Are you prepared to face the Dragons?

Seeking investment for any business is not for the faint-hearted, as demonstrated to good effect on TV’s Dragon’s Den/Shark Tank. Investors need to be convinced that you know your product,  intended market, and have a solid business plan with realistic financials. Putting such a plan together for a medical device business requires multi-disciplinary expertise to ensure all angles are considered and there isn’t going to be the heart-sinking moment when the investors find a big hole in your plan.

As clinical research can consume a high percentage of the development costs, being clear on your clinical strategy and how it supports the business goals is critical.

Elevator pitch of clinical research plans

The scope of clinical evidence required could be considered the elevator pitch for your clinical research plans. This would be based on a few key factors:

• regulatory class

  • does this drive a pre-market and/or post-market evidence requirement?

• therapeutic area

• patient profile, and

• care setting

For example: a pre-market X year follow-up study on patients undergoing procedure Z, to demonstrate the effect on a relevant clinical outcome, total duration of XX years and a budget of $YM.

Following this you should be prepared to get into a much more involved discussion, explaining your strategy – i.e. why you have decided on the details you have so that investors can, quite literally, buy into the plan.

Detailed clinical research costs

For higher risk devices (Class IIb/III under EU MDR) the clinical research budget is likely to be considerable. When business owners are challenged on the costs I would suggest there are two camps.

1. Costs have been built on a plan to conduct the study/studies required to achieve the first regulatory approval, a key milestone for all new devices.

2. A clinical strategy has been developed, with budget to match, that considers the overall long term plan and maximises the value of the investment in research.

The second of these is the one you should aim to be in. To achieve this include all key markets, factoring in the market access and reimbursement requirements, and generating evidence that will support the price point that underpins the business case. Given that the return on investment will be reliant on revenue generated in long term sales, it makes sense to demonstrate an understanding of what is required to achieve those sales, beyond just being legally able to sell the product.

For lower risk devices the potential to get regulatory approval without pre-market data means the costs may not be such a significant consideration for potential investors. However, the rationale as to why clinical evidence is not required needs to be sound and well-supported so as not to raise doubts in the investor’s mind. When market requirements have been well-researched and it’s evident that lack of clinical data will not be a barrier to market access the absence of clinical research in your plans will make sense to an investor.

Invest for investment

A modest investment at this stage to ensure you have a better chance of securing a 6 or 7 figure sum seems like a no-brainer. It makes sense to ensure you have the expertise to help you build a strategy that can withstand the fire of a Dragon or two.

Evistrat Consulting is ready to help so please get in touch via the Contact page or email info@evistratconsulting.com.