Hans Hofstraat

Philips Research

May 21, 2010

Innovations Addressing Unmet Needs in Healthcare

Engaging All Stakeholders through Open Innovation

22

Healthcare‟s current reality

The consequencesThe issues

We are getting older and sicker

We expect better choices We have higher expectations about care and will

demand more choices in healthcare.

Demand for care is growing There are simply not enough nurses and doctors to

cope with our growing (and aging) population.

We don’t take good care of ourselves Obesity, heart disease and cancer are global health

issues that are worsened by the way we live.

By 2050, 50% of the developed world is projected to

be chronically ill.

Rate of change is accelerating Innovation introduces both complexity and promise

Male Female

>65

China Demographics 2050

3

The Philips Healthcare differenceCare cycle approach

3

People focused

We start with the needs of patients and

their care providers because understanding

their experiences ensures we create

solutions that best meet their needs.

CardiologyWomen’s

Health

Oncology

And we apply our technology to help improve healthcare

quality and reduce cost because meaningful innovations

create value for patients and care providers.

Meaningful innovation

CardiologyWomen’s

Health

Oncology

Care cycle driven

We focus on their

specific medical

needs throughout

the care cycle …

CardiologyWomen’s

Health

Oncology

…wherever that care occurs.

Care anywhere

44

Translational Healthcare researchDiagnostics and therapy development from bench to bedside

Research New optionsPatient Care

Partnerships between leading academic, medical institutions and industrial partners

are a key factor for effective translation of healthcare innovations into clinical practice

5

• Technology is key to address healthcare‟s needs,

but implementation of appropriate solutions in the

clinic and in the home also requires• Patient and user insights

• Biomedical know-how

• Clinical and application expertise

• New workflows

• New channels to market & business models

• Translation of opportunities into practice needs

collaboration between• Academic partners

• Clinical/care partners

• Patients

• Large and small companies with complementary expertise

• Governments, reimbursement agencies (e.g. insurers)

PPP‟s Drive Interaction Across Boundaries

To be able to provide meaningful and effective healthcare

solutions engagement of all stakeholders is needed

Public-Private Partnerships in HealthcareEngaging all Stakeholders

Patient

Provider of care

PayerProducer

6

An Example from Oncology Unmet need in chemotherapy

• Even if two cancer tumors are of the

same type and sub-type, they often

require significantly different therapy

regimes for optimal treatment

• Patients that respond to one type of

treatment frequently do not respond to

another

• Current therapeutic interventions

struggle to balance ratio of therapeutic

effects and toxicity (“therapeutic

index”) resulting in sub-optimal

treatments

• Technology helps to address these

unmet needs

Thermo-sensitive Drug Delivery SystemsUltrasound Mediated Delivery: Non-invasive, image-guided, precise

DTDT

Temperature induced drug delivery

Heat sensitive ‘vehicles’

HIFU – MRI delivery tool

Liposomes

• Approx. 200 nm

• Phospholipid shell

• Long circulation time (hours)

• High drug load inside particle

• Suitable for MR imaging

• MRI for imaging and control

• HIFU for heating to trigger

drug release

• Temperature sensitive vehicles

8

SonoDrugs projectImage-guided ultrasound induced drug delivery

4 years project (start 2008)

Industry partners:Philips (The Netherlands, Germany and Finland),

SME‟s Nanobiotix (France) and Lipoid (Germany).

University medical centers: Erasmus Medical Center (The Netherlands) and

University Clinic Münster (Germany).

Academic institutions: University of Cyprus (Cyprus), University of Gent

(Belgium), University of Helsinki (Finland), University of

London (United Kingdom), University of Tours (France),

University Victor Segalen Bordeaux (France), Eindhoven

University of Technology (The Netherlands), and the

University of Udine (Italy).

HIFU

Tabletop

MRI

• Small Molecules

– Increase therapeutic window

– Improve DMPK profile

• Biologics

– Improve access to target

– May allow lower doses

(lower cost)

• Nucleic acid-based

– Improve DMPK profile

– Improve egress from vascular

system to cytoplasm

Brandaris movie courtesy Annemieke van Wamel, Michel Versluis, and Nico de Jong, Erasmus MC Rotterdam- UTwente, NL

HIFU-MRI: Image-guided drug deliveryAddressing drug delivery challenges, enabling minimally

invasive, „targeted‟ treatment

4 cm

10

HIFU-MRI Mediated Drug Delivery An integrated solution for minimally-invasive, personalized therapy

2. Inject drug loaded carrier

A minimally-invasive technique to

increase locally the body’s uptake

of a pharmaceuticals by:

• temporarily increasing the local

permeability of tissue

• local drug release using ultrasound

activated drug delivery systems

3. Administer HIFU

5. Temperature Monitoring

and therapy feedback

4. Permeability of tissue increases, drug released

Microbubbles Liposomes

Acoustically active drug delivery carriers

1. Therapy Planning

HIFU-MRIHIFU-MRI

1111

Example of Pharma – MedTech partnershipHIFU-MRI for Drug Delivery

CELSION Thermodox® Concept:

“Target localized cancers with high

concentrations of chemo-therapeutics

through the use of our heat activated lipid

technology…”

Partnered with PHILIPS to Improve

Treatment

Non-Invasive, MRI-Guided, High Intensity

Focused Ultrasound (HIFU) approach

results in precisely defined tissue heating,

sharp thermal boundaries and real-time,

3-D thermometry, therapy planning

Oct 16, 2008

HIFU

Tabletop

MRI

Image source: Celsion investor presentation & Duke Univ.

Philips and Celsion Advance Development of Thermodox and

MR-guided HIFU…. Entering Preclinical Development

Sept 29, 2009

12

Open InnovationEngaging all stakeholders to bring meaningful innovations to healthcare

• Open Innovation means

– Bundling and sharing of R&D

– Public-private collaboration

– Investment in start-up companies

– Technology / IP acquisition and licensing

• IP is of key importance

– To protect and leverage intellectual assets

– To enable new business models

– To facilitate collaborations

– To support product development and market-launch

Patient

Provider of care

PayerProducer

Successful Approaches to Open Innovation• Guidelines for successful Open Innovation*

– Culture and approach

• Treat collaboration strategically

• Foster strong institutions

• Organize for lasting relationships

• Align interests

• Establish clear intent

• View innovation as a trans-disciplinary activity

– Organization

• Provide the right professional skills

• Provide relevant training

• Use standard practices and communicate regularly

– Outcomes

• Achieve effective Intellectual Property

• Implementation tools, including

– Checklists for self-assessment

– Clarifications on avoiding indirect state aid13

* Based on „Responsible Partnering‟

• Innovations that address unmet patient‟s needs

• Clinical validation, healthcare economics aspects, …

• Effective implementation routes, engaging all stakeholders

• New business models, alliances,….

… and for Healthcare

• Initiated in 2004 by EIRMA,

EUA, EARTO, ProTon Europe

• Handbook updated in 2009

See http://www.responsible-partnering.org/

14

• High Tech Campus Eindhoven has become the embodiment of the Open

Innovation philosophy

• It is an 'ecosystem' of high-tech R&D companies (Corporate, SME‟s, start-up‟s),

academic and research institutes, and support services operating in related fields

• New initiative LifeTec4Health

• Enabling innovation at the interface between life sciences and medical technology

• Building on a public-private partnership started by TU Eindhoven and Philips

• Accelerating the transfer from ideas to new business

From Co-ordination to Co-creationOpen innovation in a Co-located Ecosystem

Facts & Figures:Campus site covers 103 hectares

Over 90 companies

5 institutes

Over 7,000 R&D engineers

50 nationalities

45,000 m2 laboratory space

185,000 m2 operational office space

6,000 m2 space for start-up

companies

More than € 500M invested by Philips

The best environment:Infrastructure

Quality & Regulatory

Entrepreneurs

Ramp-up with (flexible) talent

Dedicated training and education

Legal support

IP support

Access to venture capital

15

• High Tech Campus Eindhoven has become the embodiment of the Open

Innovation philosophy

• It is an 'ecosystem' of high-tech R&D companies (Corporate, SME‟s, start-up‟s),

academic and research institutes, and support services operating in related fields

• New initiative LifeTec4Health

• Enabling innovation at the interface between life sciences and medical technology

• Building on a public-private partnership started by TU Eindhoven and Philips

• Accelerating the transfer from ideas to new business

From Co-ordination to Co-creationOpen innovation in a Co-located Ecosystem

Facts & Figures:Campus site covers 103 hectares

Over 90 companies

5 institutes

Over 7,000 R&D engineers

50 nationalities

45,000 m2 laboratory space

185,000 m2 operational office space

6,000 m2 space for start-up

companies

More than € 500M invested by Philips

The best environment:Infrastructure

Quality & Regulatory

Entrepreneurs

Ramp-up with (flexible) talent

Dedicated training and education

Legal support

IP support

Access to venture capital

Start Up’s

and SME’s

benefit from

presence of

Corporates,

Research

Institutes and

Supporting

Services &

Infrastructure

Research

Institutes

Start Up’s

SME’s

Consultancy

& Services

Corporate

Innovators

EIB fostering Open InnovationRisk Sharing Finance Facility

16

EIB Risk Sharing Finance Facility is an innovative scheme to improve access

to financing of research, development and innovation (RDI)

• Key factor to improve European competitiveness and ensure long term economic

growth and employment

• Supporting RDI projects which have a difficulty in getting private funding, such as:

– Complex products and technologies • Products with a high risk, e.g. due to long time to reward (Healthcare products!)

– Unproven markets• Market and business model innovation are required for innovative healthcare solutions

European Investment Bank and Philips sign EUR 200 million healthcare R&D loan agreement

Release date: 02 December 2009 Reference: 2009-240-EN

The European Investment Bank (EIB) and Royal Philips Electronics (AEX: PHI, NYSE: PHG) have signed a EUR 200

million loan agreement. The 10 year loan, provided under the Risk-Sharing Finance Facility (RSFF) will be used to

finance research and development (R&D) activities across a range of innovative healthcare projects, including image-

guided intervention and home healthcare, in Europe.

Philips will use the EUR 200 million loan from the EIB as part of its planned research and development investment in healthcare

activities in Corporate Technologies. These R&D activities will be focused on healthcare solutions such as image-guided

intervention and therapy, home healthcare, and clinical decision support systems. The R&D will take place in an open

innovation environment, collaborating with Small and Medium Enterprises (SME), research institutes and universities

across Europe. Philips is the first company to receive EIB funding as a result of its efforts to fuel open innovation.

Summary and conclusions

17

• Healthcare poses a major societal challenge - and a

significant business opportunity (# 1 Global service market)

• Solutions based on novel technologies („convergent

technologies‟) can address these challenges

• Successful innovation in healthcare requires engagement

of all stakeholders: Public Private Partnership

• Open Innovation is a key success factor for the effective

translation of new healthcare concepts into clinical practice

• Open Innovation flourishes when the partners:– Act as responsible partners

– Share the same goals

– Are motivated and aligned

– Trust each other

– Share information across disciplines

– Build on mutual strengths

• From Co-Ordination to Co-Location and Co-Creation

– Campuses and Clusters of Innovation

Patient

Provider of care

PayerProducer

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