This presentation focuses on: Decreasing failure by finding and developing a compelling need. Understanding needs - finding and screening. Selecting meaningful projects for entrepreneurial effort. Sharing examples of needs and need statements. Beginning a paradigm shift from technology push to need pull.

1. Defining Clinical Needs and Value Proposition
Ideation in Medical Device Development:
Finding Clinical Needs
Josh Tolkoff
CIMIT CRAASH Course
http://cimit.org
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2. Defining Clinical Needs and Value Proposition
Lecture Objective
 Decrease start-up failures by finding and developing a
compelling need.
 Understand Needs: finding and screening.
 Select meaningful projects for entrepreneurial effort.
 Examples of needs and need statements.
 Begin a paradigm shift from technology push to need
pull.

3. Defining Clinical Needs and Value Proposition
Life Science Companies
 Life science companies
fail for many reasons
 Why?
 Reimbursement
 Clinical trials
 Biology
 Management
 Distribution
 Regulatory
 Medical specialty conflict
 Technology
 Financing
 Other????
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4. Defining Clinical Needs and Value Proposition
Answer: All of These…
 But, the most common reason:
LACK OF A COMPELLING NEED
 A compelling need is something that customers will
want to use and that the market will be able to absorb
 If this product or service exists:
 Who cares?
 So what?
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5. Defining Clinical Needs and Value Proposition
Finding a Need: A Two Step Process
 Clinical observations - detect problems
 What went wrong?
 What is not optimized?
 Why did it go wrong?
 Generalize the problem.
 Examine your solution CRITICALLY and EARLY
 Clinical utility
 Business prospects
 Regulatory
 Team Fit, Etc.
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6. Defining Clinical Needs and Value Proposition
A Paradigm Shift
 Old way: See a problem Solve it
 “Engineers are sometimes the least practical of men, they may
be attracted by difficulties…”
– McCullough, The Path Between the Seas (Panama Canal)
 New way: A multi-step process
 Field/user observations
 Problem definition
 Generalized need
 Evaluate for business success
Now Solve!
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7. Defining Clinical Needs and Value Proposition
The Big Idea… 2 Steps
 Work to identify the NEED
 Select your clinical area
 Observe procedures
 What is the underlying problem?
 Create a need statement
 Filter, based on business realities
 Brainstorm solutions
 Perform in-depth business analysis
 GO!
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8. Defining Clinical Needs and Value Proposition
Finding Needs in Life Sciences
Observations lead to identification of problems
 Problems are observations of recurrent and unexpected
outcomes.
 Look for deviations from optimal outcomes
 Pain, death, stress
 Stress on patient, stress on the clinical team
 Equipment malfunction
 Uncertainties
 Excess cost and inefficiencies
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9. Defining Clinical Needs and Value Proposition
Need Statements (examples)
 “A way to reduce incidence of Urinary Tract Infections”
in ICU patients
 NOT: “A catheter that decreases infection risk”
 “A way to decrease incidence of infections in artificial
heart valves in the elderly”
 NOT: “An anti-microbial coating of heart valves”
 “A means to prevent food absorption”
 NOT: “A laparoscopic instrument for morbid obesity surgery”
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10. Defining Clinical Needs and Value Proposition
Example: Morbid Obesity
 Surgery is difficult and risky
 Surgery bypasses absorption in
the small intestine
 Laparoscopic surgery is better
 Clear need – what is the need
statement?
 Suggestions? GI Dynamics
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11. Defining Clinical Needs and Value Proposition
Need Statement for Morbid Obesity
 Raised >$200MM
 Clinically successful
 1 year: no diabetes
 1 year: -15% weight loss
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“A way to avoid absorption in the small intestine”

12. Defining Clinical Needs and Value Proposition
Finding Needs in Life Sciences
Observations Problems Needs
 Observations
 What I see
 Problems
 Observations of Recurrent sub-optimal outcomes
 Needs
 General way to overcome or avoid the problem
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13. Defining Clinical Needs and Value Proposition
Technology Looking for “Killer App”
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14. Defining Clinical Needs and Value Proposition
HydroCision: No Clear NEED
 Arthroscopy
 Smaller, back of the knee, cleaner field of view
 Great opportunity, J&J became a distributor
 What happened…?
 Cost more than typical rotating cutters
 Couldn’t justify it ; Product discontinued
 Found other applications
 Wounds, spine surgery, etc.
 15 years later: founders and investors = 0
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15. Defining Clinical Needs and Value Proposition
Momelan: Meeting A Significant Need
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Enabling epidermal skin grafting
Problem Need Solution
Epidermal skin grafting
is effective for many skin
disorders, but is rarely
utilized
-imprecise
-inefficient
-invasive
-slow/expensive
MoMelan’s
automated device
can precisely and
reproducibly
generate an
optimized epidermal
skin graft
A fast, minimally invasive,
cost-effective solution for
repigmentation & wound
healing
► Minimally Invasive
► Repeatable & Reliable
► Biomechanically Precise

16. Defining Clinical Needs and Value Proposition
Momelan: Large US Markets
Medical Dermatology ($500 million)
 Vitiligo (3-6m patients)
 Skin cancer wound repair
(800k cases/yr)
Aesthetic Dermatology ($820 million)
 Post Laser Treatment Hypopigmentation
(500k cases/yr)
 Scar Revision – Including hypopigmented
scars (1.6 M cosmetic surgeries/yr)
Wound Care ($6 billion)
 Diabetic foot and venous leg
ulcers (3.4m cases/yr)
 Pressure sores (1.9m/yr)
 Burns & Trauma (600k cases/yr) 16

17. Defining Clinical Needs and Value Proposition
EpiGraft™ System
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Disposable
Harvester
Base Unit Head
Base Unit

18. Defining Clinical Needs and Value Proposition
EpiGraft™ System – Core Technology
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An optimized, ready to apply array
of autologous epidermal
micrografts that virtually eliminates
donor site issues
Solution
Autologous epidermal
microblisters raised
Epidermal
micrografts
harvested in
minimally-invasive
manner
Micrograft spacing and
orientation maintained
via transparent dressing,
yielding significant 10-80x
ratio

19. Defining Clinical Needs and Value Proposition
Stent Placement for narrowed artery
Stent placement often creates a shower of emboli
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20. Defining Clinical Needs and Value Proposition
Need – Case Study Example
 Observation: Emboli released during stenting
 Problem: During stenting procedure, emboli break off
from between the stent mesh, travel “downstream”,
risking a stroke
What is the NEED?
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21. Defining Clinical Needs and Value Proposition
Need – Case Study Example
 Observation: Emboli released during stenting
 Problem: During stenting procedure, emboli break off
from between the stent mesh, travel “downstream”,
risking a stroke
What is the NEED?
 Possible need: “A stent that prevents emboli”
 Company formed: Membrane on stent, $MM’s for R&D, clinical
trials, long follow-up…
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22. Defining Clinical Needs and Value Proposition
Need – Case Study Example (cont’d)
 First needs statement: “A stent that prevents emboli”
 But…the stents are OK
 Emboli are the problem
 Deal with the problem
 Second needs statement?
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23. Defining Clinical Needs and Value Proposition
Need – Case Study Example (cont’d)
 First needs statement: “A stent that prevents emboli”
 But…the stents are OK
 Emboli are the problem
 Deal with the problem
 Second needs statement: “A procedure that avoids the
problem of emboli”
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24. Defining Clinical Needs and Value Proposition
A Distal Embolic Filter
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25. Defining Clinical Needs and Value Proposition
Need Statements
Stent with no emboli
 Covered stent
 Adhesive coated stent
 Prevent emboli with Drug
 Deploy stent without
creating emboli
No bad emboli outcome
 All on left Plus
 Lyse emboli
 Suction emboli upstream
 Stabilize embolic material
 Temporary occluder
 Secure emboli in place during
procedure
 Basket to trap emboli
downstream

26. Defining Clinical Needs and Value Proposition
Very sensitive measure of chemistry
Very Rapid Pregnancy Test
 Need: Determine pregnancy within 24 hours of fertilization.
 Couples want to know.
 Normal test works after 2 weeks.
 Peace of mind, IEF treatment schedule.
 Low cost, point of care.
 A “no brainer”?
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27. Defining Clinical Needs and Value Proposition
Very sensitive measure of chemistry
Very Rapid Pregnancy Test
 Through needs assessment with experts and consumers:
 70% of fertilizations do not “implant”.
 Current test misses the entire event of fertilization and non-
implantation.
 New test: will lead to 70% false positives and unhappy
customers.
 Is there really a need?
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28. Defining Clinical Needs and Value Proposition
Then do a Business Sanity Test
Business Analysis
 Financing – Resources to achieve milestones.
 Cost – product and procedure.
 Competitive dynamics – companies, procedures,
technologies.
 Team
 Exit
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29. Defining Clinical Needs and Value Proposition
Your Turn: Common observation
Kitchen
Plasticware
Observations:
 Tops everywhere
 Bottoms nowhere
Problem?
Need?
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30. Defining Clinical Needs and Value Proposition
Your Turn
 It is 2012. Health care has been revised. All that’s
covered are emergency procedures and
pharmaceuticals. Key delivery of medication is by self
administration of eye drops.
 You have been stationed at Nursing Homes “R”US to
observe.
 Note: Make sure you are observing. Don’t solve
problems – yet!
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31. Defining Clinical Needs and Value Proposition
Your Turn: Eye Drops
 Observations:You have seen many. Give us some of your
experiences.
 Problems: General issues?
 Need Statement
 Narrow
 Broader
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32. Defining Clinical Needs and Value Proposition
Solution ???
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33. Defining Clinical Needs and Value Proposition
Thank You
Josh Tolkoff
http://cimit.org
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