1. UCSF Lean LaunchPad For Life Sciences
October 1, 2013
Todd Morrill
Diagnostics Cohort Week 1
1

2. Cohort D-1: LLP-LSdx
• What are we talking about?
• What are we doing here?
• Who are we?
• Why bother?
2

3. What is a diagnostic?
What we used to think:
Product which attempts to classify of an individual's
condition into separate and distinct categories that
allow medical decisions about treatment and
prognosis to be made.
3

4. What is a diagnostic?
What we used to think:
Product which attempts to classify of an individual's
condition into separate and distinct categories that
allow medicaldecisions about treatment and
prognosis to be made.
4

5. What is a diagnostic?
What we now think:
Product which attempts to classify of an individual's
condition into separate and distinct categories that
allow medicaldecisions about treatment and
prognosis to be made.
Product, service, process, data set
Individual, group, population…
Medical, nutritional, genetic, social…
Decisions, information…
Treatment, status, history, future, behavior…
Prognosis, history, potential…
5

6. What changed?
• Biology (knowledge and
understanding of human
and other bio/medical
systems)
• Technology (PCR, mass
spec, TEM, antibodies,
PET)
• Population – Aging,
richer
6

7. What changed?
• Biology (knowledge and
understanding of human
and other bio/medical
systems)
• Technology (PCR, mass
spec, TEM, antibodies,
PET)
• Population – Aging,
richer, risk averse, and
less pizza, dude
7

8. What changed?
• Biology (knowledge and
understanding of human
and other bio/medical
systems)
• Technology (PCR, mass
spec, TEM, antibodies,
PET)
• Population – Aging,
richer, risk averse, and
less pizza, dude
8

9. And the industry is changing too
9

10. So what…?
So: Value Propositions are Complex
•
Testing is more varied, complex and generally available
than 20 years ago, for example:
–
–
–
–
•
•
•
•
Detection / Change (progression) / Stratification / Prediction /
Predilection
Lab, home brew, RUO, POC, consumer, pet, vet, food etc.
Sensitivity can exceed understanding of meaning
Odd value propositions in some markets: “Diagnosis” vs
“cleanliness” uses
Medical, industrial, consumer, behavioral etc.
Tests vsDx: stratification, status, content, etc.
In vivo vs. in vitro testing
Companion diagnostics, biomarker sets, genetic profiling
and unicorns
10

11. So what…?
So: Business Models are changing
Largest Dx Companies
•
•
•
•
•
•
•
•
•
•
•
Roche
Siemens
Danaher
Abbott
ThermoFisher
Becton Dickinson
Johnson & Johnson
Alere
Sysmex
bioMerieux
Bio-Rad
Smaller Dx Companies
•
•
•
•
•
•
•
•
•
•
•
Idexx
Digene/Qiagen
Genomic Health
OraSure
Myriad Genetics
GE
Hologic
Complete Genomics
Illumina
Asuragen
Sequenom
11

12. Executors
Technologists
Innovators
?
Large markets
Routine analyses
International scope
Large distribution networks
Manufacturing excellence
Established platforms
Niche markets
Complex analyses
Focused sales
Technology superiority
Novel platforms
Entrepreneurial
Agile
Niche
Innovative…
…beyond technology
12

13. Who is Todd and why is he here?
NSF National Program Faculty
• In vitro diagnostic tests (Bio-Rad Labs $1.3B Dx development,
manufacturing, vendor)
– Human, animal, food
•
•
•
•
In vivo diagnostic discovery (Oxford GlycoSciences)
Biopharma discovery (Trellis, Lilly, Baxter, Pfizer)
Research tools (Novex, Bio-Rad, IO Informatics)
What’s fun?
– New technology discovery and development
– Entrepreneurship: 3 startups
• NSF I-CorpsTM National Faculty. Instructor at Berkeley and
UCSF .
13

14. Steve mentioned this…
14

15. Do Diagnostics fit into the BMC?
(or how don’t they fit?)
15

16. IP
REGULATION
REIMBURSEMENT
CLINICAL
TRIALS
16

17. IP
REGULATION
REIMBURSEMENT
CLINICAL
TRIALS
17

18. How we will fit DX into the BMC
CLINICAL
TRIALS
REGULATION
IP
REIMBURSEMENT
18

19. How we will fit DX into the BMC
CLINICAL
TRIALS
REGULATION
IP
REIMBURSEMENT
19

20. TAM / SAM / SOM
• Established tests – Use the current market size
• Novel tests – Use current estimated need
• Population is IMPORTANT but money (revenue) is
CRITICAL
– Always state your markets in dollars
– Use current markets, population, etc.
– OK to note market growth if it is exceptional
20

21. The importance of timing
21

22. What we wish about healthcare
22

23. What we have in healthcare: multisided markets
23

24. What we have in healthcare: complex processes
24

25. What we have in healthcare: regional differences
25

26. Multisided markets pose special challenges…
• Hypothesize about your ecosystem
• Hints to solving the ecosystem puzzle: where is the test is performed?
• Think reimbursement
• Know your regulators
Value Propositions: One per Customer/ecosystem Segment
• Who wants it. Who doesn’t want it?
• Clinical Value vs Insurance Value vs Testing Lab Value vs…
26

27. Diagnostics and Value Propositions
Comes from Technical Insight
More Efficient
More sensitive
Faster
New test
Lower
cost
Comes from Market Insight
Better
Distribution
Simpler
Better
Bundling
New user
Better
Branding

28. Examples of Market Insight
 Masses of people are more likely to microblog than blog
 The non-symmetric relationships will allow
companies and individuals to self-promote
and will impact distribution
 European car sharing sensibilities could be
adopted in North America
 People, particularly in urban
environments, no longer wanted to own
cars but wanted to have flexibility.

29. Examples of Market Insight
Need vs Want

30. Why the BMC matters …
1.
2.
3.
4.
5.
6.
7.
Value proposition
Customer segment
Practice of medicine
Reimbursement
Regulatory clearance
Clinical testing
OUS markets
(Sure, it does what you want, but not how you wanted it to!)
30

31. So for next week…
• Customer segments
Which includes (for us)
 Reimbursement
 Regulation
Hypotheses, experiments, results
31

32. For next week
CLINICAL TRIALS
IP
ECOSYSTEM?
32