Strategy in Healthcare Science and Technology for South ... · VISION 2025: A ROAD TO EXCELLENCE Strategy in Healthcare Science and Technology for South East Netherlands Project report

Strategy in Healthcare Science and Technologyfor South East Netherlands

This report was made possible by a grant from the Dutch Ministry of Economic Affairs, the Province of Noord-Brabant and the Province of Limburg.

LifeTec NetworkP.O. Box 13106201 BH MaastrichtThe Netherlandswww.lifetecnetwork.eu

April 2010

Text review: Hugh Quigley, [email protected] Graphic Design: Pien Vink, www.grabaweb.nl Printing: SCHRIJEN-LIPPERTZ, www.schrijen-lippertz.nl

vision

2025: a ro

ad

to excellen

ce Strategy in Healthcare Science and Technology for South East N

etherlands

All information contained in this report, whether in the nature of data, recommendations or otherwise is supported by the research and analysis presented and believed reliable, but LifeTec Network assumes no liability and makes no warranties of any kind in respect of application or use made of the aforementioned information. Copyright of the information rests with LifeTec Network. Reproducing, reprinting or quoting (parts of) this report is allowed provided LifeTec Network is acknowledged as the source.

VISION 2025: A ROAD TO EXCELLENCEStrategy in Healthcare Science and Technology

for South East Netherlands

Project report "Lifetec Environment Strategic Analysis" April, 2010

Foreword

Executive Summary

I t d ti

1

3

17

Content

Introduction• Why LESA?• Stakeholders• Issues• Clusters• Why "lifetec"?• Scope• Methodology

M A l i (t d )

1718192021232426

27Macro Analysis (trends)• Introduction• Society & Economy• Patients• Science & Technology• Future• Summary

Macro Analysis (business and markets)• Healthcare technologies

27282931323338

3940• Healthcare technologies

• Pharma• Markets• Pharma R&D and Regulatory• Business• Opportunities• Summary Pharma

• MedTech• Markets• MedTech Regulatory

40

4244464950

5153• MedTech Regulatory

• Business• Opportunities• Summary MedTech

Macro-Cluster Competitive Analysis• Methodology• Geography• Characteristics• Origins and Growth

53545759

6162636466• Origins and Growth

• Preconditions• Key Success Factors• Strategic Grouping• Role of the CMO• Summary

Micro Analysis• Industrial profile• Academic Profile

666869717477

798085Academic Profile

• Environment• Facilities• SWOT• Performance on KSFs• Summary and Opportunities

Strategy, Roadmap Action Lines• Scenarios• Vision Mission

85909498

100101

105106109Vision, Mission

• Roadmap• Action Lines

ReferencesAbbreviationsGlossary

109111116

131135137

Foreword: from hindsight to foresightSouth East Netherlands is populated with organisations investing in life science and medical technology. The

Vision 2025: A Road to ExcellenceStrategy in Healthcare Science and Technology for South East Netherlands

Our analysis of South East Netherlands as a "lifetec" region has highlighted some factors that may not have seemed so evident when we started out with the LESAinvesting in life science and medical technology. The

region boasts leading universities and multinationals as well as small and medium-sized enterprises engaged in world-class activities. Yet it lacks a framework, a coherent approach, to guide future innovation. If South East Netherlands wants to remain competitive in the 'lifetec' sector on a global scale, it has to evolve.In 2008, the Lifetec Environment Strategic Analysis (LESA) team set out to formulate a broadly shared strategy for the 'lifetec' sector in South East

seemed so evident when we started out with the LESA study. The region occupies a unique position at the crossroads of High Tech Systems and Life Sciences, what we refer to as "converging technologies" in this report. This position means we have an opportunity to become a world-class player in the selected areas of medical devices for cardiovascular applications and diagnostics in general. With hindsight, it is easy to forget that some of the conclusions and observations we have made in thisstrategy for the lifetec sector in South East

Netherlands, to identify our region's position in this dynamic industry and to establish the key objectives of such a strategy. In other words, to point the way forward.

By gathering and analysing data from many sources, the LESA team has produced a comprehensive picture of the state of healthcare technology today and of expected developments in the future. A lot of the

conclusions and observations we have made in this report, and which may seem evident today, were in fact far from obvious a year and a half ago. Lebanese-American artist, poet and writer Kahlil Gibran once wrote "Progress lies not in enhancing what is, but in advancing toward what will be". Our roadmap will lead to the creation of a word-class "lifetec" cluster in South East Netherlands between now and 2025. This report lays the foundations for that. Enabling foresight, for all stakeholders.p p

information we collected was already accessible and known. That information lacked the coherence and specificity necessary for our purpose, however. We have spent eighteen months intensively, discussing and digesting this information to produce this, our final report. In it we address a number of searching questions.The first and most important question we needed to answer was: what is the ultimate objective of our

stakeholders.

Rinie van Beuningen Fred BollenCasper GarosFeike HylaridesAllard KasteleinHans Kasperj

strategic plan? Is it to generate a profit? Is it to achieve scientific excellence? Or is it to generate jobs? After lengthy and in-depth discussions the conclusion was clear: to create high-quality, sustainable jobs in the "lifetec" sector as a basis for social and economic prosperity.A second, but equally important, question was: how do we achieve this goal? How do we create a comprehensive and rational framework to facilitate

Emiel LendersRogier Receveur Nikoleta Simeonova

innovations and improve clinical care? The answer lies in a concept that has been steadily gaining support in light of the soaring costs of health care: the patient-centric care cycle, enabled by existing and future technologies.The third and final question was: how can we make this a reality? The aim of the patient-centric care cycle is to develop targeted preventative care using advanced technologies. The results are cost-effective healthcare

Acknowledgements

We greatly appreciate the support, comments and suggestions we received from the members of our Sounding Board, Competition Team, project partners and others: Arna Arnautovic, Frans Baraké, Hans van den Berg, Mat Daemen, Henri Faun, Roel Fonville, Jo van Ham, Steve Hartig, Ria

solutions, but the challenges in developing them are formidable and long term. We concluded that to meet these challenges and drive this sector forward we need to bring together key stakeholders in a lifetec cluster. And a roadmap showing how government, industry and academia can collaborate in coordinating the region's strengths and so attract talent and investment to the region.

Hein, Peter Hilbers, Hans Hofstraat, Menno Horning, Henk van Houten, Michael Jacobs, Jacques Joosten, Tim Kievits, Rene Kuijten, Martijn Lamberti, Ton van Lier, Fred Lindemans, Stella Lombardi, Patric Machiels, Klaas Nicolay, Erik van Oorschot, Jos Put, Guy Peeters, André Postema, Ingrid Relou, Paul Smit, Jérôme Verhagen.

The project was made possible by a grant from the 'Pieken in de Delta' programme.

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

Background LESA objectiveT i l b lThe South East of the Netherlands already has some

world class activities in the realm of life science and medical technology. The region is home to two leading universities, multinationals in medical technology, pharma, biomaterials and high tech systems, as well as innovative small and medium-sized enterprises (SMEs). However, in order to remain competitive, the business climate for industry and institutions will have to evolve further.

To put it more elaborately:The objective of the LESA project is to determine the strategy that will enable South East Netherlands to (continue to) compete on a global scale based on an assessment of the common denominators of key players and on the competitive position of the region in a worldwide context.

Opportunities to investTh i l d ki i t t i t t i

Open InnovationFor innovation to thrive, what is needed is an open innovation model, where institutions and companies co-operate and profit from each other's competences. Commercialization of inventions should proceed smoothly. The region should be attractive to investors and to top-notch scientists and competent people.

Hi h lit j b

These include making investments in start-up companies and attracting investments from outside the region.

High quality jobsMedical technology, pharmaceuticals, biomedical materials, bioinformatics are all part of life sciences.This sector is highly knowledge intensive. Universities serve as breeding ground for new innovations.Innovations are prerequisite and need to be transferred to existing and start-up companies. As a result, high quality jobs are created across the whole value chain.

18

FinancersThe LESA project is financed by the Ministry of Economic Affairs and the provinces of Limburg and Noord-Brabant as part of the Pieken in de Delta programme.

Partners in the project are• N.V. Brabantse Ontwikkelingsmaatschappij (BOM)• N.V. Industriebank LIOF• LifeTecZONe

B i t D l t• Brainport DevelopmentUnder penmanship of• Stichting LifeTec Network

Participants in LifeTec Network• DSM• Eindhoven University of Technology• Maastricht University Medical Center • Medtronic Bakken Research Center• Phili R h• Philips Research• Philips Health Care• Merck Sharp & Dohme - MSD (the former Organon)

19

In the early phase of the LESA study, stakeholder Assets and peoplerepresentatives were interviewed about issues and key questions to be addressed in this study. The diagram above includes some quotes taken from these interviews. All the key issues are summarized below.

South East Netherlands' business position• Do we have the right portfolio of businesses and

alliances (e.g. other Dutch universities) and are there opportunities for synergy?D h th i ht tf li f h ?

• What are our Strengths, Weaknesses, Opportunities and Threats (SWOTs) and what actions can be derived from them?

• What gaps do we have in competences and what do we need to do to fill them?

• What gaps exist in business chains and what should we do to overcome them?

• Are our enabling organizations, resources and facilities "fit for purpose"? (Public-Private Partnerships (PPP ) t k i ti bli d i t• Do we have the right portfolio of research areas?

• What development scenarios are possible? • What is a realistic ambition?• Is it true that we have relatively few research and

development (R&D)-driven small and medium-sized enterprises (SMEs) and what can we do to remedy this?

• What kind of R&D should be stimulated?• What kind of acquisitions do we need?• Wh t ki d f t t d d?

(PPPs), network organizations, public and private funding, campuses, quality of life, supporting services).

• Are the present instruments for acquisition adequate?• Which research groups at our universities are really

top-flight? Sustainable? Further strengthening. Collaboration with industry to be intensified.

• Which factors determine the ability to attract and retain really talented people?

• What kind of start-ups are needed?• Do we have the right level of information sharing?

Competition• What is the competition doing and what does it take

to be competitive?• Which business systems have a potential top-3

position worldwide? And what is needed to achieve and retain it?

• With h d t t tt t b i

Markets/trendsWhat important trends have to be anticipated?

CustomersWhat areas should we focus on; which ones are better left to others?

InnovationH th "D t h i ti d "?• With whom do we compete, e.g. to attract businesses

and talented people?How can we overcome the "Dutch innovation paradox"?

20

Michael Porter Clusters increase competitiveness* by:Michael Porter pioneered the cluster concept* to successfully develop the economic growth of countries and regions.Many regions have successfully adopted this concept and some recent examples of such a cluster approach are**:• Massachusetts 2003• Texas 2006• New Jersey 2003

M i h 2007

• Increasing Productivity• Efficient access to specialized inputs, services,

employees and information• Ease of co-ordination and transactions across

firms• Rapid diffusion of best practices• Ongoing, visible performance comparisons and

strong incentives to improve vs. local rivals• Stimulating and Enabling Innovations

E h d bilit t i i ti• Munich 2007• Medicon Valley 2002

• Enhanced ability to perceive innovation opportunities

• Presence of multiple entities involved in specialized knowledge creation

• Presence of experimentation given locally available resources

• Facilitating Commercialization and New Business Formation• Opportunities for new companies and new lines of

t bli h d b i testablished business are more apparent• Commercializing new products and starting new

companies is easier because of available skills, suppliers and financing.

* M. Porter, The Competitive Advantage of Nations, Free Press 1998** Massachusetts Life Sciences Summit, 12 September 2003

Texas Economic Summit, San Antonio, Texas, 14 November, 2006

New Jersey Life Sciences Super-Cluster Initiative 2003Van Brains naar Baten, Breng Brainport in Balans, 2007Biotechnology | Life Sciences in Munich,GermanyCommercial attractiveness of biomedical R&D in Medicon Valley (Sweden/Denmark), 2002 21

Social and economic prosperityResearch on various clusters* has identified a number of benefits that a strategic cluster-development approach could yield for South East Netherlands:• Raises science, creativity, innovation and the know-

ledge base in life sciences and disciplines related to "lifetec" to a higher level.

• Enhances the education and skills of the population and stimulates entrepreneurship.

• Improves the competitive position of South East N th l d i i i l titi l b lNetherlands in an increasingly competitive global marketplace by producing and selling advanced "lifetec" products and services.

• Secures international recognition for South East Netherlands as an attractive location for "lifetec" business activities.

• Increases economic output through the direct impact of "lifetec" companies and institutes and the indirect impact of the supply and service chain.

• C t t i bl hi h lit j b l di t• Creates sustainable high-quality jobs, leading to increased personal income through the higher than average wages paid in the "lifetec" sector.

• Increases governmental income through business and personal taxes that can be attributed to the activities of the "lifetec" sector.

• Significantly contributes to the quality of life in the region by improving the employment climate in a challenging industry.

• L t b t t l t E bl S th E t N th l d t• Last but not least: Enables South East Netherlands to contribute to world health care by delivering new and improved products and services.

22 * LESA Task Force research

"Lifetec"The "lifetec" business is a proven engine of economic growth in many countries* (in particular the USA and, in Europe, the UK and Switzerland) addressing large global issues like human health, food security and renewable resources.

"Lifetec" is a highly innovative business area based on research and specialized knowledge in which further major developments and breakthroughs are anticipated b l k t h l i tillbecause several key technologies are still very young.

It is able to create new, high-paying jobs which have little dependency on economic cycles and are not susceptible to competition from low-cost countries. For every direct job created by "lifetec" businesses, roughly three additional indirect jobs are created in support services, such as business supplies and legal services, and in related consumer spending**.

The above combination of characteristics is currently difficult to find in other sectors, such as the automotive or electronic industries.

"Green""Lifetec" uses and provides environmentally friendly materials and technologies.

* Life Sciences and Health report of The Netherlands, June 2007 ** USA Biotech report, Battelle, 2006 23

Background science & technologiesTh i t h l i d d t d d t f

• Pharmaceuticals and biopharmaceuticals (drugs) –h i l b t i t d d f i iThe main technologies needed to produce products for

human health are the following:• Life Sciences encompass the disciplines of molecular

biology, pharmacology, cell physiology, genomics, proteomics and metabolomics, in addition to the science of using living things, and components of living things, to produce goods and services.

• High Tech Systems relates to end products based on advanced technologies like embedded systems, nano electronics and mechatronics*

chemical substances intended for use in curing, treating or preventing diseases.

• Medical technology encompassing devices, imaging equipment and in-vitro diagnostics.

• New emerging technologies like regenerative medicine and personalized medicine.

Connection to Innovation PlatformSix "sleutelgebieden" (key areas) have been designated at national le el These are areas of technolog in hichnano-electronics and mechatronics*.

• ICT stands for information and communication technologies (as applied, for example, in tele-health and bioinformatics).

• Chemistry is used to produce chemicals (pharmaceuticals) and materials.

• Biomedical materials technology is the technology to process materials (metals, polymers etc.) which are used in devices for both in-vivo and in-vitro applications

at national level. These are areas of technology in which the Netherlands aspires to excel. LESA's technological scope is closely linked to two of them: "High Tech Systems" and "Chemistry".

Connection to other national and provincial programmes Health technologies have already been prioritized in the context of some national public-private partnerships (PPPs) CTMM BMM TIPharma LSH and in theapplications.

FocusThe LESA study focuses on human health and products ((bio)pharmaceuticals, medical devices) designed to preserve and improve people's health.

Healthcare technologiesThe application of the aforementioned basic technolo-gies in the area of human health yields the so called

(PPPs) CTMM, BMM, TIPharma, LSH and in the provincial programs "Versnellingsagenda" and "Dynamisch Brabant".

Areas outside the scopeThe scope of LESA does not encompass agriculture ("green biotech") or industrial processes like biofuels ("white biotech") and animal health.

gies in the area of human health yields the so-called Healthcare technologies, in which the main segments are:

24 * Point-One program, Phase 2 report: From good to great in Dutch technologies, April 2008

Conceptual aspects of cluster size Cluster management for "core area"What is a natural size for a region or a cluster? There is no single answer to this question as it depends on the perspective from which the cluster is viewed. Activities such as joint R&D projects, which require frequent face-to-face interaction, in practice call for a limited travelling distance of, say, 1½ hours by car or public transport.

A similar radius might apply for the knowledge worker who is seeking a range of alternative employment

t iti ith t th i di t d t l t hi

This study places the emphasis on the "core area" for a number of reasons.

First, the travelling time of 1½ hours constitutes a more or less natural delineation.

Second, as we shall see, more than 80% of private Dutch "lifetec" research is carried out in South East Netherlands.

opportunities without the immediate need to relocate his or her family.

Two factors favor the Netherlands as the cluster of choice: the fact that governmental policy instruments are national and the issue of branding. (The Netherlands is a strong brand name).

On a broader level, however, the value proposition to the k l d k d t th b i t th t i

Third, it was realized early on in the study that managing the implementation of a strategic plan in the initial stages would only be possible in a Dutch context and that attempting to do so Euregionally would be a bridge too far at this stage. The Euregional context has been considered as a given boundary condition.

knowledge worker and to the business prospect that is considering establishing a foothold in north-western Europe, is clearly an inter-regional one.

Buyer-seller relationships and logistics are yet another angle from which to consider cluster size. From that perspective, one might come up with, say, a day's travel by car. But of course, depending on the product buyer-seller relationships can easily stretch worldwide.

25

Business Strategy Dialogue (BSD)The BSD methodology was developed in 1992 by DSM in association with IMD Switzerland and Boston University's Babson College. Over the years, the method has proved reliable and successful. This methodology was adapted for the analysis of a region or cluster.

The major building blocks are:• A macro analysis: an "outside-in" view, based on an

in-depth study of the competitive environment. A d di t d "C titi " b t d bdedicated "Competition" sub-team surveyed a number of major "lifetec" clusters in the world. The output is an overview of general Key Success Factors (KSFs) and an indication of possible strategies for success.

• A micro analysis: an "inside-out" view. An assessment of existing competences and capabilities in companies and knowledge institutes and infrastructural facilities in South East Netherlands.

• Strategic group and strategic choices: by comparing th iti f S th E t N th l d ith tithe position of South East Netherlands with competing regions, an assessment of strategic options can be made.

• A strategic roadmap: produced on the basis of the preceding steps and including mission targets, actions and performance indicators.

26

27

Trends analyzed from three perspectivesMacro trends have been analyzed from three perspectives: society & economy, patients and science & technology.

The implications of these trends for the healthcare system were identified. Those implications were then translated into effects and developments that can be regarded as opportunities and risks upon which a future strategy for South East Netherlands can be built.

Everyone is a patientThis report uses the word "patient" to refer to anyone who is receiving care, is under treatment or is otherwise in contact with the healthcare system, irrespective of his or her medical condition. In this sense, everyone can be considered a patient. Doctors generally refer to their clients as patients, even if they are healthy.

28

Rising healthcare expenseHealthcare expenses are continuing to rise in Europe and the USA and are becoming economically unsustainable.

In order to curb the growth of healthcare expense, governments are reviewing healthcare systems and are looking for opportunities to reform them.

European dataD t t d f E th f ll iData presented for Europe encompasses the following euro-zone countries: Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Slovakia and Spain.

29

Examples of expense-benefit considerations Lower-expense alternativesSome examples of expense-benefit considerations that are applied or under development are given below

• The UK pioneered the approach resulting in the Quality Adjusted Life Year (QALY) concept, which is a measure not only of the length of the life of a patient under care, but also the quality of that life. Treatments are routinely approved if their expenses to the National Health Service are below £ 30,000 per QALY*. E ti d b th t th h ld

An example here is the stimulation of the use of generics** over branded pharmaceuticals because generics are, on average, 20 - 50% below the price of branded pharmaceuticals under patent protection.

Exceptions are made above that threshold. • In the Netherlands, expense effectiveness is one of

the criteria for admitting new treatments into the basic insurance package.

• The FDA and EMEA consider efficacy compared with "gold standard" existing treatments as an important factor in approving new treatment options.

30

* Ernst & Young, Beyond Borders - Global Biotechnology Report 2009** Generics are drugs that are no longer under patent protection and which may be produced by any manufacturer who follows good

manufacturing protocols

The patient's viewSocieties around the globe are facing the growing reality and burden of increasing and aging populations, including the spiraling expenses of keeping us in good health.

Aging and unhealthy lifestyles are contributing to the rise of chronic diseases, putting even more pressure on our healthcare systems. Worldwide, many more people now die from a chronic disease - cardiovascular diseases, di b t t th f i f ti di hdiabetes, etc. - than from infectious diseases such as malaria and tuberculosis.

We are also facing a global and growing deficit of healthcare professionals. There are simply not enough nurses and doctors to cope with the growing demand for medical attention, and the problem is getting worse.

People are demanding more and better care as they b d b tt i f d Thi ibecome more and better informed. This raises expectations, the growth of medical tourism being just one example.

31

Interdisciplinary research New technologiesInterdisciplinary research on life science (molecular biology, pharmacology, cell physiology, genomics, proteomics, metabolomics) in combination with High Tech Systems (embedded systems, mechatronics, nano-electronics) results in innovative healthcare solutions or smarter devices that have an impact on future health systems and quality of therapy.

Mechanisms of diseasesU d t di th bi h i l f di

New molecules (such as RNAi's) are being identified. These could be used to influence the control of biochemical processes in the body, leading to the activation or repression of genes, regulatory proteins and even the prevention of cell proliferations.Technologies are being developed to regenerate human cells in-vitro, so they can be used to replace diseased tissue (e.g. wound healing, cartilage replacement).

ICTUnderstanding the biochemical processes of diseases, and a better understanding of how pharmaceuticals act combined with technologies that lead to personal fingerprints (e.g. genetic screening, biomarkers) including disease expectations, result in improved quality of control and personalized healthcare and targeted therapies. Targeted therapies are expected to reduce the number of adverse drug reactions and failed trials and to lower costs by allowing medicines to be administered

l t th ti t h ill b fit f th if

ICTNew ICT systems enable the handling of large flows of patient data for information sharing, which is needed in new healthcare systems. ICT also enables the handling of complex databases such as those being used for the comparison of genetic screening.

InnovationFinally, clinicians and administrators are faced with more h i d i i l l ld d t thonly to those patients who will benefit from them if proper

diagnostics are used to guide the targeted therapies.

BiomarkersThese new technologies will also lead to the identification of disease-specific biomarkers and advanced diagnostic equipment to be used for the monitoring and prevention of diseases and predicting therapy efficacy and side effects.

choices and an increasingly complex world due to the acceleration of innovation, the supply of more advanced tools, the advances in molecular medicine and an explosion of information.

32

The changing focus of healthcareThe lines in the above graph plot symptoms and costs against lifetime. Our present way of treating patients brings us to the far right of the green curve. In other words, most healthcare expense is incurred in the last 15 years or so of life due to patient conditions that are predominantly chronic.

What is needed is a prospective and preventative healthcare system aimed at preventing patients from b i h i ll ill P i h lth th thbecoming chronically ill. Preserving health rather than the number of consultations, interventions or prescriptions should increasingly become the basis for rewards to doctors and innovators.

Major changes in our healthcare reimbursement systems are needed to encourage the transition from curing illness to maintaining wellness, as represented by the red line.

In addition to prevention, new and better care should come from personalized medicine and improved drug delivery methods to treat patients with chronic conditions.

33

Current policy (USA data)If the current trends in healthcare continue, then the projected annual growth rate in healthcare expenditure is 3.4%. If prevention and early diagnosis take place, the estimated growth rate is about 0.5% lower. Estimation has been made that more effective prevention and management of disease could save $ 218 bn in treatment expenditures annually in 2023*.

People affected (USA data)Th b f l ff t d t d/ ti t dThe number of people affected are reported/estimated as follows• 2003

• Cardiovascular diseases $ 58.3 mln• Cancer $ 10.6 mln• Diabetes $ 13.7 mln• Respiratory $ 49.2 mln

• 2023• Cardiovascular diseases $ 81.3 mln

C $ 17 2 l• Cancer $ 17.2 mln• Diabetes $ 21 mln• Respiratory $ 64.6 mln*

34* An Unhealthy America: The Economic Burden of Chronic Disease Charting a New Course to Save Lives and Increase Productivity

and Economic Growth, Milken Institute, 2007

Current model Future drug developmentThe current model can be characterized as costly and ineffective• Treatment only starts after the patient has developed

symptoms.• Treatments are generally disease-specific (one size

fits all).• Pharmaceuticals work in 15 to 70% of patients, the

percentage depending on the drug concerned.• Prescription side-effects have been reported to cause

137 000 d th ki it th b 4 f

"Convergent technologies" will improve diagnosis and monitoring, resulting in a more accurate patient profile. This will lead to a better identification of targeted patients for new drugs. As a result, the approval and commercialization process will be shortened and less costly.

137,000 deaths, making it the number 4 cause of death in the US*.

The future modelThe combination of drugs, devices and diagnostics is leading to innovative healthcare solutions and new opportunities for growth and differentiation.

The convergence of therapeutics and medical devices, hi h t t d i t ith th d l i t t illwhich started in earnest with the drug releasing stent, will

continue to become increasingly sophisticated, improving efficacy and reducing the risk profile of many existing therapeutic agents.

35* Partnership for Personalized Medicine, Improving Outcomes, Reducing Costs, 2009

Care-cycle The healthcare cycle as a concept"The array of health services and care settings that address health promotion, disease prevention and the diagnosis, treatment, management and rehabilitation of a medical condition."

Domains of the cycleThe domains address all the challenges of modern healthcare (where applicable)• Anticipating an ageing society

Th i f d ti t

The concept of the healthcare cycle is useful from several perspectives. First, care is currently structured around medical specialties and discrete services. It is not aimed at the integrated care of medical conditions. Taking an overall care-cycle approach is the only way to provide patient value. This includes steps to avoid the need for interventions (prevention) and the ongoing management of medical conditions to forestall recurrence (disease management). Healthcare systems

d id ill th f t d t thi• The informed patient• Staying healthy• Preventing instead of curing• Reducing the prevalence of chronic disease• Coping with the rise of lifestyle-related diseases• Early detection• Curing people quickly• Creating faster hospital cycle times• Introducing the electronic nurse• R i t h

and care providers will, therefore, move to adopt this model.

Second, from an industry point of view, the care-cycle concept provides a target to aim for with regard to products and services. As explained on the previous page, technological developments are enabling this trend.

S i h l i l t• Recovering at home• Coping with the shortage of healthcare personnel

GeneralThe care-cycle enables better workflow management.

Cross-domain challenges: quality of care processes• Reducing healthcare variability• Reducing avoidable errors• Add i lti l di i diff t t f th

Socio-psychological aspectsThe care-cycle also considers socio-psychological questions such as why many people stick to unhealthy lifestyles and how behaviour might be influenced.

• Addressing multiple diseases in different stages of the care-cycle

• Reducing miscommunication and providing sufficient knowledge to personnel.

36

ExampleThis slide by Burrill has been included in this presentation to illustrate that the healthcare delivery system is on the threshold of major changes.

Genetic screening, specialized comprehensive (one-stop-shop) treatment centers and home diagnostics/ monitoring are elements to be noted.

37

38

39

Pharmaceuticals Medical devicesA pharmaceutical is a chemical substance used in or on the body for the treatment or prevention of a disease or other abnormal condition. Pharmaceuticals act through (bio)chemical mechanisms.

Small molecule pharmaceuticalsSmall molecule pharmaceuticals are drugs based on molecules, usually organic, with a low molecular weight, usually manufactured by chemistry.

Medical devices are instruments or appliances of a more complex nature, often based on a combination of mechanical, electrical and materials technology. Examples include pacemakers, stents and implants, drug delivery systems, and minimal invasive devices, devices that allow minimal invasive operating procedures minimizing damage to biological tissue inside the body.

DiagnosticsI i

BiopharmaceuticalsBiopharmaceuticals are large-molecule drugs like proteins, created through biomedical engineering or biotechnological processes such as microbial or cell culture.

Regenerative medicineRegenerative medicine is the field of creating living, f ti l ti t i l ti

• ImagingImaging equipment is used to obtain images of the interior of the body, using techniques such as X-ray, tomography and MRI. • In-vitro diagnostics (IVD)In-vitro diagnostics are reagents, instruments and equipment used outside the human body for the examination of specimens taken from it.

S lifunctional tissues to repair or replace tissue or organ functions lost due to age, disease, damage or congenital defects.

Medical technologyMedical technology refers to the diagnostic and therapeutic application of science and technology to improve the management of health condition. Its products are designed generally based on mechanical, l t i l d/ t i l i i d ll t

SuppliesSupplies encompass the "simple" devices and materials used in healthcare, from tongue depressors to surgical instruments and wound dressing materials.

electrical and/or materials engineering and generally act by physical means.Minimal invasive devices are devices used for performing a surgical interventions by making a very small incision in the body.Therapeutic medical devices are used to improve or restore the body functions.

40

Hightech devicesThe hightech devices segment encompasses the Medical Devices and Diagnostics sub-segments.

41

Market growthAfter many years of rapid growth, the overall pharma-ceutical business is reaching the stage of maturity, growing in the range of GDP figures. This is especially true in the developed countries. The growth rates are higher (10 - 15%) in the E7 countries (Brazil, Russia, India, China, Korea, Mexico and Turkey). Biopharmaceuticals are still growing rapidly.

42

43

GlossaryNME stands for New Molecular Entity ("small molecule"). BLA stands for Biologic License Application (biopharmaceutical).

44

Phases in clinical trialsThe phases for drug approval have been defined by FDA and EMEA. The different phases can be briefly described as follows:• Phase 1 is first stage testing in a group of healthy

volunteers, primarily to assess safety• Phase 2 tests efficacy and toxicity in relation to

dosage in a larger group of patients • Phase 3 studies are performed on large (several

thousand) patient groups in random trials. The i t k d fi iti t f hpurpose is to make a definitive assessment of how

effective the drug is in comparison with current "gold standard" treatment

• Phase 4 is concerned with post-marketing surveillance.

45

46

Outsourced R&D and servicesR&D is increasingly being outsourced by Pharma companies to an array of service companies. There are more than 20,000 of them in the US, comprising a significant part of the workforce.

Patent expiries and genericsBy 2015, pharmaceuticals representing a total turnover of $ 250 bn per annum will come to the end of their patent protection period. This will drive further growth in

i * Th t ill li it th ll fit f th hgenerics*. That will limit the overall profits of the pharma industry, as prices will fall by 20 - 50%.

47* Generics are drugs that are no longer under patent protection and are produced by manufacturers that follow good manufacturing

protocols

Consolidation in the pharmaceutical industry in the period 1993 - 2009Between 1993 and 2009, a total of 22 "Big Pharma" companies were parties to mergers and acquisitions. The consolidation resulted in 8 companies in 2009.Recent acquisitions have been• Wyeth by Pfizer• Organon by Schering-Plough• Schering-Plough by MSD• Solvay by Abbott.

48

Orphan diseases ReimbursementTypically, orphan diseases are sufficiently rare that there are no commercial incentives to research and develop effective therapies. Orphan disease designations were introduced by law in the US in 1983 to tackle this problem. The most important incentives are granting exclusivity for 7 years after market authorization, and support and fee reduction for the approval procedure. Similar legislation has entered into force in the EU. The exclusivity period in Europe is 10 years.

Although the number of target patients is, by definition, limited, some orphan drugs have become real money-makers because the reimbursement system in some countries, which determines the prices, has facilitated it. The best-known example is Cerezyme, which sells for $ 200,000 per patient per year in the US. There are also examples of sales boosted by unforeseen off-label use.In general, however, as with all medicines, the pricing of orphan drugs is under scrutiny. The attractiveness of d l i h d i th h t d l t ti

CriteriaOf the recognized diseases, 6,000 - 8,000 can be regarded as rare. About 70% of these rare diseases have a genetic origin. The definition of what constitutes a "rare" disease varies from one region to another. The prevalence figure accepted in the EU is no more than five individuals per 10,000 of the population. In the USA, the proposed prevalence is less than 200,000 individuals i th ti l ti hi h tl t t

developing orphan drugs is the shorter development time at much lower costs, since the number of trial patients for regulatory approval is not determined.

in the entire population, which currently equates to approximately 7 per 10,000 people.

49

50

Market size and segmentationThe total medical technology market (2008) can be estimated at $ 330 bn, ranging from simple hospital supplies and disposables to sophisticated imaging apparatus, pacemakers and life sustaining equipment.

Some 10,000 products can be distinguished. The market can be segmented in many different ways, and there are often overlaps. Data presented in this report are taken from a number of sources (E&Y: US medical technology

t S t 2008 SG C t J 2005 M Kreport, Sept. 2008; SG Cowen report, Jan 2005; McK report, 2009).

MedTech concentration in USIn the US, 60% of the publicly traded companies are located in just five states: California, Massachusetts, Minnesota, New York and New Jersey.

51

CardiovascularCardiovascular medical technology products include cardiac rhythm management, heart valves, cardiac surgery systems, minimally-invasive image-guided technologies, interventional neurovascular technologies and heart assist devices and stents.The cardiovascular device market is expected to reach $ 40 bn in North America alone by 2011. The European drug-eluting stent market has been forecast to reach $ 4.5 bn by the end of 2011, up from $ 1.6 bn in 2001.

OrthopedicsOrthopedic products in this sector are divided into a number of different categories. Strong growth was seen a number of years ago in reconstructive devices and joint replacements, spinal implants and instrumentation, fracture repair and ortho-biologics. On a global scale, worldwide sales reached $ 27 bn. It is estimated that the sector will top $ 44 bn in global revenues by 2010. The E k t f th di d i l d tEuropean market for orthopedic devices was valued at around $ 3 bn* in 2007.

52 * L.I. Group report 2009, The Healthcare Technology Venture Market in Europe, UK and Yorkshire & Humber

Medical device classification and approval The FDA clears more than 3,000 medical devices every Medical devices are divided into four classes, each with its own specific procedure and time period for approval. The classification of devices is generally based on:• time of continuous use• level of invasiveness • implantable and/or active• whether it contains a chemical substance.

The approval time also depends on the device's period f ti

year (ranging from surgical instruments to complex imaging machines). Of these, 30 - 40 require clinical trials; these are implants or life supporting equipment.Development times for new MedTech devices range from 0.5 - 2 years up to 5 - 7 years, depending on the criteria mentioned above.

Medical device developmentInnovation in medical devices is often more evolutionary th l ti hi h l i th b f " "of operation:

• Transient use: normally intended for continuous use for less than 30 minutes

• Short term: normally intended for continuous use for no more than 30 days

• Long term: normally intended for continuous use for more than 30 days.

Market approval for devices that came on the market b f 1995 i l t t i ti d i i ht

than revolutionary which explains the number of "new" devices.

before 1995 or are equivalent to existing devices might follow 510 (k) rules and be approved after proving physical properties based on simulation experiments (e.g. (passive) stents are approved within 5 - 10 months).For a device in class III to containing a new active chemical substance, the approval time based on the above criteria ranges from several months to ~10 years.

53

54

55

56

In-vitro Diagnostics (IVD) Segment growthAs healthcare has improved, there has been an ever-increasing reliance on better and faster diagnostic tests. Diagnostics will remain the key to reducing costs in the future. Technological change in the diagnostics market is enabling earlier and more accurate diagnoses of disease, improving clinical decisions and assisting more effective monitoring of treatment.

Market growthTh l b l k t f i it di ti l d i

Two diagnostic methods in particular are seen as high-growth areas: molecular diagnostics and Point-of-Care diagnostic tests. These segments are expected to exhibit compound annual growth up to 2010 of 14% from a base value of $ 2.6 bn in 2005 and 8% from a base of $ 12 bn in 2005 respectively*.

BiomarkersA very promising therapy area for IVD is cardiac bi k I 2005 th bi d ld id k t fThe global market for in-vitro diagnostics was valued in

excess of $ 38 bn in 2007 and has been forecast to grow by 7% year-on-year until 2012.

Geographical segmentationWorldwide distribution of IVD testing in 2004 is as follows:• US: 40%• Europe: 33%• J 14%

biomarkers. In 2005, the combined worldwide market for cardiac markers was about $ 1.2 bn. This market segment is expected to grow at an average compounded annual rate of 20% to over $ 2.5 bn in 2010. The market for cancer biomarkers may exhibit a lower growth rate, but is attractive because of the higher price level*.

• Japan: 14%• ROW: 13%

57* L.I. Group report 2009, The Healthcare Technology Venture Market in Europe, UK and Yorkshire & Humber

"Convergent Technologies" Life SciencesThe term "convergent technologies" was coined for technology developed by combining elements from different disciplines, most notably physical science, High-tech Systems, Life Sciences and ICT.Some examples• Diagnostics, biomarkers, lab-on-chip• Imaging for diagnosis and therapy support• (Implantable) Devices• Device-enabled drug delivery

R ti di i

Life Sciences comprise• Genomics• Proteomics• Systems biology• Biomarkers

ICTICT supports "convergent technologies" by providing communication and patient monitoring technology and by

bli l i f l l f ti t d t• Regenerative medicine

High Tech SystemsHigh Tech Systems comprise the following technologies• Nanotechnology• Miniaturization• Electronics• Imaging• Wireless• M h t i

enabling analysis of large volumes of patient data.

• Mechatronics• ICT, embedded systems

58

59

60

61

The competitive analysis of "lifetec" clusters was Phase 3: Further study of recent strategic reports on conducted in three phasesPhase 1: A study of 17 representative clusters* by the LESA Competition sub-team, based mainly on desk research• Europe: BioValley (Fr, D, CH), Cambridge, Ireland,

Medicon Valley (S, DK), Munich, North Rhine-Westphalia, Scotland, Wallonia

• USA: Massachusetts, Minnesota, North Carolina, San Diego, San Francisco, ArizonaR t f th ld I l O t i Si

leading "lifetec" clusters in the world. Some examples are:• Massachusetts strategic outlook for 2015, April 2009• BioMaryland 2020: A strategic plan for the Life

Sciences in Maryland, May 2009• Destination 2025, Minnesota Roadmap: Recommen-

dations to grow • Minnesota's Life Science industry, January 2009• Evidence and opportunity: Biotechnology impacts in

N th C li N b 2008• Rest of the world: Israel, Ontario, Singapore

Phase 2: Fieldwork• Visit to Cambridge cluster by Competition team • Visit to Bio 2009 by Taskforce members to interview

about 30 cluster organization representatives**

North Carolina, November 2008• Arizona's "lifetec" Roadmap, December 2002 – March

2009• Florida Life Science Roadmap, June 2007• The greater Philadelphia Life Sciences cluster 2009,

May 2009• Medicon Valley, May 2009• OBN Biocluster report 2008, Oxfordshire• Scottish Life Sciences strategy 2008, Achieving critical

2020 Vi imass, 2020 Vision.

62* Report on LESA Competition Sub-team, May 2009

** Report on visits to Bio 2009 by LESA Taskforce Team

~200 "lifetec" clusters worldwideIn Canada and the USA, "lifetec" activities can be found in every province and state. On average, there are about two clusters in each of those regions. That represents approximately 100 clusters in North America, or 50% of global "lifetec" clusters.

In Europe, nearly every country has "lifetec" initiatives. The total is in the range of 60 clusters, or 30% of the global total.

15% of all clusters are located in Asia (Japan, China, India, Singapore).

About 5% of "lifetec" clusters are located in the rest of the world (Australia, South Africa, Brazil, Argentina).

63

Medical technology clustersMedical technology in the USA is concentrated in 10 states and covers 80% of MedTech activities*.

In Germany, MedTech is concentrated in the Munich area, one of 5 clusters in the country**.

On that basis, we estimate that ~20% of the "lifetec" clusters focus on MedTech.

Ab t 10% f ll l t ti i Hi h T hAbout 10% of all clusters are active in High Tech Systems and Materials in combination with Biotech-nology (in Europe: Munich and Lyon regions, Bio Valley, Finland. In USA: California and Boston regions, Minneapolis. In Japan: Tokyo)***.

64

* E&Y, Pulse of the Industry, US medical technology report 2008 ** Biotechnology | Life Sciences in Munich/Germany

*** Business Plan BioMedical Materials Program, January 2008

Burrill quote*"Nearly every state in the USA, Japan, most countries in Europe, and many developing countries - in particular India and China - are targeting "lifetec" as a growth driver for their economies.

Why? Because their leaders recognize that "lifetec" represents a large and fast-growing sector, including a wide range of job-producing manufacturing, service and research activities, and a diverse and global market-place ranging from therapeutics to medical devices andplace ranging from therapeutics to medical devices and diagnostics to bio-agriculture and bio-energy.

The competition among regions is high and they are in a race for future "lifetec" global leadership, and none of them can afford to become complacent."

65* Burrill, May 2009

Essentially, the origin of clusters is based on the following mechanisms:• Long-standing history in medical (pharmaceutical)

R&DLife science clusters are a relatively recent phenomenon of the last 20 years. However, there are regions that have had a long history in medical and/or pharmaceutical R&D, originating either from industry (Medicon Valley, Munich) or from a world-renowned university (Cambridge, Harvard, MIT).

• Spin-off from large companiesThe presence of one or more life science companies does not make a region a cluster. However, a cluster could be built from the bottom-up as a result of spin-offs from such major life science companies. San Diego is the best-known example of this.

• Government-supported initiativesA l t f l t i t b i bA lot of clusters came into being because governments actively pursued the development of a biotechnology industry in their region or country.

66

Cluster growthMost clusters were created "bottom-up"The above table shows the 17 clusters studied by the LESA Competition Team.

There are two main routes to achieving growth• Internal growth, i.e. by creating new business entities

(start-ups) as spin-off from companies and universities and by expanding existing businesses. This is the main mechanism.A i iti i tt ti b i f t id th• Acquisition, i.e. attracting businesses from outside the region, usually by offering government incentives. This approach can be successful, but its sustainability depends on the continuity of these incentives. In the case of Ireland, for instance, companies are currently withdrawing their activities due to diminished incentives.

67

Patience and a long-term commitment: One lesson Active national and local government support: The from every successful technology community is that success takes time. Developing a "lifetec" sector cannot be accomplished in a year or two. It requires a long-term effort, measured in terms of a decade or more.

Champions: Leaders with the ability to bring all of the relevant players to the table and the means to see that strategic recommendations are implemented.

St t i f S f l t t d i h

role of national and local government is to ensure that the required infrastructure, such as research facilities, faculties and physical infrastructure, is in place. Their economic development role is to help find solutions to fill market gaps in ways that support, spur, link and leverage ongoing private investments. These economic development efforts include focusing on publicly supported research universities; addressing the future talent pool through education and workforce

d i hi h lit f lif i l diStrategic focus: Successful states and regions have recognized that they have neither the capacity nor the resources to excel in every area of technology. Instead, they have examined their comparative advantages, in both their industrial and research bases, and focused their investments on competitive niches in which they can and do excel.

Strong public-private partnerships: Growing a state's "lif t " t i ll b ti d t ki

programmes; and ensuring a high quality of life, including a sound tax and regulatory climate.

Willingness of the cluster research institutions to partner each other: In today's competitive "lifetec" field, no one research entity will be able to "go it alone" effectively. For real success, research institutions will need to partner to leverage resources, funding and scarce knowledge assets.

"lifetec" sector requires collaboration and strong working partnerships between and among the cluster's educational institutes and industry. The leading clusters in the "lifetec" have established highly intertwined and interactive processes in which research excellence and a growing industry base are pursued simultaneously in a highly connected manner, with the support of private and public investments.

68

Engaged universities with active leadership Available capital to cover all stages of the business An outstanding research university is a basic requirement for being a serious player in "lifetec". But it needs more than just research stature. It must have the capability to engage industry, directly or indirectly, and to convert this intellectual knowledge into economic activity. This calls for one or more of a region's research universities being committed to engaging with and helping to build and sustain a local "lifetec" community.

N t k i t i l t d ith i d t

cycleLeading "lifetec" regions share one characteristic: they are home to a venture capital (VC) community that is both oriented toward early-stage financing and committed to local investment. Having local venture capital funds with experience of investing in "lifetec" companies is critical. It is also critical to have financing available for each stage of development from early-stage, proof-of-concept and prototype development to

d t i d l t t t fi iNetwork intensively across sectors and with industryMost successful clusters facilitate extensive and intensive networking among technology companies and their managers and employees. In the vast majority of regions, such organizations need to be built from the ground up; otherwise, the desired degree, scale and intensity of networking will not occur. The common vehicle used to promote this process is a Cluster Management Organization (CMO).

product expansion and later-stage venture financing.

69

Discretionary government or other R&D funding Stable and supportive business, tax and regulatory supportBuilding generic R&D assets into an effective attractor of technology investment, requires leverage of substantial, ongoing, external discretionary funding.

Workforce and talent pool with an entrepreneurial spiritLike any knowledge-based industry, "lifetec" companies need a supply of qualified, trained workers. To meet the d d f l i fi ld i l d

policies"Lifetec" companies need a regulatory climate and environment that encourage and support the growth and development of their industry. Tax policies that recognize the lengthy development cycle required to bring new "lifetec" discoveries to the market can generate additional capital for emerging companies.

Patience and a long-term viewO fi l l f f l t h ldemands of newly emerging fields, new curricula and

programs need to be developed by educational institutions working in close partnership with the "lifetec" industry. Successful "lifetec" regions not only have world-class researchers but also an adequate supply of management, sales, marketing and regulatory personnel experienced in "lifetec".

Access to specialized facilities and equipmentF ilit t th t i ifi t f

One final lesson from every successful technology community is that success takes time. Research Triangle Park (North Carolina) represents a 50-year strategy that has only recently found its footing in "lifetec" and is still working to develop full capability in the entrepreneurial sector. In contrast, Maryland has emerged as a major "lifetec" center in 12 to 14 years. While this may indicate that the time required to become a leading "lifetec" center can be shortened, it must be recognized that such d l t t b li h d i tFacility costs are among the most significant expenses of

new "lifetec" firms. These firms need access to wet lab space and specialized equipment. Since most "lifetec" firms initially lease space rather than purchasing it, it is critical they have an available supply of facilities offering space and equipment (such as incubators and accelerators).

development cannot be accomplished in a year or two or around a single project*.

70 * Battelle, USA State "lifetec" Initiatives, Dec. 2006

"Lifetec" value chain Integration along the value chainThe "lifetec" value chain (R&D, Clinical Trials, Manufacturing and Commercialization) encompasses distinct but interrelated core competences to bring a (bio)technology product to market• The research and development (R&D) step of the

value chain is the discovery phase of a product.• The clinical trials segment of the value chain is

characteristic of the Life Sciences business and is strictly monitored by different regulatory bodies like FDA d EMEA M li i l t i l t d t

Many "lifetec" firms are not (yet) integrated into the complete value chain. However, the larger firms do encompass it because this gives the best protection with respect to Intellectual Property and brings higher profits.

Biotech companies typically focus on the early stages of the value chain and many of them utilize partnerships to manufacture and commercialize their products.

FDA and EMEA. Many clinical trials are outsourced to specialist companies (30% - 40%). Clinical trials are conducted to allow safety and efficacy data to be collected for new drugs or devices.

• Manufacturing is the production of the end products on a commercial scale and requires specialized capabilities. This segment of the value chain is also labour intensive, representing between 30 and 50% of all the jobs in the value chain.

• C i li ti b i th fi l d t t th• Commercialization brings the final products to the market. The commercialization of "lifetec" products requires a costly (15 - 20% of total turnover) and highly-qualified sales force.

71

Two dimensions All round toppersThe two dimensions that best describe the arena in which South East Netherlands competes are• X-axis: cluster capabilities (emerging ↔ world

class)The X-axis plots competitors that are (and have been) successfully investing to improve their cluster capabilities. Aspects that have been considered in making this assessment include• Extent to which all elements of the value chain are

d

The all-round toppers are mostly clusters that have existed for a long time, have world class capabilities and address a broad portfolio of therapies and technologies: San Francisco, Boston, San Diego.

Specialist (preferred development track)The development track that has proven to be the most successful involves first selecting a niche area and then achieving a world-class capability in it. This track starts th fl h l f b ildi t ti tt ti t l t dcovered

• Reputation and impact of companies and institutions in particular technology

• Size of the pharma pipeline• Amount of (VC and IPO) investment per field• Public and private R&D expenditure

• Y-axis: size of the portfolio of therapies/ technologies (small ↔ large)The Y-axis plots the extent to which competitors act ( d h t d) t d th i tf li f

the flywheel of building a reputation, attracting talent and generating and acquiring further business. Examples of such a specialized approach are North Carolina (manufacturing biopharmaceuticals), Medicon Valley in Denmark/Sweden (diabetes/oncology), Minneapolis (medical devices for cardiology), and Arizona (neuroscience and bio-engineering).

EmergingTh i i l t ith t i li d(and have acted) to expand their portfolio of

technologies and therapy areas.The remaining clusters are either young, not specialized, or do not pursue a well-defined strategy. Texas statement: Do not try to be all things to all people*.

72 * Texas strategic plan, 2005

73

Economic development chain Examples of successful clusters and their CMOThe diagram above illustrates a basic technology-based economic development chain and the specific links that need to be in place to form and grow a technology cluster. The chain may look relatively simple, but organizing the development, support, financing and staffing of each link is a complex challenge.

CMOThe organizing role is typically performed by a dedicated

i ti h Cl t M t

Examples of successful CMO-led cluster management include North Carolina, Arizona, Medicon Valley (Denmark/Sweden). CMOs typically have around 20 staff members; North Carolina stands out with a staff of 79.

organization such as a Cluster Management Organization (CMO). The CMO acts as a "one-stop support shop" for all the players in the economic development chain.

Successful clusters have a CMO that can be held accountable for cluster development. The CMO therefore needs to be mandated and given adequate resources. Given the specialized nature of the field, it needs to be d di t d t "lif t "dedicated to "lifetec".

74

Cluster managementA robust cluster requires a highly skilled and talented workforce, a strong local base of academic research, capital available from varied sources, and support from local and national governments.

A Cluster Management Organization (CMO) is key to and instrumental in balancing and orchestrating all of the above contributing factors.

75

CMOs can be involved in the following activities, as exemplified by North Carolina*1. Economic development• Acquisition of biotech firms and plants• Expansion of assistance to biotech companies• Services to secure retention of biotech firms• Overall strategic planning for biotechnology sector • Biotech sub-sector strategies • New sector and opportunity assessment• Regional strategies

P bli ti f bi t h l

3. Education & Workforce development• β-faculty teacher training and assistance• Biotechnology educational workshops• Educational materials loan and supply• Grants to support education and training • Industry workforce needs analysis• Biotechnology curriculum development• Bio-manufacturing workforce development

W kf it t d t ti h l• Public awareness creation for biotechnology• Promotion and marketing support

2. Science & technology development• Faculty/researcher recruitment aid• Facilities and infrastructure funding• Academic research funding• Collaborative company-university R&D• Multi-institution/multi-disciplinary support• R i l t ki

• Workforce recruitment and retention help

4. Business & Technology development• Loans to start-up biotech companies• Access to private risk capital• Tech transfer and licensing support• Facilitation of strategic partnerships• Entrepreneurship education and support• Sit /f iliti d d l t• Regional networking

• Researcher networking/intellectual exchange• Sites/facilities access and development• Business intelligence/library resources• Business planning/development assistance• Networking and events• Access to PhD scientist fellows for industry• Access to professional services

76 * Evidence and Opportunity: Biotechnology Impacts in North Carolina, Batelle report, November 2008

77

78

79

Micro analysisIn South East Netherlands 500 companies have been identified to be active in "lifetec". Together all companies have 23,000 employees, of which 17,400 are active in "lifetec". Out of these 500 companies about 250 fall into the category of consultancy, accountancy, patient care, wholesale, rehabilitation devices. Totaling 700 fte, these firms have a minor contribution to the healthcare industry.

The remaining 250 companies in "lifetec" have a total g pworkforce of 16,700 fte.

Out of these 250 companies 173 companies with 16,000 fte were analyzed in depth. About 100 out of these 173 companies are regarded to be innovative.

According to the Life Science and Health report from 2007, in the Netherlands about 55,000 people are active in "lifetec" activities (excl. hospitals and other healthcare organizations). This means that the share of South East Netherlands in "lifetec" business is about 30% of the total in the Netherlands.

However, it is possible that the workforce active in "lifetec" is defined differently by LESA and Life Science and Health.

80

The above charts are based on an in-depth analysis of 173 companies, representing the core of "lifetec" activities in South East Netherlands. Total employment is about 17,000 people, as shown on the previous page.

Definitions that are used• Pharmaceuticals - firms that develop and produce

biological and medicinal products and manufacture and reformulate drugs (example is MSD).M di l T h l fi th t d l d• Medical Technology - firms that develop and manufacture surgical and medical instruments and supplies, laboratory equipment, electromedical apparatus including magnetic resonance imaging and ultrasound equipment, dental equipment and supplies, and ophthalmic products (examples are Philips Healthcare, Fortimedix, Kleeven).

• Research, Testing, and Medical Laboratories ("Diagnostics and services") - companies engaged i R&D i th lif i li i l t i l t tiin R&D in the life sciences, clinical trials, testing laboratories, and medical laboratories and other diagnostic centers (examples are Pamgene, DSM Biomedical Materials, Fuji Medical, CTCM, Bakken Research Center Medtronic, Notox, Future Diagnostics).

• Logistics, sales and distribution companies are Boston Scientific, Medtronic Heerlen, Doc Morris.

81

Small and medium enterprises (SME)The above analysis focuses on small and medium-sized hightech enterprises. MSD, Philips and logistics companies are not included.

Number of employees in pharma SMEs250 fte out of total 400 pharma employees are involved in contract manufacturing. Of the remaining 150, 50 are in drug discovery and reformulation, the others are in drug delivery developments.

82

"Others"The group "Others" comprises women's health, dermatology, ophthalmology, pulmonary, nephrology, respiratory and smaller disease areas.

83

High Tech SystemsHigh Tech Systems and materials are one of the "Sleutelgebieden", as defined by The Dutch Innovation Platform*.• The Netherlands are home to a unique European

hightech hotspot in the field of nano-electronics, embedded systems and mechatronics, encompassing international excellences in business and technology.

• This industry and academia ecosystem is underpinning a € 51 bn economic value chain i l di j li d t i t t i thincluding major suppliers and system integrators in the applications healthcare, energy, power, ICT, lifestyle, leisure, transport, logistics and security.

• Many of the key players have leadership positions in worldwide markets and competences.

• The technologies provided by this ecosystem are essential enablers for resolving public issues such as ageing society.

• Hightech also means high R&D intensity. For i b t 30% f ll i t R&D i t tcomparison, about 30% of all private R&D investments

in the Netherlands are spent in this domain.

84 * Dutch Innovation Platform Report, January 2009

85

Management of coherenceIn a recent survey (December 2009), TU/e concluded that many "building blocks" for "convergent technologies" are already in place. "Lifetec" topics are also the subject of research or teaching in various departments. For the time being, these programs are only connected to a limited extent. The first step envisaged by TU/e is to coordinate them. The working title for this project is: "TU/e Institute for Health, Technology and Science".

86

MUMC+The Maastricht University Medical Center (MUMC+)'s main strengths are• Cardiovascular diseases, concentrated in the CARIM

institute.• Nutrition - relation between nutrition and disease

states, concentrated in the NUTRIM institute • CAPHRI " Public Health and Primary Care ",

(extramural) research on innovation in care for chronically ill people.N i ith ti l f b i• Neurosciences: with a particular focus on brain imaging technology.

87

CARIMCARIM is among the top-3 cardiovascular centers in the Netherlands*, together with Catharina Hospital in Eindhoven and Nieuwegein hospital. • Among the various cardiovascular disease states,

CARIM is presently focusing on heart failure and atherosclerosis

• The core technologies of the current research programs at CARIM are imaging and diagnostic tools for assessing of the disease state CARIM/UM di ti i h it lf f th h it l b• CARIM/UM distinguishes itself from other hospitals by applying a "Patient-centric approach", which is similar to the healthcare cycle (as explained earlier in this report)

• CARIM/UM and Klinikum Aachen are exploring the feasibility of establishing a European Cardiovascular Center of Excellence (ECCE).

An emerging strength could be knowledge of the impact of nutrition on (cardiovascular) diseases.

88 * KPMG report on ECCE, Oct. 2008

Maastricht University Medical Center (MUMC+) and According to LESA, the ECCE shouldKlinikum Aachen (Germany)*Maastricht and Aachen are centrally located and have established unique, cross-border cooperation in Europe, with strong political support from the Dutch and German governments and the EU. The Departments of Vascular Surgery of the two institutions have joined forces to create the first cross-border European Vascular Center Aachen-Maastricht. This accredited center of excellence performs the full spectrum of open and endovascular

d i ltidi i li t i t l di i

• Guarantee that top quality research prevails• Act as a magnet for top-rate clinicians and researchers• Serve as a continuous source of innovations derived

from the monitoring, diagnosis and therapy treatments of patients

• Enable testing of new applications in a clinical environment

• Serve as attractor for engineering and testing of devices and diagnostics by renowned companiesG t i ff d IP th t b li d bprocedures in multidisciplinary teams, using telemedicine

technology to monitor and observe surgical procedures, and has specific expertise in aortic pathology. Recently, a joint training program for PhD students (EUCAR) was set up between Aachen and Maastricht with the goal of becoming a European Cardiovascular Center of Excellence (ECCE). Both institutions have close links with technical universities, allowing intensive research at the frontiers of new cardiovascular technologies such as ti i i l l i i d th

• Generate spin-offs and IP that can be applied by existing companies.

tissue engineering, molecular imaging, and the development of assist devices.

89* MUMC+,Press release, July 2008

Regional Innovation Scoreboard (RIS) 2009 Dutch biotech industryThe RIS gives the following ratings for different regions in the Netherlands in terms of their performance in innovation in 2006*:

Groningen med-highFriesland averageDrenthe averageOverijsel med-highGelderland med-highFl l d d hi h

The Biotech Outlook 2010** mentions 291 "red biotech" companies in the Netherlands; the same number is reported by Holland Biotechnology*** and Technopolis****. 48 of these companies are based in South East Netherlands. LESA classified most of these companies as belonging to the in-vitro diagnostics and services segment.

Flevoland med-highUtrecht med-highNoord-Holland med-highZuid-Holland med-highZeeland averageNoord-Brabant highLimburg med-high

Noord-Brabant is one of 28 regions in Europe with the lifi ti "hi h"qualification "high".

90

* PRO INNO Europe®, Regional Innovation Scoreboard (RIS), 2009** Nyenrode LSH � Biotech Outlook 2010

*** Holland Biotechnology, Sustainable progress, Life Science in the Netherlands, 2007**** Technopolis group, Baseline study Innovation Programme Life Sciences & Health, Sept. 2008

South East Netherlands is actively participating in four PPP programs• Center for Translational Molecular Medicine (CTMM),

which is dedicated to the development of medical technologies that enable diagnosis and monitoring for personalized medicine.

• BioMedical Materials program (BMM): dedicated to the development of novel BioMedical Materials and their applications.

• Top Institute Pharma (TI Pharma) aims to achieve l d hi i h d d ti i th tleadership in research and education in areas that are critical for the international competitive position of the pharmaceutical industry.

• Point-One is a strategic innovation program aimed at development of new applications for nanoelectronics, embedded systems and mechatronics*.

91* From good to great in Dutch technologies, Phase 2 report on Point-One, April 2008

Prime focusPrime focus is on the region bordering South East Netherlands, especially the Aachen- Jülich area.

92

VIBThe "Vlaams Instituut voor Biotechnologie" is a scientific research institute in which the top researchers of 4 Flemish Universities have been brought together organization-wise (not physically). Total headcount around 1,150. VIB forms a European center of excellence in biomolecular research with the ambition to reach the global top. Total R&D budget € 100 mln in 2008, of which 40% in the form of subsidy from the Flemish Government. Research Groups obtain funding

th b i f t t i l i thon the basis of transparent appraisals in three categories: scientific excellence, valorization and education.

IMECIMEC is Europe's largest independent research center in nano-electronics and nano-technology and is headquartered in Leuven, Belgium. Over 1,650 employees coming from all over the world work at IMEC' IMEC' h i li d i b ttIMEC's campus. IMEC's research is applied in better healthcare, smart electronics, sustainable energy, and safer transport.

93

Employment growthEmployment growth in South East Netherlands is based on estimates by the LESA team. Robust historical data are not available.The following examples provide a benchmark for the growth of top-performing "lifetec" clusters in the world*.• Period 1990 -2001 (growth per year)

• Bay area in California: 6%• Raleigh Durham (RTP): 6%• Minneapolis: 5%P i d 1996 2001 ( th )• Period 1996 – 2001 (growth per year)• Massachusetts: 10%

• Period 2002 -2007 (growth per year)• Arizona: 4.2 %

(the initial years of their 10-year "Roadmap plan")A common feature of all these clusters is that they have a strong and dedicated Cluster Management Organization (CMO).

94 * LESA research, based on strategy report of the particular clusters

High Tech Campus (HTC) Eindhoven | Hotspot for P l F d I ti

ChemelotCh l t i th l t h i l it i EPeople Focused Innovation

Ten years after it was established, the High Tech Campus Eindhoven is today an R&D ecosystem of more than 90 companies, comprising multinational companies, small and medium-sized businesses, technology start-up companies and institutes, employing more than 8,000 researchers, developers and entrepreneurs. Philips has invested over € 500 mln in the HTC; Philips Research added about € 100 mln to build its unique R&D i f t t d f iliti Th f d f ki

Chemelot is one the largest chemical sites in Europe(> 800ha and > 5000 fte-s). It houses 103 companies, encompassing firms producing base chemicals, fine chemicals and raw materials, as well as companies developing new chemistry-based products and materials. The campus houses companies from start-ups to multinationals. Extensive infrastructural facilities, such as full analytical and support services, are available.

Lif & S i C M t i htinfrastructure and facilities. The preferred way of working at the Campus is open innovation: companies on the Campus share knowledge, skills and R&D facilities. Open innovation is exemplified by the programs of the Holst Center, the Center for Translational Molecular Medicine, and the shared laboratory and analytical facilities at MiPlaza. Expertise on the Campus spans a range of disciplines including High Tech Systems, Microsystems, Embedded Systems, and Life Sciences. The nearby site of Philips Healthcare in Best accelerates

Life & Science Campus Maastricht The Maastricht Life & Science Campus is a modern health and life science park with a clear focus on biomedicine. It is the home for scientific institutions, educational facilities, academic spin-offs and science businesses, especially in the area of biomedicine and healthcare oriented life sciences. The campus provides an environment for cooperation, open innovation, business development and venturing. Major areas of activity include cardiovascular diseases oncologyThe nearby site of Philips Healthcare in Best accelerates

the product-creation process. Located at the heart of Europe's leading R&D region, the High Tech Campus Eindhoven is the Hotspot for People Focused Innovation.In a recent study by Buck Consultants for the Dutch Ministry of Economic Affairs*, the High Tech Campus was singled out as a mature Campus of national interest. The European Institute of Technology haschosen to establish the Knowledge and Innovation Centers ICT Labs and InnoEnergy (integrated

activity include cardiovascular diseases, oncology, chronic diseases, mental health & neuroscience and public health & primary care. With large investments planned in the coming years, the Maastricht Life & Science Campus has the ambition to become a biomedical hotspot in Europe.

Campuses are highly complementaryThe three campuses are highly complementary, with HTC as a center of High Tech Systems and Life ScienceCenters ICT Labs and InnoEnergy (integrated

partnerships combining excellence in higher education,research and business) at the HTC.

HTC as a center of High Tech Systems and Life Science, Chemelot as a campus specializing in chemicals and materials, and the planned campus in Maastricht focusing on biomedical research and applications.

95* Fysieke investeringsopgaven voor campussen van nationaal belang,Buck Consultants International for EZ, Nov. 2009

LifeTec for Health Center of Excellence The presence of Philips AppTech (with strengths in (LifeTec4Health Center)With this initiative, HTC will become the cradle of innovation in healthcare through "convergent technologies", leading to the creation of new businesses and jobs. HTC offers strengths in High Tech Systems alongside expertise in life sciences in a unique and dedicated infrastructure for "lifetec". Expertise is available in all areas of High Tech Systems. Available life science competences encompass nano-biotechnology, a f f

productizing) and Philips Healthcare (with a major advanced development and production site in neighboring Best) facilitates the product creation process.

full range of pre-clinical imaging technologies and (radio)chemistry laboratories for synthesis of targeted agents for imaging and therapy, facilities for molecular biology and biochemistry, including PCR and molecular diagnostics, arrays and sequencing, proteomics and metabolomics, and systems biology. There is also access to MiPlaza facilities for nanotechnology, microsystems technologies, devices for processing and prototyping, and facilities for materials analysis.

HTC provides a comprehensive ecosystem for the effective transformation of LifeTec solutions into validated products and their broad application (clinical cure and care) in the practice of healthcare, with support in the areas of quality, regulatory issues, legal affairs and IP, residential entrepreneurs, flexible talent, dedicated training and education, as well as access to venture capital.F th HTC id di t li k t R&DFurthermore, HTC provides a direct link to R&D program management through the presence of the headquarters of the Center for Translational Molecular Medicine, CTMM, and Point-One.

96

Dutch International SchoolsThe Dutch international schools are in fact international departments of regular Dutch primary or secondary schools.

Recognized areas for improvementThese areas include management and communication (independence, transparency), teaching staff (more native speakers) and the community function (extracurricular activities). It has also been remarked that th h l hibit D t h h t th th t lthe schools exhibit a Dutch character rather than a truly international one. On a national level, the need for image building and promotion has been signaled.In Maastricht, the hitherto separately managed primary and secondary schools have recently been united under the flag of United World College, an internationally renowned institute of education. There are plans for new accommodation.A process has also commenced in Eindhoven to bring

i d d d ti d i lprimary and secondary education under a single management.

97

Strengths of South East Netherlands Weaknesses of South East Netherlands• Academic and business presence in cardiology• Presence of large global companies• Presence of Philips as integrated company, covering

the complete value chain and as promoter of the cardiovascular healthcare delivery cycle

• Presence of MSD as large pharmaceutical company offers opportunity for partnerships

• Industrial engineering and manufacturing capabilities • Strong logistic position due to its favorable geographic

iti i EU

• No clear and shared vision about the future of South East Netherlands in "lifetec"

• Lack of integrated network among stakeholders• Employment is too dependent on just two large

companies • Lack of highly qualified people due to limited career

opportunities • Insufficiently developed venture capital infrastructure

(funds are mainly for phases after "proof of concept")L k f t hi t i l i itposition in EU

• Multilingual workforce• Maastricht University is organized in research

institutes around topics like cardiovascular diseases (CARIM), metabolites of nutrition (Nutrim), developmental biology (GROW) and healthcare systems (CAPHRI)

• Presence of several major industrial sites/campuses (Chemelot (Geleen), High Tech Campus (HTC-Ei dh ) A ti (H l ) d S i P k

• Lack of entrepreneurship, entrepreneurial spirit • Low interest in -sciences among secondary school

students• Relatively small universities• Poor tradition in valorization of university know-how • Cooperation between the universities in South East

Netherlands is not optimal• No real focus within Life Sciences technologies /

therapy areas• Q lit f lif i t t ti l ( lit fEindhoven), Avantis (Heerlen) and Science Park

(Maastricht))• Strong industrial R&D presence in South East

Netherlands (>60% of NL) • Presence of Dutch Polymer Institute (DPI) in

Eindhoven as hotspot of material sciences• Emerging capabilities in the area of robotics as a

result of High Tech Systems activities.• Good housing conditions and green areas, rich cultural

lif *

• Quality of life is not yet optimal (e.g. quality of international schools, lack of sufficient international flight connections)

• Common network opportunities insufficiently understood and used

• Relatively weak position in the area of molecular biology at the universities.

life*.

98 * E'til

Additional opportunities for South East Netherlands Additional threats for South East Netherlands• Provincial claims of commitment to Life Sciences

("Pieken in de Delta" and "Versnellingsagenda" reports)

• South East Netherlands is a part of a larger "triangle" (Liege – Aachen – Maastricht – Eindhoven – Leuven) with similar ambitions in "lifetec"

• Strengths can be leveraged to enter emerging innovative business areas like regenerative medicine, personalized medicine and convergent technologies (d d i i it di ti )

• Lack of support of creating a powerful cluster development organization, due to• lack of funding• unwillingness of the stakeholders to cooperate

• Shortage of qualified people settling in South East Netherlands

• In general, non-compliance with the preconditions and KSFs for clusters.

(drugs + devices + in-vitro diagnostics)• Joining forces with the initiatives designed to develop

South East Netherlands into a hotspot for chemistry and High Performance materials at Chemelot (BAK Basel study recommendation).

99

100

101

102

103

Vital to becoming competitive in the current technology-focused and agile economy is the ability of South East Netherlands to leverage current strengths and opportunities to achieve excellence and become a global leader.

Given the breadth of the "lifetec" business and competitiveness of its clusters, it is impossible to excel in every area. Targeting will allow South East Netherlands to hone in on a particular field and gather the specialized

t l t d t t bresources, talent, and assets necessary to become a premier destination for educators, scientists, researchers, entrepreneurs, investors, corporations and workers interested in a specific facet of the "lifetec" business.

To take full advantage of the targets of opportunity, South East Netherlands must purposefully choose to rationalize its resources based on significant strengths

d t th l t i th ldcompared to other clusters in the world.

104

105

106

Pharmaceuticals (new drugs), not a cluster priority, MedTech as key area for South East Netherlandsbut …South East Netherlands is home to one major pharmaceutical company (MSD), which is the only entity in the region fully capable of bringing new drugs to market. There are 10 SMEs in drug development, employing ± 50 fte-s. The region has no tradition in biopharmaceuticals. Given this constellation, development of new drugs is not a priority for cluster policy. It would require a lot of

hil th t ti l ff t i t f

As the "Macro" chapter of this report showed, MedTech is an attractive area from a competitive perspective. South East Netherlands possesses competences and capabilities in MedTech, divided amongst one major LSE, 50 SMEs and 3 universities.The region is also a global "hot spot" for High Tech Systems and materials, which constitutes an opportunity and connects with one of the "key areas" designated at national level.

resources, while the potential effect in terms of employment is uncertain. On the other hand, MSD's position poses two challenges:First, MSD makes an essential contribution to the cluster's competences, talent pool and job flexibility. What cluster support is needed to maintain this?Second, how could MSD contribute, in a win-win situation, to the evolution of the cluster, given the strategic direction advocated in this report?

Cardiovascular a core disease areaExcellent fit with competences and capabilities in South East Netherlands (industry, academia), combined with attractive business growth.

Focus for diagnostics embraces, cardio-vascular, cancer and other disease areasThe focus in diagnostics should be broadened to

b b th di l di (CVD) t t tOpportunity for PharmaApplications of "convergent technologies" would open up opportunities for developing personalized medicine on the basis of diagnostics and contribute to a more effective pathway for new drug applications.

Emerging key areasThese are areas in which South East Netherlands has th t ti l t hi ll i th f t b d

embrace both cardiovascular disease (CVD) treatment and oncology, since both types of disease have common characteristics such as apoptosis (cell-death) and angiogenesis (growth of new blood vessels). There is therefore considerable potential for synergy from cross-fertilization and the application of findings in one disease area to the other.

Emerging core disease areasIt ld b ibl t b ild iti i lthe potential to achieve excellence in the future, based

on existing competences and ongoing research at the universities and a growing number of SMEs.

It would be possible to build a position in musculo-skeletal in South East Netherlands in the medium term, bearing in mind the MedTech capabilities for biomedical materials.

Low priority disease areasThese are disease areas where the cluster is not in a position to develop a world-class capability.

107

Focus is not "black-and-white"The focus on medical devices for cardiovascular applications described in this report is indicated because of the opportunity South East Netherlands has to become a leading global cluster in this area. It is to be expected that many innovations and technology platforms will find applications in areas other than cardiovascular. In other words, the focus is not "black-and-white" and the right balance has to be struck in pursuing a cluster policy.Thi i ill t t d i th b di th tThis is illustrated in the above diagram, the percentages being indicative.

108

109

110

Three periods with evolution of focusThe figure above is a qualitative and schematic representation of the roadmap for the implementation of the chosen scenario: "a road to excellence" for South East Netherlands in the period 2010 - 2020 and beyond.

The dark green area relates to building a leading position in the chosen business segments (MedTech for CVD and diagnostics in general), based on the excellent fit with current capabilities.

In the period 2015 - 2020, efforts will be concentrated mainly on achieving global leadership (top-five) in the selected business segments.

From 2020 onwards, there will be room to expand beyond the selected areas.

The roadmap encompasses the complete "lifetec" value chain, as this will give the best guarantee of creating

t i bl d b t ti l l t ti l l iThe "white" area relates to activities in regenerative medicine and personalized medicine, areas that are logical extensions of the first category.

The light blue area relates to activities to expand beyond the initial business segments by building on previously achieved positions.

W h hi hli ht d th i ti i d B t

sustainable and substantial employment, particularly in the area of manufacturing.

We have highlighted three main time periods. Between 2010 and 2015, South East Netherlands will lay the groundwork for securing European leadership positions (top-three) by creating the necessary infrastructure and by strengthening the core competences and capabilities. Parallel to the "dark green" activity, preparations will commence for the activities relating to the "white" and "light blue" areas.

111

112

Final situation Link with the current situationThe description of the final situation gives examples of deliverables resulting from the strategic actions taken in the period 2010-2015. The strategic action lines are described later in this chapter.

South East Netherlands should aim to be among the top three regions in terms of the commercialization of devices (including in-vitro diagnostics and imaging) for CVD in Europe. The target should therefore at least be th t th 15% f th di l d i th t t th

The link between the target for 2015 and the current capabilities and competences of South East Netherlands is as follows• Clinical know-how in the field of CVD at

CARIM/MUMC+ and Catharina hospital• BMM/CTMM/TI-Pharma/DPI programs support this

field• TU/e/BMT and CARIM have strong R&D capabilities in

this fieldSME i S th E t N th l d h tthat more than 15% of the medical devices that enter the

European markets beyond 2015 are either engineered or produced in South East Netherlands.

The workforce in the medical technology industry should grow by 7% per year by 2013 and by 10% per year from 2015 onwards.

Another target is to double the number of researchers at i iti d h i tit t b 2015 i th i it

• SMEs in South East Netherlands have strong capabilities in the engineering and manufacturing of medical devices

• The capabilities of the major companies (Philips, DSM, Medtronic) in this area

• Partnering potential in Euroregion, e.g. RWTH• Open Innovation ecosystem at HTC/Eindhoven• Campus development at Chemelot and Life and

Science Park Maastricht.universities and research institutes by 2015 in the priority areas chosen for the period 2010-2015.

Knowledge and Innovation Community (KIC)South East Netherlands prepares to become a KIC in Healthcare Technologies in the context of the European Institute of Technology.

113

Additional links with current position• TU/e already has a Robotics group, which will grow in

the coming years• Care cycle approach already adopted within Philips,

and is emerging at MUMC+.

Assumptions (preconditions)• The 2010 - 2015 action plan for South East

Netherlands has been fully implemented• Rapid diagnostics for personalized medicine for CVD

i l t d i th f th R&D i tit tare implemented in the programs of the R&D institutes• Expand capabilities in MUMC+/TU/e-BMT• Ally with strong partners/clusters

• To implement care cycle delivery approach within South East Netherlands• CMO actively promotes the care cycle approach• Integrated approach for IT is in place

• Adequate Venture Capital environment in place• Industry in South East Netherlands will actively pursue

b ti i t d i i l i i frobotic equipment and minimal invasive surgery for CVD

• Close cooperation TU/e/RWTH/CARIM/Klinikum Aachen

• Reimbursement model for tele-health approach is accepted

• MUMC+ becomes center of excellence for musculoskeletal medical research, including alliances with other parties.

114

Link with current position• BMM program for musculoskeletal/drug delivery• The MUMC+ program targeted at the elderly • Biomaterials developments at TU/e/BMT and DSM

aimed at drug delivery.

Assumptions (preconditions)• The strategic plans for 2010 - 2020 for South East

Netherlands are fully implemented• South East Netherlands forms strong alliances with

th l t t t f it k i thother clusters to compensate for its weakness in the areas outside CVD.

115

Generic Key Success Factors (KSFs) Roadmap 2010-2015 (Macro cluster competitive analysis, pages 69, 70)• Engaged universities with active leadership.• Intensive networking across sectors and with industry.• Capital available for every stage of business

development.• Discretionary R&D funding support from government

or elsewhere.• (International) workforce and talent pool with an

entrepreneurial spirit. A t i li d f iliti d i t

(Strategy, Roadmap, Action lines page 113)• Building a leading position in Europe in medical

devices for CVD and in in-vitro diagnostics and imaging. Supported by• Research focusing on translation and applications

such as identifying markers for medical devices and (in vitro) diagnostics

• Leading position in BioMedical materials St t f th t CVD t• Access to specialized facilities and equipment.

• Stable and supportive business, tax, and regulatory policies.

Preconditions (Macro cluster competitive analysis, page 68)• Patience and a long-term commitment• Champions • Strategic focus• St bli i t t hi

• State-of-the-art CVD center• Campuses providing state-of-the-art (shared)

facilities and a climate of "open innovation".• Building position in regenerative medicine for CVD

• Strong public-private partnerships• Active national and local government support. • Willingness of research institutions and companies to

partner each other. • Quality of life.

116

Growth rate ambitionsGrowth rates as presented may seem ambitious, but are in line with worldwide growth as depicted in the chapter "Macro Analysis" of this report.

117

FinancialsIndustry financials are in the form of contract research or by supporting/sponsorship specific research groups.

Public financials - by established channels for University Research funding.

Collaboration UM, MUMC+, TU/eThe universities at Maastricht and Eindhoven are complementary. Expansion of both institutes will need a

di t d hcoordinated approach.

118

Medical devicesTherapeutic and minimal invasive devices, robot-assisted/image-guided interventions, Point-of-Care devices.

DiagnosticsDiagnostic devices in CVD, Bio-markers for in-vitro diagnostics and imaging, Micro-devices.

Tele-healthCVD d i C l tCVD devices, Care cycle concepts.

BiomaterialsTissue engineering in CVD, Active scaffolds.

FinancialsParties are contributing the amounts indicated into a tender fund, out of which R&D projects will be funded.Contributions to the tender fund can be in cash or in ki dkind.Amounts and number of tenders mentioned, are totals per annum.

119

120

121

122

123

124

125

InvestmentsIn principle, there will be a return on investments, which therefore do not represent "sunk" money.

Running costs of CMOMost of these costs are not new as they are presently already allocated to several organizations and initiatives.

126

Net comparisonThe graph shows the net result of the comparison of the scenario's "a road to excellence" and "business as usual". "Business as usual" presumes a growth in SME of 4% p.a., zero growth in large scale firms and no addition in public (largely academic) employment."A road to excellence" takes as starting point the ambition presented on page 117. This encompasses a gradual increase in the growth rate of SME-employment t 12% d t 5% i LSE t d bto 12% p.a. and to 5% in LSE, augmented by an increase of jobs in the public domain.

127

Net comparison Investments in R&D environment The graph shows the net result of the comparison of the scenario's "a road to excellence" and "business as usual".

Added value of employmentEmployment growth has been assumed as per the previous page. Based on literature*, LESA has calculated with an added value of € 60.000/fte, generated per direct job in the life science or MedTech i d t Th dd d l f R&D l t d f ti i

These investments in projects, campus programs and infrastructure have been assumed to yield a return of their own and therefore have not been incorporated in our calculations. There is some overlap with expense contained in our scenario comparison, such as the expansion of academic staff, but this makes LESA's comparison more conservative.

Added value minus expensesThi h i l t th f ili l ti hindustry. The added value of R&D related functions in

academia has been assumed to be zero.Only direct employment has been taken into account. Indirect employment may be estimated at 2-3 jobs per job. Return flows to public bodies in the form of taxes have not been calculated as such.

Expenditure assumptions.Expense assumptions are in accordance with action li 1 3 4 d 5 Th t d f d ( ti li 1B) i

This graph is analogous to the familiar cumulative cash-flow curves used in financial investment project analysis.

lines 1,3,4 and 5. The tender fund (action line 1B) is considered as expense, the in-kind contribution of academia having already being included in the expansion of academic capabilities (action line 1A). The investment fund has been assumed to provide € 10 mln p.a. for five years, yielding 5% return and exhibiting a revolving period of 5 years.

* Added value generated per FTE is quoted in the lit t f llliterature as follows:€ 58.000, Berenschot € 67.400, Policy Research Corporation, Hochschule Niederrhein, E'til

128* Pieken in de Delta, SWOT-analyse Zuidoost-Nederland, Berenschot, June 2006

Technological topEuregio SWOT analysis, Policy Research Corporation, Hochschule Niederrhein, E'til, Dec,2007

129

130

References

Introduction

P20 –• LESA internal report on interviews with members of the Sounding Board, January 2009P21 –• M. Porter, The Competitive Advantage of Nations, Free Press 1998• Massachusetts' Competitive Position in Life Sciences: Where Do We Stand?, Massachusetts Life Sciences

Summit, September 2003• M. Porter, Competitiveness and Economic Development: Where Does Texas Stand?, Texas Economic Summit

San Antonio, November 14, 2006• Growing Biomedical Research in New Jersey: The Garden State, A Forum for Thought-Leaders

from Industry, Academia and Government, March 2003y, ,• Van Brains naar Baten, Breng Brainport in Balans, 2007• Gwarlann De Kerviler et al., Biotechnology | Life Sciences in Munich/Germany, May 2007• Commercial attractiveness of biomedical R&D in Medicon Valley, The Role of R&D in Attracting Regional

Investments, The Boston Consulting Group, Nov. 2002P23 –• Life Sciences & Gezondheid, Capitalizing on Knowledge, June 2007 • Battelle, Spatial Clustering of the U.S. Biotech Industry, 2006P24 –• Point-One program, Phase 2 report: From good to great in Dutch Technologies, Apr. 2008p g p g g g p

Macro-trends

P29 –• OECD website, www.oecd.org • George Poste quoted in Biotech 2009: Life Sciences Navigating the Sea Change, Burrill, May 2009P30 –• Ernst & Young, Beyond Borders - Global Biotechnology Report 2009P31P31 –• Philips quoting WHO dataP33 –• Ralph Snyderman quoted in Biotech 2009: Life Sciences Navigating the Sea Change, Burrill, May 2009 P34 –• Milken Institute, An Unhealthy America: The Economic Burden of Chronic Disease Charting a New Course to

Save Lives and Increase Productivity and Economic Growth, Oct. 2007 P35 –• Business Insight, Innovations in Diagnostics. Next generation molecular and Point-of-Care diagnostics driving

li d h lth 2008personalized healthcare, 2008• Partnership for Personalized Medicine, Improving Outcomes, Reducing Costs, 2009P37 –• Burrill, Biotech 2009: Life Sciences Navigating the Sea Change, May 2009

Macro business and markets

P42 –• IMS Evaluate pharma quoted by Johnson & Johnson June 2009IMS, Evaluate pharma quoted by Johnson & Johnson, June 2009 P43 –• IMS Health Forecasts Oct. 2008• Anthony Arundel, The Bioeconomy in 2030 and 2015, UNU-MERIT, Maastricht, 2009 • Ernst & Young, Beyond Borders - Global Biotechnology Report 2008P44 –• FDA website• EFPIA website• John K. Jenkins, M.D., New Drug Review: 2009 Update, FDA/CMS Summit, Dec. 2009P45 –P45 • C.P. Adams and V.V. Brantner, Spending on new drug development, Feb. 2007• Kola I., Landis J., Can the pharmaceutical industry reduce attrition rates?, Nature Reviews | Drug Discovery,

3(8):711-715, 2004

131

P47 –• Ernst &Young, Beyond Borders - Global Biotechnology Report, June 2009• European companies outpace American counterparts in R&D investment growth for the first time in five years,

IP/08/1 04 O 2008IP/08/1504, Oct. 2008• Burrill, Life Sciences Navigating the Sea Change, May 2009• IMS reports P48 –• Bloomberg, Credit Suisse, Company report, 2009P49 –• EMEA website, www.ema.europa.eu, analysed by LESAP51 –• Ernst & Young, Pulse of the Industry, US medical technology report, Sept. 2008 • SG C & C t M di l S li & D i J 2005• SG Cowen & Co. report, Medical Supplies & Devices, Jan. 2005: • McK report, Pharmaceuticals and Medical Products, Executive Insight, 2009P52 –• L.I. Group report 2009, The Healthcare Technology Venture Market in Europe, UK and Yorkshire & Humber,

2009P55 –• Ernst & Young, Beyond Borders - Global Biotechnology Report 2009• Advanced Medical Technology, Advamed website, 2009 • M.Rosen, Global medical device market outperforms drug market growth, June 2008P56P56 –• Battelle, US healthcare technology profile, 2006P57 –• World Health Organization website• Heino von Prondzynski, Roche, Diagnostics: providing healthcare solutions, May 2005• Business Insights, Innovations in In-Vitro Diagnostics, June 2009• Business Insights, The Top 10 Global In-Vitro Diagnostics Companies, March 2009• L.I. Group report 2009, The Healthcare Technology Venture Market in Europe, UK and Yorkshire & Humber,

2009

Macro cluster,CMO

P62 –• Report LESA Subteam Competition, May 2009• LESA internal report, Bio 2009P63 –• Battelle, Growing the Nation's Bioscience Sector: A Regional Perspective, Growing the nations "lifetec" sector:

state "lifetec" initiatives 2006, Jan. 2007• E t & Y E C t fil B d b d l b l bi t h l t 2007• Ernst & Young, European Country profiles, Beyond borders: global bio-technology report, 2007• Europe Innova, Do's and Don'ts for biotech cluster development: the results of NetBioCluE, 2008• Ernst & Young, Pulse of the Industry, US medical technology report, 2008P64 –• Ernst & Young, Pulse of the Industry, US medical technology report, 2008• Biotechnology | Life Sciences in Munich/Germany report, May 2007• Business Plan BioMedical Materials Program, January 2008P65 –• Burrill, Biotech 2009: Life Sciences Navigating the Sea Change, May 2009P68 69 70P68, 69, 70 –• Based on: Battelle report, Growing the Nation's Bioscience Sector: A Regional Perspective, Growing the nations

"lifetec" sector: state "lifetec" initiatives 2006, Jan. 2007P72 –• Texas strategic plan, 2005P74, 75, 76 –• Battelle, Evidence and Opportunity: Biotechnology impacts in North Carolina, Nov. 2008

132

Micro

P80 –• EIM E i h b t k i 'Lif S i G dh id' N d l d N 2006• EIM, Economische betekenis van 'Life Sciences en Gezondheid' voor Nederland, Nov. 2006• ATLAS databaseP81 –• ATLAS database• Nyenrode LSH, Biotech Outlook 2010• Holland Biotechnology, Sustainable progress, Life Science in the Netherlands, 2007• Technopolis group, Baseline study Innovation Programme Life Sciences & Health, Sept. 2008P82, 83 –• ATLAS databaseP84P84 –• Point-One website, www.point-one.nl• From good to great in Dutch technologies, Phase 2 report on Point-One, April 2008• Dutch Innovation Platform Report (Voortgang Sleutelgebieden en tussentijdse evaluatie Sleutelgebieden-

aanpak), January 2009P85, 86 –• LESA analysis, based on discussion with Prof. P. Hilbers, TU/e, 2009P88 –• KPMG, Feasibility Study on the Cooperation between the Academisch Ziekenhuis Maastricht and the

Universitätsklinikum Aachen Oct 2008Universitätsklinikum Aachen, Oct. 2008P89 –• KPMG, Feasibility Study on the Cooperation between the Academisch Ziekenhuis Maastricht and the

Universitätsklinikum Aachen, Oct. 2008• Press release, The Cardiovascular Center, July 2008 P90 –• Partners in the polder, A vision for the life sciences in the Netherlands and the role of public-private partnerships,

2009• From good to great in Dutch technologies, Phase 2 report on Point-One, April 2008; Dutch Innovation Platform

Report, January 2009• PRO INNO Europe®, Regional Innovation Scoreboard (RIS), 2009• Nyenrode LSH Biotech Outlook 2010• Holland Biotechnology, Sustainable progress, Life Science in the Netherlands, 2007• Technopolis group, Baseline study Innovation Programme Life Sciences & Health, Sept. 2008P91 –• Based on participation in Point-One, BMM, CTMM, and TI-Pharma• From good to great in Dutch technologies, Phase 2 report on Point-One, April 2008P92 –• Database Life Science Excellences Aachen-JülichP93 –• Flanders Bio, www.flandersbio.be• VIB annual report 2009, Activities 2008P95 –• Fysieke investeringsopgaven voor campussen van nationaal belang, Buck Consultants International for EZ, Nov.

2009P97 –• Research by Educaide commissioned by LESA, December 2009 • Deuren Open, Advies Internationale Scholen, Innovatie Platform, September 2009P98 –• E'til

Strategy SEN

P128 –• Pieken in de Delta, SWOT-analyse Zuidoost-Nederland, Berenschot, June 2006• Technological topEuregio SWOT analysis, Policy Research Corporation, Hochschule Niederrhein, E'til, Dec,2007

133

134

BLA Biologic License Application

BMM BioMedical Materials

BMT BioMedical Technology

Abbreviations

BMT BioMedical Technology

CAPHRI Public Health and Primary Care Research Institute, part of MUMC+

CARIM Cardiovascular Research Institute Maastricht, part of MUMC+

CMO Cluster Management Organization

CTMM Center of Translational Molecular Medicine

CVD CardioVascular Disease

ECCE European Cardiovascular Center of ExcellenceECCE European Cardiovascular Center of Excellence

EIT European Institute of Technology

FDA Food and Drug Administration

GDP Gross Domestic Product

HTC Hightech Campus Eindhoven

ICT Information and Communication Technologies

IP Intellectual PropertyIP Intellectual Property

IPO Initial Public Offering

IVD In-vitro Diagnostics

KIC Knowledge and Innovation Community

LSE Large Scale Enterprises

LSH Life Science and Health

M&A Merger and AcquisitionM&A Merger and Acquisition

MHeNS Mental Health and Neurosciences, part of MUMC+

MRI Magnetic Resonance Imaging

MSD Merck Sharp and Dohme

MUMC+ Maastricht University Medical Center

NME New Molecular Entity

OECD Organization for Economic Co-operation and DevelopmentOECD Organization for Economic Co-operation and Development

p.a. per annum

PoC Point-of-Care

PPP Public Private Partnerships

R&D Research and Development

RIS Regional Innovation Scoreboard

R O W Rest of the WorldR.O.W. Rest of the World

RWTH Rheinisch-Westfälische Technische Hochschule Aachen

SME Small and Medium-sized Enterprises

TIPh Top Institute Pharma

TTO Technology Transfer Office

TU/e Eindhoven University of Technology

VC Venture CapitalVC Venture Capital

VIB Vlaams Instituut voor Biotechnologie

WHO World Health Organization

135

136

Glossary

Biomedical materials technology Is the technology to process materials (metals, polymers etc.) which are used in devices for both in-vivo and in-vitro applications.

Biopharmaceuticals Large-molecule drugs like proteins, created through biomedical engineering or biotechnological processes such as microbial or cell culture.

Care-cycle The array of health services and care settings that address health promotion, disease prevention and the diagnosis, treatment, management and rehabilitation of a medical condition.

Convergent technologies Technology developed by combining elements from different disciplines, most notably, High Tech Systems and Life Sciences.

Healthcare technologies Medical Technology, regenerative medicine, personalized medicine, pharmaceuticals.

High Tech Systems Relates to end products based on advanced technologies like embedded systems, nano-electronics and mechatronics.

Hightech devices segment Encompasses the Medical Devices and Diagnostics subsegments.

Imaging Imaging equipment is used to obtain images of the interior of the body, using techniques such as X-ray, tomography and MRI.

In-vitro diagnostics Reagents, instruments and equipment used outside the human body for the examination of specimens taken from it.

Life Sciences Encompass the disciplines of molecular biology, pharmacology, cell physiology, genomics, proteomics and metabolomics, in addition to the science of using living things, and components of living things, to produce goods and services.

"lifetec" Medical technology, pharma, biomaterials, bioinformatics.

Medical devices Instruments or appliances of a more complex nature, often based on a combination of mechanical, electrical and materials technology.

Medical technology The diagnostic and therapeutic application of science and technology to improve the management of health condition.Encompasses medical devices, diagnostics, supplies.

M di l T h l i Fi th t d l d f t i l d di l i t t d

137

Medical Technology companies Firms that develop and manufacture surgical and medical instruments and supplies, laboratory equipment, electromedical apparatus including magnetic resonance imaging and ultrasound equipment, dental equipment and supplies, and ophthalmic products.

Open innovation model Where institutions and companies co-operate and profit from each other’s competences.

Orphan diseases Rare diseases for which there are no commercial incentives to research and develop effective therapies.

Orthopedic products Reconstructive devices and joint replacements, spinal implants and instrumentation, fracture repair and ortho-biologics.

Pharmaceutical A chemical substance used in or on the body for the treatment or prevention of a disease or other abnormal condition. Pharmaceuticals act through (bio)chemical mechanisms. Within pharmaceuticals, "small molecule pharmaceuticals" and "biopharmaceuticals" are distinguished.

Pharmaceutical companies Firms that develop and produce biological and medicinal products and manufacture drugs.

Point-of-Care Laboratory – and other services provided to patients at bedside. These include testing using automated information entry systems.

Point-of-need Similar to Point-of-Care, but somewhat broader.

Regenerative medicine The field of creating living, functional tissues to repair or replace tissue or organ functions lost due to age, disease, damage or congenital defects.

Small molecule pharmaceuticals Drugs based on molecules, usually organic, with a low molecular weight, usually manufactured by chemistry.

South East Netherlands Encompasses Limburg and Eastern part of Noord-Brabant.

Supplies "Simple" devices and materials used in healthcare, from tongue depressors to surgical instruments and wound dressing materials.

138

Strategy in Healthcare Science and Technologyfor South East Netherlands

This report was made possible by a grant from the Dutch Ministry of Economic Affairs, the Province of Noord-Brabant and the Province of Limburg.

LifeTec NetworkP.O. Box 13106201 BH MaastrichtThe Netherlandswww.lifetecnetwork.eu

April 2010

Text review: Hugh Quigley, [email protected] Graphic Design: Pien Vink, www.grabaweb.nl Printing: SCHRIJEN-LIPPERTZ, www.schrijen-lippertz.nl

vision

2025: a ro

ad

to excellen

ce Strategy in Healthcare Science and Technology for South East N

etherlands

Documents

Strategy in Healthcare Science and Technology for South ... · VISION 2025: A ROAD TO EXCELLENCE Strategy in Healthcare Science and Technology for South East Netherlands Project report