This document provides an overview of key considerations for starting a medical technology company. It discusses challenging ideas, defining user needs, developing technology and products while securing intellectual property. It also covers determining competitors and differentiation, developing a business model and financial plan. Later sections discuss incorporating the company, finding the right team members, pursuing patents, establishing business partnerships and visibility, and complying with regulatory and quality standards. The overall message is to thoroughly research and plan all aspects of the business from the initial technology development through product launch and commercialization.

1. A company in MedTech ?
Key points to consider
Irio Calasso, PhD
irio.calasso@gmail.com

2. Table of content 1/2
Before incorporation
• Challenge your idea
• User requirements
• Technology and product development
• Secure IP
• USP
• Competitors and differentiation
• Business model, SWOT
• Plan / Financial needs

3. Table of content 2/2
Incorporation
• Put together the right people
• Patents
• Establish business plan
• Important agreements
• Investors & dilution
• Establish collaborations
• Visibility
• Regulatory and Quality

4. Before Incorporation

5. Challenge your idea
12/2/2014 5
• What is the problem you are solving or improving
• Why somebody needs your product ?
• What are the constrains (reimbursement, learning, establishing,
etc.)
• Does your product fit into the market ?
• What is your strategy to enter into the market?
• Why it will be profitable?
• Do you have the right solution , is it working ?

6. User requirements /needs
• Before you start developing clarify the user requirements (ISO
13485)
• Ask your target market , key opinion leaders, etc.
• What is important? What is optional?
• Propose solution to be assessed.
• Listen carefully! Consider also what you do not want to hear
=> Define product specifications

7. Technology development
12/2/2014 7
There is a big difference between technology development an
product development!
By developing technology you are free to play , the goal is making it
working, show the proof of concept with a prototype considering
user requirements!

8. Product development
12/2/2014 8
The step into product development should be well thought!
Consider that you enter then into a well regulated environments.
You might need to comply to Regulatory and Quality standards. This
will increase the costs! Consider it in the plan!
Start the product development after you have demonstrated the
entire technology.

9. Secure IP
• Have a clear understanding of the third party IP application
• File the “Key Patents”
• Negotiate License agreement at the beginning (later it will cost
you more!)
• Describe the features of your product for a FTO clearance
Consider : No patent rights = No value

10. USP (unique selling proposition)
Unless you’re fortunate enough to be the only player in your
industry you’ll need to differentiate yourself from your competition
through your unique selling proposition, or USP.
Consumers don’t want to buy products ! – they want to solve their
problems.
What will motivate people to by your product?
Consider that a problem to solve could also be related to the lack of
glamorous, confidence or style:
• Take the cosmetics industry, for example. Companies in this space
don’t just sell make-up
• Take Nespresso

11. What is the USP here?

12. Competitors and differentiation
12
• Who are your competitors?
• Understand well their product, service
• Tray to understand what could be their next steps
(remember : you need time to develop..)
• What could compromise your product ?
• What are the strength of your product /proposition?

13. 13
SWOT
Strengths
- Brings innovation in XY market
- Cost effective
- Easy to use, small and therapy
supportive
- Meets unmet customer needs and
stakeholders requirements
- IP: concept secured due to new
technology
Weaknesses
- Few contract manufacturer
available
- Lack of marketing experience
Opportunities
- Adaptable to other applications
- Merge, joint venture or
partnership
Threats
- Complex IP situation
- Competition from Medtech
companies are attracted from the
pen market.
- Low COG (< 1 Euro) is fundamental

14. Plan / Financial needs
• Internal & external R&D costs
• Prototyping /manufacturing
• Patents (application and maintenance)
• Infrastructure /equipment
• Office
• Marketing /business development
• Legal costs
• HR
• Travel
• Visibility

15. Plan / Financial needs
Project Plan
Dez 13 Mrz 14 Jun 14 Sep 14 Dez 14 Mrz 15 Jun 15 Sep 15 Dez 15 Mrz 16 Jun 16 Sep 16 Dez 16 Jan 17 Feb 17 March 17
Prototpye of patch with all elements (exept needle)
New hand-held: smaller with feedback sensors for pump activity
COG of patch (external estimation)
Patch: Integration of needle, fluidic sensors and reservoir 10 10 10 20
Full funcional realistic hand held with all sensors (rapid prototyping) 60 60 60 10
System: 1st validation in lab
Patients tests with mock-up 5
Product requirement established
Patch: manufactured with injection molding 20 20 20 30 50 80 100 100 100
Hand held prototype with external partner 40 60 60 60 60
Verification of prototype system 20 20 30 30
Usability validation of system with patients 30
Final hald held development with external partner 60 60 60 100 50
Final system 100 100 100 100 100 100 150 150
ISO 14385/CE label 0 0 30 45 50 50 60 60 60 60 80 80
Number of FTE (32'000 CHF /Q) 32 1.5 2 3 3 4 4 4 5 6 7 7
Cost of FTE in CHF 0 48 64 96 96 128 128 128 160 192 224 224
Equipment&Infrastructure& support in CHF 10 20 10 20 20 20 20 30 50 50
Cost/milestone in CHF 58 340 852 2164 1304 1304
Total in CHF
Cost ext. R&D 0 290 905 860 350
4Q/13 1Q/14 2Q/14 3Q/14 4Q/14 1Q/15 2Q/15 3Q/15 4Q/15 1Q/16 2Q/16
FTE in R&D
Mechanics 1 1 1 1 1 1 1 1 1 1 1
System Arch. / Proj. Magt 1 1 1 1 1 1 1 1 1 1 1
Quality 1 1 1 1 1 1 1
Testing 1 1 1 1 1 1
Total in R&D 2 2 2 2 3 4 4 4 4 4 4
FTE in Sales
Supply Chain Mgt. 1 1
Total in Sales 0 0 0 0 0 0 0 0 0 1 1
FTE in Magt & Admin
CEO 1 1 1 1 1 1 1 1 1 1 1
Finanz 1
Support 1 1 1
Total in Magt. & Admin 1 1 1 1 1 1 1 1 2 2 3
Total FTE 3 3 3 3 4 5 5 5 6 7 8

16. Find Investors

17. Incorporation

18. Find the right people
• Consider that investors are investing in an idea therefore in the
people that are behind the idea
• Put together a competent group of people that support the idea.
• Think that the success depends on the people you involve!
• Think how investors looks at you group, are you convincing?
Do you have the right skills? Have the people experience?
Alone you will not do it -> share !!

19. Establish business plan

20. Important agreements
• Shareholder agreement
• HR agreements
• NDA *
• Term Sheet *
• License agreement *
• Collaboration agreements *
• R&D assignment agreement *
• Etc..
* Big companies will propose their version

21. Investors & dilution
Each time you have investor money you are diluted
Dilution in function of company evaluation !
e.g.
Company value =1 mio EURO pre money
Investment = 0.5 mio Euro
=> Investor obtains: 0.5/(1+0.5) = 33 % of the company

22. Company value
The company value is based on negotiation !
(you have no revenues)
Your arguments are :
• # of patents
• Technology status -> to reduce technology risks
• Market analysis -> to reduce business risks
• Regulatory analysis -> to consolidate planning and investment
• NPV value
• Invested money

23. Establishment collaborations
To
- reduce R&D risks
- reduce Market risks
- require less investor money (grants.. )
Describe in the agreement :
- Target
- Specifications
- Milestones
- Exit scenarios !!
- Ev. Penalties

24. Visibility
Your company need to be visible:
- Internet
- Participate in competitions
- Articles
- Apply for grants
However consider well:
What type on information you are disclosing !

25. Regulators & Quality
Stepping out technology developments into product development
might involve to follow regulatory and quality standards!
This because you need to register before launching a new product
- Clarify the Q standard to follow (e.g. ISO 13485)
- Involve an expert to roadmap the registration patch
- Introduce it into the company
Do not underestimate the efforts, and costs !!
= >outsource as much as possible !