Category: Articles, Podcasts, Videos

Rafael Mazuz recently sat down with Morgan Stanley's US Medtech Equity Managing Director, Patrick Wood, at their NYC global HQ to discuss some of the investment mistakes as well as high level trends and dynamics in the advanced wound care sector.

The MedTech Moment: Wound Care Expert Insights

Earlier this week, Diligence Wound Care Global’s Managing Director Rafael Mazuz visited Morgan Stanley’s Global HQ in NYC to spend some time with Morgan Stanley’s Managing Director of US MedTech Equity Research, the incredible Patrick Wood! Here’s a link to the podcast episode we recorded (12 min): The MedTech Moment – Ep. 6: Woundcare Expert Insights On this special episode of The MedTech Moment, Morgan Stanley’s Pat Wood is joined by Rafael Mazuz from Diligence Wound Care Global to talk about common analyst mistakes, trends, and competition in the Wound Care market. Specific and related companies discussed on this episode include: Solventum (formerly 3M Health Care / Acelity / KCI / Systagenix), Smith + Nephew, Coloplast, Convatec, Medline, Mölnlycke Health Care, and more. Are these the types of insights that make you more confident in your wound care business and investment decisions? Contact us to discuss the advanced wound care medtech, biotech, services, and investment opportunities. Most importantly, don’t get hit with bad wound care business decisions!

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Upcoming Wound Care Conferences & Events (UPDATED 28 March 2024)

Upcoming Wound Care and Related Conferences, Meetings, Exhibitions, & Industry Events There used to be a couple of solid online lists of wound care industry events that are no longer maintained. The current ones are either too US focused, ignore ecosystem conferences (ex: home care), and/or include meetings that are not very relevant, or in some cases of questionable reputation and value…so I decided to make my own! If I am attending / faculty / speaking / moderating a session, and have a discount code, I will put it in the Remarks section. Is there a wound care (or adjacent-yet-relevant) industry event that is relevant to our audience and not listed above? Interested in Wound Care Global’s Rafael Mazuz to attend as faculty, moderator, chairperson, pitch competition judge, or another capacity? If so, contact us, providing as much detail as possible.

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Coloplast Acquires Kerecis: Key considerations and implications by Diligence Wound Care Global

Coloplast’s acquisition of Kerecis: Considerations and implications

Coloplast’s announcement is the latest large and significant advanced wound care (AWC) industry deal. As the high level details have already been thoroughly disseminated by press releases and news aggregators, our analysis of the Danish multinational’s acquisition of Kerecis will focus on: What makes this deal noteworthy in the context of the current advanced wound care (AWC) landscape and Coloplast’s positioning, especially in the US AWC market? What are the potential tailwinds and headwinds that Coloplast will encounter as they integrate the Kerecis business org, portfolio, and platform? Why is this deal noteworthy? Aside from its 10-figure price tag and a high multiple on revenues relative to other recent AWC transactions, this deal is also a possible tipping point whereby now roughly half of the top wound care MNCs operating in the US now have biologics / skin substitute / allograft / CTPs (cellular and tissue-based products) to their portfolios. (Side note: There is a recent effort, including a consensus paper published in the Journal of Wound Care [JWC], to begin referring to this segment by the more accurate term, CAMPS [cellular, acellular and matrix-like products]). Does this mean that the rest will follow suit? No–and some have intentionally avoided this segment–for very valid reasons as well. On the other hand, it has become clear to most of the major global wound care brands that to simply innovate around the edges of their core dressings and bandages, if they do not have some other competitive advantage (ex: full service logistics, manufacturing, digital health, remote monitoring, etc.), will eventually render them obsolete. However, beyond these relatively surface-level points, this deal is significant for the following reasons: 1. Only a handful of players have successfully achieved commercial penetration at scale There are around 100 advanced wound care CTPs available in the US, which makes up roughly half of the global AWC market overall, and the overwhelming majority of AWC CTPs. However, relatively few players have managed to successfully take this AWC category from concept to successful commercialization in the years since wound care has been on the map with specialized care settings and reimbursement. Indeed, various platforms based on everything from dehydrated porcine, bovine, ovine, and equine (pig, cattle, sheep, and horse) tissues, to autologous cells, cell culture banks, and human cadaver skin, to various amniotic and placental tissues, to collagen derived from bio-engineered plants, to bioactive glass and other synthetic materials have all been shown to contribute to healing in complex wounds and burns. However, of these ~100 products / platforms, only a handful of companies have achieved significant commercial traction to date (some of these companies have multiple AWC CTP products in their portfolios): Organogenesis Smith+Nephew (portfolios acquired from Healthpoint and Osiris Therapeutics) MiMedx Integra Life Sciences Kerecis A few others could be added, depending on the thresholds considered, such as: Convatec (via its acquisition of Triad Life Sciences in 2022) Medline Life Net Health (acquired the combined Bioventus-Misonix-Sol Systems wound portfolio earlier this year) MTF Biologics PolyNovo So out of ~100 technologies, only about ~5-10 have significant commercial traction. Of these, Kerecis and its fish-derived Omega3 platform has been the fastest growing company in this segment for multiple years. 2. International presence + viability Of the CTP companies mentioned above, most of them have virtually no presence outside of the US (OUS), and/or their OUS focus is on a different part of their business (i.e. not AWC / burn care or CTPs). Again, almost the entirety of wound care CTP usage today is in the US. When you attend US wound care conferences, the CTP companies’ booths are among the largest, busiest, and most elaborate in the exhibition hall (and a large proportion of their booth’s footprint if they have multiple product lines). Yet if you attend the increasing number of international wound care conferences (as we do), most of the same companies listed above are nowhere to be found–or perhaps just a small brochure or poster in the corner. Even large multinationals like Smith+Nephew may have a major presence or sponsorship, but they are unlikely to make their CTPs a major commercial focus, in many cases not even bothering to register the products overseas. I won’t go into details here of the many reasons for this, but suffice it to say that they include: Reimbursement / willingness to pay out of pocket Market and stakeholder awareness: of advanced wound care overall, and specifically of CTP use cases for wounds and burns Regulatory, sourcing, logistical, and cultural challenges, for example: some markets require human tissue products to be sourced from local populations, or to undergo a level of material safety processing/testing (ex: heat) that offsets their clinical effectiveness or proper and timely shipping + storage of such products becomes too complex or costly. Sources of cells / tissues may not meet local cultural or religious guidelines However, Kerecis in recent years has been increasingly present in the global wound care markets. Do they make up the majority of their revenues? Certainly not. However, the platform’s pricing elasticity, regulatory, and sourcing characteristics, combined with increased awareness overall, solve many of these issues. As such, in recent years (even pre-Covid), it was not uncommon to see Kerecis–or one of their third party distributors–with a presence at burn and wound care industry conferences across EMEA, APAC, and LATAM. Kerecis also has some complementary, mostly consumer-focused, wound and skin products (that Coloplast can likely competently commercialize through their channels), as well as a pipeline of more complex surgical reconstruction and repair-focused products based on the Omega3 platform. However, the core of their business at the time of the deal is still their fish-derived lines of wound, surgery, and burn grafts. In short, not only was Kerecis the fastest-growing CTP firm in the US prior to Coloplast’s acquisition, but they also were uniquely able to demonstrate at least some initial traction in less traditional and emerging markets where wound care biologics and CTPs

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A figure showing the many clinical, operational, financial, and quality benefits of an advanced wound care program.

Are Advanced Wound Care and Management Services The Next Frontier in Asian (and Emerging Markets) Healthcare?

Advanced Wound Care Global, our vehicle for bringing advanced wound care to areas of the world where the need and opportunity are greatest, was recently invited by Asian Hospital & Healthcare Management to share our thoughts on the potential for advanced wound care in Asia. Here is a brief excerpt from the intro: Asia has developed some of the highest quality, patient-centric, cost-effective, and value-based medical services in the world. From specialty1 ophthalmology, cardiovascular, and orthopedic care, to organ transplants, plastic surgery, and dental procedures–excellent healthcare, the same or better than in the West, is available to locals and medical tourists alike. But access to one critical, fast-growing service line in particular is mostly untapped across Asia: Advanced wound care and management. Click here to continue reading the full article on the Asian Hospital & Healthcare Management website. Contact us to discuss wound care management services in areas of the world where the need and opportunity are greatest. Most importantly, don’t get hit with bad wound care business decisions.

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Live polling from the AAWC-Desert Foot 2019 track on Digital Health and Clinical Operational Best Practices

Underappreciated Advanced Wound Care Opportunities in 2020 and Beyond

Despite the overwhelming majority of R&D, regulatory, sales, marketing, and corporate finance focus in the advanced wound care (AWC) sector being on physical advanced wound care products, many of the greatest opportunities to drive outcomes–and profitability–exist in the realm of wound care service delivery. This concept was further developed by senior management from several of the leading global AWC brands in the well-received executive panel session we facilitated in Gothenburg, Sweden earlier this year at the EWMA Conference. Keeping with this theme, several of the speaking engagements, articles, partnership explorations, and related advisory we have performed towards the end of this year have revisited this idea. We will share some areas of particular interest below. Calling all forward-thinking AWC professionals Whether you’re in AWC or an adjacent sector (dialysis, diabetes, vascular, ortho, plastics, home care, etc.), or affiliated with a service provider and/or payer organization (ACO, IDN, HMO, CCG, VA)…if you’re seeking to partner with like-minded, forward-thinking executives, payers, health systems / facilities, clinicians, and investors on the types of initiatives discussed in the remainder of this article, get in touch to describe your unique approach and what you and your colleagues stand to gain and could bring to the table. We’ll confidentially use this to explore if there are existing or future collaboration opportunities to accelerate your goals within the Diligence Wound Care Global network. When you have the wound care “Hardware,” but what you need is the “Software” This concept was eloquently articulated a couple of years ago by one of our Singaporean clients…During a tour of several large, well-equipped, generously-staffed, high volume wound care facilities in several countries as part of the early experience program, he witnessed firsthand the lack of administrative support, uniform processes, data analytics, and relative ability to influence key (external) decision makers among the potential customer sites. Immediately after one such customer visit, he turned to me and exclaimed, “They have plenty of ‘hardware,’ but what they need is ‘software!’” In addition to the educational and networking opportunities, we had the opportunity to contribute as faculty at The Association for Advanced Wound Care (AAWC)’s track at The 2019 Desert Foot Multi-Disciplinary Limb Salvage Conference in Phoenix, Arizona earlier this month. One of the topics, Bringing Together Best-in-Class Clinical, Operational, and Technological Approaches to Delivering Advanced Wound Care: An Interactive Panel Discussion, leveraged live polling of the AWC clinicians and administrators in attendance to draw attention to some very surprising yet highly relevant and underappreciated stakeholder pain points and related market needs. Barriers to adoption of new products and technologies Firstly, if you were to ask the average commercial or medical affairs AWC (or more broadly speaking, medtech) professional about the key activities needed to gain adoption, they would likely list the following product-centric factors among their top three replies: Presenting and communicating scientific and clinical evidence Education and training of staff Initial trialing and feedback Strikingly, the live polling results as articulated by actual AWC users and customers suggest exactly the opposite, with their top three barriers overwhelmingly being: [Navigating] administration and bureaucracy Financial pressures to always choose the cheapest or on-contract option Logistics (too many supplies to order, stock, etc.) The audience-reported feedback is consistent with our experience as both an AWC customer and strategist, and is equally as relevant in the non-US markets as it is in the US. Stated differently, even when discussing a topic such as adoption of new AWC products, the key barriers are ironically related to services (management, administration, logistics, etc.). This concept was eloquently articulated a couple of years ago by a Singaporean client, a seasoned global marketing executive in the midst of a best-in-class product pre-launch across nine Asian markets. During a tour of several large, well-equipped, generously-staffed, high volume wound care facilities in several countries as part of the early experience program, he witnessed firsthand the lack of administrative support, uniform processes, data analytics, and relative ability to influence key (external) decision makers among the potential customer sites. Immediately after one such customer visit, he turned to me and exclaimed, “They have all of the ‘hardware,’ but what they need is ‘software!’” The phrase stuck with us throughout that engagement and beyond, anytime we encountered care delivery that was inconsistent, inefficient, unscalable, or otherwise not meeting its full potential despite adequate physical resources (in other words, the vast majority of AWC facilities and providers) . In fact, improving stakeholders’ “software” for delivering care then became a critical parallel activity alongside the traditional “hardware” sales and marketing activities during the actual launch phase, with major dividends in terms of building customer trust and branding for the distributor and their products alike. Clearly, the misalignment on AWC “hardware” (tangible facilities, products, and staffing) vs. “software” (intangible processes, protocols, tech, analytics, business/financial models, and other enablers) is something holding the sector back from its full potential on a global scale–and thus represents a phenomenal opportunity for non-AWC and AWC firms alike. Barriers to adoption of digital health (mobile assessments, diagnostics / imaging, telemed, analytics, etc.) Another highly instructive live audience poll from the event specifically zoomed in on the top barriers to adoption of digital health (literal “hardware” and “software,” not to be confused with the figurative “hardware” and “software” described above). The results are here: Once again, just like with physical product adoption, the most pressing challenges to adoption of digital health faced in the real world are overwhelmingly managerial, administrative, and financial in nature. This begs the question: Why do so few digital health initiatives in AWC actually address these gaps? One might even argue that the majority of AWC digital health creation and marketing activities are not even taking aim at the right problems to solve. But even putting that point aside, can these issues of how to secure budgeting, viable business / financial models, and integrations (both technical and practical) be effectively tackled by individual corporations and health systems alone? At what point does there need to be more cross-pollination beyond just

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Investing in Advanced Wound Care? Avoid These 3 Costly Mistakes

We are frequently tapped by analysts, fund managers, investment banks, and other financial and investment professionals–from small independent funds through the largest global institutions. At the same time, our engagements are also filled by biotech, medtech, life sciences, and digital health executives, as well as provider and clinic networks, payers, hospitals, IDNs, and other healthcare services providers. Whether seeking to make an investment, or to plan and execute to increase stakeholder value, advanced wound care is among the highest potential healthcare subsectors, with no sign of that changing anytime soon. So why all the interest in advanced wound care? This is why… Demographically, this segment is poised to explode, as a plethora of projected global demographic and epidemiological trends contribute to difficult-to-heal wounds, including: aging populations cardiovascular disease (heart, arteries, veins) renal (kidney) disease diabetes and other endocrinology-related disease oncological (cancer) disease rheumatological disease dermatological issues obesity and malnutrition immobility and sedentary lifestyles immune system compromise chronic pain medication side effects hundreds of other health conditions related to infection, hereditary, environmental, psycho-social, and other factors The prevalence and projected growth of these conditions drive a large, unmet demand for advanced wound care that make for an attractive investment opportunity. Yet at this time, there are multiple areas where the deployment of capital to this space is greatly under the current and future potential. This article is primarily intended for healthcare, medtech, and related services and technology investors who seek to either explore advanced wound care opportunities, or to refine assumptions and investment theses. If you’d like to explore the concepts below further or wish to discuss a your specific investment strategy, get in touch to schedule a consultation. What exactly is advanced wound care? The first key to successful wound care investing is to wrap your head around the core concept of, “what is advanced wound care?” Healthcare executives and investors who are not strictly focused on wound care are certainly reading this article. Many are already exposed to this space (whether they know it or not). Unfortunately, many damaging wound care due diligence and investment choices are related to a fundamental misunderstanding of what even makes up the segment. Following that initial misstep, even highly intelligent, thorough, and experienced business people have a higher chance of running into major problems that could have been avoided. Before anything else, a solid advanced wound care investment foundation depends on correctly grasping these four core concepts on at least a practical level: The phases of wound healing The difference between simple vs. advanced wounds Local vs. systemic problems with healing A working definition of advanced wound care Finally, we’ll apply that foundation by exploring common investment mistakes made by both rookie and experienced advanced wound care investors alike. So here we go… The phases of wound healing and “simple” vs. “advanced” wounds Let us suppose a healthy person accidentally cuts his finger while cooking. Assuming the wound is not large, the knife was clean and not rusty, and no major surprises (like slicing an artery), the wound is likely to close on its own. If so, we can classify the above example as a “simple wound” because we neither anticipated nor experienced any healing complications making healing take longer than expected. On a very basic and practical level, there are four (or five) overlapping phases of wound healing: Hemostasis – a blood clot forms to stop bleeding, prevent further damage / contamination, and sends signals to trigger the next phases of the healing cascade Inflammation – increased blood flow; removal of debris and neutralization of bacteria that may have entered the wound Proliferation – (often categorized as two separate phases, granulation and epithelialization), where the wound bed and skin fill in; When this is complete, most clinicians (including for clinical trial endpoints) refer to a wound as “healed,” even though there is technically one more phase… Remodeling – (also referred to as maturation), where the underlying cells continue to restructure and strengthen over time (months or years). This phase not only impacts the cosmetic appearance, but also range of motion and propensity for reinjury or recurrence of the wound, due to factors such as the type, quality, and location of scarring / collagen formation. Each of these phases actually consists of dozens–even hundreds–of complex chemical, biological, and physiological processes. A video animation + explanation with more detail can be viewed here, and although there are often new discoveries at the microscopic level, there is no shortage of academic discussion discussing each phase in detail, as well as factors affecting wound healing. The key takeaway for business and investment professionals looking at this space is that for a wound to heal properly, it must pass through and complete all phases in the above order (though as stated, there is overlap). When the above process does not-or is not expected to–occur within four weeks, we can refer to it as an “advanced wound.” Some use that term at five, six, or eight weeks…there is no consensus on the precise timing, nor is the precise timing crucial to this discussion. If there are no problems with the healing phases, the wound will follow its natural trajectory, which is to heal. However, there are literally hundreds of reasons wounds might take (or be expected to take) longer than normal to heal. More often than not, multiple factors contribute in parallel. Nonetheless, once again for the purpose of keeping this article simple and focused on investors (not scientists), we might categorize the factors into two broad types: Local – Examples: The wound is deep, in a region susceptible to dirt and bacteria, on an area of pressure / friction / shear / reinjury, and other factors. Systemic – Examples: The patient is elderly, malnourished, underweight / overweight, taking medications with side effects or has one or more conditions affecting their ability to heal (cardiovascular disease, kidney disease, diabetes, cancer, or anything else that might possibly affect the body’s natural processes). So even a very

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Confused by Recent Wound Care Digital Health Developments and Their Implications?

In many ways, the pace of innovation in advanced wound care can feel slow compared to other areas of medtech. As a result, many from across the spectrum are understandably confused by recent digital wound care news and developments. Relative to the rest of the sector, this segment is evolving at light speed. Many wound care firms are at various phases of formulating, testing, and executing their digital health strategies. Others are waiting on the sidelines a bit longer before determining if and how to become involved, and whether to develop that competency in house, outsourced, or via partnerships. Investors are wondering if this is the next major growth opportunity for wound care, especially due to the interest from payers, healthcare IT, and other tech stakeholders, beyond the product and service providers already engaged. Since there is significant interest in this topic, Diligence Wound Care Global and Tissue Analytics have created an overview of this space and its potential, published on Wound Source at the following link: https://www.woundsource.com/blog/wound-care-devices-apps-integrations-and-analytics-digital-health-platform-overview-industry The content is indeed sponsored (in order to increase its reach). However, it absolutely does reflect the state of wound care digital health opportunities. It also highlights recent choices made by players in the space, as well as the legitimate potential manifestations and implications for the management and delivery of advanced wound care. We researched and authored the piece and stand by the overview and outlook as presented as of publication.

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Why Mölnlycke’s Acquisition of SastoMed Is a Big Deal

What happened? Today (2018.07.02), Mölnlycke Health Care announced its acquisition of SastoMed GmbH. Mölnlycke is of course known in the industry as a top global wound care (also wound prevention and surgical) product brand, particularly in Europe and the United States. SastoMed, a much smaller German firm, was a subsidiary of SanderStrothmann GmbH, a company which assesses, formulates, and produces cosmetic, skin, and medical products for hundreds of well-known global brands. SastoMed has developed and commercialized two wound care products at the heart of this acquisition: Granulox, a hemoglobin spray that delivers oxygen from the surrounding air into to the wound bed via facilitated diffusion (see this article for a video + discussion). Granudacyn, a hypochlorous wound irrigation solution for cleaning, moistening, and rinsing of acute, chronic, and contaminated wounds, and 1st and 2nd degree burns. Why is it important? There have been multiple wound care M&A and JV deals in recent history, including: Integra’s acquisition of Derma Sciences Acelity’s acquisition of Crawford Healthcare The formation of Appulse as a JV by the principals of Hollister’s divested key wound care products (Hydrofera Blue and Endoform) …and several others (with more expected!) Yet despite the volume of wound care activity, this deal is unique and significant for a variety of reasons: Innovation Significance Both Granulox and Granudacyn are innovative products beyond what we normally see in the industry. Let’s briefly recap why: Granulox There exist dozens of negative pressure wound therapy (NPWT) devices, over 80 allografts, and hundreds of dressings and pressure offloading solutions. Clearly, not all wound care products in each category have the same levels of efficacy, quality, and cost-effectiveness, yet as a whole, these categories are clearly becoming increasingly saturated and sensitive to reimbursement and other economic factors. But what about solutions for delivering oxygen to hypoxic wounds (most chronic wounds are hypoxic)? Historically, the only options for these patients have been: Vascular procedures (bypass surgery, stents, etc.): These overcome blood vessel blockages and are important procedures not going away anytime soon. Indeed, the other options listed below are not substitutes for improving the underlying circulation addressed by vascular procedures. However, such procedures and are both invasive and expensive, so not every patient is a good candidate. Revascularization benefits also apply primarily to the large blood vessels, often having less impact on microvasculature, which is a key challenge for many types of chronic wounds (such as diabetic ulcers and pressure ulcers). Systemic medications (blood thinners, diuretics, etc.): These are and will continue to have important roles in cardio-vascular management (circulation, edema management, etc.), and they aim to help balance negative impacts of certain co-morbidities. Still, many chronic wounds will require additional oxygen to optimize healing–especially at the wound surface and surrounding microvasculature. Hyperbaric oxygen therapy (HBOT): Thousands of patients receive and benefit from this treatment daily (the vast majority are in the US). However, it requires proper functioning of the patient’s blood vessels in order to be effective (and to be approved for reimbursement in the US), and there is a steep drop-off in perfusion between treatments. The high cost, long treatment time (~2-3 hours per day for ~20-60 days), contraindications, low availability (outside of the US), limited indication coverage, and recently heightened regulatory scrutiny and cost pressures mean that while HBOT is and will continue to be an important wound care tool, it is not enough to meet the large and growing need for wound oxygenation solutions. Topical oxygen devices (besides Granulox): The growth of this category in recent years underscores both the increasing awareness and need for tools to combat wound bed hypoxia. On the other hand, the existing alternatives have the following limitations: Difficulty overcoming the exudate (moisture) barrier: A thin layer of just 0.1mm of moisture, such as is found on most wounds and between the cells, blocks 99% of oxygen diffusion from the air to enter the wound bed (hemoglobin molecules such as in Granulox can break that barrier, which is why the mechanism of action is referred to as “facilitated diffusion [of oxygen]”). Incompatibility with many other treatments: Application of most topical oxygen products limits clinicians’ choices for which dressings can go on top (often, the dressing is part of the delivery mechanism). Granulox can be used together with most standard and advanced wound care products. Granulox is the only hemoglobin-derived oxygen transfer product for wound care. But most importantly, Granulox complements all of the above treatment options. So it does not disrupt clinical practice, but rather is a readily available adjunct treatment to initiate oxygen delivery which overcomes many of the hurdles making wound oxygenation such a challenge. The ~100% reduction in slough buildup and ~50% reduction in pain for Granulox patients across all wound types are two more underserved clinical needs (in addition to the increased oxygenation / 50% faster healing) that make this a very innovative development. Granudacyn Natural and pH balanced: Hypochlorous Acid (HOCl) is produced by the human body as part of the immune system, and innocuously breaks down into water and a salt. As such, Granudacyn can be used inside body cavities and will not impact cellular tissue products (CTPs), which makes it complementary to Mölnlycke’s surgical business in addition to wound care. The importance of balanced pH in wound healing is also well documented. Excellent stability: Many otherwise high potential wound cleansers suffer from a relatively short shelf life. Granudacyn can be stored for a minimum of 18 months, which is plenty for any typical wound care setting. Strategic Significance Prior to this acquisition, the focus of Mölnlycke’s wound care business had primarily been on prevention (offloading, reduction of wound/periwound trauma and irritation) and passive healing (moisture balance, infection management, etc.). Granudacyn of course strengthens their wound management (and surgical) portfolio(s), but with Granulox, it can be said that Mölnlycke has now established a significant position in the field of active healing. Stated differently: Pre-acquisition Mölnlycke had products to optimize the wound bed and surrounding area via the body’s own healing process. Post-acquisition Mölnlycke can now offer its customers active acceleration of tissue regeneration,

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Do you manage, invest in, or work with a challenged wound care program? This is for you…

A quick update… We’ve been super busy empowering clients’ wound care businesses so far in 2018: Engagements in Hong Kong, Malaysia, coast-to-coast in the US, and now gearing up for some groundwork in Mexico and both Eastern and Western Europe, to name just a few. In between, we’ve been attending and prepping for key industry events, including Diabetic Limb Salvage (DLS) in Washington, DC (ending today), SAWC Spring in Charlotte, North Carolina (26-29 April), followed by EWMA in Krakow, Poland (9-11 May). The rest of the year shows no signs of slowing down, either! But when Today’s Wound Clinic (TWC) Managing Editor Joe Darrah asked me to contribute to this month’s edition (April 2018), I just couldn’t turn him down. That’s because the theme of the entire edition is, “How to Fix Your Failing Wound Clinic.” It’s a topic of great interest to me, since managing wound centers forms the cornerstone of my wound care experience. In other words, it’s an important lens through which we provide our clients insights, guidance, and confidence. As such, I’m proud to share with you the finished article, Diagnosis & Treatment of The Failing Wound Care Center: 2 Underappreciated Considerations. Free print copies of the entire April TWC magazine will be distributed at SAWC Spring later this month, too (usually near the entrance to the exhibition hall). Organizational and Management Wound Care Center Challenges I urge anyone with an interest in this topic to check out the full article and share it with colleagues who might find it of value. Following is a quick summary of the issues covered. Today, there are more resources available than ever for getting a struggling (or new) wound care center on the right track. These include medical and product training, clinical documentation courses, mobile assessment platforms, specialty electronic health records (EHRs), and revenue cycle management and supply chain consultants, to name just a few. In fact, when hospitals and wound centers partner with a wound care management company, the goal is often to pull together several of those “tools” together into a single package. But I had yet to come across a fair (unbiased), third party look at the “big picture” options available. As such, the article focuses on two considerations: Organizational: What is the reporting structure (if any) of the wound care center? Is it a good fit for the size, needs, and challenges / aspirations of the team? How can the right balance be struck so that wound care services receive enough attention and resources, yet don’t suffer from micromanagement or apathy? The article weighs the relative advantages and drawbacks of the following structures: Reporting to hospital C-Suite Reporting to hospital VP/director-level Independent/owner reporting structure Management: Although there have recently emerged an increasing number of flavors of wound care management, for the sake of this discussion, we divided them into three categories: Full service outsourced Flexible outsourced Insourced If anyone tells you that one form is superior to the other in all cases and for all wound centers, they’re either not being genuine or they simply do not have a full command of the wound care services space. Although a deep dive into wound care management approaches goes way beyond what can be communicated in a single article, the goal is to expand the reader’s horizons when considering options. Are you facing similar challenges? Executives and investors facing wound care services challenges such as those mentioned in the article are always encouraged to reach out. We have worked on both sides of the equation, and our interest is to help clients choose the best path forward for their current situation–whatever shape that may take. If you’re involved with: A struggling or new wound care center, A program seeking to deliver at a higher level, or Discovery or due diligence on a potential wound care services investment Get in touch or seek us out at one of the upcoming major industry conferences.

Do you manage, invest in, or work with a challenged wound care program? This is for you… Read Post »

Illustration of the challenging incentives for implementing value based advanced wound care

What the Recent Healogics Developments Can Teach Us About the Future of Wound Care

The situation Last week (15 Nov 2017), David Bassin (Healogics’ former CFO), was appointed as the company’s new CEO. As the world’s biggest wound management firm and provider of wound services, Healogics has both a massive network and a huge volume of wound care and outcomes data. Understandably, healthcare executives, analysts, and investors watching this space have been very eager to know about what this and other recent developments mean for the future of wound care. This is similar to how major moves by Boeing would be of interest to those working and investing in the aviation industry. Stakeholders know that change at Healogics, and other wound services firms to some extent, leads to new opportunities. At the same time, it can also expose their business models to new vulnerabilities. Since leaving Healogics to focus on Diligence Wound Care Global, dozens of clients have turned to us specifically seeking to better grasp strategies and initiatives related to wound management firms (how to react, or what to avoid). From investors and bankers, to startups, to product executives, to healthcare facilities–and to even payers and other wound care services firms–all realize that without understanding how Healogics and other wound management firms prioritize and make decisions and especially how that might affect their short term tactics as well as long term planning, they may be caught off guard. Bassin is taking the helm during a challenging and unique period in the company’s history: Healogics’ traditional business model is under massive pressure in recent months. Many facilities whose wound programs partnered with Healogics (or its pre-acquisition predecessors) to launch wound care programs five, ten, or even twenty years ago have recently chosen to not renew their wound management contracts due to cost-cutting and other pressures. While a normal churn of contracts won and lost has always been part of the business, Healogics has recently lost significantly more contracts than it has gained–the first major contraction in the history of a company which was otherwise characterized by impressive growth for most of the past decade. Today, US healthcare facilities have more options than ever for outsourced wound care management–from clinical training and certifications, to clinical-operational flow consulting, to revenue cycle management, to wound care service line marketing, to EHR vendors and mobile health–offering à la carte options in addition to the full-service management approach on which companies like Healogics, Restorix, and others have traditionally focused. Many–perhaps most–hospitals that do not renew their Healogics wound center management contracts are actually content with the overall services provided. But the ability to, with the stroke of a pen (or more precisely, the lack thereof), cut an annual expense amounting to hundreds of thousands of dollars becomes easier when there are multiple firms that will fulfill specific wound management needs on an à la carte basis. For most US hospitals who are struggling to squeeze even a one or two percent operating margin, the potential savings are material and quite tempting. At the same time, let’s not discount that Healogics managed nearly half of the hospital-affiliated outpatient wound care centers–though that number is now closer to one third. Centers run by management companies tend to have higher patient volumes and better healing outcomes than their independently managed peers, so it’s quite reasonable that close to 50% of US patients treated in specialized, outpatient hospital-affiliated wound centers are seen in a Healogics facility. Healogics also has a relatively small but potentially growing influence in the inpatient, skilled nursing facility (SNF), and related landscapes. Perhaps the most significant asset that Healogics has is its healing data. While the à la carte solutions can help solve certain problems, not a single one of them has the A-to-Z depth and quantity of clinical, operational, and financial data that Healogics does. This is important to keep in mind when considering the future dynamics of Healogics, its wound care services/management competitors, and the industry overall. On the other hand, there exist other players with fewer data points but claiming more precise and actionable data such as automated wound measurements. So although the title of “best wound care data set” is yet to be claimed, Healogics is surely a top contender. The Past: A Brief History of Healogics from 2006 to Today In 2006, Diversified Clinical Services was born, becoming the largest wound management company following the merger of three smaller firms: Diversified Therapy, Curative, and Praxis Clinical Services. With over 260 hospitals under management, the newly integrated firm had a presence in around 40 US states. When I joined the company as a wound care center director in early 2011, the Jacksonville, Florida-based company had somewhere around 400 centers under management and was considered one of the fastest growing healthcare services firms in the US at the time. The growth plan was quite clear: Due to factors such as aging populations, rise in chronic disease, and related lifestyle problems, patients will continue to develop wounds that need advanced treatment. Particularly with all of the baby boomers retiring, the business outlook was strong as long as they were served. Many even believed that within a few years, virtually every hospital in the US would have some sort of formal wound care program. For the most part, they were right. Although the number of difficult-to-heal wounds in the US has skyrocketed to between 6-7 million, the majority are still not treated in a specialized, outpatient wound care center. The opportunity for growth was substantial back then, and still is today. The following infographic, produced by Healogics (and which is consistent with what I have seen working with the industry from other angles, too) visualizes this breakdown: Another merger with major competitor National Healing Corporation in 2011, and rebranding as Healogics, Inc. in 2012 brought the total to “more than 500 centers” and close to $300M in annual revenue when large private equity player CD&R purchased the firm from Metalmark (another PE firm that had owned it for a few years) in mid-2014 for $910M. By this point, Healogics centers were treating over 200,000 wounds

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The Case for Emerging Market Wound Care

Demographic and economic trends, combined with the sheer magnitude of the unmet needs in the emerging markets represents the largest untapped opportunity for advanced wound care products and services globally. Introduction As the business of advanced wound care in North America and Western Europe has boomed for the past two decades, most major wound care product and services firms, which are overwhelmingly based in those markets, have made comparatively little investment in the developing world. To be clear, the complex wound epidemic in the developed world is far from over, and it will remain a high growth healthcare opportunity for years to come. Yet trends such as new market entrants, insurance consolidation, increasingly cumbersome documentation requirements, and the commoditization and market saturation of certain product types, combined with overall pressures to cut healthcare costs, have at a minimum impacted per-unit/per-patient profitability in the West, even as the total market size continues to soar. Emphasis on prevention, bundled payments, and other risk-sharing trends on the horizon will further challenge the lucrativeness of wound care in the developed markets. At the same time, aging populations, wound-related comorbidities, and increasing purchasing power and overarching demand for advanced healthcare in the emerging and frontier markets have created tremendous opportunities for specialized wound care in these regions. Of course, unique challenges and obstacles exist as well. Still, demographic and economic trends, combined with the sheer magnitude of the unmet needs in the emerging markets represents the largest untapped opportunity for advanced wound care products and services globally. In line with this, greater than 50% of our 2016 engagements and related advisory at Diligence Wound Care Global involved the emerging and frontier markets. This trend has continued into 2017 as well. In this article, we will explore: The current state of advanced wound care across the developing world. Global demographic and financial data, cultural-religious considerations, and real-world, on-the-ground international wound care experience and information I have gathered from my wound care colleagues and during my extensive travels. The reader will gain a keener appreciation of evolving opportunities for wound care (and other healthcare) executives, specialists, startups, and investors. Why look to the emerging markets for wound care? With between 6 to 7 million complex wounds, estimated market sizes of between USD $8bil to $15bil for advanced wound care products, and $40bil to $60bil for wound management-related services in the United States alone (depending on which specific wound etiologies, products, and services are included), why should executives and investors even consider placing valuable resources in the emerging and frontier markets? The following figures provide an answer: 1. Population size and distribution 2. Overweight, obesity, and other malnutrition As if overweight and obesity were not enough of a challenge, due to evolving demographic, economic, and cultural factors affecting diets (e.g. urbanization, a shift to processed foods, etc.), many emerging markets have simultaneously overweight/obese yet undernourished populations. The lack of protein, micro-nutrients, and other consequences–even as average BMIs soar–is yet another comorbidity associated with delayed wound healing. This phenomena is well-documented in the 2016 World Bank paper, The Double Burden of Malnutrition in East Asia and the Pacific: Evidence and Lessons for a Multisectoral Response. 3. Diabetes 4. Kidney disease 5. Smoking Despite an overall reduction in smoking across the developed markets, 80 percent of the world’s 1 billion smokers are in low and middle income countries (WHO), with double-digit increases in smoking rates across dozens of developing nations. Indonesia alone is home to 70 million smokers, a nearly 30 percent increase over 15 years. During the same period, the percentage of Jordanian smokers rose from 25 to 40 percent. Similarly, rates in Bahrain rose from 12 percent to almost 30 percent, and in Cameroon from 7 percent to 22 percent. The CDC reports that overall, smoking in the developing world is increasing at a rate of 3.4 percent annually. As anyone who has worked in wound care services knows, smoking (and the resulting cardiovascular and pulmonary complications) is one of the most difficult clinical challenges faced by the wound care provider. While for most patients (in theory), wound bed moisture can be balanced, microbial counts (infections) reduced, albumin/pre-albumin levels raised, and blood glucose controlled, the damage that years of smoking does to the body’s ability to deliver oxygen required by healing tissue is extremely difficult to reverse in both the short and long terms. Noninvasive therapies to improve tissue perfusion are only effective if there is a certain amount of underlying vascularization. Yet invasive revascularization procedures are both medically complex and financially costly. In this sense, the colossal, growing rates of smoking in many of the world’s developing nations simultaneously contributes to both the clinical challenges and business opportunities for advanced wound care in these markets. The connection to chronic wounds Thanks to firms such as Net Health, it is possible to access real-time data comparing the effects of both individual and multiple comorbidities on wound healing. Such data is sourced from hundreds of thousands of wound outcomes across hundreds of US wound care centers. The following figures show that the chronic diseases and related factors that plague the developing markets are precisely the ones that have the most profound impacts on delayed wound healing: The comorbidities found to have the most acute impacts on patients in the US are also the most prevalent and fastest growing conditions in the emerging markets. Clearly, from the perspectives of both absolute and relative population sizes, as well as factors associated with non-healing wounds, the current and future needs in the developing world are immense. As we will see, despite these figures, specialized wound care in these regions has traditionally been the focus of disproportionately low levels of investment. We will dive deeper into just how massive the opportunities are in future articles and posts. Wound care products and services: “Chicken-and-egg?” Which should come first–emerging market wound care products, or services? Having been first introduced to advanced wound care in the developed markets (as a director for a leading wound management firm), I had always been exposed to a plethora

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Assessing and selecting medical device distributors in the emerging markets requires a unique approach.

Assessing and Selecting Wound Care Distributors in the Emerging and Frontier Markets

The following is an excerpt from the original article, published in MedTech Intelligence on 3 Apr 2017: The attractive opportunities for medtech product firms to drive growth in the emerging and frontier markets are well-known: Rising disposable incomes and an expanding middle class, aging populations, and chronic disease prevalence (diabetes, cancer, obesity, hypertension, etc.), combined with increased access to healthcare diagnostics and services, all feed demand for advanced medical technologies in those regions. However, despite the strong desire of firms to capitalize on these trends, the precise strategies and tactics to achieve their goals are elusive to most executives seeking to do so. In recent quarters, corporations seem just as likely to fall short of earnings goals due to missed targets in the emerging markets as they are due to slowdowns in the developed markets. Therefore, a key question that clients ask is: How might we quickly yet sustainably capture and grow our market share in the developing markets?… Click here to continue reading the full article… Also check out or sister company, Advanced Wound Care Global, which focuses on equipping and delivering advanced wound care services in the emerging markets.

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The Top 10 Mistakes Wound Care & Regenerative Medicine Sales & Marketing Executives Make (& How to Avoid Them)

Why are so many intelligent, sharp, knowledgeable, and articulate wound care and regenerative medicine professionals unable to gain customer trust and drive product adoption and usage? Introduction Years managing advanced wound care centers and advising investors, device, and services firms in the industry have given me countless opportunities to be on both sides of sales and marketing activities. Sometimes, I’m on the buying side of wound care: Deciding which dressings, offloading devices, allografts, negative pressure wound therapy (NPWT), and other consumable and capital medical devices to budget for and purchase, like when I was a director at Healogics in the US. Or when working with international healthcare services firms and investors considering adding a wound care service line to their existing or planned hospitals, clinics, or rehab centers (and if so, how to proceed). Other times, I’m on the selling side: Assessing and negotiating with medical distributors, facilitating a business war gaming workshop for a new wound care product launch in the US, or training wound care and regenerative medicine sales and marketing professionals on how to drive product adoption and usage from the customer perspective. In both situations, I frequently asked myself: Why are so many intelligent, sharp, knowledgeable, and articulate wound care and regenerative medicine professionals unable to gain customer trust and drive product adoption and usage? In search of the answers, I compiled my experiences and spoke with colleagues and industry professionals. It turns out that I was not the only one interested in this answer. Demand was so strong that I began to offer a specialized workshop for sales, marketing, product specialist, and leadership teams in the industry. In the training program, we focus on the user and customer perspective, demonstrating actionable methods for improving commercialization effectiveness. Following are ten of the most common and devastating mistakes made and some ways to avoid them: 1. “Showing up and throwing up” (instead of asking questions I’m not talking about the rep running to the bathroom and vomiting during a product in-service (though I’ve witnessed that, too). “Show up and throw up” is a behavior most sales and clinical education professionals are guilty of at some point–especially when in a new role or right after in-depth product training. Often due to nervousness, or simply being eager to demonstrate their newly acquired knowledge, a sales rep (and often the manager or VP) will arrive for a meeting, blurt out a quick introduction, then launch into a rapid fire barrage of product features and technical specifications, regardless of the audience and their unique pain points. “Asking nurses and doctors questions rather than lecturing them about your product or what to do, is key,” says Isaac (all names have been changed), clinical nurse manager at a leading outpatient wound clinic in the mid-Atlantic US. A sales professional fresh out of an intense week of training is likely to want to talk about how their company’s antimicrobial foam line has more silver molecules or absorbency than the competition, or that their tissue-based product has a higher percentage of living cells or a thicker extracellular matrix (ECM). It’s understandable behavior, but it’s ineffective. Rather, establishing a relationship and learning your audience’s pain points by asking questions yields much greater success. Ron, a mentor and sales executive I used to report to, is currently a Senior VP of Business Development for a leading wound care services firm. He quotes one of his favorite sales analogies: “Questions to the sales professional are like a scalpel to the surgeon. It’s the primary tool for doing your job well.” Asking the right probing questions will both effectively build rapport, as well as help you determine which of your products and their features will solve real problems for your client. When I deliver a workshop for wound care sales, marketing, product, and leadership professionals, I review the call points and personality types involved in wound care purchasing decisions in detail. Participants leave understanding the most powerful questions that can stimulate a valuable wound care dialog to drive more sales than “show up and throw up.” 2. Not having a basic understanding of a facility’s clinical quality, operational, and other metrics (and which ones your customers are most focused on) The products you sell probably solve one or more real wound care problems. Adhesion, elasticity, wicking, and fluid retention are all examples of important characteristics of wound care products. But of equal importance, can you competently carry on a discussion with your customers about their key clinical and operational metrics and goals that your products supposedly help them achieve? Can every wound care product manager, account executive, clinical specialist, and executive in your firm or on your team answer (or know how to find out) the following questions that directly affect your customers’ clinical and operational goals and challenges?: What are the most common wound etiologies treated by your customers, and which ones present the greatest challenges (and why)? Do you know how to define key clinical metrics such as MDH, outliers, and others (which can vary across management approaches and care sites) that your stakeholders are evaluated on? Do you understand your clients’ key operational metrics, such as staffing and patient ratios, cancellation rates, average supplies per encounter, and clinical flow metrics (see #3 below)? While an effective NPWT product manager or CTP (allograft) account executive does not need to know all of these points for each customer, a big mistake that many of them make is not attempting to learn more about them when planning or discussing. Strategically, corporate executives can use this knowledge to drive future direction of their R&D efforts and product portfolios. Tactically, field-based professionals can use it as a tool to gain customer trust, and to select which of their product’s features to focus on. Unfortunately, most employees at all levels of most wound care and regenerative medicine firms are unable to articulate these critical considerations, much less incorporate them into their daily sales, marketing strategy, and clinical education activities. 3. Not understanding and adapting to the clinical flow

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Recent Wound Care & Regenerative Medicine Innovation Trends

(20 Jun 2016) Following is the final article in a series reviewing emerging advanced wound care and regenerative medicine trends and implications for the future of the industry. Part 1 focused on wound diagnostics approaches. Part 2 analyzed corporate strategy and positioning among the major wound care players. Part 3 will look at emerging innovative therapies, trends, and opportunities. Emerging Innovative Therapies In my prior post on trends in advanced wound care and regenerative medicine, I stated that the most successful of the next generation of therapies will need to simultaneously deliver high levels of clinical efficacy and cost effectiveness. In this post, I will demonstrate that it is possible for solutions to both meet these criteria and still be highly creative and innovative. Due to my background in both wound care services management and product commercialization, innovators and entrepreneurs in this space often approach me for clinical, financial, operational, and strategic insights before and during early-stage commercialization. The result is that I get an inside look at many emerging solutions, even before they get a lot of attention. However, for many of those solutions, I have also committed to refrain from discussing material aspects of their business. Although I cannot disclose all of the emerging innovations and therapies I have had the opportunity to be involved with, I will share a few exciting ones (and my thoughts on them) that I have no formal business or financial relationships with and can therefore discuss freely: 1) Compression Therapy Meets Smart Materials Ask any vascular, podiatric, or wound care clinician about compression therapy and they will tell you, “It works great–when the patients use it!” Indeed, chronic venous efficiency and related comorbidities are the causes of many advanced wounds (venous leg ulcers), and can exacerbate treatment of others such as traumatic, surgical, and diabetic leg ulcers. In addition to chronic leg ulcers, swelling, blood clots, and other issues can be mitigated with compression therapy. Traditional compression stockings can be uncomfortable and difficult for patients to put on without assistance. This can be due to age, arthritis, poor mobility/flexibility/dexterity, and related issues. Pneumatic compression pumps, which use air chambers to squeeze fluid out of the legs, can also be effective. Yet due to their cost, bulk, and cumbersomeness, patients tend to refuse the modality, or use it for just a few days or weeks before compliance drops. Moreover, they cannot easily bring the pump with them to work, vacation, and other places. It’s no surprise that partial or non-compliance with traditional compression is about 79%. Finally, from the point of view of the physician/clinician/case manager/administrator who is usually the one facilitating the order, the multiple specific documentation requirements and order forms can be a huge hassle compared to ordering traditional compression. (Above: ElastiMed Founder & CEO Omer Zelka demonstrates a prototype of his smart-material-based compression therapy device at the May 2016 IATI Biomed Conference in Tel Aviv) Enter ElastiMed. ElastiMed is using smart materials to develop a wearable compression therapy device to improve circulation in the lower extremity. The lightweight stocking presents patients with a comfortable, easy-to-wear, highly effective and affordable treatment option. The garment, which can be put on effortlessly like a normal sock, holds a lightweight battery. The battery sends regular pulses of low energy through the stocking, which allows it to contract and “massage” the leg, much like a pneumatic compression/lymphadema pump. In short, by using nanotechnology, their solution combines the the mobility and cost effectiveness of a traditional compression stocking with the comfort, ease-of-application, and clinical effectiveness of a compression pump. (Below: a video demonstration of ElastiMed’s technology shows the device and its compression mechanism in action) According to Founder and CEO Omer Zelka, “I was a student of electrical engineering when I found out about the materials, fell in love with the technology, and constructed an improvised lab at home. When I reached a breakthrough with the materials, I started looking for the right application for it…After talking to countless physicians—and especially to patients—I began to understand the pain that people with these conditions experience: The current compression stockings on the market are uncomfortable and very difficult to put on and take off. With the majority of people being elderly or suffering from arthritis, wearing a compression stocking becomes Mission: Impossible. In most cases, they just stop using the stocking, which leaves them vulnerable to DVT, lymphedema, and other venous diseases or conditions such as chronic wounds.” Patient-centric? Check. Clinically efficate? Check. Price attractive? Check. I believe that Elastimed’s technology has the potential to disrupt the medical compression therapy industry, and as a result, to have a significant impact on the delivery of advanced wound care and related chronic venous disease. My industry sources recently informed me of at least one major advanced wound care company that is attempting to develop a similar smart materials compression product as well (launch targeted for 2017). Leading traditional compression therapy firms fighting to differentiate such as BSN Medical (who just announced they are looking to be acquired or listed), Convatec, 3M, medi, Sigvaris, Tactile Medical, and even athletic compression firms like Under Armour and Nike will likely take a keen interest in ElastiMed (if they haven’t already). 2) Growing & Harvesting Human Collagen from Plants As of this writing (June 2016), there are something like 60+ soft tissue related allografts / CTP (cellular and tissue products marketed in the US. Generally, I would not advocate that this is an underserved market in need of new entrants. However, sometimes there are innovative approaches to this space, with implications beyond wound care. CollPlant (TLV:CLPT) is such a technology. CollPlant has developed a method of genetically modifying tobacco plants so that their leaves grow human collagen, which are then harvested and turned into allograft/biological products for chronic, surgical, and related wound care/regenerative medicine applications. Their VergenixFD gel and VergenixWD matrix products were recently awarded CE approval and distribution in some Western European markets. At this time, they are simultaneously working on the necessary clinical trials to gain US FDA approval as well. Why tobacco plants? In ideal conditions, they can grow to a height of two meters (six feet) in one month. Also, their large leaves allow for relatively large quantities

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Setting up the exhibition hall at the Spring 2016 Symposium on Advanced Wound Care (SAWC)

The Race To Assemble The Ultimate Advanced Wound Care Portfolio: An Analysis of Corporate Strategies and Trends

(26 Apr 2016) Following is part 2 of 3 in a series of posts reviewing emerging advanced wound care and regenerative medicine trends and some key implications for the future of the industry. Part 1 focused on emerging wound diagnostics approaches. Part 2 will analyze corporate strategy and positioning among the major wound care players. Part 3 will look at emerging innovative therapies, trends, and opportunities. Putting things into perspective I’m fortunate to interact regularly with sales representatives, product specialists, regional managers, and executives in both clinical and corporate settings. But there is something unique and valuable about attending key industry conferences and trade shows. The ability to walk around and see each firm’s portfolios showcased, to play devil’s advocate with product managers, chief science officers, and CEOs, then to walk over to another booth and toss their competitors’ talking points at them, yields priceless insights. Beyond investor presentations and press releases, seeing corporate strategy and competitive dynamics in the exhibition setting is an inherently valuable experience that puts industry trends in perspective like no other. US advanced wound care is unique By my analysis, there is no segment in US healthcare expanding their portfolios and product lines faster and more intensely than advanced wound care. To this point, I have created the following chart which lays out the major product lines by category, highlighting some of the recent portfolio additions and acquisitions among the major wound care players. It also shows where each player has potential gaps in their portfolio (to be discussed below). This chart will serve as a reference for the rest of this post: Assembling comprehensive portfolios Corporate competitive dynamics are in full swing in the advanced wound care space. Being in a heavily regulated industry, costs of compliance and sales are tremendous. As a result, once companies have overcome market entry regulatory hurdles, they are under massive pressure to ramp up sales in order to capture market share and generate a satisfactory ROI on their costly investments. There are two primary incentives for companies to have comprehensive wound care portfolios: Firstly, when a brand and its sales force have successfully penetrated care sites and captured market share, economies of scale allow add-on products to be sold at a lower marginal cost (because the accounts and relationships already exist). This is especially true for product classes that do not require a large amount of end-user education (such as skin cleansers, foams, alginates, collagens, etc.). Secondly, having a comprehensive portfolio allows for companies to negotiate broad, competitively priced contracts with clinics, SNFs, home health agencies, hospitals, and even entire healthcare systems/ACOs (which we have increasingly seen during the end of 2015 and into 2016). As long as a firm’s sales force is not overwhelmingly distracted by the quantity of products or care sites, there is usually value in having multiple related and complementary products in their “bag.” If the quantity of products grows too large, there are ways to deal with this scenario as well. Strategies include segmenting reps by: a) care site (inpatient vs. outpatient vs. SNF vs. home health, etc.), or b) by product category (dressings vs. allografts vs. NPWT, etc.). Due to the inherent overlap between both care sites and products used, I generally consider it valuable to have at least a small portion of the sales professionals’ bonuses linked to team performance, which incentivizes collaboration and cross-coverage (but too much may disincentivize top performers, which is a huge risk). The above incentives are significant. Combined with the overall growth and trajectory of the need for wound care in the US, the result is virtually all of the major firms racing to fill holes in their current portfolios, with a goal of most of them to ultimately become fully integrated wound care product providers. Identifying the trends: predictions and competitive dynamics There are a number of important wound care trends that can be inferred solely based on the above chart–but there are also other aspects of corporate strategy, culture, and even the personalities of individual executives to consider. These can have a significant impact on each firm’s strategy. To claim that every firm has the goal of filling every product category is overly simplistic and probably not the case. However, there is a clear overarching trend towards assembling comprehensive wound care portfolios because of the economies of scale and distribution synergies discussed above, as well as due to the evolving clinical and financial landscape. For the remainder of this post, I’ll discuss some of the related trends that I have observed and deduced. Trend 1: Product categories and future predictions As US wound care moves towards bundled payment models, many vendors will likely take a more active part in the risk sharing for healing outcomes. In my opinion, future products most likely to be acquired/licensed by the major players will need to be highly cost effective while of course influencing positive clinical outcomes. Specifically, I predict that the most significant activity will be in the following categories: 1) Offloading (total contact casts (TCCs), positioning, etc.); 2) Skin care and wound cleansers; 3) Disposable NPWT; and 4) Wound diagnostics (the topic of my recent post). Lately, there has been an enormous volume of new biological/allograft products hitting the US market. Many of these have been driven by recent changes in the fee-for-service reimbursement model for this product class. Bundled payments will once again cause a shift in usage. This clinically important yet relatively expensive category will continue to play an important role in wound healing, but the focus will shift towards those products with attractive associated characteristics and costs (not just purchase price, but storage ease/cost, preparation/application time, etc. as well). Vendors of these products may even introduce new pricing and distribution models, such as only receiving payment if the product results in certain clinical outcomes, or packaging diagnostics with the product, which might better match the right patient with the right product at the right time. Other high potential innovations such as SevenOaks Biosystems’ outpatient full-thickness autologous skin grafting system (based on technology developed by dermatologist

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