Dirk Probst

8/15/2019 Dirk Probst

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Commercialization and development

roadmap for healthcare biotech products

Bio Malaysia 2011, Nov. 22nd

Dr. med. Dirk Probst, MD,PhD

D2 Bio Solutions Sdn Bhd


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Key question for smaller

healthcare companies

Technology development ?

or

Technology commercialization ?


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Answer

• Biotech companies are specialists inTechnology development

•

Big Pharma or Big Medical Device companiesare specialists in technologycommercialization (Marketing & Sales)

Biotechnology is the technology driver , butevery New Technology must create additionalvalue


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Commercialization

stages

The more advanced the product the higher the

purchase price and your profit, but…

0

50

100

150

200

250

300

350

400

450

500

I II III IV

deal price

Investment


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Commercialization

stages

The risk of development and failure is also increasing-

Only 12% of compounds entering the clinical phase

will make it to the market

0

1

2

3

4

5

6

7

8

9

10

1 2 3 4 5

risk for purchaser

risk for seller


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Key success factors

for commercialization• Valid IP

• Proper Product development

• Early Business development

• Regulatory check

• Cooperate versus compete decision

• Deal structure


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IP Management

Build up strong IP

•

The freedom to operate (make, use orsell products)

• The provision of a "technology fence"

•

Controlled access to a market niche• Licensing opportunities


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IP

The power of licensing

• Quickly capitalize on new technologies

• Using technology for competitive advantage

• Global business participation

•

Maximizing profits from deals


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chemicalsynthesis

preclinical

clinicphase I

clinicphase II

commercialization

Idea

clinicalphase

IV

clinicalphase III

registration

/approval

From R&D to

Commercialization:

IP – patents,

etc.


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Parallel Commercialization

Pathway

Who is translating R&D results to

commercialization ?

Invention

How does theInventor bridge

the gap?

Market

What is themarket?


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Commercialization

roadmap

• IP

• Scientific product development

• Business Development

• You can start to commercialize at every

timepoint in product development, If you take

into account the critical components for

commercialization success


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The 4 driving forces

Technology& IP

Market

Management Financials

the product being assessed

compared to existing

technologies, including

the medical or

market need for

your product

what is the future market potential

for your product,

regulatory hurdles

what management

capabilities are

available and what

will be needed

what expenses are

expected during thewhole process of

development and

commercialization,

what financial resources

are available,

how can the ROI becalculated


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Critical components for


What are the precondition for marketing a

healthcare product ?

• Regulations – all healthcare products are

regulated in terms of market access. Are you

aware of them ?

• Regulatory Requirements – what are the

specific requirements for your product ? Do

you meet them ?


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Regulatory Approval

• All product development plans have to reflectthe regulatory requirements

• Making expensive mistakes in the beginning,that turn out to be dead ends in productdevelopment cannot be corrected at the time

of application for product approval.• Talk to regulatory experts or officials before

you start !


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Commercialization

Roadmap

• Do you have strong IP ?

• Where are you in product development ?

• What are the market needs ? competition ?

other innovators ? – Business Development

• Timelines for development

• What are the regulatory requirements ?


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Technology &Science Market

Management FinancialsFundraising

Business

DevelopmentLicense

Agreements

Strategic or

distribution

partners

IP protection

R&D

Development

plan

Market

research

Company

valuation

Manpower

Manufacturing Regulatory

ApprovalTimelines


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Commercialization

Options

• Compete or cooperate

• Distribution vs. licensing out


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Compete or cooperate

Return on investment tends to be higher for acooperation strategy than a competitionstrategy when one or more of three

conditions exists for the start-up company.These conditions are the following:

The firm has a high degree of control overits intellectual property rights

The firm enjoys low deal transaction costsThere is a high sunk cost requirement forthe firm to compete in its industry


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Compete or cooperate

Start-ups benefit more from cooperation strategiesthan compete strategies when they:

• possess strong intellectual property rights,

• utilize brokers to facilitate trade,

• leverage the assets of established firms tocommercialize their innovation.

In these situations, a start-up can earn higher returnsby acting as an upstream supplier of innovation rather

than as a horizontal innovation-oriented competitor. Inother words, by participating in the market for ideasrather than in the market for products, new companiescan make the best use of their innovations.


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Distribution vs. licensing

and other options

Decision base:

• Capital requirements

•

Manpower requirements• Time Needed to Access the Marketplace

• Accessibility to Worldwide Markets

• Liability & Exposure to Risk


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Licensing-out

How Much - Setting the Royalty Rate

• There is no such thing as a typical or standard royalty rate.

• Licensor : 20% of the total benefits , licensee: 80% of the

profits

• Royalty result: 2% to 10% of gross sales.

Major factors include:

• The inherent quality of the technology,

•

The market potential of the technology,• The fit with the licensee's business,

• The ability to assure the licensee protection for unauthorized

use of the technology

• The risk involved in the agreement (technology, business etc.).


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Commercialization &

Development Roadmap

• Build strong IP

• Start proper product development planning

• Execute product development based on – market needs

– regulatory requirements

•Start Business Development at an early stage

• Commercialize at the earliest possible stage

Dirk Probst

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