Written by: Gerald L. Klein, MD; Roger E. Morgan, MD; Shabnam Vaezzadeh, MD; Pavle Vukojevic, MD; Burak Pakkal, MD; Michael Fath, PhD; Renu Jain, PhD; Larry Florin, MBA; Victoria Manax, MD

In light of the recent conclusion of the JP Morgan Healthcare Conference in San Francisco, a pivotal event for global investment, there’s a noticeable shift in focus among companies and investment groups. As they reassess strategies for raising capital and evaluating a wide spectrum of sectors - including biotech, tech, digital, device, pharmaceuticals, and diagnostic technologies - we find it timely and pertinent to dedicate this month’s Practical Pointers to these emerging trends, which are currently at the forefront of investor and founder discussions.

Fundamental Topics Related to the Technology and Pathway

What is the medical or technological need?
What is the background science?
Is there rational data proving the hypothesis?
What is the patent portfolio?
What is the regulatory pathway?
What is the clinical trial strategy/pathway?
What is the expected clinical benefit?
What is the reimbursement strategy?
Is there an experienced product development team running the organization?
What are the competitive products?
What is the exit strategy?
What is the market size?
What are the risks of the project?

What is the Medical Need? This is one of the most quintessential questions that helps determine the value of a scientific product. The more significant the medical need the more it may lead to quicker funding, quicker regulatory review, and more investigator engagement. For example, there is a huge need for better oncology treatments, so these products are highly valued, and a tremendous amount of venture capital is being poured into many of these companies. Meanwhile, cancer prevention is what has led to a recent reduction in cancer mortality in the U.S. Another example of a critical area is the need for vast improvement in cardiovascular disease.

What is the Science? Is the technology based on plausible and good scientific work? Can the results be replicated? What is the level of expertise of the scientists who have conducted the experiments? Is the scientific hypothesis convincing?

Is there Rational Data Proving the Hypothesis? Does the data support the hypothesis? Are there other plausible explanations for the observed effect? Does this stand up to critical scientific review?

What is the Patent Portfolio? What is the status of patent filings? Have provisional patents been filed? Are patents pending? Which countries are covered? How much longer do the patents last? Are the patents adequate to provide protection vis-a-vis current and future competition? Who owns the patents? If it is a university, what are the licensing terms? It is essential to answer the following questions: Are the patents on the composition of matter; formulation/process; methods of use; and is there confirmation of freedom to operate?

What is the Regulatory Strategy? Is the technology going to be regulated by the FDA? Will it require filing an Investigational New Drug (IND) application or an Investigational Device Exemption (IDE)? What regulatory division of FDA/EMA will review this? Is there potential for special designation; orphan drug, expedited review, breakthrough? Have you had preliminary discussions with FDA/EMA regarding regulatory and clinical pathways? Will Phase I be in a healthy normal population? At what stage will you attempt to obtain proof of concept?

What is the Clinical Strategy/Pathway? What kind of clinical data will be required? Do you have information from the FDA/EMA as to their requirements? How are you planning to generate the clinical data? Are there competitive products on the market or in development that will affect your development plan?

Will you utilize a contract research organization (CRO), fractional service providers, or your own team? Do you have the medical, clinical, and scientific expertise to create a clinical strategy to plan clinical development in the most direct, economic, and efficient manner? Will you work with academic institutions, a site management organization, and/or independent investigators? What will be the duration and expense of each clinical phase? What will be the geographic scope of the clinical program?

What is the Expected Clinical Benefit? Will this product significantly modify a disease, prolong life, improve quality of life, or have fewer side effects than current therapy? Will it improve disease diagnosis? In addition, are there pharmacoeconomic benefits of the product?

What is Your Reimbursement Strategy? Is the technology a novel product or a “me too” (one that closely imitates an existing product)? Will it treat a rare disease? If there are competing products on the market, does it have significant medical or economic benefits? Will it extend life or improve quality of life? Are there reimbursement codes or do you need to lobby for them? Are you planning to generate data for Medicare reimbursement if applicable? Who will provide reimbursement pathway advice to your team?

Do You Have an Experienced Product Development Team? How many people are on your team? Do you have full-time dedicated staff? Has your team developed similar products before? Have they attained a New Drug Application (NDA), Biologics License Application (BLA), or clearance? Does your group work in other countries besides the U.S.? What types of companies and roles has your senior leadership team been involved with in terms of their experience?

What are the Competitive Products? What are the competitive products already on the market or in development? What is your competitive advantage over them? How will they affect your clinical development, commercialization, and market potential? What other products are in development and how might they affect your development and/or commercialization strategy?

What is Your Exit Strategy? Are you planning to sell the product (or company) when you have demonstrated proof of concept? Will you try and obtain product approval before an exit? Do you intend to manufacture, and commercialize the technology yourself, seek partnership, hand off, or some combination in different geographies?

What is the Market Size? Have you identified your Total Addressable Market (TAM)? What is the overall market size, and which is your addressable market? Which geographies and populations will you target? What is your order of entry strategy? Would there be opportunities for expanding the market?

What are the Risks of the Project? Have you characterized the project risks across the full range of functional areas? Have these been quantified in a risk register? Do you have mitigations for the relevant risks?