Published: 25 Nov 2013
Making the Most of Scientific Meetings - 5 Tips for Emerging Medtech Companies
I’ve attended at least three lifetime’s worth of trade shows and scientific meetings, both as an exhibitor and a hanger-on, and I still find myself wondering before each one whether it’s worth the time and money to go. What do you really get for wearing your shoes down at RSNA, AAOS, TCT, DDW, ACC, and the like? For big device companies paying major bucks for a top-notch “footprint” in the exhibit hall, it’s about supporting the professional societies, brand-building, and rubbing shoulders with thoughtleaders (a diminished presence could ignite all sorts of rumors and ill will). For emerging medtech companies, though, whose product may be years away from market, the idea of increasing the burn rate to buy booth space seems kind of crazy. But these meetings uniquely and valuably assemble everyday clinicians, scientific glitterati, competitors, potential strategic partners, and even some investors together in captivity under one great big convention center roof.
So the question remains, if you are lacking excess cash or even so much as a working prototype of your gizmo, is it worth even attending scientific meetings, much less exhibiting? For most early stage companies, really until full commercial launch, an official presence in the exhibit hall is generally not a wise investment. While a booth provides a certain legitimacy and anchor point for meeting up with people, it quickly becomes a ball and chain, not to mention that any booth affordable to a start-up is not in a prime location (I have been positioned next to Alcoholics Anonymous more than once, whose services I required by the end of the show).
Best to attend scientific meetings as a free agent, but even then you can waste your time and money, that is unless you follow these five tips to make your trade show investment count:
- 1. Have clear goals – It is easy to wander around aimlessly at these enormous meetings, hoping to learn something inspiring at a session (you won’t) or run into the “right” people at the networking events (you won’t). Some more realistic objectives might include understanding current practices and trends, investigating your competitors, establishing early relationships with thoughtleaders, conveniently gathering your scientific advisors or investigators, or meeting with potential strategic partners. Before you drop one dollar on registration, make sure you know what you want to accomplish.
- 2. Pick the right meetings – Not every scientific meeting will be well suited to your goals, and frankly some are just better than others at attracting the right attendees, exhibitors and content. The big meetings are best for connecting with strategics, since the business leadership is more likely to attend, and also good for competitive snooping in the exhibit hall since you can get lost in the crowd. If your goal is to meet with target clinician customers, check with a few to make sure they are attending. Smaller, more focused meetings are usually better for connecting with potential advisors who specialize in that area; there may be less competition for their time at these smaller meetings as well.
- 3. Start planning early – Review the conference program at least 4-6 weeks in advance of the meeting; the program is a great way to identify clinician thoughtleaders with knowledge relevant to your technology. Reach out to these folks at least 3-4 weeks before the meeting; dance cards tend to fill up very quickly at these events. If you have a truly novel technology, they will probably give you 20 minutes over coffee. Also study the exhibitor list in advance to know which companies have a presence if you want to set up partnering meetings or gather competitive intel (note that the exhibition is generally shorter than the conference when you book your travel). Inside tip – the reps in dark suits manning the booths get quite bored and would talk an inanimate object by the last day of the show.
- 4. Come prepared – So now you’ve set up your meetings, noted the few must-attend sessions, and planned your exhibit hall time. The next step is to have the right props and materials with you to impress the important people you encounter. Create a short company presentation on your iPad, 4-5 slides maximum, that clearly describes your technology and the problem you are solving. A few select slides from your investor pitch deck should do the trick. Animations or images of your medical technology are also a great way to quickly ground your discussions with clinicians or business people. If your device is small enough and not likely to get you into trouble with TSA, stick some in your bag. Nothing says “we are real” like some devices strewn across the table at Starbucks.
- 5. Don’t forget to follow up – Take a cue from the reps at the big device companies and follow up diligently on every lead and contact you generate at the meeting. Let them know you are professional and organized; invite them to come by your global headquarters (a.k.a. the sub-sub leased space off the freeway) if they find themselves nearby. Most importantly, articulate a tangible “call to action” and some clear next steps. Do you want them to become advisors to the company? Agree to evaluate your device in a pilot launch? Collaborate on a feasibility study? Keep the drumbeat of communication going so by the next scientific meetings these are old friends who are happy to see you.
With good planning, execution, follow-up, and comfortable shoes, scientific meetings can reap rewards for early stage medtech companies.
Published: 08 Oct 2013
Five Essentials for Emerging Medtech Pitch Decks
Last month I had the sadistic pleasure of serving as a judge for a business plan competition at the 2013 Advamed conference. I have to give credit to the fledgling entrepreneurs who agree to present at such sessions, designed to publicly expose the flaws of their technology, commercial story and personal presentation styles. The only grimmer form of torture is watching a videotape of yourself giving the company pitch.
The presentations by these energetic new CEOs, on top of the many I encounter in my day job, got me thinking about the “must-have” elements of early stage medtech fundraising pitches. So here is my checklist – commit it to memory if you want to avoid public humiliation at my hands during some future business plan competition:
Be clear on what your product is, right up front
It is surprising how often I hear a pitch that leaves me asking, “So what exactly is it that you have / do / make?” A good product description should be understandable by an intelligent layperson, incorporating enough technical elements to sounds like an accomplishment but not rocket science; remember that you know way more about your specific area than your potential investors do. Include images, or animations if your technology is used in a procedure or it is difficult to envision how it works. A concise technology description should be in the first tenth of your pitch deck, not the exciting climax after a big buildup of the company history, IP, market, and so on, or you will lose people quickly.
Articulate the important problem you are solving
Once a potential investor understands your product or service, the next natural question is, “So what?” The simpler your value proposition story, and the more compelling, the better it will be received. I fondly recall a conversation with a founder of Nellcor who simply described the value of pulse oximetry as “preventing death.” A technology doesn’t have to save lives, though, to be meaningful. An example of a clear value proposition, selected randomly from MedGadget, is “Fertility Lab-on-a-Chip: Assess Your Semen Quality at Home.” I get the concept right away, and can see why men might want a home test for this particular purpose.
Define your customers
Closely following the “so what” question are “who cares” and “who pays.” Who are the customers for your technology? In what setting will it primarily be used? Who will champion it? Who will need to be convinced of its value? To paraphrase George W. Bush, who will be The Decider? It is advisable to focus on a clear set of customers and stakeholders who are logically vested in the problem you are solving and are in a position to take action.
Spell out how you will create value with the $$ you are raising
Investors are funny creatures; curiously, they like to know what you plan to do with the money they are being asked to give you. What near-term milestones will the funds enable your medtech company to achieve, and how will achieving them increase the value (and valuation) of your company? Don’t waste a slide on a bar chart showing a 3-year revenue ramp to $1B in sales (and that’s just the US market), or a plan for a big licensing deal or strategic take-out in two years. No one will believe you and you won’t look credible. Instead, highlight the data you will generate, the functional prototype you will develop, or the regulatory clearance you will obtain, and the activities and expertise that must be funded to get you there.
Instill confidence in you and your team
If you’ve done a good job on “what”, “so what”, and “how much,” its time to tackle “why me.” It may be trite to say that investors invest in teams, not technologies, but it’s true. Company leadership is most important; have you assembled the right skills and experience on your team to get the job done? Do you as a leader exude energy and passion in your presentation? Have you engaged strong advisors and collaborators to support you, connect you and lend credibility to the solution you are peddling? Are they for real or did you just run into them in the men’s room at a scientific meeting? Keep in mind that any serious investor will call them!
I would love to say that the value of technology speaks for itself, and in rare cases a great idea can overcome a discombobulated pitch. But like a depressed real estate market, with all of the forces and odds against medtech entrepreneurs, a little “staging” is a wise investment if you want to make the sale.
Published: 02 Sep 2013
Reimbursement Fundamentals for Disruptive Medical Technologies
Many new medical technologies, particularly the low- or mid-tech ones, fit more or less neatly into an existing reimbursement code. For the companies developing such devices, de-risking involves demonstrating 1) it works and won’t kill anyone, 2) the path through FDA is efficient, 3) the company can manufacture it at attractive margins, and 4) enough people will want to buy to imagine profitability.
For most “disruptive” medical technologies, however, it is the market adoption risk that often generates the most worry starting around Series B and escalating to a fever pitch in the quarters leading up to launch. Providers generally want to get paid more for using expensive new technology, and additional reimbursement typically lags years behind product approval if it ever happens at all. Compared to the payers of the world, the medical device regulatory bodies are virtual pussycats. You did one study for FDA? We need three. You studied patients out 6 months? We want two years. And we still might not pay extra for your devices, no guarantees.
The high hurdle to new reimbursement will, and is meant to, discourage all but the most confident in the value of their novel therapy or diagnostic. Those brave companies that do forge ahead to slay the reimbursement beast need to be armed appropriately. To learn more about how emerging medtech companies can pave the way toward reimbursement for disruptive new devices, I spoke with Kelly Shriner, Director of Health Economics and Reimbursement for Boston Scientific (by way of Asthmatx). In 2010, BSC acquired Athmatx, with its novel Alair Bronchial Thermoplasty treatment for severe asthma, for $193.5M up front and up to $250M more on the back end. Bronchial Thermoplasty was awarded a rare new Category 1 CPT reimbursement code in 2012, a major milestone long in the making.
For the edification of our emerging medtech clientele, I asked Kelly what she was glad she did early on at Asthmatx to position the technology for reimbursement down the road. “I can’t overemphasize the importance of a strong clinical strategy,” said Kelly. “We followed a scientifically sound path that helped us gain ground along the way, which was crucial for a technology as novel as ours.” What made Asthmatx’s clinical program so rigorous? Three randomized, controlled trials, including a robust sham control arm and tracking of healthcare utilization data in both arms to facilitate economic comparisons. “If we didn’t have that data, we’d be dead in the water with payers,” said Kelly.
Building relationships with the relevant clinical societies, and building them early, is also important groundwork for future reimbursement. “Payers seek the input of these societies on all their decisions,” said Kelly. Asthmatx started reaching out to societies in 2005, a full seven years before receiving their Category 1 code. “The societies are the ones that push for appropriate coding with the American Medical Association (AMA), and as a company you can’t own that process,” said Kelly. “The persistence of the societies helped us go from a temporary Category III code to a Category 1 code in one year.” Trust me, this is lightening speed.
Once on the market with a new CPT code, the reimbursement effort is far from over. Individual payers still have to agree to actually cover the assigned code (a.k.a. send money) when the procedure is performed. Payers can do this on a case-by-case basis, necessitating much paperwork and fortitude on the part of providers, or they can issue a coverage policy so the reimbursement flows with appropriate use. “The Catch 22 is that payers’ coverage policies don’t flip until payers see demand from market, but demand is driven by reimbursement,” says Kelly. In the meantime, companies need to be prepared to offer users “an intense level of support” through the one-off reimbursement appeals.
Companies also need to intensively educate the payers, for example about the rigors of the PMA regulatory process. “I found myself having to explain the difference between a 510(k) and a PMA, and the level of evidence required for a PMA device like Alair,” said Kelly. Feeding into this misperception is the fact that the FDA has access to all of the company’s data, whereas payers tend to only look at published, peer reviewed articles – a naturally self-limited dataset. Given the opportunity to explain how similar a PMA is to an NDA, though, payers got it. “As an industry, we need to do a better job of bringing payers up to speed on the FDA process, particularly for PMA-approved medical devices”, suggested Kelly.
Kelly continues to negotiate with payers around the world as part of the BSC team. Reflecting on the acquisition, Kelly proudly recalls, “Our early payer strategy helped BSC get comfortable with Asthmatx; the reimbursement strategy, as well as the strong clinical strategy and compelling data, helped get BSC over the hurdle of taking on an earlier stage technology.”
- 25 Nov 2013: Making the Most of Scientific Meetings - 5 Tips for Emerging Medtech Companies
- 08 Oct 2013: Five Essentials for Emerging Medtech Pitch Decks
- 02 Sep 2013: Reimbursement Fundamentals for Disruptive Medical Technologies
- 30 Jul 2013: Should I Fund My Medical Device Company on Kickstarter?
- 10 Jul 2013: Medtech heads to Africa and so does S2N
- 12 Jun 2013: Defining Disruption in Emerging Medtech
- 07 May 2013: The Luck Factor for New Medical Devices
- 03 May 2013: S2N Whitepaper - Marketing for Emerging Medtech: A Stage by Stage Guide
- 21 Mar 2013: Valuation Drivers for Emerging Medical Device Companies
- 27 Feb 2013: The Rise of Robotics in Med Tech
- 14 Feb 2013: Five Marketing Essentials for Emerging Medical Technology Companies
- 31 Jan 2013: Is The Medical Device Industry Ready for Big Data?
- 11 Jan 2013: Europe Ups the Post-Market Ante for New Medical Devices
- 28 Nov 2012: KOL Matchmaking – Four Key Considerations for Medical Device Companies
- 09 Nov 2012: Election Lesson for Emerging Med-Techs - It's All About the Ground Game
- 31 Oct 2012: The New Normal in Medical Device Exits
- 27 Sep 2012: The Next Big Niche? Emerging Med-Tech in Transplant.
- 19 Sep 2012: The Three Greatest Pivots in Medtech
- 12 Sep 2012: Driving Early Market Adoption for your New Medical Device
- 30 Aug 2012: S2N Summer 2012 Newsletter
- 19 Jul 2012: The Affordable Care Act - Implications for Emerging Med Tech Companies
- 17 Jul 2012: Six Ways Through the Valley of Death for Emerging Medical Device Companies
- 26 Jun 2012: When Medical Devices go Quiet - Managing End of Life
- 14 May 2012: The Mythical Emerging Medical Device “Platform” Company
- 07 May 2012: What specialty distributors need to know about medical device start-ups
- 24 Apr 2012: Top 5 Anxiety-Provoking Med-Tech Acronyms
- 19 Mar 2012: Pulling Together: Aligning Stakeholders in Emerging Med Tech Companies
- 06 Feb 2012: How Low Can You Go? The Value of Developing Cheap Medical Devices
- 12 Dec 2011: The Legacy of Boston Scientific for MedTech Entrepreneurs
- 26 Sep 2011: Emerging Med Tech Execs: The 10 C’s You Need to Lead
- 08 Aug 2011: Back to Basics: The Surgical Segment Heats Up
- 28 Jun 2011: First Stop, Third World: Emerging Markets for MedTech
- 06 Jun 2011: Successfully Naming your MedTech Company (hint: add beer)
- 16 May 2011: The Squeeze of the VCs - Four Conspiring Trends
- 25 Apr 2011: Who Will Win in the New Healthcare Economy?
- 08 Apr 2011: Corporate Venture Funds – What’s the Deal?
- 23 Mar 2011: Medical Device Exits - Part 2
- 09 Mar 2011: Medical Device Exits - Part 1
- 01 Mar 2011: The Hidden Cost of Non-Dilutive Funding
- 22 Feb 2011: How Virtual Can You Go in Emerging Medtech?
- 01 Feb 2011: Top 5 Reasons Why We Like The Medical Device Industry