Posts Tagged American economic crisis
With shrinking pool of serious early stage life science investors and stringent capital requirements, the path for medtech companies has become greatly challenging. As is the case every year, Wilson Sonsini Goodrich & Rosati 2017 Medical Device Conference provided a forum for addressing challenges faced by new medtech companies as well as opportunities presented by current trends.
Various speakers and panels addressed these issues from diverse angles and perspectives. Following a welcome address by Casey McGlynn, an early morning panel moderated by Donna Petkanics addressed new models for medtech investing. Panelists Andrew ElBardissi (Deerfield Capital), Eric Milledge (Endeavor Vision SA), Leighton Read (Brandon Capital Partners), and Valeska Schroeder (KCK Group) discussed how the investors are adapting their financing strategies and business models in response to the newer challenges that medical device companies face. Milledge opined that it is now crucial for medtech companies to get some regulatory approval before seeking to raise money. Even CE mark could help, said Milledge. ElBardissi offered that if the company is US based and focused on US commercialization strategy then EU approval does not help. He advised that medtech companies “keep the head down and focus on US approval UNLESS there is capital efficient advantage of focusing on EU”. Schroeder said their fund was “geographically agnostic” but they believed that for an early stage medtech company it is important that they not “simply throw capital without a plan”. but there are values you can get out which may not be revenue based but you can get close to your customer base etc… not go in every country but choosing a small no. of country to go through. Read observed that a company seeking to create larger returns must go after larger markets.
With the current challenges medtech world has become more global as companies and investors are finding win-win solutions through newer models of partnering by going across continents and countries. Geographically, Pacific Rim has emerged as hot collaboration frontier. A panel moderated by Elton Satusky with CEOs Yue-Teh Jang (Medeon Biodesign), Kewen Jin (Serica Partners, Trevor Moody (M. H. Carnegie & Company), and Norman Weldon (Partisan Management Group), who completed such collaborations, financings and mergers with companies and investors in Asia discussed how these transactions may be structured. Another panel moderated by Jack Moorman (US-Japan MedTech Frontiers – USJMF), with panelists Kenichi Hata (Terumo Corporation), Masazumi Ishii (AZCA Inc.), Yuichiro Morimoto (Enplas Corporation), and Richard Packer (Asahi Kasei Corporation) discussed collaborations between Japan and Silicon Valley. Japan has emerged as a major partner in medtech OUS financing and growth strategy.
Increasingly there is a pressure on medtech industry that is unlike most other industries, to show value. Many organizations have now come up with ways to define and measure value creation. Among them, AdvaMed has developed a new framework to assess the value of medical technologies and diagnostics in a broad, patient-centric approach. A panel moderated by Donald May (AdvaMed) with panelists Maneesh Arora (Exact Sciences Corp), Jeff Farkas (Medtronic), and Jo Carol Hiatt (Kaiser Permanente) addressed how companies may leverage value creation to make internal business decisions to allow for more efficient use of capital and to drive discussions with potential investors as well as to keep track of milestones during the commercialization process.
AdvaMed model focuses on following drivers of value creation, 1) clinical outcomes, effectiveness and utility measures 2) non clinical patient impact including impact on caregivers, families, ease of product use, ease of care, financial impact etc. 3) new drivers around value based purchasing, care delivery costs, reduction in readmissions etc. from provider perspectives, and 4) broader public impact on population and communities in terms of whether or not the technology reduces overall cost to the system, helps identify diseases, helps employers reduce absenteeism and so on. May said the model begins with the patient and goes on to incorporate multiple stakeholders and values for all may not always be aligned or the time frames may differ. As an industry, “we need to think of appropriate levels and types of evidence as we think of new value based models of integrated care”, said May. Speakers discussed the need to move away from one number and focus on broad picture with many factors that include clinical as well as economic value, in order to get better outcomes while reducing costs.
As is the case, WSGR medtech conference provides an excellent forum for investors, startups, and professionals in the industry to come together in a spirit of learning and collaboration. And compared to previous years, it seemed to be even more well attended with hallways abuzz with discussions on partnering. As always, the conference ended with short presentations from select few startups and the announcement of the $25,000 grand prize and Medtech Innovator Award. But the best was reserved for the last. More networking happened and deals were done as attendees mingled with good food at the reception and as the best wines were uncorked and venture capitalists served as sommeliers and poured wine for the attendees.
In the civilized nation of America, the 400 richest Americans own more wealth than the bottom 150 million people. Heist is a groundbreaking feature documentary by Frances Causey and Donald Goldmacher, about the roots of the American economic crisis. The movie is dedicated to the Occupy Wall Street movement and to the 99%. There are more staggering statistics in the film. During the recent economic crisis, over 10 million people lost their homes, about 47 million people slid into poverty and the film explores the continuing assault on the working and middle class people in the US, where social security and medicare cuts are looming on the horizon.
Heist goes beyond the crisis itself to explore the policies and decades of deregulation that led up to this crisis. The oft-repeated mantra during the Regan era came to be “Government is the problem” and the policies enacted were aimed at rolling back the Government and introducing tax policies favoring mega corporations and the outrageously wealthy elites. The film explores the historical background beginning with FDR’s handling of the economic crisis. During the 1930s economic depression, President Roosevelt’s swift and bold action involved deep Government intervention, from which emerged a centralized, planned economy. During the last four decades, FDR’s New Deal was largely dismantled, under the guidance of the infamous Powell Memo and the right wing Heritage Foundation’s Mandate for Leadership on government reform. Both Republicans and Democrats, courted by the lobbyists, showed allegiance to big businesses and played a hand in drafting policies to minimize the role of the government.
The film makes a case that the US government is not the enemy of the people. Government can be incompetent and wasteful but rarely does it systematically and in a planned way work against the common people. Heist offers several “Take Action” suggestions, starting with a persuasive case for swift reinstatement of watchdog laws to prevent financial institutions and big businesses from taking further advantage of common people. Heist makes a case for saving social security and medicare. People in the bottom 50% depend on social security for 80% of their income. Heist also makes a very strong case for supporting local lending institutions, and supporting all local businesses. Several experts make a strong case that localized landing and decision making is the cornerstone of sustainable, green economy which in turn is a foundation for the long term health of a community.
Several screenings are being held across various communities and many are followed by panels of experts, dialog with the attendees, and Q&A sessions, with activists holding tables outside to collect signatures for various causes and distribute information about various campaigns. While the merit and accuracy of the movie can be debated since statistics can be looked at from various perspectives and story behind the numbers can be understood from multiple angles, the movie is stirring up dialog. The movie is keeping alive the OWS movement and getting communities involved in understanding the causes of the economic crisis, caring about the politics behind the numbers, and discussing the importance of checking the extreme greed which can lead to complete collapse and instead, focusing on sharing resources to sustain the long term health of the whole community. For more information on movie screenings, go to www.heist-themovie.com . For questions, send inquiry to firstname.lastname@example.org .