Growth Strategies and Exit Alternatives for MedTech Companies Lessons Learned from Successful...

“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

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?

Unilever, BTG, Genome Therapeutics, ActiveCyte, AnVil, Sequitur, Signet Laboratories, ProNAi,

Launchpad Venture Group

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) Alzheimer’s Disease Diagnostic Device

NABsys (A Round Financing $1M) Gene Sequencing Device

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

Revenues

What growth strategies were pursued and why? Direct Sales

High Salary Costs OEM

Sharing a Bigger Pie M&A

Realize value with $$/Stock/Earn Out

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 M&A M&A

Provide for Capitalization With Earn Out Provisions License

Least Capital Intensive

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 R&D Innovative Shops…

Backed by the Academic Research Faculty…

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 biology’s turn with genomics & proteomics

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’

Evidence Based Medicine

Hereditary – Hemophilia – BeneFIX (Wyeth)

Cancer – Her2 +ve (Bayer) = Herceptin (Genentech)

Diabetes – Blood Glucose +/- = Insulin

What next?Alzheimer’s Diagnostic & Treatment?Personal Genomic Profile & Prognosis?

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

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’

Development Opportunity

‘Drug Rescue’ Repositioning Old Drugs

‘Orphan Drugs’ less than 120,000 patients; R&D tax credits; up to 6 years of monopoly (regardless of IP)

Lifestyle & Insurance Drugs….

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 weren’t ill, but you might drop

dead if you stop taking it – pay premium for life!

New Use Old Drugs

Cardiovascular – side effect hair growth = Rogaine

That said…

Great way to make a living! You get to make $$$ & see patients successfully treated

‘Just don’t assume its about curing folks - folks!?’

Dr Richard D Gill ActiveCyte Holdings RIKI4455@aol.com 781 864 7515

Bb 269 823 8430

We all need different medicine

Questions?

RIKI4455@aol.comRIKI4455@aol.com