High-Impact & High Value Medical Innovation Zen Chu CIMIT Forum Harvard Medical School Beth Israel Deaconess Medical Center © zen@acmedx.com

Discipline of Clinical Innovation Physician/inventor & role on the team Innovation landscape High-impact innovation Matching opportunity to funding and teams Disciplined development process Techniques for clinical innovation Panel discussion & examples © zen@acmedx.com

Physician/inventor & role on the team

Innovation landscape

High-impact innovation

Matching opportunity to funding and teams

Disciplined development process

Techniques for clinical innovation

Panel discussion & examples

Innovation without Impact is Worthless “ Unmet Clinical Needs” Cliché, not useful metric “ Translational Medicine” must strive to become Standard of Care © zen@acmedx.com

“ Unmet Clinical Needs”

Cliché, not useful metric

“ Translational Medicine” must

strive to become Standard of Care

High Impact Innovation © zen@acmedx.com

Clinician Innovators Critical to Medical Technology 22% of surgeons innovate - von Hippel, 2003 Physician-invented = higher impact - Chatterji, 2008 99/100 top Medtronic products originated by MDs © zen@acmedx.com Anticipate Path Standard of Care

22% of surgeons innovate - von Hippel, 2003

Physician-invented = higher impact - Chatterji, 2008

99/100 top Medtronic products originated by MDs

Why MDs Must Innovate False argument that Big Opportunities already identified & tried 99/100 Top medical products invented by practicing physicians (Medtronic) Think of big companies as funders of large clinical studies, tech integrators, manufacturers, regulatory & sales machines Not efficient at identifying and testing clinical gaps Very high market opportunity thresholds of $100+MM Need for Clinician Innovators Evidence: Invent most important new products Understand clinician frustrations, untreatable segments, adoption Largest cost component of Healthcare = Physician & Facilities Critical User & Recommender, under pressure to solve quickly Efficacy and patient care paramount Invention includes reapplying existing therapies in new ways © zen@acmedx.com

False argument that Big Opportunities already identified & tried

99/100 Top medical products invented by practicing physicians (Medtronic)

Think of big companies as funders of large clinical studies, tech integrators, manufacturers, regulatory & sales machines

Not efficient at identifying and testing clinical gaps

Very high market opportunity thresholds of $100+MM

Need for Clinician Innovators

Evidence: Invent most important new products

Understand clinician frustrations, untreatable segments, adoption

Largest cost component of Healthcare = Physician & Facilities

Critical User & Recommender, under pressure to solve quickly

Efficacy and patient care paramount

Invention includes reapplying existing therapies in new ways

Physician’s View of Value © zen@acmedx.com Time Market Introduction FDA Approval Patent grant First in Man Animal testing Patent disclosure Prototype/Reduction to Practice Idea Milestones Value Conflicts of Interest perceived & real Hand off to Licensing office

Investor’s View of Value © zen@acmedx.com Value Time Milestones Acquisition/IPO Exit Reimbursement Published clinical results Market Introduction Salesforce hired Europe & Japan distribution FDA Approval Manufacturing ramp Human pivotal study Corporate partnership First human data First Hiccup & Danger of Momentum Loss Management team hired Pilot manufacturing Patent grant First FDA meeting Regulatory opinions CEO hired Animal testing Clinician feedback Patent disclosure Prototype/Reduction to Practice Market Analysis Idea Anticipate Potential Exits

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

Which Risks to Prioritize? Value Time Market Risk Reimbursement Physician & Patient Adoption Packaged Solutions Regulatory Risk Safety & Efficacy Management Risk Technology Risk Largest Risks Must Be Addressed & De-Risked Up Front Before Funding Team, VCs & Partners Manage These Risks © zen@acmedx.com

Myth of the Lone Inventor Initial invention & patent is only 1 st step Value created far beyond lab or operating room Success takes Team, Experience, Focus Partnership toward common goals 10,000 ways to fail if mismatched “ I have not failed. I've just found 10,000 ways that won't work.” - Thomas Edison © zen@acmedx.com

Initial invention & patent is only 1 st step

Value created far beyond lab or operating room

Success takes Team, Experience, Focus

Partnership toward common goals

10,000 ways to fail if mismatched

“ I have not failed. I've just found 10,000 ways that won't work.” - Thomas Edison

“ Physicians and engineers often have no sense of the requirements to create a company…In a start up environment, more is not always better. Hiring the appropriate people at the right time can determine success or failure.” - Thomas Fogarty, MD – Founder & investor in over 30 medical companies Professor of Surgery, Stanford University © zen@acmedx.com

Building Teams What’s your desired role? Understand own strengths & weaknesses Match milestones to right people & skills Choose & pay for the best people Analytical, revisit assumptions Honesty amid new information Agile of mind & adaptable View Board & Investors as Partners Maintain focus © zen@acmedx.com

What’s your desired role?

Understand own strengths & weaknesses

Match milestones to right people & skills

Choose & pay for the best people

Analytical, revisit assumptions

Honesty amid new information

Agile of mind & adaptable

View Board & Investors as Partners

Maintain focus

Cultural Barriers to Med Innovation Interdisciplinary collaboration takes extra effort Culture of Academic & Clinical Research Grant treadmill and publishing mentality Leads to secrecy, slow progress Defining Conflicts of Interest too broadly (Stossel, NEJM 2005) Fear of Failure Better to fail quickly and learn faster Experimental Model Bias Human data of efficacy paramount Only use predictive animal models that FDA accepts Physician’s acceptance of current Standards of Care Overvaluing initial Intellectual Property & Patents © zen@acmedx.com

Interdisciplinary collaboration takes extra effort

Culture of Academic & Clinical Research

Grant treadmill and publishing mentality

Leads to secrecy, slow progress

Defining Conflicts of Interest too broadly (Stossel, NEJM 2005)

Fear of Failure

Better to fail quickly and learn faster

Experimental Model Bias

Human data of efficacy paramount

Only use predictive animal models that FDA accepts

Physician’s acceptance of current Standards of Care

Overvaluing initial Intellectual Property & Patents

Development Best Practice © zen@acmedx.com Value Time Milestones Acquisition/IPO Exit Published clinical results Market Introduction Salesforce hired Europe & Japan distribution FDA Approval Manufacturing ramp Human pivotal study Corporate partnership First Hiccup & Momentum Loss Management team hired Pilot manufacturing Patent grant First FDA meeting Regulatory opinions CEO hired Animal testing Clinician feedback Patent disclosure Prototype/Reduction to Practice Market Analysis Idea 2) Hire team & Execute 1) Plan in Reverse

Traction for New Technology Best to start with clinical need, but… Many start with new technology and look for applications Beware of inventor bias and blinders Map tech advantages to clinical apps Key sustainable advantages Clinical trends that will drive adoption Beware learning curves, adoption barriers © zen@acmedx.com

Best to start with clinical need, but…

Many start with new technology and look for applications

Beware of inventor bias and blinders

Map tech advantages to clinical apps

Key sustainable advantages

Clinical trends that will drive adoption

Beware learning curves, adoption barriers

Innovation Landscape “ If you don’t know where you are going, you might end up someplace else.” - Yogi Berra - © zen@acmedx.com

“ If you don’t know where you are going, you might end up someplace else.” - Yogi Berra -

Innovation Landscape Match Resources to Opportunity Size Market Size of Opportunity Low Capital Required High Big Opportunities Complex Solutions, Fragmented Services Philanthropy/NIH Basic Research Unknown Mechanisms $100MM $500MM © zen@acmedx.com Large Established Companies Venture-Backed Companies Focused Teams to Prioritize, Execute Equity Discrete Product Product-Line Extensions License or Product Acq Royalties

Market Size of Opportunity

Innovation Landscape Adapt New Info to Larger Opportunities Market Size of Opportunity Low Capital Required High Big Opportunities Complex Solutions, Fragmented Services Philanthropy/NIH Basic Research Unknown Mechanisms $100MM $500MM © zen@acmedx.com Large Established Companies May Discover New Applications & Technologies Venture-Backed Companies Focused Teams to Prioritize, Execute Equity Discrete Product Product-Line Extensions License or Product Acq Royalties May Discover New Larger Opportunities

Market Size of Opportunity

Innovation Landscape Match Resources to Opportunity Size Philanthropy/NIH Basic Research Unknown Mechanisms Gates Foundation Off-Label Uses Ortho Lumbar Disc Market Size of Opportunity Low Capital Required High Big Opportunities Complex Solutions, Fragmented Services $100MM $500MM © zen@acmedx.com Stem Cells RNAi for AMD Cystic Fibrosis Ischemic Stroke Gastric Bypass Unfocused & Requires Segmentation Aortic Abdominal Aneurysm

Market Size of Opportunity

Incremental vs Breakthrough © zen@acmedx.com METRIC INCREMENTAL BREAKTHROUGH Funding $$ $$$$$$ Market Size Varies depending on funding needed >$500MM No current therapies Time Needed Adoption & Exit Shorter Match opportunity to strategy Longer Regulatory path dependent Value @ Exit Less More Major Risks Window of opportunity Execution quality & critical path Competition Technical/Clinical unknowns Market adoption hurdles Reimbursement Success Factors Focused execution Management experience Manufacturing economics Patents, Franchise Value Market adoption, Std of Care Investor expectations Patent Protection Less More Competition More Less

Valuable Incremental Products Huge companies built on incremental innovations Fast followers can succeed Fill existing company’s product line in hot strategic areas Match best mode, milestones & resources Creating a company may doom product © zen@acmedx.com

Huge companies built on incremental innovations

Fast followers can succeed

Fill existing company’s product line in

hot strategic areas

Match best mode, milestones & resources

Creating a company may doom product

Time is Life © zen@acmedx.com ACCELERANT DECCELERANT REGULATORY Device 510(k) Predictive animal models New materials & claims Unclear endpoints CLINICAL Existing human data Reproducible published studies Non-superiority Entrenched behavior No practice benefit REIMBURSEMENT Existing Codes DRGs Private-pay, consumer Cost-Benefit Studies MARKET Reduce skills needed Physician buying power Unambiguous diagnostic Capital equipment purchase SALES Focused physician popul. Existing distribution Learning curves Entrenched behavior

Accelerants Amplify Clinical Impact & Return on Investment © zen@acmedx.com Value Cashflow Time Milestones $0 COMPRESS TIME TO MARKET FASTER CURES

Techniques to Identify New Opportunities “ To have a great idea, have a lot of them.” Thomas Edison © zen@acmedx.com

“ To have a great idea, have a lot of them.”

Thomas Edison

Simply put “Interventional” in the name Apply interventional techniques to a sleepy discipline Empower an aggressive specialty to disrupt another specialty Interventional pulmonology Interventional podiatry? © zen@acmedx.com

Apply interventional techniques to a sleepy discipline

Empower an aggressive specialty to disrupt another specialty

Interventional pulmonology

Interventional podiatry?

© zen@acmedx.com Michael Porter, tiesberg Economics drive innovation to interventions

Opportunities from Wider View Surgical Procedure Example Narrow View Implant choice Surgical prep Access Fixation Closure Broader Analysis Diagnostic Procedure venue Surgical tool or implant Easier customization Intraoperative feedback Confirmation of efficacy Easier revision, tuning Re-use service © zen@acmedx.com

Narrow View

Implant choice

Surgical prep

Access

Fixation

Closure

Broader Analysis

Diagnostic

Procedure venue

Surgical tool or implant

Easier customization

Intraoperative feedback

Confirmation of efficacy

Easier revision, tuning

Re-use service

Productize the Procedure Turn medical service/procedure into a repeatable product Efficacious, simpler, quicker, less skill Stomach stapling to Lap-Band © zen@acmedx.com

Turn medical service/procedure

into a repeatable product

Efficacious, simpler, quicker, less skill

Stomach stapling to Lap-Band

Remove Treatment Ambiguity Anticipate or create the Standard of Care Definitive diagnostics Procedure choice Implant & tool choice Quicker learning curves Effectiveness of intervention Recovery and maintenance Surgical revision rates © zen@acmedx.com

Anticipate or create the Standard of Care

Definitive diagnostics

Procedure choice

Implant & tool choice

Quicker learning curves

Effectiveness of intervention

Recovery and maintenance

Surgical revision rates

Driving Solutions & Costs Down Healthcare Value Chains Point of Care General Hospitals Out-Patient Facilities In-Office Care In-Home Care Provider Specialists General Physician Nurse Practitioners Self-Care © zen@acmedx.com Improves reimbursement economics Convenience, simpler use Complexity of diagnosis & Treatment Christensen Seeing What’s Next, 2004

Point of Care

General Hospitals

Out-Patient Facilities

In-Office Care

In-Home Care

Provider

Specialists

General Physician

Nurse Practitioners

Self-Care

Eliminate A Provider or Facility Heresy! Reduces procedure costs Accelerate payor approvals Creates economic headroom Examples Office procedure no anesthesiologist no operating room, quicker Posterior lumbar no vascular access surgeon © zen@acmedx.com Facility Fee Device Cost

Reduces procedure costs

Accelerate payor approvals

Creates economic headroom

Examples

Office procedure no anesthesiologist

no operating room, quicker

Posterior lumbar no vascular access surgeon

Compete at the Consumption Void Unique venue Different Unique provider Design Requirements Cleveland Clinic satellite cardio centers Spa/Cosmetic centers Condom catheter for home/self care Diagnostic nutritionists as referral channel © zen@acmedx.com

Unique venue Different

Unique provider Design

Requirements

Cleveland Clinic satellite cardio centers

Spa/Cosmetic centers

Condom catheter for home/self care

Diagnostic nutritionists as referral channel

Reframe the Need © zen@acmedx.com A better method to revascularize the heart - Thomas Krummel, MD Chief of Surgery, Stanford Medical Center

A better method to

revascularize the heart

- Thomas Krummel, MD

Chief of Surgery, Stanford Medical Center

Disease has Process & Timeline Different Interventions in Lifecycle Match the clinician intervention to disease state at that particular stage Prevention Early Presentation & definitive diagnosis Full-blown disease & active intervention © zen@acmedx.com

Match the clinician intervention to disease state at that particular stage

Prevention

Early Presentation & definitive diagnosis

Full-blown disease & active intervention

Feedback Loop Shortcuts Shorten the time between diagnosis and therapy Intraoperative imaging Rapid diagnostics Customizable implants © zen@acmedx.com

Shorten the time between

diagnosis and therapy

Intraoperative imaging

Rapid diagnostics

Customizable implants

Ride Down the Cost Curve Cheaper, Faster, Single-Use Minimum efficient manufacturing scale Modify outside technologies to jump onto another cost curve Leverage Moore’s Law for software/hardware performance © zen@acmedx.com

Cheaper, Faster, Single-Use

Minimum efficient manufacturing scale

Modify outside technologies to jump onto another cost curve

Leverage Moore’s Law for software/hardware performance

Simplify Unknowns & Process Cell therapies & tissue engineering Autologous vs allograft economics Complex & unknown mechanisms Host tissue integration Genzyme Carticel economic failure Reframe: View cells as biologic depots JNJ Growth factor concentrator Bedside autologous therapy via Device Model © zen@acmedx.com

Cell therapies & tissue engineering

Autologous vs allograft economics

Complex & unknown mechanisms

Host tissue integration

Genzyme Carticel economic failure

Reframe: View cells as biologic depots

JNJ Growth factor concentrator

Bedside autologous therapy via Device Model

Import Solutions Find publications & therapies outside USA with rigorous human efficacy data Ortho implants from Eastern Europe Embolic protection studies in EU © zen@acmedx.com

Find publications & therapies

outside USA with rigorous human efficacy data

Ortho implants from Eastern Europe

Embolic protection studies in EU

Value = Efficacy Invasiveness^2 Win with same efficacy, less invasive Natural orifice tranluminal endoscopic surgery (NOTES) Intuitive Surgical, robotic surgical tools Lithotripsy obviate kidney stone surgery © zen@acmedx.com

Win with same efficacy, less invasive

Natural orifice tranluminal endoscopic surgery (NOTES)

Intuitive Surgical, robotic surgical tools

Lithotripsy obviate kidney stone surgery

Identify Opportunity from Off-Label Usage © zen@acmedx.com

Conclusion It’s not brain surgery © zen@acmedx.com

Innovation is Spark… but Development drives Value Approach clinical innovation empirically Prioritize efforts in the landscape Map entire value chain & risks Align opportunity to funding and teams Analyze the economics to optimize impact & value © zen@acmedx.com

Approach clinical innovation empirically

Prioritize efforts in the landscape

Map entire value chain & risks

Align opportunity to funding and teams

Analyze the economics to

optimize impact & value

See One, Do One, Teach One Entrepreneurship can be learned Innovation Grand Rounds needed Identify & train MDs to think like VCs MIT $100K Competition Medical Track Zen @ acmedx.com

Entrepreneurship can be learned

Innovation Grand Rounds needed

Identify & train MDs to think like VCs

MIT $100K Competition Medical Track

Panel Discussion Richard Anders Cofounder - LaunchPad, Still River Fund Zen Chu Cofounder - 3DM Inc, AcMedX Robert Creeden Managing Director, Partners Healthcare Center for Innovative Ventures David Milne General Partner, SV Life Science Advisors Former VP, Corp Business Dev, Boston Scientific Thomas Stossel, MD Harvard Medical School Professor Co-Director, Hematology, BWH

Richard Anders

Cofounder - LaunchPad, Still River Fund

Zen Chu

Cofounder - 3DM Inc, AcMedX

Robert Creeden

Managing Director, Partners Healthcare Center for Innovative Ventures

David Milne

General Partner, SV Life Science Advisors

Former VP, Corp Business Dev, Boston Scientific

Thomas Stossel, MD

Harvard Medical School Professor

Co-Director, Hematology, BWH

Backup Materials

Helpful Reading & Resources MEDICAL INNOVATION: Ferrari, Richard. Keys to Creating Value for Early-Stage Medical Device Companies . In Vivo: The Business & Medicine Report, 2005. 20 (10) Pisano, Gary. Science Business: The Promise, The Reality, and The Future of Biotech. 2006, Harvard Business Review Press. Stossel, Thomas. Regulating Academic–Industrial Research Relationships — Solving Problems or Stifling Progress? New England Journal of Medicine, 2005. 353: 1060-65. Center for Accelerating Medical Solutions. Investing in Innovation: Accelerating Disease Research Through Philanthropy and Business. www.fastercures.org , 2005. Community Wealth Partners. Venture Philanthropy 2002: Advancing Nonprofit Performance Through High-Engagement Grantmaking. www.vppartners.org , 2002. GENERAL HIGH TECH STRATEGY: Chesbrough, Henry. Open Business Models . 2006, Harvard Business School Press. Christensen, Clayton. The Innovator’s Dilemma . 1997, Harvard Business School Press. Christensen, Clayton, et al . Seeing What’s Next . 2004, Harvard Business School Press. Megantz, Robert. How to License Technology . 1996, John Wiley & Sons. Moore, Geoffrey. Crossing the Chasm . 1991, HarperCollins. Porter, M. and Teisberg, E. Redefining Healthcare: Creating Value-Based Competition on Results . 2006, Harvard Business School Press. © zen@acmedx.com

MEDICAL INNOVATION:

Ferrari, Richard. Keys to Creating Value for Early-Stage Medical Device Companies . In Vivo: The Business & Medicine Report, 2005. 20 (10)

Pisano, Gary. Science Business: The Promise, The Reality, and The Future of Biotech. 2006, Harvard Business Review Press.

Stossel, Thomas. Regulating Academic–Industrial Research Relationships — Solving Problems or Stifling Progress? New England Journal of Medicine, 2005. 353: 1060-65.

Center for Accelerating Medical Solutions. Investing in Innovation: Accelerating Disease Research Through Philanthropy and Business. www.fastercures.org , 2005.

Community Wealth Partners. Venture Philanthropy 2002: Advancing Nonprofit Performance Through High-Engagement Grantmaking. www.vppartners.org , 2002.

GENERAL HIGH TECH STRATEGY:

Chesbrough, Henry. Open Business Models . 2006, Harvard Business School Press.

Christensen, Clayton. The Innovator’s Dilemma . 1997, Harvard Business School Press.

Christensen, Clayton, et al . Seeing What’s Next . 2004, Harvard Business School Press.

Megantz, Robert. How to License Technology . 1996, John Wiley & Sons.

Moore, Geoffrey. Crossing the Chasm . 1991, HarperCollins.

Porter, M. and Teisberg, E. Redefining Healthcare: Creating Value-Based Competition on Results . 2006, Harvard Business School Press.

Accelerated Medical Ventures Lean Team, Focused Process, Alignment of Purpose © zen@acmedx.com Rational Device Design Process Market opportunities, driving trends Clinical needs, gaps, undertreated Favor Accelerated Regulatory Path Actively engage FDA feedback early Clinical endpoints, clear & quick, for downstream claims and sales support Human clinical data ASAP if needed File & Source Intellectual Property Sophisticated mapping & filing of IP Choose technology & engineers later Only after clinical needs, approach, predicates specified Prototypes for quick feedback & testing Design for manufacturing & scale issues Right Team, Properly Aligned, Working Quickly Rational Portfolio Approach Products vs. Company analysis Spin out companies with plan, early data, clinical plans, rapid funding, ramp team Driven by entrepreneurs & VCs Closely participating VC, early alignment Large funds avoid EIR costs from mgmnt fees Deep pockets to fund, build team quickly, but only when & where appropriate Multidimensional MDVC Clinician Advisors 10+ MDs specific to Project/Company/Domain Recruit multiple clinical design perspectives Meaningful early-stage feedback Virtual Organizations For Each Project Anti-Incubator - Not a real estate play! Co-locate with VCs for ideaflow, alignment Outsource labs, testing, prototyping, regulatory No obligation/mis-incentive to create companies

Rational Device Design Process

Market opportunities, driving trends

Clinical needs, gaps, undertreated

Favor Accelerated Regulatory Path

Actively engage FDA feedback early

Clinical endpoints, clear & quick, for downstream claims and sales support

Human clinical data ASAP if needed

File & Source Intellectual Property

Sophisticated mapping & filing of IP

Choose technology & engineers later

Only after clinical needs, approach, predicates specified

Prototypes for quick feedback & testing

Design for manufacturing & scale issues

Right Team, Properly Aligned, Working Quickly

Rational Portfolio Approach

Products vs. Company analysis

Spin out companies with plan, early data, clinical plans, rapid funding, ramp team

Driven by entrepreneurs & VCs

Closely participating VC, early alignment

Large funds avoid EIR costs from mgmnt fees

Deep pockets to fund, build team quickly, but only when & where appropriate

Multidimensional MDVC Clinician Advisors

10+ MDs specific to Project/Company/Domain

Recruit multiple clinical design perspectives

Meaningful early-stage feedback

Virtual Organizations For Each Project

Anti-Incubator - Not a real estate play!

Co-locate with VCs for ideaflow, alignment

Outsource labs, testing, prototyping, regulatory

No obligation/mis-incentive to create companies

Accelerated Med Venture Process Market & Clinical Drivers Market opportunities, driving trends Existing solutions & problems Physician and patient critical needs Initial sub-segments to drive adoption Map competitors & potential exits Critical development & distribution partners Maximum clinical impact & use scenarios Clinical frustrations with std of care Faster/Better/Cheaper metrics Segmentation of undertreated/Inability to treat Source clinical advisors & indep. champions Sales model and doctor/patient targets Clinical trials endpoints to drive adoption Patient recruitment issues Initial Regulatory Path Existing safety & efficacy data Clinical endpoints, clear & quick, for downstream claims and sales support Clear predicates FDA feedback & path to human clinical data Patents & Reduction to Practice Whole solution mapping Tools, implants, techniques, materials Critical 3 rd parties & existing products Blank sheet design inputs Essential new IP, in-licensing Platform & franchise value of this idea Prototypes for quick feedback & testing Existing primary human & animal data Predictive & accepted animal models Existing papers identifying design requirements File & Source Intellectual Property Sophisticated mapping & filing of IP Prior art and FTO search Plug holes Design for manufacturing & scale issues © zen@acmedx.com

Market & Clinical Drivers

Market opportunities, driving trends

Existing solutions & problems

Physician and patient critical needs

Initial sub-segments to drive adoption

Map competitors & potential exits

Critical development & distribution partners

Maximum clinical impact & use scenarios

Clinical frustrations with std of care

Faster/Better/Cheaper metrics

Segmentation of undertreated/Inability to treat

Source clinical advisors & indep. champions

Sales model and doctor/patient targets

Clinical trials endpoints to drive adoption

Patient recruitment issues

Initial Regulatory Path

Existing safety & efficacy data

Clinical endpoints, clear & quick, for downstream claims and sales support

Clear predicates

FDA feedback & path to human clinical data

Patents & Reduction to Practice

Whole solution mapping

Tools, implants, techniques, materials

Critical 3 rd parties & existing products

Blank sheet design inputs

Essential new IP, in-licensing

Platform & franchise value of this idea

Prototypes for quick feedback & testing

Existing primary human & animal data

Predictive & accepted animal models

Existing papers identifying design requirements

File & Source Intellectual Property

Sophisticated mapping & filing of IP

Prior art and FTO search

Plug holes

Design for manufacturing & scale issues

Clinical Opportunity Evaluation Clinical Merit & Adoption Current therapies Untreatable problems & populations, sub-segments Prevalence vs. incidence & other objective metrics of clinical need Independent clinical champions Stage of Development Reduced to practice Prototypes, animal data Human data Manufacturing feasibility and economics Commercial Potential Defined product, market size, procedures Time to market, regulatory pathway, reimbursement Interim milestones and risks Protection & Competition Patent & prior art search Public disclosure, scope of protection, FTO Natural product line extensions, product/procedure cannibalization © zen@acmedx.com

Clinical Merit & Adoption

Current therapies

Untreatable problems & populations, sub-segments

Prevalence vs. incidence & other objective metrics of clinical need

Independent clinical champions

Stage of Development

Reduced to practice

Prototypes, animal data

Human data

Manufacturing feasibility and economics

Commercial Potential

Defined product, market size, procedures

Time to market, regulatory pathway, reimbursement

Interim milestones and risks

Protection & Competition

Patent & prior art search

Public disclosure, scope of protection, FTO

Natural product line extensions, product/procedure cannibalization

Typical Early-Stage Medical Failure Non-optimal Design Process, Clinical Focus Technology-focused origin => Solution looking for a clinical problem Wedded to technology, scientific & engineering bias among founders Initial patents filed prematurely Tech focused rather than clinical approach Prior art poorly mapped & early IP overvalued Funding raised, paths & milestones committed, expectations set Regulatory path not mapped Consultant opinion, but little FDA feedback Clinical endpoints and patient recruitment either too slow or not clear Lack of predictive & robust animal models Clinical feedback not complete Clinical need, economics, practice implications, design prototypes Solution not matched to expedited proof and approval paths Clinical Advisors not matched with staged milestones Too late to give meaningful feedback on chosen roadmap Feedback doesn’t impact design modifications Respected names promoted, but feedback mismatched to stage Advisors used in early development dropped later for clinical phases © zen@acmedx.com

Technology-focused origin => Solution looking for a clinical problem

Wedded to technology, scientific & engineering bias among founders

Initial patents filed prematurely

Tech focused rather than clinical approach

Prior art poorly mapped & early IP overvalued

Funding raised, paths & milestones committed, expectations set

Regulatory path not mapped

Consultant opinion, but little FDA feedback

Clinical endpoints and patient recruitment either too slow or not clear

Lack of predictive & robust animal models

Clinical feedback not complete

Clinical need, economics, practice implications, design prototypes

Solution not matched to expedited proof and approval paths

Clinical Advisors not matched with staged milestones

Too late to give meaningful feedback on chosen roadmap

Feedback doesn’t impact design modifications

Respected names promoted, but feedback mismatched to stage

Advisors used in early development dropped later for clinical phases

Zen Chu Founder, Accelerated Medical Ventures Early-stage medical investor & accelerator CEO & Co-founder, 3DM Synthetic Regenerative Biomaterials Equal co-founder with MIT Faculty Shuguang Zhang, Alex Rich, Bob Langer, Alan Grodzinsky Bootstrapped business, licensed IP portfolio from MIT, drove pre-clin data, FDA feedback Raised venture capital from Bain Capital Angels, Monitor Ventures Collaborations with Boston Scientific, Medtronic, J&J/DePuy, Genzyme, among others Worldwide license & partnership with Becton Dickinson for cell culture reagent Acquired 11/2007 by NMJ Capital (Japan) to fund human clinical trials (2008), licensing Partner, NetVentures Early-stage firm founded by Adam Kirsch, co-founder of Bain Capital Seed funded 3DM and a number of early-stage technology companies Founder & Director, HPGarage, Hewlett Packard HP’s new technology ventures group across business units and HP Labs Venture capital partnerships to quickly add value to portfolio companies Increased sensitivity to investment trends, new technologies, internal metrics Participated in 1st ever spinout from HP, TimesTen Software Biomedical Analyst, MD Buyline Largest subscription service for quality & service ratings of medical device manufacturers Education MBA, Yale University School of Management BS Biomedical/Electrical Engineering, Southern Methodist University NVCA / Kauffman Venture Capital Institute © zen@acmedx.com

Founder, Accelerated Medical Ventures

Early-stage medical investor & accelerator

CEO & Co-founder, 3DM Synthetic Regenerative Biomaterials

Equal co-founder with MIT Faculty Shuguang Zhang, Alex Rich, Bob Langer, Alan Grodzinsky

Bootstrapped business, licensed IP portfolio from MIT, drove pre-clin data, FDA feedback

Raised venture capital from Bain Capital Angels, Monitor Ventures

Collaborations with Boston Scientific, Medtronic, J&J/DePuy, Genzyme, among others

Worldwide license & partnership with Becton Dickinson for cell culture reagent

Acquired 11/2007 by NMJ Capital (Japan) to fund human clinical trials (2008), licensing

Partner, NetVentures

Early-stage firm founded by Adam Kirsch, co-founder of Bain Capital

Seed funded 3DM and a number of early-stage technology companies

Founder & Director, HPGarage, Hewlett Packard

HP’s new technology ventures group across business units and HP Labs

Venture capital partnerships to quickly add value to portfolio companies

Increased sensitivity to investment trends, new technologies, internal metrics

Participated in 1st ever spinout from HP, TimesTen Software

Biomedical Analyst, MD Buyline

Largest subscription service for quality & service ratings of medical device manufacturers

Education

MBA, Yale University School of Management

BS Biomedical/Electrical Engineering, Southern Methodist University

NVCA / Kauffman Venture Capital Institute

High Impact Clinical Innovation Course © zen@acmedx.com

High Impact Clinical Innovations Course Landscape of Medical Innovation How clinicians, grant research, philanthropy, start-ups, venture capital, large med-tech & pharma companies prioritize innovation differently Matching invention to appropriate funding source Patterns of the Highest Impact Clinical Innovations Common attributes and best practices for proving efficacy & accelerating adoption Segmenting & Prioritizing Patients & Providers Example inventions, retooling techniques Transitioning from Research to Development Team-building & roles for inventors, clinicians, entrepreneurs Identifying and Solving Conflicts of Interest Milestones & common pitfalls on the roadmap to patient treatment Toolbox for Innovation & Accelerating Clinical Adoption Techniques for analyzing current care, care gaps & business models Tailoring venture models, Christensen, Porter, Moore’s Chasm and other techniques to medical innovation and clinical adoption Team sessions & case studies Strategies for clinicians and medical inventors to maximize adoption and clinical impact of new products & services © zen@acmedx.com

Landscape of Medical Innovation

How clinicians, grant research, philanthropy, start-ups, venture capital, large med-tech & pharma companies prioritize innovation differently

Matching invention to appropriate funding source

Patterns of the Highest Impact Clinical Innovations

Common attributes and best practices for proving efficacy & accelerating adoption

Segmenting & Prioritizing Patients & Providers

Example inventions, retooling techniques

Transitioning from Research to Development

Team-building & roles for inventors, clinicians, entrepreneurs

Identifying and Solving Conflicts of Interest

Milestones & common pitfalls on the roadmap to patient treatment

Toolbox for Innovation & Accelerating Clinical Adoption

Techniques for analyzing current care, care gaps & business models

Tailoring venture models, Christensen, Porter, Moore’s Chasm and other techniques to medical innovation and clinical adoption

Team sessions & case studies

Efficiently Training MD/VCs Key to Identifying & Scaling Innovation Creating MD/VCs: 3 Apprentice-based Groups Must Intersect MDs, VCs, med tech entrepreneurs skillsets tough to scale Efficient cross-pollination will enable innovation of the correct solutions Apprenticeship must address medical & business domains Improving interaction & sophistication pays dividends to all involved MDs Must Innovate Economically Viable Solutions Scalability : Best way to benefit society beyond physician’s own hands Economics : Commercial realities must be addressed for wide impact De-Risk Ideas Early : MD Adoption, Substitution, Regulatory, Economic, Design Timeframe : Simple focused ideas often yield greater impact, both short & long term Institutional Benefit : MD staff creates royalty stream for institution Focus on Jr. Faculty & Fellows Fresh eyes on the problems, right level of experience Aspiration as innovators, greatest segment of frustrated young doctors Grant treadmill has not completely handicapped them Mentorship by top thought leading VCs and MDs © zen@acmedx.com

Creating MD/VCs: 3 Apprentice-based Groups Must Intersect

MDs, VCs, med tech entrepreneurs skillsets tough to scale

Efficient cross-pollination will enable innovation of the correct solutions

Apprenticeship must address medical & business domains

Improving interaction & sophistication pays dividends to all involved

MDs Must Innovate Economically Viable Solutions

Scalability : Best way to benefit society beyond physician’s own hands

Economics : Commercial realities must be addressed for wide impact

De-Risk Ideas Early : MD Adoption, Substitution, Regulatory, Economic, Design

Timeframe : Simple focused ideas often yield greater impact, both short & long term

Institutional Benefit : MD staff creates royalty stream for institution

Focus on Jr. Faculty & Fellows

Fresh eyes on the problems, right level of experience

Aspiration as innovators, greatest segment of frustrated young doctors

Grant treadmill has not completely handicapped them

Mentorship by top thought leading VCs and MDs

Why Now, Why Boston? Fantastic Boston Medical Resources Huge denominators in most metrics Thought leaders, institutions, grant funding, doctors, OR’s, licensing, entrepreneurs, engineers, VCs Over 300K active Physicians have come through Boston institutions Over 50 hospital networks and 115K active physicians in New England New England highest per capita MD pop Medical Devices & Services Ascendant Devices as best ROI Growing VC experience, investment Robust non-reimbursed opportunities Improved patient outcomes vs pharma Mature companies as distribution partners & exits Broken Pharma Model driving capital into med device & services investments Boston Underproductive Relative to SV Less commercialization than Silicon Valley Few vehicles to institutionalize early stage device commercialization Vacuum mentoring entrepreneurial physicians Complex institutional IP sourcing & licensing More conservative VCs than Silicon Valley Macro Trends Driving Innovation Realization that “Translation” means commercialization Aspiring Surgeon Innovators Top 99% of Medtronic Innovations from MDs Consolidation of Device Companies Faster Lifecycle & Moore’s Law Impacting Device Performance & Cost Aging Boomers & Consumer-Driven Health Healthcare crisis & cost pressures © zen@acmedx.com

Fantastic Boston Medical Resources

Huge denominators in most metrics

Thought leaders, institutions, grant funding, doctors, OR’s, licensing, entrepreneurs, engineers, VCs

Over 300K active Physicians have come through Boston institutions

Over 50 hospital networks and 115K active physicians in New England

New England highest per capita MD pop

Medical Devices & Services Ascendant

Devices as best ROI

Growing VC experience, investment

Robust non-reimbursed opportunities

Improved patient outcomes vs pharma

Mature companies as distribution partners & exits

Broken Pharma Model driving capital into med device & services investments

Boston Underproductive Relative to SV

Less commercialization than Silicon Valley

Few vehicles to institutionalize early stage device commercialization

Vacuum mentoring entrepreneurial physicians

Complex institutional IP sourcing & licensing

More conservative VCs than Silicon Valley

Macro Trends Driving Innovation

Realization that “Translation” means commercialization

Aspiring Surgeon Innovators

Top 99% of Medtronic Innovations from MDs

Consolidation of Device Companies

Faster Lifecycle & Moore’s Law Impacting Device Performance & Cost

Aging Boomers & Consumer-Driven Health

Healthcare crisis & cost pressures

Sources of Critical Feedback BOSTON INSTITUTIONS Center for the Integration of Medicine & Innovative Technology (CIMIT) Robert Langer Chiefs of Hospital Departments Harvard Medical School Harvard-MIT Health Science & Technology Faculty & Advisors Harvard Business School Faculty Partners Healthcare Ventures Tech Licensing Offices MIT$100K leadership MIT Deshpande Center VCs & CORP DEVELOPMENT Leading East & West coast med tech VCs Med Tech Incubators/Acclerators Corporate Venturing groups Entrepreneurs on both coasts Windhover Publications Editor MA Governor’s Life Science Initiative OTHER INSTITUTIONS Gates Foundation Milken Foundation & FasterCures Stanford Biodesign Stanford Medical School Biomedical IDEA Competitions Yale University Medical School Faculty © zen@acmedx.com

BOSTON INSTITUTIONS

Center for the Integration of Medicine & Innovative Technology (CIMIT)

Robert Langer

Chiefs of Hospital Departments

Harvard Medical School

Harvard-MIT Health Science & Technology Faculty & Advisors

Harvard Business School Faculty

Partners Healthcare Ventures

Tech Licensing Offices

MIT$100K leadership

MIT Deshpande Center

VCs & CORP DEVELOPMENT

Leading East & West coast med tech VCs

Med Tech Incubators/Acclerators

Corporate Venturing groups

Entrepreneurs on both coasts

Windhover Publications Editor

MA Governor’s Life Science Initiative

OTHER INSTITUTIONS

Gates Foundation

Milken Foundation & FasterCures

Stanford Biodesign

Stanford Medical School

Biomedical IDEA Competitions

Yale University Medical School Faculty