How do uk med tech startups cope with the capital pressure
-
Upload
rina-nir -
Category
Healthcare
-
view
273 -
download
1
description
Transcript of How do uk med tech startups cope with the capital pressure
![Page 1: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/1.jpg)
Analysing the current state of R&D in the UK and global
MedTech markets: how do start-ups cope with capital pressure?
Dror Nir, [email protected]
![Page 2: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/2.jpg)
•The UK MedTech arena
•Coping with hurdles
•Summary
Agenda
![Page 3: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/3.jpg)
![Page 4: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/4.jpg)
67% of the life-science companies in the UK are MedTech companies
Source: The “Strength and Opportunities” governmental annual report by the department of Business Innovations and Skills (BIS) for 2013, reviewing the UK life science industry
3309
1073
121477
Companies
![Page 5: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/5.jpg)
UK’s life-science cluster is the largest in Europe
![Page 6: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/6.jpg)
In Europe, UK is presenting the highest
number of life-science products that are in
development.
Source: KPMG - European Life Sciences Cluster 2013 Report
![Page 7: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/7.jpg)
![Page 8: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/8.jpg)
![Page 9: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/9.jpg)
USA & UK – global MedTech trends
![Page 10: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/10.jpg)
The National Health Service directed the Clinical Commissioning Groups, which manage 65% of the NHS budget, to be cautious in budget planning across the board in order to meet a £30 billion budget shortfall by 2020/21.
NHS budget cuts
![Page 11: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/11.jpg)
….. is born…..
![Page 12: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/12.jpg)
2013: 3096 MedTech companies in UK
Source: The “Strength and Opportunities” governmental annual report by the department of Business Innovations and Skills (BIS) for 2013, reviewing the UK life science industry
3309
1073
121477
Companies
![Page 13: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/13.jpg)
Largest employer in the life-science segment
Source: The “Strength and Opportunities” governmental annual report by the department of Business Innovations and Skills (BIS) for 2013, reviewing the UK life science industry
![Page 14: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/14.jpg)
99% SME’s, 62% have micro status (≤ 10)
0-446%
5-916%
10-1912%
20-4915%
50-997%
100-2493% 250+
1%
![Page 15: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/15.jpg)
£0-49,0007%
£50-99,0008%
£0.1-0.249m16%
£0.25-0.499m17%
£0.5-0.999m12%
£1-4.9m23%
£5m+17%
MedTech companies distribution by turnover; ~40% presenting annual turnover in the range of £0.1m - £0.5m
Source: The “Strength and Opportunities” governmental annual report by the department of Business Innovations and Skills (BIS) for 2013, reviewing the UK life science industry
![Page 16: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/16.jpg)
![Page 17: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/17.jpg)
Essentials for a MedTech company
•Technology
•Funds
•People
![Page 18: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/18.jpg)
No longer just a
TECHNOLOGY
Needs a
SOLUTIONTo an important health problem
Typical to UK
![Page 19: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/19.jpg)
Funding
In the last years, the number of UK based VCs that are specialised in MedTech has dramatically declined.
For UK investors, revenue and margins have much greater importance than technology in establishing a valuation.
Source: EY Pulse of the industry 2013 Report
Typical to UK
![Page 20: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/20.jpg)
Funding support
Investment-boosting tax breaks are offered by the government to encourage investors to plough money into early-stage companies:
Incentives for R&D expenditureSeed Enterprise Investment Scheme (SEIS)10% R&D tax credit of qualifying expenditures
etc…Source: KPMG - European Life Sciences Cluster 2013 Report
Typical to UK
![Page 21: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/21.jpg)
Funding supportOngoing R&D support schemes: SMART (for industry), MRC (academies), Charities.
Source: BIS- 2013 Report
Typical to UK
![Page 22: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/22.jpg)
Funding support
Government (TSB and MRC) is investing £310m of non-dilutive grants, matched with private funding, to support R&D and commercialization of technology:• £180 million for the Biomedical Catalyst• £130m for Stratified Medicines
Source: BIS- 2013 Report
Typical to UK
![Page 23: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/23.jpg)
90% of the interviewed entrepreneurs say that the UK fundraising environment is challenging:
• UK investors prefer to invest in advanced stage companies.
• Access to government grants is overly restricted.
YET
Source: EY & KPMG 2013 Reports
Typical to UK
![Page 24: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/24.jpg)
PeopleExecutives of UK MedTech startups are looking primarily for workers with STEM (Science, Technology, Engineering, and Math) skills.
UK is considered to have a very good education system and is second best in Europe regarding labor market flexibility.However: Nine in ten say it is “challenging” to find workers with the skills needed to grow their businesses.
Source: EY & KPMG 2013 Reports
Typical to UK
![Page 25: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/25.jpg)
Balancing the flowCash (in-out)/Time
![Page 26: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/26.jpg)
Time…
![Page 27: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/27.jpg)
Regulations
Dogmatism of the market
![Page 28: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/28.jpg)
Navigate around increased regulation complexities.
Pacemakers need to be verified for accuracy and safety to much higherstandards than electrical switches installed in household appliances.
![Page 29: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/29.jpg)
Navigate around increased regulation complexities.
Pacemakers need to be verified for accuracy and safety to much higherstandards than electrical switches installed in household appliances.
Unlike general-purpose technologies, IVD kits and medical-imaging devices needs to be validated in lengthy clinical trials.
![Page 30: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/30.jpg)
Available solution to shorten time to market
UK Health Technology Campuses in collaboration with the NHS: The goal is to accelerate the development of innovative medical technology solutions and their adoption by hospitals. Transparent benchmarks to drive improved performance of clinical research by the NHS: the NIHR (National Institute for Health Research) made the 70-day benchmark, from receipt of a valid research application to the recruitment of the first patient for trials, a condition of new contracts with providers of NHS services. Fast track for regulation: Developing and implementing together with the MHRA (Medicines and Healthcare products Regulatory Agency) of a workable Early Access Scheme. This is currently on hold for budgetary reasons.
![Page 31: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/31.jpg)
Legacy of hundreds of years of established protocols,
processes and procedures
![Page 32: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/32.jpg)
Novel products are no longer reimbursed without also proving that they are contributing to better health care at a reasonable cost.
![Page 33: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/33.jpg)
![Page 34: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/34.jpg)
PLANETARY ALIGNMENT WITH THE GIZA PYRAMIDSIT ONLY HAPPENS ONCE IN 2,737 YEARS
![Page 35: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/35.jpg)
What UK MedTech startups do?
•Delegate fundamental R&D problems to universities.
•Partner with university hospitals to perform the clinical studies required for products validation
1.Universities do not follow regulations and quality procedures
2.In practice, operational processes and administration related to running clinical studies by universities are very heavy.
![Page 36: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/36.jpg)
What UK MedTech startups do?
![Page 37: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/37.jpg)
What UK MedTech startups do?Earliest possible commercialisation
Reach self-sustainability
break-even
profitability
EXIT
![Page 38: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/38.jpg)
Going beyond the classical business approach of selling
innovation: MedTech companies expand into services and
solutions.
What UK MedTech startups do?
![Page 39: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/39.jpg)
While continuing to innovate?
![Page 40: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/40.jpg)
Sales has a cost: time and resources….
Can startups sell enough to maintain their R&D momentum?
Changes in management focus?
Investors’ focus?
How does all that influence innovation?
![Page 41: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/41.jpg)
Typical budget
•Average gross annual salary – 50K£ + cost of salary 10% - 15%
• R&D & Infrastructure – From ~30% of the initial budget decreasing to few percentages of sales (8% - reported)• QA/RA – Typically adding 20% - 30% to the global costs of R&D• Manufacturing – Depends…• Cost of marketing & sales - From several Ks >>>>• Legal (e.g. agreements, IP) – From several Ks >>>>• G&A – ~10% of the total budget
![Page 42: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/42.jpg)
Distribution of MedTech companies by turnover.
Source: The “Strength and Opportunities” governmental annual report by the department of Business Innovations and Skills (BIS) for 2013, reviewing the UK life science industry
£0-49,0007%
£50-99,0008%
£0.1-0.249m16%
£0.25-0.499m17%
£0.5-0.999m12%
£1-4.9m23%
£5m+17%
31%
![Page 43: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/43.jpg)
Distribution of MedTech companies by turnover.
Source: The “Strength and Opportunities” governmental annual report by the department of Business Innovations and Skills (BIS) for 2013, reviewing the UK life science industry
£0-49,0007%
£50-99,0008%
£0.1-0.249m16%
£0.25-0.499m17%
£0.5-0.999m12%
£1-4.9m23%
£5m+17%
![Page 44: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/44.jpg)
Summary
![Page 45: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/45.jpg)
![Page 46: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/46.jpg)
Solving big health care challenges - in a highly regulated industry with numerous parties and conflicting interests - is likely to take much longer than the relatively straightforward task of building a new product.
![Page 47: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/47.jpg)
UK Government Supports
• R&D grants
• Tax incentives
![Page 48: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/48.jpg)
What UK MedTech startups do?
• Strive to generate early revenues
•Delegate fundamental R&D to universities.
•Partner with university hospitals to perform the clinical studies required for products validation.
![Page 49: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/49.jpg)
![Page 50: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/50.jpg)
Help universities provide better support
to the MedTech segment
• By incentivising:
• Timely delivery of R&D results
• Running high quality and cost-effective clinical studies
• Adherence to MHRA regulations
![Page 51: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/51.jpg)
• Over 20 years experience in development and commercialisation of medical-imaging devices comprising machine learning.
• Expert consultant:
• Management• Business & technology development• Access to market• Clinical studies
• PhD in Nuclear Physics, TAU, Israel.
Dror Nir
![Page 52: How do uk med tech startups cope with the capital pressure](https://reader035.fdocuments.us/reader035/viewer/2022062702/554a1066b4c90507558b4c6b/html5/thumbnails/52.jpg)
Thank you!