Presentation - Creating new medical treatments with bio ...
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Northwood Implants
Northwood Implants LimitedCreating new medical treatments with bio-compatible implants
Richard Malczyk
Managing Director
Northwood Implants
Our First ApplicationThe Problem: Prominent Ears
• A psychologically distressing condition
• Patients suffer:– Teasing/bullying
– Loss of self-esteem
– Lack of self-confidence
• Most would prefer not to have them
Northwood Implants
An incision is made behindthe ear
The skin is degloved and suturesare inserted into the cartilage to
create a new shape
Ear Correction – today’s approach
Northwood Implants
Imagine a cross-sectionthrough an ear at the
level indicated
Ear Correction – today’s approach
The suture istightened and
the cartilage bends
SkullCartilage
A suture is insertedto bend the cartilageand produce a fold
Northwood Implants
Ear Correction – today’s approach
Sutures are inserted to pullthe cartilage into position
The sutures can be seenrecreating the antihelical fold
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Post-surgery complications
Asymmetry of prominent earsSuture material extruding
from the ear 1 year post-op
Collapse of ear after infection
post-surgery
Keloid scars on both ears 2 years after
surgery
Northwood Implants
Ear Scaffoldswww.earscaffolds.com
• A new minimally-invasive surgical approach to correct prominent ears
• Ear Scaffolds transform a complex 1.5 hour surgical operation into a 10 min outpatients procedure
Northwood Implants
One (or 2) smallincisions are made on the
anterior skin of the ear.A small subcutaneoustunnel is made to allow
Ear Scaffolds to beinserted
A prominent eardue to absenceof the antihelical
fold
Ear Scaffolds areinserted & fixed
creating theantihelical fold
How Ear Scaffolds work
Northwood Implants
How Ear Scaffolds work
Northwood Implants
Patient FeedbackEar Scaffolds
• 100% preference for Ear Scaffolds• Key reasons:
– Less Surgery
– Faster recovery
– Quicker procedure + instant results
• Wider patient spectrum:– 50:50 male to female– 50% aged below 18 (rest up to age 60+)
• Low price sensitivity (other factors more important)
* Based on direct market research undertaken with 100 patients
Northwood Implants
Target Customers:Cosmetic Surgeons & Clinics
• 3 out of 4 surgeons willing to try it• Key reasons:
• Quicker procedure• Less complex• Less patient trauma
• 42% believe demand may increase• Significant cost reduction in fees (34%
+)• Positively received by top UK cosmetic
surgery centres:• Transform Medical Group• Spire Health• Nuffield Health• BMI Health group
* Based on direct market research undertaken with 270 UK surgeons & 66 clinics
Northwood Implants
UK Cosmetic Surgery Market
• UK Market Growth:• +42% in 2005
• +53% in 2006(Key Note Jan 2007)
• +42% in 2006
• +49% in 2007(Mintel Nov 2007)
• + 534% growth - last 5 years• Market value: £900M in 2007• Forecast to grow to £2.5Bn by 2011 (Mintel Nov 2007)
Forecast Value (£m)
0
500
1000
1500
2000
2500
3000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
£m
“Less invasive surgical techniques are driving growth” (Mintel Nov 2007)
Northwood Implants
Market PotentialProminent Ear Correction
• Approx 5% to 10% of the human population has prominent ears
Market Potential Otoplasties %
UK 3 Million 6,500 NHS3,000 Private
0.22%0.1%
US 15 Million 28,000 0.19%
Developed World
60 Million ?
Ear Scaffolds potential could be 10x or even 100x current demand by appealing to the majority.
(Analogy = Teeth brace)
Northwood Implants
UK Market DistributionCosmetic Clinics
Private Hospital Groups
(144)
Specialist Cosmetic Surgery Clinics (320)
Beauty Clinics & Medi-Spas (20,000)
Private Hospital Groups
(144)
Specialist Cosmetic Surgery Clinics (320)
Beauty Clinics & Medi-Spas (20,000)
Spire, BMI, Nuffield
Transform Medical Group & 200+ independents
Healthcare Commission Licensing
Target Market
Northwood Implants
Competition = current methodsThe AuriClam® Device
Lock
Cartilagefolded over
at antihelicalfold
The AuriClam® devicefolds the earcartilage by pushingup from behind
External Splints Otoplasty surgery Ear Scaffolds
• Relatively low cost
• Non-invasive
• Limited application
• Lengthy treatment period
• Low compliance rate
• Unreliable
• Broad age range (7 yrs+)
• Treats wide range of ear deformity
• Flexibility via different techniques
• Heavily dependant on surgeon skill & experience
• Risky: high post-op complication rate
• Outcome not guaranteed
• Instant results + predictable outcome
• Patient choice
• Less patient trauma
• Lower complication rate
• Foreign body
• May not fix extreme ear deformity
+
-
Northwood Implants
IPR Position
• National patent applications derived from [WO2007/0232964] covering EU and 11 other key national & economic territories
• IPR search confirms no barriers to commercial exploitation
• Extension of IPR portfolio will occur with further R&D
Northwood Implants
Business Model Partnership Approach
• Northwood Implants promotes & licences a novel ear correction procedure
• Limited access to Ear Scaffolds available only to licensed ‘Practitioners’
• Training/Certification Fee• Fee per procedure
– (Ear Scaffolds & accessories provided inclusive)
• Quality controls, practitioner approval & device distribution controlled by Northwood Implants
Northwood Implants
Partnership ModelBusiness Forecast
Year 1 Year 2 Year 3
Revenue 740 3,252 8,432
Gross Profit 692 3,056 8,045
GP% 93.5% 94% 95.4%
Overheads 845 1,683 3,042
Net Profit (loss) (153) 1,372 5,003
Franchise business
-1,000,000
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
Revenue Direct Costs Gross Profit Net Profit
Year 1
Year 2
Year 3
Northwood Implants
Business Model Partnership Approach
Pros• Potentially higher
profit• Protected market &
pricing• Greater control over
procedure quality & availability
• Lower-skilled practitioners possible
Cons• Unproven – no
precedents• Growth is constrained
by ability to train new practitioners
• Requires monitoring & controls
• Potential ‘abuse’ of inclusive pricing
Northwood Implants
Financials
£’000s 2009 2010 2011 2012 2013 2014
Revenue 740 3,252 8,432
Direct Costs 47 177 382
Gross Profit 692 3,074 8,049
Overhead 403 430 170 886 1,722 3,149
Net Profit (403) (430) (170) (196) 1,198 3,726
Product Development Phase Market Development Phase
• High Gross Margin
• Breakeven achieved by end of 1st year of sales
• Investment recovery within 2 years of starting sales
• Profit triples in the last 2 years
Northwood Implants
R&D DevelopmentCosts & Timescales
Design & development
Manuf
Animal Study
Tox
Human Study
Year 1 Year 2 Year 3
Costs: £420k £450k £200k
Total:
£1.07M
Northwood Implants
Funding requirementYear Investment Application
1 £400,000 Set up operations and start product development
2 £450,000 Complete product development, testing & validation
3 £150,000 Clinical Trials
4 £250,000 Market launch & pilot trials
Northwood Implants
PartnershipsHealth Enterprise East – founder stakeholder
• Continued IPR management and advice
West Hertfordshire NHS Hospitals Trust – founder stakeholder
• Facilities support for a clinical trial
Spire Healthcare Group
• Pilot trials of Ear Scaffolds in Private sector
Royal Free Hospital
• Pilot trials of Ear Scaffolds in the NHS
Northwood Implants
Management TeamNorbert Kang FRCS – Inventor, Founder, & CTO
• Extensive plastic surgery & medical innovation experience
• Considerable clinical trials experience
• Strong links with private hospitals, NHS & surgeon community
Richard Malczyk MBA – CEO
• Business management experience (start-up, marketing, finance, operations & legal)
• Programme management experience for new product introduction
• Global sales & marketing experience
Supported by:
Dr Paul Seabright of NHS Innovations East – Non-executive Director
• Extensive IP management & medical innovation development/commercialisation experience
ANO of West Herts Hospital Trust – Non-executive Director
• Extensive operational experience and contacts in the health sector
Northwood Implants
Milestones
Phase 1Near Past
(last 18 mths)• Experimentation
• IPR Protection• Market Research• Ear research
Phase 2NOW
• Business Plan• Company set-up• Fundraising
Phase 3Short Term
(2 to 3 yrs)• Product Devmt• CE marking• Clinical Trial• Marketing & PR (awareness)
Phase 4Mid Term(3 to 6 yrs)
• Market Devmt• UK pilot / launch• EC pilots/ launch• FDA approvals• Ear Scaffold 2.0
Phase 5Long Term
(6 yrs+)• US pilot / launch• ROW launch
Exit 1
Exit 2
Exit 3