 20 Oct 2011
Bioasorbable stent Stent support vessel with minimum local tissue
aggravation Stent serves as scaffold construct that facilitates
dynamic reconstruction of vessel tissue lining- Laws of Tissue
Engineering (SH Teoh) Stent dissolves when tissue healing is almost
complete Architectural Innovation
19. S-Curves - Stents Performance 2006: reported that DES pose
an increased risk of late stent thrombosis Bioabsorbable Stent
2009: Abbott 2nd phase clinical trial Drug-Eluting Stent (DES)
2006: 1st phase clinical trial Bare Metal Stent (BMS) 2002:
reduction of revascularisation, benefit of DES over BMS Effort /
Time 1986 1994 2006
20. Stent Industry Overview
21. Quick Industry Facts The stent industry is highly
competitive, due to historical average 85% gross margins (2005)
Competition between firms mainly on basis of customer relationships
and product quality High barrier to entry, requirements:
Manufacturing capability, Relationships with physicians and FDA,
large sales force and brand
22. Quick Industry Facts (cont.) High learning curves:
FDA-approved manufacturing process hard to surmount No Network
Externalities: Only externality being brand reputation
Commoditization, mature market: DES stent price drop from 2003
price of $3000 to 2011 price of $1400
23. Acquisitions show that The stent market is maturing The
decline in the number of operating companies and the price drops
indicates a transition into a process innovation phase Merger and
Acquisition is the only viable option for most small start-ups
24. Acquisitions 1995 Meadox Medicals SciMed Life Sys. Heart
Technology Boston Scientific
25. Acquisitions 1996 MediSense Cordis Abbott J&J
26. Acquisitions 1997 Target Therapuetics Boston Scientific
[3]
32. Acquisitions 2006 Guidant The 2nd worst deal in US history
according to Fortune Magazine, claiming that Boston Scientific paid
too much for Guidant Boston Scientific [5]
33. Stent Industry Overview Drivers and Industry Learning
34. Technology and Industry Drivers Newer Drug Delivery
Mechanisms Newer imaging Modalities for better Visualization
Demographics Increased Efficiency and Efficacy Potential for
Cheaper Stent Platforms? Introduction of New Drug Device
Combinations
35. Technology: To contract or integrate? Dominant Design
Paradigm: Paradigmatic Phase Stents are hollow, mesh-like,
elongated structure, biocompatible, crimped on Strong
Appropriability a stent delivery system Regimes of Appropriability
Usually Strong Appropriability Efficacy of legal mechanisms of
protection Complementary Assets: usually Specialized/Cospecialized
assets Vertical (Dis)integration Channel Strategy Factors include
time-to-market, price of stent (buy or make), controlling the
quality of stent, incentives and options, etc. Complementary Assets
Generic Specialized Innovator captures most of the value. Innovator
& owners of specialized assets share value. Contract/ Outsource
Integrate
36. Network of Learning & Innovation Locus of innovation of
stents -- found in networks of learning Large-scale reliance on
inter organizational collaborations Dedicated Invest / work closely
with universities Keen eye on potential technology development
Clinical Trials / Evaluation with research hospitals Purchase
Rights to Universities ideas Research Institutes & Universities
Exploration New radical developments Knowledge Innovation Vascular
Firms Established Pharmaceutical Firms $$$ Regulatory Savvy
Inadequate facilities for Basic R &D Manufacturing Marketing /
Licensing Supply / Distribution Mergers & Acquisition
Exploitation
37. Abbott Vascular Division of Abbott (nutritional &
pharmaceutical products) Global Leader: Cardiac & Vascular Care
products HQ at Northern California Acquired Guidant vascular device
division in 2006 Flagship product: XIENCE V (DES)
38. Abbott Vasculars Success Acquired Guidants vascular device
division in 2006 with the Xience V DES technologies, patent
assigned to Abbott Strategic move to gain entry into the coronary
stent market Pursued R&D (clinical trials) on Xience V and
Ziomaxx DES. Plans were to launch both stents & grab market
share in the rapidly growing DES market In 2006, clinical trial
showed Xience V as superior to Taxus DES by Boston Scientific
Abbott withdrew Ziomaxx DES development program, focused efforts
for immediate launch of Xience in European countries, followed by
launch in the US. Time-to-market urgency crucial to stay ahead of
competitors
39. SWOT Analysis Industry Leader Global Presence Heavy
investment in R&D for product innovation Investment in Training
& Education Leverage via relationship with Industry
Professionals Excellent clinical trial results for Xience V (DES),
shown to be superior to Taxus DES by Boston Scientific S W O T
40. SWOT Analysis Product Recalls: Powersail Recent negative
limelight for incentivising a cardiologist, Dr Mark Midei to
implant its stents S W O T
41. SWOT Analysis S W O T Emerging Economies Exit of J&J
from stent market Bioabsorbable Stent Pipeline
42. SWOT Analysis W O Tight Regulatory Approvals S T Late stage
Thrombosis and Major Adverse Cardiac Events (MACE) Mediated with
Surgical Imaging Technologies such as Portable Ultrasound devices
Image obtained from http://www.sciencephoto.com/image/2704
83/530wm/M3900535Angioplasty_techniques-SPL.jpg
43. How can Abbott capture a larger market ? Cost of Bare Metal
Stent: ~$800 Cost of Xience V Drug Eluting Stent: ~$1500-$2000 Cost
of Abbotts Bioabsorbable Stent: >> Xience V Image obtained
from Controversies in Cardiovascular Medicine
http://circ.ahajournals.org/content/114/16/1736.full
http://online.wsj.com/article/SB10001424052748704471904576230671702390088.html
44. Shifting the Battlefield: From Upper Class to Middle Class
Per Capital Income Population 296 million Disrupting the Top: 1
billion in headroom Measured Leap Downward- 2011: 2.4 billion in
Headroom The Bulgeoning Middle Class $30,000 723 million $10,000
The bottom of the top 2,397 million $4,000 2,692 million : Middle
Class experiences major burdens with CABG Procedures. In developing
countries, surgeons may be ill-equipped to perform these
procedures. : , ; Middle Class is expected to boom from 2 billion
population to 5 billion in 2030. Tremendous upside potential once
the firm finds a disruptive foothold at the bottom.
45. Disruptive Innovations as a Strategy- Abbott Performance
Middle of Pyramid Bottom of Pyramid Top of Pyramid CABG Reduced
surgical complexities Increased Cost Accessibility Angioplasty DES
BMS Purples (XIECE V) and Orange (BVS) by solid arrows- currently
adopted by Abbott Second growth wave: Reduction in Surgical
Complexities Purples and Orange dotted arrowsstrategies that Abbott
can adopt Effort- Time Third growth wave: Accessible Treatments to
Emergent Economies
46. R&D, Networks and Alliances When Resources are Abundant
Systemic Innovation R&D Joint- Collaboration with distribution
companies to maximize market penetration (With Caution) Reduced
time to market Reduced costs to market Interconnected framework for
success Modular Innovation Drugs and Drug Release Technologies
Research and Operations Base Leverage- Singapore a biotechnology
and Trade Hub. Partnerships with Universities and RIs Make larger
R&D of bioabsorbable stents scaled in dimensions for other
biological applications Centralize Research Facilities in --- Drug
& Device Coupling --- Device Compatibilities with Imaging
Specialized Complement ary Assets Freedom to Operate &
Protection IP Filing for new drug- device couplings Where to File?
Systemic Innovation+ Control Is Important Acquire & Integrate
complementary assets operations Integrate with Contract
Manufacturing Organizations Alliances Get governments to endorse
large scale clinical trials Overcoming Regulations Work with Group
of Doctors in Hospitals--> Establish De- Facto
47. Integrating complementary assets of stents manufacturing,
faster workaround of CE Mark and FDA approvals To remain as #1
leader in Cardiac Interventions. Target new, emerging geographical
markets Reduce complexity of techniques and use of stents Catch
disruptive waves for medical innovations in minimally invasive
surgeries Establish de facto standards of new biodegradable stents.
Conclusions There is at least 1 CAD is going to rise intervention
afforded from 47 million DALYS by low- income to 82 million DALYS
in countries. (WHO) 2020. Where should Abbott Aim? Will Abbotts
stents be made available and affordable?