GDPR, AI, IP and the move to value-based contracts, were all featured at MedFIT, held June 26th and 27th in Strasbourg, France. The convention, now in its second year, represents the only international meeting targeting the early-stage medtech investment market place
The interactive meeting, attended by 600 delegates from 20 countries (including Australia, the US, Canada and Israel), offered an abundance of helpful ‘tricks and tips’ for start-ups venturing into the medtech arena for the first time. Proceedings included hosted events for medtech interaction, 1,100 partnering meetings, a start-up pitch competition and exhibition. ‘We launched MedFIT last year because we wanted to create a concrete tool where big companies could interact with academic institutions and start-ups,’ said Etienne Vervaecke, general manager of Eurasanté, the organisers of MedFIT. A sign the business development concept worked well was this year’s metrics showing that attendance was up by one third compared to last year in Grenoble – and 20 per cent more partnering meetings had been organised. ‘We’re now well on the way to reach the critical mass needed for success across the innovation cycle,’ said Vervaecke.
Strasbourg, he added, was a deliberate choice of venue for MedFIT since it represents a vibrant medtech environment. Above all, the city is home to Nextmed an umbrella organisation supporting 900 med tech companies with the objective of reducing the time to market for innovative medical devices. The initiative, which involves over €1 billion investment in public and private funding, is located in the historic setting of the city’s hospital with a campus covering 30 hectares. ‘With a location less than one kilometre from the European Parliament, Nextmed should help convince European politicians that medical innovation is great,’ said Nicholas Matt, from Strasbourg Eurometropolis.
The opening session explored early-stage dealings between big players and SMEs, with speakers agreeing that the first pitch needed a ‘carefully crafted’ one-line sentence sent through LinkedIn. Benno Lansdorp (DEMCON Medical Robotics, Netherlands) advised SMEs to identify people in big companies responsible for strategic innovation, who he felt would be the most approachable to target. Rogier Receveur (Medtronic, Netherlands) said SMEs had to meet three criteria before his company would consider partnerships. Technology had to address an unmet medical need; fit with Medtronic’s company mission to ‘alleviate pain, extend life and restore health’; and work from the technical and scientific perspective.
The session heard how different companies adopt specific talent scouting strategies, with Medtronic not providing direct funding for the activity; Phillips working with KOLs to source innovations; and Johnson & Johnson having a dedicated innovation department to identify new companies for investment.
IP required careful consideration. ‘Before big companies invest it’s really important to ensure SMEs aren’t contaminated. From the outset you need to get every employee and consultant to sign forward-looking IP disclaimers,’ advised Rob Lipps (GATT technologies, Netherlands).
In the plenary session exploring future medtech trends, delegates heard how a new emphasis on value across health services was making the environment more testing. ‘Three years ago the challenge was solely around achieving regulatory approval; whereas today it’s more about whether devices will be reimbursed,’ said Zishan Haroon (JulzCo, US).
Sacha Loiseau (Mauna Kea Technologies, France) felt anyone setting up a medical device company needed a good understanding of health economics; and Guenter Huhle (Johnson and Johnson Innovation, JLABS EMEA) added that for devices to be successful they need real world evidence or big data that proves value.
The approval environment is also set to change, with the CE mark becoming more difficult in Europe due to requirements to obtain efficacy data in addition to safety data. Acquiring such data will undoubtedly drive up costs and remove the competitive environment for launch that was offered by Europe. China, it was felt, offered ‘an amazing opportunity’ for the medtech industry, since health care represented just five per cent of GDP offering tremendous room for growth. ‘It’s key for companies to have their IP protected in China upfront,’ said Haroon.
This was the prediction of Didier Patry (France Brevets) in the session on AI. With the European commission set to deliver guidelines on AI by the end of 2018, this aspect of medtech development needs to be embraced by start-ups. AI requires companies to amass huge quantities of data. ‘When assessing data investment decisions you need to consider that data is not owned and instead look at the capacity of companies to build data. Data only becomes relevant when you achieve critical mass,’ said Patry. One challenge will be enabling AI to make ethical decisions. ‘To programme AI to take such choices will require putting real people into testing situations and learning from their decisions,’ said Patry.
Exploring the bridge from concept to early-stage development, delegates heard that academic disinterest was one of the main barriers to commercialisation of ideas. Tamar Raz (Hadasit, Israel) said academics needed to be taught the importance of putting patents ahead of publications. ‘The bottom line is if you don’t patent it, companies can’t make a profit, and no one will partner with you,’ she said. When it comes to academic promotion boards, Raz added, patents should be awarded the same priority as publications. Markus Clemenz (Verapido Medical, Germany), stressed that patents today should at the very least cover Europe, US, Japan and China.
With fines up to four per cent of annual global turnover or €20 million (depending which is higher) GDPR is not to be ignored. The GDPR session panel estimated that only one in five European companies are currently compliant with the legislation that went live on May 25 2018. ‘Our advice is to keep things simple, be pragmatic and document decisions. If you can explain why you took decisions it can help mitigate risk of fines,’ said Xavier Gobert (My Data Trust, Belgium). GDPR, he added, provided an opportunity for companies to clean up their data and, if they did not need it, remove it.
Start-ups need to appoint Data Protection Officers (DPOs) who should be separate from CEOs to avoid conflicts of interest. ‘In practice many compliance officers become DPOs because they’ve transverse roles in companies placing them at the centre of everything,’ said Cécile Théard-Jallu (De Gaulle Fleurance & Associés, France). When running clinical trials, companies need to be aware that ethics committees in different member states have different understanding of GDPR, making it important to consult them upfront about wording of informed consent.
The paradigm shift where innovators need to think about cost containment in addition to effectiveness was the focus of another session. Delegates heard that companies such as Novartis and Medtronic, are now using outcome- based contracts, where manufacturers return a percentage of the device or pharmaceutical price if products do not meet performance targets.
Raquel Riera (Moebio Biocat, Spain) stressed the importance of developing different value propositions for all stakeholders. ‘The only way to manage this is by talking to all the different players including patients, physicians, nurses, hospital managers and budget holders,’ she advised. The worth of staff with experience of value propositions who have worked for big companies and start-ups cannot be overestimated. ‘It’s vital to have people who’ve done it before, not those learning on the job,’ said Olivier Delporte (Miracor Medical, Romania) adding that an alternative approach would be to employ health economic consultants.
In a session targeted at gaining insights into the mind-set of seed and equity investors, Anke Cassing (High-tech Grunderfonds, Germany) felt start-ups need a clear view of the problems they are solving and markets to attract investors. In such early conversations gauging how much start-up companies know about their competitors can be a valuable test of whether they have done their research and understand the market.
Staff represents an important asset that investors take into consideration. In addition to science and tech personnel, said Daniel Lyle (DeBere Capital Partners, US), companies need people in place who know how to sell and build a story. Start-ups, said Thijs Cohen Tervaert (Inkef Capital, Netherlands), should not shy away from offering high salaries to attract the most appropriate employees. One of the best determinants of success, the speakers believed, was establishment of good personal relationships between start-ups and investors. ‘It’s like a marriage. If that person hasn’t the right phenotype you’re set up for failure. You need to also do your research on the investor,’ advised Cohen Tervaert.
A highlight of the second day was the Start-up Slams pitch contest where 17 companies (selected from more than 50 initial applicants) presented their technology, competing for a prize €5,000 for the most innovative start-up selected by the jury. The winner was Marion Gasperment (Ablacare, Paris), who presented a minimally invasive radiofrequency device for the treatment of Polycystic Ovary Syndrome (PCOS)-related infertility.
Summarising the value of the MedFIT meeting, Rogier Receveur said getting to know a range of other people in the industry was good for the medtech ecosystem. ‘The serendipity of what happens at these meetings is the real reason for attending. You think you know what’s going on, but then find things of interest that you’ve never heard of before.’
Join us at the second annual Medical Alley Innovation Summit in Minneapolis (October 2-3). This global investment and networking event will feature pre-screened start-up medtech companies delivering presentations, thought-leading guest speakers, timely panel sessions – all providing candid insight on topics of utmost importance to stakeholders in the evolving device marketplace.
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