Key Activities. Ofer Reizes, Ph.D. Skills Development Director

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1 Key Activities Ofer Reizes, Ph.D. Skills Development Director 1

2 Key Activities Core Question: What key activities required for your Value Propositions? Key Partners Key Activities Key Resources Value Proposition Customer Relationships Channels Customer Segments Costs Revenue Streams

3 Critical Activities File the strongest possible IP Generate data Bench, pre-clinical, and clinical Conduct a clinical trial Sensitivity and Selectivity studies Obtain regulatory approval Obtain reimbursement Conduct a cost outcomes study

4 We Know Pathways

5 Translational Research is more than Bench to Bedside

6 Navigating the Ecosystem of Translational Science Understanding your ecosystem is critical for your activities

7 Generic Therapeutics Ecosystem Efficacy Toxicology KOLs CROs Pre- Clinical Clinical Trials Physician/ Hospital Patient Dosing IP Regulatory Pathway Reimbursement Side Effects CROs FDA Compliance Cure/Treat

8 Therapeutics Discovery Activities Target ID Validation Lead ID Lead Optimization Pre-clinical Studies First in man HTS Medicinal Chemistry Efficacy Studies ADME Pharmacokinetics In vitro Toxicology In vivo Toxicology Two Species Efficacy Studies Large Animal Toxicology Pre-IND

9 Devices Activities Design Controls Waterfall

10 The Critical Three Elements Compelling Clinical Need MVP Intellectual Property Technological Solution How does this fit within the ecosystem?

11 Minimum Viable Product Generate prototype to demonstrate problem-solution relationship. Articulated a problem definition based on your understanding/experience Provide High-Level Engineering Specifications Understand the minimum feature list to Prototype Customer Segment Value Proposition Prototype. Bench testing to demonstrate solution Simulation to aid engineering specifications (e.g. stent design, fatigue testing, ) Pre-Clinical model for safety and efficacy (acute & chronic models) Generate data to substantiate your claim and test hypothesis. What are you trying to prove? To whom are you trying to prove it? (customer, VC, FDA or regulatory body) Think feasibility ($) versus statistical significance ($$$)

12 Goal of MVP Prototype Show-n-Tell to your stakeholder and help envision product features and discuss product-market fit. Articulate the main idea and could point-out to design risks. This is important for Reg. activity of dfmea for instance. Helps you in choosing your product features and iterate prototype to determine the minimum features needed and not dilute your value proposition. Question = What should your M.V.P prototype look like?

13 Clinical Activities for Therapeutics/Devices Efficacy Toxicolog y KOLs CROs Pre- Clinical Clinical Trials How do these activities fit within YOUR ecosystem? Who will you partner with? Do you have a timeline? IP Regulator y Pathway CROs FDA

14 Pre-clinical Models Can you show Disease modifying mechanism of action. Benchmark against competing programs. You are competing against everything including generics and preclinical programs. Generate and evaluate. Highest quality therapeutics or optimal design of your device. Metrics need to be understood from day one and constantly reviewed. Your expertise must be the best in the world. What does it cost? Who cares the most? What will they pay?

15 Clinical Trials are a Critical Activity

16 Activities Dictate your Timelines

17 Know YOUR Competition

18 Know YOUR Partners Tools & Platforms Pharma & Biotech Cybel e

19 Activities and Risk Financing Risk is THE major hurdle to success. IP underpins your exit value. Regulatory Pathway and Reimbursement define the size and scope of the required clinical trial and finance ability. The clinical trial is the ultimate test of the hypotheses.

20 Intellectual Property - Activities Seek a professional opinion. The quality of your Intellectual Property underpins Exit Value. Quality of IP is evaluated on some of these criteria: Novel, non-obvious, Utile Do you have a patent? Freedom-to-Operate Are you borrowing someone else s IP to build yours? Blocking IP Are you preventing competitors from practicing in this field? Core patents can often be augmented with strong follow-on patents. The process of iterating and refining leads to better IP.

21 Clinical Needs Are Usually Addressable By Multiple Technologies Don t chase clinical needs with technology. Be technology agnostic FOCUS ON THE NEED Gravitate towards the technical solution with the broadest and deepest IP protection. A better clinical solution with weaker patent coverage will have a harder time being commercialized than a less than ideal clinical solution with stronger patent protection (will discuss further with IP workshop).

22 Other Types of Intellectual Property Trademark: Protect branding and marks. Stronger if registered. Trade Secret: No IP filed, but you have to demonstrate you have restricted access. Patent: Government Monopoly. Strongest Barrier to Entry.

23 It ALWAYS Comes Back to Knowing YOUR Ecosystem (Pathway)

24 Regulatory Activities

25 Generic Therapeutics Ecosystem Efficacy Toxicology KOLs CROs Pre- Clinical Clinical Trials Physician/ Hospital Patient Dosing IP Regulatory Pathway Reimbursement Side Effects CROs FDA Compliance Cure/Treat

26 Early Determination of Regulatory Pathway is Critical 75% of all money raised will be spent on clinical studies and regulatory approvals. Major factor in getting financed. Major factor in Product Market Fit and strategy. Customer Discovery and Interviews can help. Identify the data set necessary to show that your invention does or does not deliver the hypothetical value in humans. Identify clinical trial design options. Regulatory approval often involves the opposite of IP goals similarity to existing approaches versus novelty. Identify path of least resistance in getting regulatory approval.

27 Therapeutics Need to Generate Scientific Evidence (Data) The system for ranking the quality of clinical evidence is known as Evidence-based Medicine. Demonstrating Safety and Efficacy of therapeutic requires hard data with clear endpoints. The highest level of evidence (and most expensive) is a prospective, randomized, placebo-controlled, double blind trial (RCT) published in a peer review journal. The value of your company and technology will be bracketed by the strength and clarity of your data. Major risk to getting funding: Equivocal Data

28 Typical development program Nonclinical Animal data usually surrounding safety but efficacy might be added in POC Clinical Phase I Phase II Phase III Usually safety, SAD, MAD, PK/PD, very short term Efficacy signal studied, dose ranging, may include PK/PD Longer than in phase I, some safety data accumulated More robust, larger numbers, and longer duration, would serve as pivotal trials for approval NDA/BLA * POC proof of concept; SAD single ascending dose; MAD multiple ascending doses; PK pharmacokinetic; PD pharmacodynamic; NDA New Drug Application; BLA= Biologic Licensing Application

29 New Drug Application review (focus) Substantial evidence of effectiveness... Evidence consisting of adequate and well controlled investigations, including clinical investigations, by qualified scientific experts, that proves the drug will have The effect claimed by its labeling... (Kefauver-Harris Drug Amendments to Section 505[d] of Federal Food, Drug and Cosmetic Act, 1962) Safety (Federal Food, Drug and Cosmetic Act of 1938) Labeling (Original Food & Drug Act of 1906)

30 So will anyone pay for your technology?

31 Why Reimbursement is Important for devices? Seek professional opinion Very dynamic field. INTERVIEW. Reimbursement is the driver of revenue and profitability of medical device start-ups and typically. No existing coverage/code = Hard to finance (must be disruptive technology) Near Term suboptimal code that might be changed over time with compelling data demonstrating superior clinical efficacy = Good chance to finance. Reimbursement for public payors is determined by CMS (Center for Medicare and Medicaid Services), private payors tend to follow CMS s lead, but occasionally do not. New reimbursement code = 2-3 years post FDA approval.

32 Reimbursement is Required to Effectively Sell Therapeutics Major concern for VCs and other financers. No existing coverage/code = unfinanceable Reimbursement for public payers is determined by CMS (Centers for Medicare and Medicaid Services). Obtaining a new reimbursement code can take 2-3 years AFTER getting FDA regulatory approval.

33 Reimbursement = Coverage, Coding, Payment Coverage: The terms and conditions under which Medicare or private payers will or will not provide payment. Dependent on scientific evidence and data generated by comparative clinical trials and published in peer reviewed journals. The evidence must support effectiveness in substantially improving health outcomes over existing therapies. Therapeutic must demonstrate medical benefit and added value.

34 Reimbursement = Coverage, Coding, Payment Codes link coverage to payment. Coding consists of: CPT (Current Procedural Terminology) Codes identify medical procedures performed by physicians. ICD-9 (International Classification of Diseases, 9 th Revision) Codes convey a patient s diagnosis(es) and provide the medical justification for the episode of care for which the provider is filing a claim. They are used in both the inpatient and outpatient settings. ICD 10 is coming out soon T Codes and -99 Codes are used to cover emerging technologies on a temporary basis. HCPCS (Healthcare Common Procedure Coding System) Codes are intended to cover supplies, medical equipment and services billed by suppliers rather than by physicians.

35 It is Complex SEEK ADVICE Technologies that do not fall into the bundled payment system must obtain their own reimbursement code Good Luck!!

36 Reimbursement = Coverage, Coding, Payment Payment: The amount paid to the hospital or physician for using the therapeutic. Medicare is moving to link payment to the quality and efficiency of care provided. This will shift the focus of Medicare from paying providers and suppliers based solely on the volume of services furnished to paying them based on the delivery of high quality, efficient health care.

37 Reimbursement Influencers

38 Summary Key Activities are linked to your ecosystem. Need to define your: Minimal viable product Clinical trials Regulatory strategy Intellectual property Reimbursement

39 Questions?