Posts Tagged Pharma & Medical Device News

Cloud-based eClinical Systems – Myths, Challenges & Opportunities


Al Gicqueau, CEO & President at Clinovo talked about Cloud-based eClinical Systems to make clinical trial process more efficient and cost-effective, at www.bio2devicegroup.org event.

Cloud has been a big buzz word, significantly impacting the economy, in the last few years.  Cloud is growing 3X faster than traditional internet infrastructure, said Gicqueau.  Worldwide public cloud services market will total to over $73 billion, by 2017.  There is also simultaneous cloud-bashing.  According to Citrix research, majority of the Americans don’t understand it and over 51% think it has something to do with the stormy weather.  Most also believe they have never used it but over 95% of us have used cloud based services.

It is therefore important to understand what constitutes cloud based services.  There are 5 essential components of cloud based services.
Self Service, On Demand: Cloud based services are available, when the consumer needs them.  Further, for the most part  they are autonomous and the user can perform the actions without going through the IT department.  They are easy to use and on-site training will increasingly become a thing of the past.  Any training required has to be available on-line and has to be very short and for the most part the service has to be intuitive and should not require training.
Broad Network Access: Cloud based services provide a broad internet access.  For instance, consider gmail.  It can be accessed through desktop, laptop, tablet, smart phone etc.  Cloud based services enable an ability to easily synchronize information over multiple devices.
Resource Pooling: Amount of traffic over the internet is rapidly growing. Because of the distributed nature of the internet, there is no single point of measurement for total internet traffic.  But it is a fact that the total global IP traffic will pass the zettabyte threshold by the end of 2015.  By the year 2017, the total internet traffic is expected to reach 5.3 zettabytes.  To put it in perspective, if the 11 oz coffee on your desk equals one gigabyte, a zettabyte will have the same volume as the great wall of China!  Cloud based services enable customers to pool their resources and save cost.

Rapid Elasticity: In the world of internet activity there are lot of peaks and valleys.  Cloud can scale based on demand peaks, without incurring penalty for the period of low traffic.
Measured Service: Cloud offers and ability to pay as you go.  People can pay for the internet infrastructure as they pay for electricity.
Some of the examples of cloud based services include, SalesForce, Netflix, Gmail and Amazon.

Clinical Data Trends

Spiraling costs have been a grave concern in healthcare.  Typically, efficiency has not been very high in the area of healthcare. Costs of clinical trials is likely to increase even more significantly, in future, on account of increasing costs of medical research and changing and tightening regulations, among other things.  Increased costs for clinical trials will push the cost of drugs higher.  On the other hand, there is strong public criticism of higher costs of medicines and there is a lot of pressure on drug companies to contain costs.  Companies have pressure to cut the middle layers and manage clinical trials on their own.  Citing CISCRP (Center for Information & Study on Clinical Research Participation) study, Gicqueau said, currently, only 6% of clinical trials are completed on time, whereas 72% run late by over a month.

Compliance issues and regulations specified in 21 CFR, part 11, prohibit use of public cloud, for clinical data.  Clinical data has to be stored in a private cloud.  Clinovo’s ClinCapture is a cost-effective EDC (electronic data capture) system.  It is tailored to specific clinical studies teams and offers intuitive navigation and one-click access to routine functions.  It reduces time for data entry.  ClinCapture is also flexible and can be customized and deployed rapidly.  “We validate our software like medical devices are validated”, said Gicqueau.

Mobile is next major trend, as more data entries are happening through tablets and smart phones.  Tables are also very useful in remote regions of the world where cell phone reception may be spotty or non existent, where information can be easily synchronized later.  Data entries can also be structured  by getting patients involved.  Data integration is another big challenge.  Everyone hopes to make sense of the data and make meaningful use of the data.  However, making sense of the data and putting it to good use remains expensive.  Gicqueau said, meaningful data integration is another promise of the cloud.

Clinovo is launching CloudClinica, next generation, cloud-based eClinical platform.  With its easy to use, pay as you go platform, CloudClinica will eliminate IT dependency and allow small companies  to manage clinical studies in a sophisticated manner, without high level programming skills.  About 30% of cost and 60% of time associated with clinical trials is about data management, and almost 80% of clinical trials are still conducted on paper, said Gicqueau.  Paper has many pitfalls.  Paper can get lost, it is inefficient, there is challenge of mis-reading someone’s handwriting, it has regulatory risks and other hidden costs.  CloudClinica is FDA compliant and it can scale.

HomeClinovo had revenues of over $4 million in 2013 and raised $500,000 from business angels over the last few months to execute on their business strategy.   The company is profitable, and has 30+ clients that include Gilead, Roche and others.  Clinovo is now targeting small to mid-size companies, said Gicqueau.  Current market of $2.3 billion can be rapidly growing in the coming years.  MediData and Oracle are two dominant players but are relatively more pricey.    Clinovo’s CloudClinica will fill in the gap and broaden the use of eClinical systems and will empower and bolster the biotech, pharmaceutical, and medical device companies, said Gicqueau.  The event was followed by Q&A.

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Neglected and Rare Diseases Panel


EPPICon 2014 (www.eppicglobal.org) will address the important topic of developing therapeutics for rare and neglected diseases.  So what are rare and neglected diseases?   Rare diseases are diseases that affect a small percentage of the population, most of them are genetic, and may be present throughout a person’s life.  In the United States, rare diseases are defined as those that affect fewer than 200,000 people.  About 7,000 diseases have been designated as rare and as many as one in ten Americans may suffer from a rare disease.  More rare diseases are discovered ongoingly.  Despite the growing numbers of rare diseases, the overall numbers are small and therefore they had not been a focus of research and many do not have treatments available.

Neglected diseases have also not been a focus of great deal of research and many of these diseases also lack viable treatment options.  These include tropical diseases like Tuberculosis and Malaria and affect over 1.4 B people, worldwide.  Often these affect the most vulnerable populations in the developing world, who lack access to basic sanitation, healthcare, and clean water.

A panel moderated by Roopa Ramamoorthi will discuss how companies and researchers can engage and bring forward cures for these diseases.  Rmamoorthi is an experienced scientist with extensive background in global health, drug development, biotechnology, bacteriology, and engineering.  As an Associate Director for Partnering and Scientific Affairs, at BioVentures for Global Health, Ramamoorthi leads the efforts to match researchers with pharma and other contributors, with an aim to accelerate product development for neglected tropical diseases like TB and Malaria.

Panelists include David Swinney, CEO of iRND3 (Institute for Rare and Neglected Diseases Drug Discovery).  Swinney has 20+ years of broad experience in preclinical drug discovery.  He founded his current non profit, in 2010, with a mission to help discover new medicines for rare and neglected diseases.  The equipment for its lab in Mountain View was donated by Roche, and three early stage drug discovery programs at iRND3 have focused on pediatric cancers and parasitic diseases.

Eric Easom is the VP of neglected diseases at Anacor Pharmaceuticals, and Vimal Srivastava, is VP or Product Development, at Ultragenyx Pharmaceuticals.  Anacor is focused on discovering, developing and commercializing novel small molecule therapeutics derived from its novel boron chemistry platform.  Ultragenyx is committed to bringing to market novel products for the treatment of rare and ultra-rare diseases, with an initial focus on serious and debilitating, metabolic genetic diseases. On the panel, they are likely to add the big pharma perspective regarding focusing on neglected and rare diseases.

Ponni Subbiah, MD has an extensive experience in global medical affairs and clinical development across multiple therapeutic areas in the pharmaceutical sector.  Currently, in the role of Global Program Leader, Subbiah is leading drug development efforts, at PATH, a nonprofit organization, with a bold vision for improving health, worldwide.  PATH seeks to blend the entrepreneurial side of the business and the scientific expertise of a research institution with on-the-ground experience of an international NGO.

Other interesting panels at EPPICon include, “Innovations in Clinical Development of Novel Agents” and “Point of Care Gold Rush – Hype versus Reality”.  Besides keynotes and networking opportunity, the conference will also feature a Speed Pitch session where entrepreneurs of early stage companies in the life sciences, are invited to give a five minute pitch about their technology and receive a quick feedback from a distinguished panel of VCs.

EPPIC is a volunteer driven organization, with a mission to promote networking, entrepreneurship, and mentoring for life science professionals.  All day EPPIC conference will be held at The Westin, San Francisco Airport, in Milbrae, CA, on March 29, 2014.  For more details and to register for the conference, go to www.eppicglobal.org .  Please note: Early bird registration is extended to March, 7.  EPPICon has an excellent lineup of great speakers and panels.  This is not a conference to miss for any life science industry professional.  Hope to see you there.

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Intravascular Magellan Robotics Catheter System by Hansen Medical


Francis Macnamara, VP of Advanced Technology at Hansen Medical, talked about their proprietary intravascular robotic catheter system at www.bio2devicegroup.org event.

Hansen Medical was found in 2002, as an alternate to Intuitive Surgical’s robotic surgical tools.  Intuitive’s tools are rigid tools that require incision closer to the organ, said Macnamara.  A flexible device can go in through the femoral artery and can get a flexible catheter inside, with the control of the robots.  Sensei system was Hansen Medical’s first electrophysiology based robotic navigation system that offered catheter stability with force sensing, with a potential for reduced fluoro for physicians, and instinctive 3D control at the tip. Sensei systems mapped out the heart, prior to doing the ablation.  Hansen Medical has now unveiled a new catheter system, the Magellan Robotics Catheter System.

But first, how big is the EP market and what is the prevalence of AF or atrial fibrillation?  About 3.1 M Americans suffer from AF.  Atrial fibrillation is the most common arrhythmia in elderly persons and it creates a huge potential risk for stroke.  In 2012, the US, market for cardiac rhythm management (CRM), electrophysiology, and ablation devices, was valued at $6.8 billion.  Worldwide, over 13,000 AF procedures are done annually, said Macnamara.  Over 1150 AF patients are treated in EC/IRB approved clinical studies.  These procedures lead to 100% success in delivering therapeutic modality.

Open surgeries are going down across the world and most procedures are now increasingly minimally invasive procedures.  However, like interventional surgeons, the vascular surgeons often lack the skills for doing minimally invasive surgeries.  Surgeons would be more effective with robotic procedures specifically around complex regions of the anatomy, like the aortic arch, common carotids etc.   By pushing the catheters in these complex anatomical regions, these procedures can lead to major complications.  With robotically steering the catheters, these complications can be avoided, said Macnamara.  Additionally, with greater control at the tip, surgeons can make controlled lesions and stable sheath helps with the placement.   With robotic procedures, the surgeons can also have more predictability and certainly with regards to time.  Since surgeons have to be prepared for complications that can turn non robotic surgeries into open procedures, they have to block extra period of time.  With robotic surgeries, they can adhere to the time schedule and thus it would enhance their efficiency.

Hansen Medical recently unveiled its new Magellan Robotic System that cannulates peripheral vessels and delivers simultaneous distal tip control of a catheter and a sheath from a centralized, remote workstation.  Macnamara showed videos that indicate that this system gives the physician a right balance of flexibility with precision and control.  Early adoption in Europe indicates great success in procedures like PAD, Splenic Aneurysm, Abdominal Aortic Aneurysms and so on.  Clinical data suggests that with this system there is less vessel wall trauma to the patients, while the physicians experience greater success with higher efficiency.  The next gen system will give independent control of both bends as research indicates that double bend will deliver huge benefits.  Hansen Medicals’s technology is very exciting and we will stay tuned.  The talk ended with highly interactive Q&A session.  Magellan Robotic System

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How to take a Biotech company from Idea to Exit


Mahendra Shah, Partner with Vivo Ventures & Ravi Mistry, President of EPPICGLOBAL (www.eppicglobal.org) talked about how to take a biotech company from idea to launch, at www.bio2devicegroup.org event.  Here is some of the comments made by Shah and Mistry.

Entrepreneurs starting a biotech company must start with a disease target, said Shah.  First and foremost there should have a good understanding of the disease and at which stage in the disease progression is the biotech seeking to interfere.  Second, one should have a good understanding of the market opportunity and about existing treatments.  Entrepreneurs need to ask the hard question regarding “clinical meaningfulness”; and whether or not the possible treatment developed by the biotech will lead to significant enhancement in patient care.  Payers will not pay for little improvements, said Shah.  Companies need to identify gaps in the treatment, and find a niche market.  Patients need to be identified for who the prescribed treatments do not work well and that could be a niche market for entrepreneurs, said Shah.  Shah said that during his career, he found such niche markets through repurposing, taking old drugs and finding new indications.  He also cautioned about the importance of ensuring secure Intellectual Property to protect the proposed solution.  With currently available internet tools and database resources, that is not hard to do.  Even speed browsing on Google can give you a quick idea of who owns the IP and if there are ways to get around it, said Shah.  Biotechs based on developing Orphan drugs are a great opportunity for a new startup, because once approved, you cannot have competition for up to 7 years in the US, and up to 10 years in Europe.

In terms of drug development, one needs to also get clarity on development pathway to determine whether it will require 10 thousand patients or few hundred, since that can make a huge difference in the amount of financial capital that will be required to bring the product to market.  Companies need to identify how quickly one can progress to phase 2 and bring it to a meaningful endpoint.  Also it is important to get an understanding if the endpoint is subjective or objective.  A subjective endpoint will have significant placebo effect and will require much higher number of patients, said Shah.  In order to do successful fund raising, companies need to have approximate idea of time and costs of bringing the product opportunity to a meaningful endpoint.  Companies also need to have clarity on the various product development milestones and inflection points.  Finally, an experienced Team is extremely important to bring the idea to fruition.  However in this, two members of the team are particularly important; the CEO and the Medical Director.  Other members of the management team can be hired as consultants but these two team members of the team need to be identified early and brought on board and should be people one can trust and those who feel passionate about the technology and who buy into it.

A biotechnology company requires significant money for its operations, so it is important to make sure that the first time investors have deep pockets, very sane advice from Shah.  He told the budding entrepreneurs to be careful and make sure they have synergy with the investors.  “Some of the investors’ money is not good, it will give you ulcers”, warned Shah, since money can have many strings attached to its return on investment.  Referring to reimbursement, Shah emphasized that the payer is very important and entrepreneurs should do a quick survey of physicians and Key Opinion and Thought Leaders and get a clear idea about existing and current modes of treatment and who will be paying for the new product opportunity.

Mistry shared some statistics on activity in the life science space.  2013 has been a banner year for life science IPOs.  Out of a total of 82 total IPOs in 2013, 46 were in the life science industry.  Life science industry also enjoyed a substantial investment of dollars.  The increase was certainly more significant in biotechnology, while medical device industry actually saw fewer dollars invested.  Mistry talked about how to prepare for an M&A exit and provided some advice to entrepreneurs to keep diligent documentation with respect to company’s IP.  He also commented that when it comes to negotiation, there is no “one size fits all” and best deals can be made if entrepreneurs remain can remain flexible throughout the process.

At the start of the talk Mistry put in a plug for EPPICGlobal and their upcoming annual conference, on March 29, 2014.  The conference has an exciting lineup of speakers and panels addressing neglected and rare diseases, point of care diagnostics, and innovations in clinical development of novel agents.  The talk ended with Shah sharing information on exciting speed pitch session, at the EPPIC conference, where entrepreneurs will have an opportunity to pitch their company to a panel of VCs and receive real-time feedback.

I would encourage my readers to attend the EPPICon 2014 conference, and avail of the opportunity to listen to various industry renowned speakers.  To register for the conference and/or register for the speed pitch, please go to www.eppicglobal.org.
            Bio2Device Group

 

 

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Challenges and Opportunities in Developing Products for Older Adults


Health Tech Forum (http://www.healthtechnologyforum.com/) recently hosted a panel to discuss challenges and opportunities in product development for older adults and marketing challenges in the disparate aging market.  The event was held at Hogan Lovells office in Menlo Park, CA.

Moderator Stephen Johnston, Co-Founder of Aging 2.0, began the session by sharing some eye opening statistics.  Try to guess the percentage of Americans who will be 50+ by 2017.  The answer is at the end of this article.  There were 6M Americans with 85+ years of age, in 2010.  By 2050, there will be 19M.  In 1950, the global median age of Americans was 29.  In 2050, the median age of American population will be 46.  Clearly, older adults represent a growing market; albeit, a disparate market with varying needs.  While some older adults may need help with daily activities like dressing, laundry and eating, others may need help with instrumental activities like housekeeping and managing finances.  While it is a growing market, there are many barriers to innovation in this segment.  First, entrepreneurs need to have empathy and understanding of the needs of the aging and must come up with designs that are appealing to them.  Marketing would be a unique challenge in this fragmented market, which has indirect gage keepers, and multiple decision makers, said Johnston.

Aging 2.0 is a global innovation platform aimed at addressing the needs of the aging market.  The objective is to connect, educate, and support innovators in aging and long term care.  Entrepreneurs in this space are seeking to address such diverse issues as senior living, travel, geriatric care management, remote caregiving, telehealth, new distribution channels, and address health specific issues such as dementia, incontinence, palliative care, and medicine management.

Dr, Leslie Kernisan, a practicing geriatrician and self described “cautious techno-optimist” and “enthusiastic caregiver educator”, talked about the overarching need to improve healthcare.  Additionally, there are specific and changing needs of the aging population.  Some of them are “old old” and others are “young old”, who may be in their 70s and may be very healthy and active.  Purpose of healthcare is to maintain wellbeing, maintain ability to participate in life activities, prevent daily health complications, prevent or keep the chronic disease from worsening, and avert catastrophic events, said Kernisan.

Richard Levinson, Founder and CEO of BrainAid, shared about BrainAid’s PEAT device that provides cognitive assistance for independent living, by helping cue and schedule tasks, meetings, medicines etc.  Normally the brain helps in three critical functions, said Levinson; to assess, plan and execute.  With brain injury or impairment, sometimes it gets locked into execution mode and a person may keep reacting but lacks the ability to assess and plan in order to appropriately execute the function.  This makes them unable to manage daily activities.  Unlike other devices that may assist with scheduling etc., PEAT has inbuilt flexibility to re-plan and update the schedule data when changes occur.  Life is not static and taking the dynamic aspect of everyday living, the PEAT system schedules changes, adds activities, reschedules tasks and notes and accounts completed or skipped tasks.  BrainAid is also working on integrating the technology with other sensor based, wearable devices including Pebble Watch and Google Glass, said Levinson.

Iggy Fanlo, Co-Founder and CEO of MyLively, talked about their patented product, the lively hub with activity sensors that log a person’s daily routine.  This comes with no annoying gadgets to wear and there are no intrusive video cameras.  The sleek design of the lively hub makes it seem less like a monitoring device and more like some cool new technology.  The tiny sensors can be kept in various places of significance.  For instance, a sensor on a pillbox can keep track of an individual taking the medication at appropriate time, another one can be attached to the fridge, and yet another one can be attached to the keychain to measure the time spent outside the home.  The easy to install Lively hub receives activity signals from each of the sensors to compare daily events with normal routines and healthy preferences.  Lively can share activity patterns through a secure computer or a tablet or through a smart phone.   Fanlo said, many people as they age, fiercely seek to remain independent but often miss social connections.   Lively comes with an additional feature called the LivelyGram.  Twice a month, Lively automatically compiles and publishes a personalized printed LivelyGram (through pictures and messages shared on computer or smartphone or social network site) and delivers this personalized printed document through the postal mail.  This is something that is perfect for non internet users; a population that may be even more lonely, and this may give them something to feel connected, something to hold in their hand, and something to talk about.

So what percentage of Americans will be 50+ by 2017?  A staggering 50% of us will be over the age of 50, in USA, in about 3 years.  Every single day, life expectancy increases by 5 hours.  Yes, every day!!

This was a great event that drew a huge participation from entrepreneurs, software developers, gerontologists, geriatricians, and others.  The panel generated many excellent questions and comments from the audience and participants continued the discussion after the event, in informal networking.

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OneMedForum – San Francisco, 2014


The OneMed forum conference was launched in January of 2008, when economy was showing all signs of progressing to new heights, with an objective to showcase innovation in medtech.  The conference aimed to bring together the companies and investors, during the large influx of healthcare investors and executives, during the JP Morgan Healthcare Conference, in San Franciso.  Fast forward to 2014 and we are perhaps just emerging from one of the worst recessions; a downturn that hit the medtech sector more than any other industry segment.

This year, the location of OneMed Forum was changed and the venue was moved further away from the JP Morgan Conference.  Since the weather in SF was gorgeous, it was not a problem; but if the venue continues to be further away in future, and in the event of cold and rainy weather, it can have an impact and lower the attendance at future OneMed events.  This year also OneMed event seemed to be sparsely attended, although that appearance might also be enhanced because the meeting rooms were spread out on two different floors and there wasn’t a single spill out location for the participants to meet and network – another problem with the venue.

There was also a palpable difference between the JP Morgan conference and the OneMed Forum, this year, in terms of optimism.  While biotech and pharma sector is returning to pre-recession levels with a large number of IPOs and higher numbers of dollars raised, medical technology companies have yet to see significant investment dollars.  On talking with the participants, I heard a note of disappointment regarding low attendance from VCs and other investors, just like in the last few years.

However, despite slow pickup and staggering growth in the medtech sector, it is transforming and the companies are learning to operate more efficiently.  It is also recognized that healthcare is at a critical point and medical innovation will have to address some key challenges.  Various panels and speakers at the OneMed Forum, addressed the changing healthcare landscape and how the future of health and medicine will need to be shaped, in the coming years to address the key issues. 

Major Highlights

Personalized Medicine Panel discussed the promise offered by customized diagnosis and treatments, in lowering the cost and increasing effectiveness.  Panel sessions addressing the JOBS Act and the Affordable Care Act, explored the impact of the legislation on cost of care and access to care.  Companies and solutions that may be poised to offer effective healthcare solutions and may also present interesting investment opportunities were highlighted.  In somewhat grim medtech landscape, digital health is emerging as the hottest new trend, with much potential.  The Digital Health panel discussed the impact of Affordable Care Act in increasing information transparency and empowered consumers taking greater control of their health information.  The changing role of the patients/ consumers will require change in the healthcare delivery and transformation in the business model.

A panel addressing “reimbursement strategy after the affordable care act”, discussed impact of medicare payment rules on medtech and hospital markets.  The panel also discussed trends in coverage and payment for newly emerging molecular diagnostic tests.  One key advice from the panel was that thinking upfront about the reimbursement strategy will be increasingly more important for companies with new, innovative products.  A panelist also suggested that during clinical trials, companies can also think about reimbursement and instead of doing only what may be required by the FDA, if they can also collect reimbursement data then they would come out ahead.  During innovation, the companies should relentlessly focus on disease management, and that would lead to them to appropriate and effective reimbursement strategy, advised the panel.

Financing and IPO issues were addressed in various panels.  One interesting panel on Crowdfunding discussed a handful of portals that are beginning to raise some capital for emerging growth companies.  One investor who was attending the panel, later told me, that it is too early to give an opinion on what kind of success this strategy would yield, but he had some grave concerns.    AdvaMed CEO’s Unplugged Panel featured some of top leaders of the MedTech industry, who shared their insights on key challenges facing the industry.  Stuart Randle, CEO of GI Dynamics advised startups to focus on crucial healthcare issues including obesity.  He also advise companies to pursue capital intensive strategy, and at least initially sell products outside the US.  Scott Brooks, CEO of Regenesis Biomedical, advised startups to get good legal and regulatory counsel early on.  Patrick Daly, CEO of Cohera Medical was optimistic about the future of MedTech.  “IPOs are coming back, M&A is picking up, and dollars are rolling in, big companies have record levels of cash, and I feel positive”, he said.

One of the most prolific financiers, Bill Hambrecht gave a keynote address.  Hambrecht has over 500 IPO’s to his credit that include seed level funding in nascent industries.  Although I did not attend the keynote, I heard some highly positive comments from an attendee.  Steven Burrill, who has been at the helm of innovation in healthcare and shares and who regularly shares his insights through his annual reports, gave a second keynote.  Again, I missed the address but both keynotes were major highlights of the event.  Throughout the conference, over 800 emerging companies gave presentations.  Following the presentations, partnering and breakout sessions gave the opportunity for conference delegates to meet the CEO’s of these companies.

Although it may seem hard to believe, it appears that now the MedTech sector has nowhere to go but up.  The industry has learned some hard lessons, the companies are lean, operating with greater efficiency, spending cash wisely, and instead of hawking next new technology, they are focused on key problems facing the healthcare industry, and on providing effective solutions.  If the healthcare providers are not eager to incorporate some of the solutions, then it will happen out of necessity.  It will become incumbent upon the healthcare industry to implement solutions offering greater ROI in terms of improved health and lower cost.  Healthcare providers will be looking for solutions that provide digital and point of care diagnosis and health monitoring and treatment options and solutions from personalized medicine and genomic health.  Let us stay tuned for some cool innovations from the MedTech sector in 2014.  Senior Analyst at Wells Fargo, Larry Biegelsen has also observed that not only acceleration in healthcare spending is expected in 2014 but there are number of other tailwinds including, “emerging technologies and emerging markets contributing more to growth and a more industry-friendly FDA, which should lead to faster approval times for medical devices”.   

 

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JPM 2014 – Dr. Delos M. “Toby” Cosgrove, CEO & President, Cleveland Clinic: on Challenges, Opportunities & Affordable Care Act


During the luncheon keynote, Cosgrove began by quoting Lenin, “there are decades when nothing happens, and then there are weeks when decades happen”.  Clearly there is tremendous activity and major and disruptive overhaul happening in the healthcare sector.  To meet increasing demands proactively, Cleveland Clinic has made some significant changes in how they operate.  These include, one year contracts for employees, eliminating tenure tracks, implementing annual performance reviews, offering high deductible insurance policies, and greater transparency throughout the system, said Cosgrove.  Many other businesses are also moving towards some of these reforms.   In the new healthcare environment, retail clinics like Walmart and CVS will play a significant role.  Over 813 branded clinics and hospitals and other providers are partnering with these retail clinics, in anticipation of the shortage of physicians that will hit the system.  Cost pressures will also intensify as providers are increasingly pressured to move from the volume based system of providing care to value based system, linked with outcomes, said Cosgrove.  Cost pressures are coupled with pay cuts in education for physicians and other practitioners and there less money coming from VC funding sources.

Among the challenges, are hidden opportunities that can help overhaul the system to make healthcare better.  For instance VC funding for Health IT has gone up, M&A continues at rapid pace, and some of the focus on behavior changes is yielding good outcomes, said Cosgrove.  Genomics and behavior modification represents some of the largest unmet challenges and they account for 70% of premature deaths in the US.  At CC, with a relentless focus on behavior modification, employees collectively lost 430,000 pounds.  Similarly, genomics has opened up a huge opportunity in healthcare.  Approximately, 4300 single gene diseases have been so far been identified, and the cost of sequencing of full genome is dropping rapidly.  Other huge opportunities are with respect to patient health records and management of big data in healthcare.  CC has given 1.8 million patients access to their electronic health records.  Quoting “IBM’s Watson Computer”, Cosgrove observed that artificial intelligence is opening huge opportunities in healthcare.

All the disruptions in the healthcare should eventually enable society to “build a healthcare system that is humane, high quality, and sustainable”, said Cosgrove.  But this transformation will not be painless.  It will require a great shift in mindset for physicians and also in how people view healthcare, in society at large.  Roles of care providers are changing rapidly.  Only about 10 years ago, hospitals used to be epicenters of care.  Now increasingly care is delivered outside the hospitals and we need to develop systems that support and scale out of hospitals care delivery, said Cosgrove.  A few hospitals will need to be very high tech and to offset costs, they will need to share and partner with other care providers.  Cosgrove gave the example of CC’s high tech data center built at the cost of $170 million.  Cosgrove said, healthcare is the only industry that has not consolidated and it will need to consolidate in the coming years.

The only criticism Cosgrove offered with the implementation of affordable care was that it has not built in incentives for wellness.  Obesity is sharply rising in the US and it needs to be contained, in order to control costs, said Cosgrove.  Affordable care bill is not perfect and there will be unintended consequences, but they can be dealt with.  One of the shocking thing that Cosgrove opined upon was that US will one day have a single payer system, with basic healthcare provision for everyone, and optional choices in supplementary insurance on top of that.  This was an exciting keynote.  The whole bar in healthcare is being raised and Cleveland Clinic is clearly taking a leadership role in meeting the challenges head-on.

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JPM 2014: Keynote by General Michael Hayden, Former Director, NSA & CIA


Three days before President Mr. Obama announced changes in NSA and limitations to Government access to phone data, participants at 32nd Annual J. P. Morgan Healthcare Conference in SF, had an opportunity to listen to the luncheon keynote address given by General Michael Hayden, former director of National Security Agency and Central Intelligence Agency. See below some highlights from the talk.

Traditionally lunch keynotes at JPM conference have been given by conservative political figures. Hayden is known to have headed the super secret agency from 1995 to 2005 and oversaw some of the controversial programs that followed 9/11.  He has always defended them as effective and proper.  At JPM keynote however, Hayden did not give his opinions but mostly discuss the increasing complexity in the world, where the choices are limited and equally complex, with varying ramifications.

Hayden painted a realistic, complex, and scary picture of the world.  In the new hyper connected world, the boundaries are less defined, said Hayden.  Previously, it was easy to classify the world into domestic and foreign; intelligence and law enforcement.  However, geographical and other boundaries are not that well marked, in this new world.  Today, a security establishment tries to defend the nation against threats that do not neatly fit into domestic or foreign, said Hayden.  To bolster his argument, he quoted the example of Edward Snowden’s actions and its wide ranging implications.

Hayden also said that US has parted ways with its allies a while back.  For instance, while US believes in the use of force, our allies believe that its usefulness is limited.  In the US, law is not concerned with privacy issues of an individual who is not a US citizen.  Whereas in Europe, there is a broader sense of expectation of privacy as a sacred human right, said Hayden.  “Values matter and we have fundamental value differences with our allies”, said Hayden.

Speaking of China, he said, China does not present any major threat to the us because our economies are deeply integrated, with the Chinese economy more dependent on the US than the other way around.  In the coming years, China will face huge labor shortages, due to its one child policy.

Speaking about Al Qaeda, Hayden said, it is not a group, but a movement, focused on scaling “a leaderless jihad”.  Al Qaeda represents some of the toughest choices.  If the US is too tough, too soon then it may be able to squash trouble, before it becomes bigger, but on the other hand, an early use of force can turn people against the US, said Hayden.  In some regions, Al Qaeda only focuses on local grievances and not on the US.  If the US goes there to squash the group in its infancy then it can snuff out the trouble before it begins or it might end up focusing the groups efforts on the US as its new enemy.  Also how the US defines a problem can affect the adoption of the strategy.

Hayden also gave his opinions on his former boss, President Mr. Bush as well as on President Obama.  President Bush’s style was Wilsonian and Jacksonian, said Hayden.  When it came to dealing with external threats, President Bush was an idealist and aggressive and he tended to be rhetorical.  President Obama is also Wilsonian, in that he is idealist and rhetorical.  But additionally, he is Jeffersonian, a thinker, said Hayden.  Hayden is believed to have said before that it is important to understand the scary world we live in and keep a focus on safety, while also protecting civil liberties.  I would have loved to hear his perspectives on how these competing issues would be balanced.   Instead, Hayden focused on sharing his thoughts on the complex set of challenges that the government or the government security agencies like the NSA and the CIA face on a daily basis and discussing how any choice they make could put them on a path of novel set of choices and challenges.

Michael Hayden, director of the CIA.

Michael Hayden, director of the CIA. (Photo credit: Wikipedia)

The seal of the U.S. National Security Agency....

The seal of the U.S. National Security Agency. The first use was in September 1966, replacing an older seal which was used briefly. For more information, see here and here. (Photo credit: Wikipedia)

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JPM 2014: Opening Remarks – Doug Braunstein, Vice Chairman


There was a general atmosphere of cautious optimism at 32nd Annual J.P. Morgan Healthcare Conference, in San Francisco, this year.  In his opening remarks, Doug Braunstein, Vice Chairman of JP Morgan Chase & Co., welcomed 432 companies presenting at the conference plus over 9,200 attendees.  This year, the presenting companies included 100 not for profit companies and 38 companies from emerging markets.  Braunstein remarked that while life expectancy in the US has not improved significantly, US spends considerably more on healthcare than majority of the other nations.  Increasing pressure to contain costs in healthcare represents both a major challenge for healthcare professionals, as well as a big opportunity, said Braunstein.  He also remarked that healthcare industry is returning to pre-recession levels.  There were 46 IPOs and over $10 million dollars were raised by life science companies, in 2013.  This past year has also been a robust year in debt markets, said Braunstein.  By all indications, 2014 will continue to be a robust year, and acquirers will be rewarded, in the stock market, observed Braunstein.  Acquisition of Life Technologies by Thermo Fisher Scientific for $13.6 Billion was the largest acquisition deal in 2013 and is poised to give Thermo Fisher a leading position in the genetic sequencing market.

English: Category:JPMorgan Chase

English: Category:JPMorgan Chase (Photo credit: Wikipedia)

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JP Morgan Healthcare Conference 2014 – Environment of Optimism


For the healthcare sector, JPM conference is the largest and most important event of the year.  Technology innovators and life science professionals come together with the business analysts and investors and significantly more transpires outside the halls of the Westin hotel and presentations rooms, then what goes on inside.  Inside, the companies begin their short presentations with disclaimers that their presentations will include forward looking statements and reality can be different.  The companies give a quick overview of how they met the goals, objectives, and milestones they had envisioned or how and why they failed to meet them.  The companies go on to succinctly talk about their goals, objectives and milestones for the year ahead.  They share about new technologies, products, or drugs in the pipeline, the kind of return shareholders can expect, and make a case for why they present a great investment opportunity.

Outside the conference halls, market opportunities are discussed, new product or technologies are pitched, licensing contracts are signed, and deals are done as suited professionals fill up SF hotel lobbies, coffee houses, and diners.  The networking does not stop in the evenings.  Instead, it picks up.  Various receptions hosted by law houses, life science companies, and investment firms at hotel penthouses and art galleries, offer opportunities to mingle and get to know people, in a less formal and more personal way.  As alcohol freely flows and finger food and attractive dessert choices loosen everyone, professionals find more ways to make deals.  In my next few reports, I will share more details from JPM conference and One Med Forum events.  But overall mood this year was positive and companies had less to apologize for.  Large pharma companies and smaller biotech and device companies are mostly done dealing with most dire recession challenges that hit the life science industry most deeply; nearly dried out funding sources, stagnated hiring, patent cliffs and lackluster period of growth that significantly lowered earnings.

Biopharma sector has enjoyed an incredibly good year, with 76.25% increase in value for the year, according to Bio World Blue Chip Index.  Funding has also begun to flow.  According to Bioworld Snapshots, the amount of capital raised by global private biotech companies was $4 B in 2013, up 4% on the total raised in 2012.  Almost $1.5 B was raised in 4th quarter of 2013, a huge 55% more than $975 million raised in the third quarter of 2013.  Biotechs also closed many venture rounds in Q4, 2013.  And there was a flurry of activity in the IPO market, with a number of IPOs with 2X the offering price.  So the good news is not just the number of IPOs, but their price, which has gone up 119% and their market cap which is up 236%.

But it will take a while for money to trickle down and spread more widely.  And many other challenges remain.  For instance, at 45 percent of the global R&D spend, although US still tops investment in life sciences, the amount has dropped 51% since 2007.  Meanwhile the cost of developing drugs continues to rise.  As one of the most scientifically and technologically advanced industries, life science sector still faces major challenges including stringent and constantly changing regulatory standards, rising R&D costs, and shorter market cycles.  Additionally, there are increasing cost pressures, a need to streamline business operations, and increasingly higher expectations from patients, doctors, payers and so on.  The environment at JPM was one of optimism, even exuberance, but it was also mingled with caution.  In my following posts, I will include highlights from various keynotes and some company presentations.

English: Category:JPMorgan Chase

English: Category:JPMorgan Chase (Photo credit: Wikipedia)

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