Executive Intro - Brain Repair Market Development Model.pdf · market development at Medtronic. Established 2007 Founders have analyzed over 150 medical technologies, markets, and

1 © Copyright 2013. Contents owned by and under license from Dymedex Consulting, LLC. 1/28/2014 © Copyright 2013. Contents owned by and under license from Dymedex Consulting, LLC.

Executive Intro

Joseph Galatowitsch, President

Ross Meisner, Managing Partner

Copyright 2013. Contents owned by under license from Dymedex Consulting, LLC.

2 © Copyright 2013. Contents owned by and under license from Dymedex Consulting, LLC. 1/28/2014 2

About Dymedex Consulting

Dymedex reduces market risk for medical companies We deliver systematic, proprietary market assessments that help you understand critical market nuances, identify and address pitfalls in commercialization, and maximize revenue growth

We apply the scientific method to the discipline of medical Market Development

Scientific methods has greatly improved success rates in nearly every field, e.g. • Business accounting principles (P & L, balance sheet) in the early 1900s

• Manufacturing (e.g. Edwards Deming)

• Product development, engineering, and quality control systems

• Major sports teams

• Traffic management

3 © Copyright 2013. Contents owned by and under license from Dymedex Consulting, LLC. 1/28/2014

Effectively assessing market risk is a widely misunderstood and under-valued endeavor

Misunderstanding #1: I only need to know the size of the market

– Market size is not a single number, it’s a response surface based on many factors and features of the market, patients, business model, clinical strategy, investments and more

Misunderstanding #2: I need a really big market size in case I can only get a small piece

– You don’t need a massive market to ensure a significant ROI for investors – but you do need to know the time, investment and revenue potential associated with key adoption inflection points

Misunderstanding #3: A basic working knowledge of the market is all we need

– A detailed understanding of the nuances of your market landscape is critical for making good decisions relative to nearly every other aspect of your business (development, clinical, regulatory)

Misunderstanding #4: Once we launch we will be able to quickly drive growth

– Frequently at launch less than 5% of the realizable market is actually accessible – potentially for several years, until structural barriers to adoption are addressed

Misunderstanding #5: Our KOL advisors are key to our market development strategy

– Physician input is important, but they can’t help you understand everything necessary to access the total market


Technology adoption rates vary wildly, some taking decades to reach full potential

Technology adoption follows the classic ‘S-shaped’ curve

It is predictable based on understanding the underling dynamics and factors

– If it’s predictable, it can be influenced

Many technologies (not on this chart) failed to achieve broad adoption

Source: NY Times, 2008


Dymedex’s Constrained Dynamic Adoption (CDA) Model helps predict medical technology adoption

Milestone 1 is the gateway to broad market adoption

Milestone 2 is a strategic inflection point that can happen soon after Milestone 1

– Can be a significant decline in revenue based on how small incidence is in relation to prevalence

Milestone 3 is the fully realized market - which can take many years to achieve

R, I, and T must be defined for each milestone to make informed strategic decisions

R1

R2

R3

I1

T1

I2

T2

I3

T3

3 R = Revenue ($ mil.) I = Investment ($ mil.) T = Time (years)

M2: Penetration of “easily accessible”

segments

1

2

M1: Completion of infrastructure and Technology barriers

Rate of growth dictated by Indication Attractiveness


Three major workflows inform the Dymedex CDA Model

Barriers to Adoption

Behavior Change

Pillars of Adoption

Sufficiency Analysis

Timing and Investments

to Reach Milestones

Market Size

Patient Indications Population Dynamics Net Sources of Revenue

Annual Revenue

Potential (ARP)

at each Milestone

Calculus of Penetration

Attractiveness

Accessibility by Segment

Growth Rates and

Inflection Points 0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Penetration of BPH Incidence by Scenario

Max-growth Scenario

Baseline Scenario 1

2

Growth forecast by Scenario


Dymedex provides a rigorous analysis of the market landscape and defensible roadmap for the business vision

Data matters (garbage in = garbage out)

– We utilize peer-reviewed published data to inform our analysis

• And we stratify data by level of quality

– We use well established tools and methods to extract the most reliable data we can from the organization (fully documented)

Analysis and synthesis of data is a combination of:

– Logic and statistics

– Understanding and application of key relationships and dynamics

Drivers and modeling is:

– Statistically sound and validated by experts in both statistics and epidemiology

– Well proven, with dramatic examples of the predictive power of the tools

We’ve analyzed over 35 medical products

– Over 150 patient indications

– U.S. Europe, Japan, Emerging Markets

Broad application

– Diagnostics or therapeutics

– Capital equip., implantables, disposables

– New technologies or mature products

Proven Forecast Accuracy

Pacing market saturation in 2002 ICD market slow-down in 2006 Spinal fusion market inflection in 2007 Diabetes pump market growth profile Neurostim for pain, movement, incontinence, obesity, depression Coronary stents and heart valves


After launch, a firm’s value is based on meeting expectations

Theoretical market size plays a secondary role in valuation

Having a trusted understanding of the market is a prerequisite to meeting expectations

0

10

20

30

40

50

60

70

80

90

BenchTest

Animal Firstin Man

Safety &Efficacy

LAUNCH! MarketPerformance

Enterprise Value

Value-Enhancing Milestones

Meet or Exceed

Expectations

Mixed Results

Fail to Meet Expectations

Rigorous, credible, and defendable opportunity

definition can increase early valuation

Post-launch valuation depends on meeting expectations set

in the commercialization strategy


Dymedex delivers an in-depth understanding of the market, segments, barriers, and investments translated into a validated growth forecast

Market Landscape Attractiveness and Revenue Potential

Accurate Forecasts Driven by Investments, Attractiveness and Segments

Gaps, Strategies, Investments required to drive broad adoption

Pre-

Disease(23M)

All US

Adults(232M) “Identified

Disease”(12M)

Controlled on 1-3 Rx

(or being titrated)

“Controlled Disease” (2M)

Resistant Disease(8M)U

nd

iag

no

se

d D

ise

ase

(1

0M

)

Fals

e D

iagnosi

s (1

M)

Hyper-

reactive

patients

(20%)

0%

100%

CRT-DARP = $3.1B

3. 140-160, any drugs, no CCM

ARP = $3.1B

ICD - PPARP = $3.0B

1. >160, no BAT muting, no CCM

ARP = $2.5B

ICD - SPARP = $2.0B

2. >160, BAT muting, no CCMARP = $1.3B

4. All >140, any drugs, with CCM

ARP = $0.7B

Patient Accessability

Ind

icat

ion

Act

ion

abil

ity

0% 100%

KEY:Circle size = total ARPGreen = untapped market potentialPurple = Industry revenue

INDICATION ATTRACTIVENESS BY MARKET SEGMENT

Key:

Circle size = market opportunity

• Indication clarity

• Clinical &

economic

benefit

• Patient aggregation• Referral network

Segment 2 ($1.3B)Segment 1

($2.5B)

Segment 3

($3.1B)

Segment 4

($0.7B)

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

Total Revenue by Market Segment

1.>160,no-mute 2.>160 muted 3.140-159, no CCM 4.All >140 w/CCM

$ Mil.

“Perfect

Patients”

Segment 1 Segment 2 Segment 3 Segment 4

STAGE 3 BAT (today), and BAT (launch)

MARKET INFRASTRUCTURE1 2 3 Target 5

MARKET

SCORE

Condition Mgmt (Independent of Tech.) 0

Diagnostic Tests For the Technology 0 TODAY

Clinical Evidence 0 43%

Practice Guidelines 0

Reimbursement and Coverage 0 FORECAST

Provider Economics 0 53%

Provider Capacity 0

TECHNOLOGY READINESS1 2 3 Target 5

TECHNOLOGY

SCORE

Operational Disruption 0

Procedure Scalability 0 TODAY

Ease of Use 0 55%

Maintenance 0

Outcomes - Therapy 0 FORECAST

Patient Factors 0 62%

Vendor Support 0

On a 1-5 scale a score

of 4 signals sufficiency for the early majority to

adopt

Pillar sufficiency at

launch is well below what is needed (75%)

for broad adoption


Example: The U.S. ICD/CRT market is one of the largest and most lucrative medical technology markets at $4B/year

ICDs took over 10 years to get to 50k implants/year

Between 2001 and 2005 the market more than tripled (36% CAGR)

It may take 20+ years (at current growth rates) to reach M3

Source: Analyst reports, company reports, Dymedex analysis

0

50

100

150

200

250

300

2000 2001 2002 2003 2004 2005 2006 2007 2008

Industry Plan

Dymedex Model Actual

US ICD

Implants (thousands)

M1

Guidant sold just prior to Milestone 2 M2


The benefit of investing in a Dymedex assessment: increased credibility and confidence in the road ahead

A clear, data-driven understanding of the market landscape:

1. To inform critical and expensive strategic decisions:

• Regulatory, clinical, go-to-market, product development, market development

2. To more effectively set and meet expectations with all stake-holders

• Minimize the risk of “over-scaling” the business

• Maintain credibility, confidence and momentum

3. To support funding/fund-raising activities

• Clear, quantification of the opportunity and road-map to broad utilization

4. To help maintain control over the strategic direction of the business

• Drive & sustain organizational alignment, enthusiasm and focus

• Limit second guessing and the use of ‘one-off’ or selective information

5. To maximize and sustain market success and enterprise value

• Strategies to drive rapid and sustainable market adoption


Dymedex Consulting

Joseph Galatowitsch, President & Managing Partner

– Joe has 26 years in the global medical technology industry at 3M’s medical supplies business and at Medtronic. Joe pioneered the discipline and implementation of market development at Medtronic.

Ross Meisner, Managing Partner

– Ross has 20 years experience building high-tech and med-tech companies. He has co-founded four start-up companies, managed two international joint ventures, and directed international market development at Medtronic.

▲ Established 2007

▲ Founders have analyzed over 150 medical technologies, markets, and indications

▲ “I firmly believed we understood our market and our path for growth, but Dymedex provided such new insights into the market opportunity and the barriers to adoption that their analysis has become a foundation for our business strategy.”

– CEO, therapeutic system company

▲ “Your market assessment caused us to recast our go-to-market strategy, and now helps me present the true potential of our company to investors with complete confidence.”

– CEO, pre-launch diagnostic company

▲ “Joe pioneered elegant new market and portfolio assessment methodologies at Medtronic. His new strategic insights dramatically improved our ability to objectively value and effectively manage Medtronic's extensive therapy portfolio.”

– Executive Vice President, Medtronic

▲ “It would have taken us a year to do this ourselves, and it would not have been nearly as actionable.”

– Director, large med tech company

▲ “I only wish we had hired Dymedex 3 years ago! Their analysis has made an incredible difference in our approach and understanding of the market”

– CEO, public med tech company

4570 Churchill Street, Suite 200

St. Paul, MN 55126

(651) 217-5990

www.dymedex.com

http://www.dymedex.com/

Documents

Executive Intro - Brain Repair Market Development Model.pdf · market development at Medtronic. Established 2007 Founders have analyzed over 150 medical technologies, markets, and