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Trilogy Tidings
May 2009
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in this issue
     I conducted a survey of our medtech supplier and investor contacts last month.  I also had occasion to review the state of affairs in novel molecular diagnostics.  The results of these two activities came together in an interesting way to bring focus on the critical importance of paying attention to so-called "game changers" in the future success of medtech businesses.  I'll share my conclusions with you.
 
     Carry on, and remember: Refuse to participate in the recession!

Regards,
Joe

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Focus on the Game-Changers to Exploit Opportunities 
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Game-ChangersOur survey results suggested that many medtech suppliers have great interest in future game-changing opportunities and threats: new treatment modalities, breakthrough technologies, reimbursement policy changes, societal healthcare shifts, investment preferences, and the like.  These and other high-interest topics were all general in nature; they cut across all medtech markets and businesses.  These topics can have strong, far-reaching effects on medtech markets and the futures of individual suppliers.  Clearly, these game-changing dynamics can make or break a medtech business a few years out.
 
     Now, I will admit that this finding is obvious in retrospect.  It's not an intellectually challenging conclusion.  But here's the thing: In my experience, most medtech suppliers - at least most of the ones we've worked with over the last 20 years - do not systematically monitor their fields of interest in a rigorous way to identify and track these game-changing developments.  There's just too much else to do in taking care of today's and next quarter's business; the short-term needs always seem to take precedence.  So the game-changers often remain unmonitored until it's too late to respond effectively; an opportunity is lost or a threat is unmitigated.
 
     I'm sufficiently impressed by this unmet need that I've chosen to help our clients focus on these potential dramatic changes before they take hold, kind of an early warning system.  Specifically, I see a business opportunity associated with providing our clients timely information that is at once reflective of potential seismic shifts in market opportunity and also fully customized to the market segments of importance to each Trilogy client.  We intend to do this by developing and delivering a series of Game-Changer Reports attuned to specific client requirements.
 
     If you make and sell medical products of any kind and you'd like to learn more about this new offering, please let me know.
A New Day Dawning for Novel IVD Products
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Green EyeshadeIf you're in the in vitro diagnostics business, get out your green eyeshades and sharpen your pencils.  Get ready for some serious economic analysis.  And be prepared to invest a little (or a lot) more cash in getting your next product to market.  That's because the FDA and various insurers are conspiring to require more clinical and healthcare cost data from you as conditions for generating revenue from your wonderful innovations.  This is a potential game-changer for sure.
 
     The "new day" actually dawned on September 7, 2006 when FDA issued its draft guidance entitled, "In Vitro Diagnostic Multivariate Index Assays [IVDMIAs]".  An additional FDA guidance was issued in July 2007.  Both documents were in response to the important emerging need to regulate the marketing and conduct of lab tests of multivariate molecular assays ultimately useful as companion diagnostics in so-called personalized medicine.
 
     Suppliers will be - and already are - required to provide compelling evidence of clinical relevance and efficacy for these tests, and that obviously requires expensive clinical trials closer to the drug model than to the historical IVD model for FDA clearance, a burden that may argue convincingly for a pharma partnership.  To recover these up-front costs, IVD suppliers must command premium pricing for these tests ($2,000-$4,000 for the products in evidence so far).  That will require insurers to buy in -- no mean feat.  That's where the green eyeshades come in; suppliers of these biomarker tests must build convincing and complete economic models that demonstrate the short-term and long-term cost savings resulting from application of the new assays.  (Best of luck if you cannot demonstrate cost savings.)
 
     But there's more.  This amplified need for relevant clinical and economic data will almost certainly "trickle down" to less-novel assays of various kinds.  New assays are likely to require both kinds of data, while older assays may require only economic data to justify increased IVD reimbursement compared to their currently anemic levels.  This need to demonstrate cost minimization is the very same need I expressed in more general terms, and for a wider swath of producers, last month.  The market for green eyeshades will expand in great measure!
 
     One more potentially discouraging word on companion diagnostics and personalized medicine:  Several University of Pittsburgh statisticians have recently cast doubt on the validity of genome-wide SNP genotyping in guiding clinical decisions on individual patients.  See their press release for details.  On the other hand, Dr. James Prudent, CEO of Centrose, provides a slightly more positive spin in his April article in IVD Technology.

 
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).
 
What does Trilogy do? 
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     Trilogy Associates facilitates business growth and renewal through commercialization of new products, providing the following services:
  • Opportunity assessment
  • Business planning and enterprise growth strategies
  • New-product conceptualization, commercialization and marketing
  • Market research and competitive assessment
  • Business development and partnering
  • Market and technological due diligence
  • Assessment of the therapeutic and diagnostic potential of novel technologies
  • Design of efficient and effective development strategies for early-stage biomedical products
  • Business and technical writing/publishing

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

Contact Information
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ContactInfoJoseph J. Kalinowski, Principal
919.533.6285
LinkedIn Profile: www.linkedin.com/in/trilogy
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