Market Assessments

1. Market Assessments Michael Pratt Executive Director Business Development November 1, 2011

2. Setting • Raw Invention • Detailed Science • Light on technology • Hints of a product • Vacant of a value proposition

3. Objectives of Assessment • Triage • Should a patent be filed? • Value • What are we offering to prospective licensees? • What is the value of this asset? • Strategy • What is the best way to commercialize? • What should be protected? • How do we reduce risk and make this more appealing to investors? • Who will license this? Why?

4. Market Shift Product Life Cycle Impact Threshold New Science Incumbent or Emerging Faster, Better, Cheaper Emerging Threats Figures of Merit State of Art Barriers Market Acquirers Prior Art/ Participant Science Validator Contacts Patents General Familiarity Market Forces Licensee or Competitor Accelerator Marketable Products End Users Enabler Companies Tech Synergy Existing Threats

5. Market Shift Product Life Cycle Impact Threshold Barriers Market Acquirers Market Forces Licensee or Competitor Accelerator New Science Incumbent or Emerging Faster, Better, Cheaper Prior Art/ Participant Science Validator Emerging Threats Figures of Merit Marketable Products End Users Enabler State of Art Contacts Patents General Familiarity Companies Tech Synergy Existing Threats

6. Step # 1 • What is the product? • What will be delivered to a customer? • Form factor? • Service or product? • Therapy or diagnostic? • Stand alone or adjuvant? • Delivery?

7. Step # 2 • Identify & Characterize the addressable market(s) • Large & growing? • New market? • Highly competitive? • Litigious? • Receptive to new technologies? • Active investments?

8. Resources • Google • Pardee Management Library • Subscription Services • www.frost.com • Venture Source • T2+2 • Knowledge Express • Contact OTD for a list of helpful resources

9. Healthcare • Much easier than physical sciences/IT/Software • Need is more obvious • Addressable market size is easier to estimate • Range of possible products is usually constrained

10. Healthcare But… horizons vary • Drugs • Stage of development is earlier • Leads to far reaching assumptions about performance • Devices • Returns are usually much lower than drugs • Therefore risk must be much lower • Translation: 510K, replace an existing therapy, has an established reimbursement code • Diagnostics • Market is highly competitive (many solutions, many entry points…) • Incumbents require compelling data • Expectations on performance are much higher (clinical samples)

11. Physical Sciences & IT • Many possible products • Many possible markets • Varying levels of competition • Value chains not clearly defined • Market data harder to identify

12. Physical Sciences & IT • But…horizons are usually within reach • Must act quickly • Time to market is critical • Promise or Performance?

13. Step # 3 • Establish your logic • Map technology elements to product features to market needs • “Feature-benefit analysis” • Technology • Faster, better, cheaper… • Market • Growing, competitive, but lacks… • Development Milestones • Technology development • Regulatory pathway • Reimbursement • Impact • Patient, payer, clinician, hospital

14. example • Technology blank will enable a new product category for the blank industry which will allow the entire industry to address blah blah unmet need in the blah blahmarket • The are four major competitors in this mature market all competing on price. The blank technology will provide a competitive advantage to one of these major incumbents because booboo(feature/benefit).

15. example • Blank is an emerging scientific field that promises to have a major impact on blank emerging markets. • Sales in blah blahmarkets are small but growing rapidly. Competition centers around performance and product cycles are quick. • Blank technology with have XX increase in performance over current technologies and YY over all other emerging techniques. Development time is in line with rapid turnover.

16. Consideration • Choosing the “right” application is difficult • Try to build some consensus from multiple data sources

17. Features – Benefits - Needs

18. Step # 4 • Quantify your adjectives • How big is the addressable market? • How many competitors? • How much money will be saved? • How much will customers benefit from the new product? • How much will the product effort patients, clinicians, hospitals, & payers?

19. Considerations • Do the costs of development outweigh the potential benefits? • Is the required development time beyond the window of opportunity (market timing)? • Is this the “right” solution? Why? • Is there are “burning need” for this solution? • Understand degree of interest

20. Step # 5 • Create value proposition • State • Unmet, burning need • Who needs this? • Want vs. need vs. interest • What is the product? • Why is this the best solution?

21. Example • A soft good knee brace that is lightweight, low profile, and easy to use yet maintains the performance characteristics of a rigid brace. This enables an effective therapeutic alternative that is much less expensive, easier to manufacture and offers attractive profit margins. • “A Soft Good with the Performance of a Rigid Knee Brace”

22. Step # 6 • Validate your assumptions • Pick up the phone… • Open ended questions… • What is driving the move towards molecular diagnostics? • What are the top three challenges your are facing? • What reimbursement codes do you use for xx procedure? • What are the biggest time constraints in xx protocol? • Followed by direct questions… • Would a product that is taken orally and relieves these symptoms improve the lives of your patients? • Would a diagnostic that provides instant readout from a clinical sample change your clinical practice?

23. Recap • What is the product? • Identify & characterize the addressable market • Establish your logic • Quantify your adjectives (e.g., how big) • Create a value proposition • Validate your assumptions (pick up the phone)

24. mpratt@bu.edu 617-353-4569 Questions