Medical device executives desire to achieve successful commercialization, yielding a multimillion $/€/¥ exit while delivering clinical value to patients who benefit. To achieve these objectives, entrepreneurs have ever-changing hurdles to conquer. With so much at stake, how is it possible to identify the indication for use with the highest potential for successful commercialization, and to predict adoption early in the development process?
The “Time to Medical Device Commercialization – 2017” graphic below, created by Nancy Patterson, CEO of Strategy Inc. (www.strategyinc.net), one of the leading medical device market due diligence, financial valuation, and commercialization strategy companies, provides exemplary insight into the complex process. The roadmap outlines a simplified 5-step timeline for medical device development that includes 5 stages: Identify, Invent, Confirm, Review and Market. This timeline outlines how medical device development takes between 3 and 11 years from idea to sale of the innovation, depending on many factors including product complexity, clinical testing, regulatory review and eventual launch. The costs for medical device development from concept to market are estimated ~$31 million for a low to moderately complex device and $94 million for a moderate to high-risk device, according to a survey of >200 medical device companies (Nature Biotechnology; Vol. 33, 910-920; 2015).
The Strategy Inc. analysis shows that proven successful serial entrepreneurs seek to:
· Clarify and confirm market needs early and iteratively;
· Investigate and comprehend both the immediate and anticipated emerging direct and indirect competitive landscape;
· Understand changing industry trends driven by adapting healthcare economics;
· Anticipate viable exit strategies early in the development process to drive collection of highest-value clinical data’
· Identify and reach out to anticipated partners early; and
· Prepare defensible valuations to ensure negotiations yield desired outcomes.
These sought-after objectives are most successful with an expanded understanding of the medical device development timeline. This understanding improves clarity of the required processes and those best executed at each stage.
In today’s competitive market for resources, even companies with technology that will deliver an immediate solution for an unmet need must convince investors that the path to successful commercialization has been de-risked to increase the probable ROI and the odds of successful commercialization.
When asked about the secret to determining which technologies will achieve market dominance, Ms. Patterson says, “Understanding the market landscape surrounding a specific innovation and securing definitive input from key industry leaders in combination with ‘in-the-trenches’ physicians about clinical needs and current clinical offerings at the earliest stage, and then in an iterative process throughout development, ensures that the innovation developed will address market needs.”