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Driving AcceleratedClinical Data<br />ZEN CHU<br />Wyss Institute<br />HarvardMedical School<br />Office of Technology Development <br />CIMIT Innovation Grand Rounds<br />Mass General Hospital<br />May 4, 2010<br />© zen@acmedx.com<br />

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Best Practices for Med TechAccelerated De-Risking<br />Challenges Today<br />Innovation Landscape & Risks<br />Teams & Conflict of Interest<br />Clinical Innovation Rules & Tradeoffs<br />Panel Discussion<br />Good Business IS Good Medicine<br />© zen@acmedx.com<br />

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Challenges In Driving Clinical Data<br />Clinical effectiveness is not enough<br />Pharma & venture funding tight<br />Publications & research polluted with noise<br />High sensitivity to Conflict of Interest<br />FDA reviews more conservative, higher hurdles<br />Payers & Clinicians demand Evidence-Based Data<br />Health reform & Comparative Effectiveness impact today<br />More important than ever to match<br />Focused solution to clinical champions<br />© zen@acmedx.com<br />

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Disciplined IntentonRole & Therapy<br />© zen@acmedx.com<br />

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Clinical Innovation LandscapeMatch Resources to Opportunity Size <br />Big Opportunities<br />Complex Solutions, <br />Fragmented Services<br />Philanthropy/NIH<br />Basic Research Grants<br />Unknown Mechanisms <br />Large Established<br />Companies <br />Integrate Whole Solutions<br />Humanitarian Exemption,<br />Venture Philantropy<br />Low Capital Required High<br />Venture-Backed<br />Companies<br />Focused Teams to <br />Prioritize & Execute<br />Discrete Product<br />Product-Line Extensions<br />License or Product Acq<br />Royalties<br />$100MM<br />$1B<br /> Market Size of Opportunity<br />© zen@acmedx.com<br />

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Segment To FocusPatients, Disease State, Providers<br />Philanthropy/NIH<br />Basic Research Grants<br />Unknown Mechanisms <br />Big Opportunities<br />Complex Solutions, <br />Fragmented Services<br />Unfocused & <br />Requires <br />Segmentation<br />Gates Foundation<br />Ischemic<br />Stroke<br />Cystic Fibrosis<br />Off-Label Uses<br />Low Capital Required High<br />RNAi for AMD<br /> Stem Cells<br />Aortic<br />Abdominal<br />Aneurysm<br />Ortho<br />Lumbar<br />Disc<br />Gastric Bypass<br />$100MM<br />$500MM<br /> Market Size of Opportunity<br />© zen@acmedx.com<br />

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Value To Whom?<br />© zen@acmedx.com<br />

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Current Healthcare Model Drives Interventions<br />Michael Porter, Tiesberg<br />© zen@acmedx.com<br />

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Disease SegmentationMap Unmet Clinical Needs To Development Path<br />Disease Natural History & Diagnostics<br />Comorbidities & Adjacencies<br />Physician Referral Patterns<br />Untreatable Patient Subsegments<br />Humanitarian Exemption<br />Focus Segments on<br />High Impact & High Value<br />© zen@acmedx.com<br />

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Market Analysis CriticalEnables Path To Clinical Efficacy<br /> Proven Clinical Adoption Drivers<br />1) Patient pain & outcomes<br />2) Therapeutic procedure time<br />3) System costs over entire disease cycle<br />Comparative Effectiveness <br />Will Impact Prioritization<br />© zen@acmedx.com<br />

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Return On Investment Drivers<br />Choose Clinical Endpoints with <br /> Fastest & Highest ROI<br />Hospital stay<br />Re-admission & revision<br />Complications & errors<br />Recurrence<br />Early detection (prevention coming?)<br />Key Players<br />Patients, Payors, Physicians, Hospitals<br />© zen@acmedx.com<br />

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Analysis Is ParamountEfficacy is NecessaryBut Insufficient ForTranslating to Widespread Practice<br />© zen@acmedx.com<br />

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Time & Risks<br />© zen@acmedx.com<br />

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Value Inflection PointsTime to Market & FDA Approvalbut alsoTime to First Human Data&Time to Clinical Adoption<br />© zen@acmedx.com<br />

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Acquisition/IPO Exit<br /> Reimbursement<br /> Published clinical results<br /> Market Introduction<br /> Salesforce hired<br /> Europe & Japan distribution<br /> FDA Approval <br /> Manufacturing ramp<br /> Human pivotal study<br /> Corporate partnership<br /> First human data<br />First Hiccup & Danger of Momentum Loss<br /> CEO hired<br /> Pilot manufacturing <br /> Patent grant<br /> First FDA meeting<br /> Regulatory opinions<br /> Money raised & team hired<br /> Animal testing<br /> Clinician feedback <br /> Patent disclosure<br /> Prototype/Reduction to Practice<br /> Market Analysis <br />Idea<br />COMPRESS <br />TIME TO MARKET<br />FASTER CURES & ROI<br />Value<br />Time<br />Critical Milestones<br />© zen@acmedx.com<br />Accelerate Clinical ImpactTime is Life<br />

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Which Risks to Prioritize?<br />Market Risk<br />Reimbursement<br />Physician & Patient Adoption<br />Packaged Solutions<br />Value<br />Regulatory Risk<br />Safety & Efficacy<br />Management Risk<br />Technology IP Risk<br />Time<br />© zen@acmedx.com<br />

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Investor Risk Priorities<br />Market Risk<br />Reimbursement<br />Physician & Patient Adoption<br />Packaged Solutions<br />Largest Risks Must Be Addressed & De-Risked Up Front Before Funding<br />Value<br />Regulatory Risk<br />Safety & Efficacy<br />Investors & Companies Willing to Take These Risks<br />Management Risk<br />Technology IP Risk<br />Time<br />© zen@acmedx.com<br />

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Build Team To Execute<br />Market Risk<br />Reimbursement<br />Physician & Patient Adoption<br />Packaged Solutions<br />1) Plan in Reverse<br />2) Team Execution<br />Value<br />Regulatory Risk<br />Safety & Efficacy<br />Management Risk<br />Technology Risk<br />Time<br />© zen@acmedx.com<br />

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Teams Drive Data<br />Clinical & Business teams<br />Focus & segment the opportunities<br />Build teams to match opportunity type<br />Complement inventors with team<br />BUILD TEAMS THAT UNDERSTAND <br />THE RISK / EXECUTION TRADEOFFS<br />© zen@acmedx.com<br />

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Building Clinical Team WhileNavigating Conflict of Interests<br />Transparency in relationships & publication<br />Equity holders cannot drive clinical data<br />Avoid equity & minimize cash consulting<br />Find & Engage Clinical Champions<br />Match patients to risk/benefit<br />Negotiate IP rights up front<br />CAPITAL EFFICIENT & CREDIBLE DATA<br />© zen@acmedx.com<br />

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7 Rules of Innovation<br />Minimize Time To Demonstration<br />Build Smallest Possible Team<br />Develop Only Bare Minimum<br />Iterate Frequently Before Mfg Controls<br />Never Develop What Can Be Bought<br />Insist on Highest Quality Workmanship<br />Prove One Idea/Variable At A Time<br />EMPHASIS ON SPEED & PROOF<br />© zen@acmedx.com<br />

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Clinical Data TradeoffsImpact & Speed versus Cost<br />BALANCE COSTS & RISKS<br />© zen@acmedx.com<br />

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Time is Life<br />© zen@acmedx.com<br />

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Incremental vs BreakthroughPlenty of Incremental Value, Different Strategy<br />© zen@acmedx.com<br />

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Clinical InnovationCritical Success Factors<br />Rigorous Analysis<br />Focused Plan To Early Proof<br />Credible & Creative Team <br />Adapt With New Data<br />Evidence-Based Business<br />Desire to help patients<br />© zen@acmedx.com<br />

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Innovation Grand Rounds Panel Discussion:Driving Clinical Proof<br />ZEN CHU<br /> Wyss Institute<br />Harvard Medical School<br />Office of Technology Development<br />HELEN COLQUHOUN, MD<br />Founder & CEO, Pleiad Devices<br />DAVID REED, MD, MBA<br /> Serial Medical Entrepreneur<br />AARON SANDOSKI<br />Managing Director, Norwich Ventures<br />

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GOOD BUSINESS ISGOOD MEDICINE<br />Thank You!www.LinkedIn.com/in/zenven<br />© zen@acmedx.com<br />