Growth Strategies and Exit Alternatives for MedTech Companies

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Growth Strategies and Exit Alternatives for
MedTech Companies
Lessons Learned from Successful MedTech
Companies Dr Richard D Gill
Board Member, Launchpad Venture Group
Mass Medic Meeting September 12th 2008
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Background

• What were the obstacles to growing the
  business(es)?
• What growth strategies were pursued and why?
• What were the exit alternatives, and what were
  the key strategic decisions made that resulted in
  success?

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Unilever, BTG, Genome Therapeutics, ActiveCyte,
AnVil, Sequitur, Signet Laboratories, ProNAi,
Launchpad Venture Group
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Relevant Portfolio

• Sequitur (sold to Invitrogen)
• Oligo RNAi Services Technology
• Signet Laboratories (sold to Covance)
• Oncology Neurodegenerative Diagnostics
• Catalyst Oncology (sold to Diagnocure)
• Colon Breast Cancer Diagnostics
• Neuroptix (B Round Financing 17.5M)
• Alzheimers Disease Diagnostic Device
• NABsys (A Round Financing 1M)
• Gene Sequencing Device

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Resources

• What were the obstacles to growing the
  business(es)?
• Financing
• UnderCapitalized Fund the Froth
• Technical
• Intellectual Property Patents, TM, Branding
• Regulatory Third Party FDA Requirements
• Expertise
• Recruiting Can Do Teams
• Outsourcing Virtual Development

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Revenues

• What growth strategies were pursued and why?
• Direct Sales
• High Salary Costs
• OEM
• Sharing a Bigger Pie
• MA
• Realize value with /Stock/Earn Out

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Liquidity

• What were the exit alternatives, and what were
  the key strategic decisions made that resulted in
  success?
• OEM
• Third Party Marketing With a view to MA
• MA
• Provide for Capitalization With Earn Out
  Provisions
• License
• Least Capital Intensive

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It has already happened

• (Outsourcing, that is)
• The large Biotechs have become Pharmas Amgen,
  Genentech, Chiron, Biogen-Idec, Genzyme
• The Pharmas Device Diagnostic Companies are
  becoming the marketing distribution Houses
• The small Biotechs Start Ups are the RD
  Innovative Shops
• Backed by the Academic Research Faculty

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Its all about the IP!

• Without patents (intellectual property) you are
  nowhere
• You need the 20 year protection in order to
  protect the huge investment needed
• Originally patents were filed on pharmaceutical
  diagnostic uses of chemicals from the paints
  dyes industry
• Now its biologys turn with genomics proteomics

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Market is Demanding..

• Evidence Based Personalized Medicine
• vs
• Block Buster One Size Fits All
• Q? But can Pharma change?
• A Yes - Driven by cost escalation Pharma is
  changing
• A la Unilever Soap Powder/Liquid Detergent

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Evidence Based Medicine

• Hereditary Hemophilia BeneFIX (Wyeth)
• Cancer Her2 ve (Bayer) Herceptin (Genentech)
  
• Diabetes Blood Glucose /- Insulin
• What next?
• Alzheimers Diagnostic Treatment?
• Personal Genomic Profile Prognosis?

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HealthCare Reform

• Q? Why did Hilary Clinton fail at HealthCare
  Reform?
• Easy A Pharma lobby spent 280M to destroy the
  reform
• Small potatoes
• Harder A Bill Clinton Walks on Water
• Real A It was all about Gennifer Flowers

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Value Proposition For the Future

• Knowledge Management Interpretation of Same
• Horizontal Dx (Titrate Patients) in order to
  administer Rx (Effective Therapeutics)
• Vertical Portable Electronic Medical Record
  Portable Medical Insurance (Medicare/Medicaid
  Socialized Medicine)
• Brazilian Soldiers

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Development Opportunity

• Drug Rescue Repositioning Old Drugs
• Orphan Drugs less than 120,000 patients RD
  tax credits up to 6 years of monopoly
  (regardless of IP)
• Lifestyle Insurance Drugs.

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Life Style Insurance Drugs

• Life Style Viagra
• It will not ever not work for the patient or the
  partner bound to make !
• Insurance Lipitor
• So you werent ill, but you might drop dead if
  you stop taking it pay premium for life!

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New Use Old Drugs

• Cardiovascular side effect hair growth Rogaine

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That said

• Great way to make a living!
• You get to make
• see patients successfully treated
• Just dont assume its about curing folks -
  folks!?
• Dr Richard D Gill
• ActiveCyte Holdings
• RIKI4455_at_aol.com
• 781 864 7515
• Bb 269 823 8430

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We all need different medicine
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Questions?
RIKI4455_at_aol.com