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Trilogy Tidings
November 2015
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in this issue
     Medtech innovation fascinates me. Not just because it's my business, but because the outcomes can be so very important to us all. I don't get very hyped up by the latest in phone apps or social media who-cares. But medtech is, dare I say, cool! So, I find it important to examine the (mostly) failures and the (occasional) successes.

     These are my themes on this fine November day.

Regards,
Joe

Reality Bites Theranos             
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     I've written about Elizabeth Holmes' Theranos twice before, in October 2013 and in August 2015. The story was, and is still, fascinating because the potential for market disruption was so great and the mystery so profound - until today.  Now the bubble appears to be bursting.
Theranos
 
     If you've missed the story so far (which seems highly unlikely), Theranos is the emerging medtech company that promised to disrupt laboratory clinical diagnostics by radically reducing blood-sample sizes and lab-test costs and by enhancing patient convenience by moving the point of testing to walk-in storefronts.
 
     Now that first disruption has apparently failed and the others appear to be at great risk. My conclusions are based upon a recent investigative piece in the Wall Street Journal and subsequent follow-ups. I won't rehash the issues here; you can read about them in my prior musings, the WSJ articles, and a great many derivative sources.
 
     Rather, I want to focus on the lessons learned:  
  • Secrecy works - up to a point. Sooner or later your ideas will be judged by subject-matter experts, and their judgments can kill your venture.
  • Don't try to erect competitive barriers using regulatory methods that (you think) will favor your product offerings. Chances are, as in this case with attempted FDA clearance of lab tests, that back-handed approach will fail.
  • Don't make outrageous claims for product characteristics and analytical performance unless and until you have proven your case. The hype may attract unsophisticated investors, but your fall from grace will be hard indeed once professionals have a look at the data.
  • Carefully think through your direct-to-consumer business model. In this case: Can you rely on the consumer to self-order and properly interpret storefront lab tests?
     Finally, if you are an investor with little or no knowledge of the target business arena, for goodness sake do some due diligence! Don't sign on just because another neophyte or high-profile public figure has done so.
Then There's Neuromodulation              
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     Neuromodulation, which some call bioelectronics, is an interesting counterpoint to the Theranos story. As you probably know, neuromodulation is a therapy aimed at the mitigation of pain and disease through excitation of the central or peripheral nervous system. It's pioneering medtech done right, in my opinion.

 
     The work is mainly focused on classical scientific research and reporting. Investors tend to be knowledgeable of the science to some extent, or at least experts in the target diseases. The level of hype appears to be well controlled. Claims tend to be guarded. Yet the future promise is very great.
 
     A rather nice pop-summary of the technology and its applications appeared in the New York Times in 2014. That piece focused on Kevin Tracey and his company (SetPoint Medical) in its development and trials of a technology to treat rheumatoid arthritis and other inflammatory diseases. It leaves me with a sense of promise for future sufferers, and it bodes for an interesting future of our "drug" industry.
Listening to the Noise              
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     In this information-saturated world we inhabit these days, it's easy to become overwhelmed with the "noise", some useful and most not so much. Your likely response may be to tune out everything but what is generated and shared within your own organization. As Charlie Goodrich sensibly points out, that can leave your business - and maybe your career - in jeopardy. His recent newsletter is entitled "Listening to the Noise. How Paying Attention to Alternative Sources of Information Can Make or Break Your Organization."
 
     Charlie's thoughts are worthy, as are most of his monthly tidings. 
What does Trilogy do? 
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     Trilogy Associates facilitates business growth and renewal through commercialization of new products, providing the following services:
  • Development and critique of business strategies and plans
  • Characterization of market drivers and adoption dynamics
  • Identification and evaluation of fitting technologies
  • Surveillance of competitors and emerging threats
  • Market-testing of development-stage product concepts
  • Assessment of clinical value and comparative economics
  • Support for partnering, acquisition and divestiture initiatives
  • Quick-turnaround M&A due diligence
  • Business and technical writing/publishing

     Inquiries to establish whether and how we might support your business initiatives are always welcome.  Contact us.

Resources from our Archives 
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     Check out our Reading Room to view my published articles, presentations and white papers on a variety of topics.
  
     And, you can examine an archive of my prior newsletters (since February 2007).
Contact Information
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Joseph J. Kalinowski, Principal
919.533.6285
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