Conferences & Events

The European Wound Management Association (EWMA) conference in Gothenburg, Sweden earlier this month was a great success. We witnessed several important advanced wound care innovations and announcements: From new approaches for addressing nonviable tissue and infection, to CTPs (cellular and tissue-based products) which are financially viable in non-US markets, to sensors and other digital health approaches, to further exploration of companion diagnostics and strategic pivots by leading companies–the signs were all there to those who knew what to look for. Each one of these topics could be the subject of a lengthy analysis. Yet this post will focus on the EWMA Executive Industry Forum, which is one of the few (perhaps the only) setting where top executives from multiple leading firms get the chance to interact live and share their visions with the broader business and investment community. Executive Industry Forum Interaction Report We incorporated live polling of our executive and investor audience throughout the forum. So let’s begin by sharing the actual Event Interaction Report (note that not all options add up to 100% because poll participants were able to select multiple responses): Click here to view the Event Interaction Report or scroll down in the embedded version below: Some takeaways:   United States Advanced Wound Care Trends, Challenges, and Opportunities: Poll participants were most concerned with the reimbursement, healthcare economics, and regulatory frameworks. This was followed by a perceived lack of clinician education / training / specialization. Challenges related to language, culture, and local competition were of least concern. Some of our panelists articulated the unsustainable nature of the US fee-for-service model, and how that must change. Others expressed less concern regarding the sustainability of the system as a whole, but acknowledged the reality of new dynamics. In the words of one executive on our panel, “It used to be that in the US, you could have a better product, and charge a premium price, or you could have a slightly inferior product, but at a slightly lower price. Now, the expectation is that your product will be both better and less expensive.” There was some optimism from the panel around the HEOR (healthcare economics and outcomes research) models which have been built out in Europe and other markets, which may get some mileage in the US given the recent market forces trends; However, overall there also seemed to be quite a bit of hesitation as to whether the AWC industry as a whole has figured out / made enough progress in this area to “put their money where their mouths are” and actually take their products and protocols to the payers with a guaranteed outcome. One area where most of the panel agreed (at least those who spoke to this topic) is on the need for some better standards in the industry–whether for product claims, clinical trial design, or others. On the topic of recent high levels of M&A and digital health activity/investment, the consensus from the panel is that it is not just a fluke, and will absolutely continue into the foreseeable future. Asia Pacific Advanced Wound Care Trends, Challenges, and Opportunities: Poll participants were most concerned with local competition (distribution, price points, established relationships, etc.) and the lack of / difficulty in establishing a regional presence by the principal firm (i.e. needing to rely on local distributors for sales, marketing, and support). Interestingly, intellectual property (IP) concerns were cited by a minority of survey participants. Yet our executive panel did seem to express significant concern about it, explaining how such risk impacts all decisions, from product design to partnership selection. Compared to the poll on the US a few minutes prior, the challenges concerning Asia were much more varied (no individual option reached a 50% majority), implying that participants view AWC challenges in Asia as more diverse and dynamic. A majority (52%) of poll participants considered China (followed by Japan) to be the greatest mid to long term AWC opportunity in Asia–a perspective that the panelists seemed to echo–yet there was still enthusiasm around all of the Asian geographies given as options. We discussed the demographics of an aging population and the practical remnants of the “One Child Policy” on healthcare needs such as advanced wound care: A couple (two people) caring for four parents plus their own children, and how that impacts the time and financial resources to deal with conditions such as chronic wounds. In addition to aging, the sheer size of the population (China and India alike), the socioeconomic trends, and the potential for local partnerships were all highlighted by the panel as drivers they consider when evaluating the commercial potential of specific Asian markets. The concept around what is allowed in Asia from a legal and regulatory perspective was discussed: For example, it is not uncommon in many Asian markets for healthcare providers to be proprietors of product distributorships, or for product manufacturers to openly own and operate their own healthcare / wound care service lines. Still, even our executive panel admitted to fundamentally struggling with wound care in Asia. They all appreciated the opportunity, and some offered up some victories in terms of establishing local partnerships and driving educational efforts. Yet admittedly, none have managed to “crack the nut.” One of the executives who came from a pharma background remarked how for most big pharma companies, China is their second or third largest market–with many times more sales and marketing reps there compared to countries in Western Europe. When it comes to advanced wound care, however, the relationship is totally flipped. We discussed some of the digital and educational initiatives each company has explored in recent years, and which components might be leveraged to drive AWC in Asia (and in other markets, too). Each of the participating firms have some form of digital strategy and presence, but they have begun to manifest themselves in different forms at each respective organization. Final Thoughts All in all, our Executive Industry Forum was extremely well received. Several companies hold global team meetings

At the recent Symposium on Advanced Wound Care (SAWC Spring 2019), there were several interesting developments and companies to watch (scroll down for a video interview we did with one of them). But without a doubt, the major advanced wound care (AWC) industry theme in the first half of 2019 has been consolidation. Given the increasing size and frequency of recent deals in the sector, it also may be time to discuss if, when, and how executives and investors might potentially begin to look at companies’ handling of post-M&A integrations as a core competency–and perhaps even an opportunity to develop new competitive advantages?   Recent corporate activity To be clear, M&A activity in this space has been ramping up for years. To recap just a few: 2017: Integra Life (IART) Science’s acquisition of Derma Sciences Organogenesis’ (ORGO) acquisition of NuTech Medical Essity (ESSYY)’s acquisition of BSN Medical 2018: Acelity’s acquisition of Crawford Healthcare Mölnlycke Health Care’s acquisition of SastoMed Urgo Medical’s acquisition of SteadMed Medical Yet both the quantity and scale of activity in just the fist half of 2019 alone is essentially unprecedented. At least six deals, three of them mid-to-large (by  AWC industry standards, not necessarily when compared to medtech or pharma overall), and all of them strategic, occurred: 1H 2019: 3M Company’s (MMM) acquisition of Acelity (KCI + Systagenix) for $6.7 billion including assumption of $2.4 billion in debt (expected to go through later this year) Smith & Nephew’s (SNN) acquisitions of Osiris Therapeutics for $660 million and Leaf Healthcare for an undisclosed amount Misonix’s (MSON) acquisition of Solsys Medical for $97 million in stock, plus assumption of $20 million in debt Mölnlycke Health Care’s acquisition of M&J Airlaid Urgo Medical’s acquisition of Realm Therapeutics (Vashe) Perspective and significance The 3M-Acelity and S&N-Osisis deals are both considered very large relative to historical activity in the AWC sector. In particular, 3M and Acelity were both “Top 6” AWC players before the acquisition, and the combined entity will command a very significant scale, particularly in the US (about half of the global AWC market), but also in the rest of the world, where Acelity traditionally lagged but had impressive growth leading up to the acquisition, and 3M already has a solid presence. The S&N-Osiris deal pulls a top regenerative medicine company (with a particular AWC focus) into the portfolio of a “Top 6” AWC firm. Before the acquisition, S&N already had what we might casually be referred to as “tissue growth acceleration” products like Oasis and Regranex, in addition to active healing assets such as PICO (single-use NPWT) and Santyl (collagenase ointment for enzymatic debridement). While clinically different, those products shared similar sales call points, reimbursement support infrastructure, and other considerations to the Osiris portfolio. The Leaf acquisition, while certainly much smaller in size, is in line with strategic trends in the AWC space overall: Pressure ulcer prevention and offloading is among the skin and AWC product segments with the most focus in recent years. Moreover, it put S&N particularly head-to-head with Mölnlycke (who acquired patient turning, positioning, and offloading device firm Sundance Systems in 2016), with both companies claiming their respective foams, adhesives and turning/offloading systems as a three-pronged approach to pressure injury prevention and care. Pressure ulcer prevention and treatment has become such a key battleground in the AWC sector that it was the subject of a lawsuit filed by Mölnlycke in 2017, claiming misleading and unsubstantiated advertising. As of May 2019, both firms continue to assert their respective skin and pressure injury portfolios, even as multiple new entrants have launched solutions for prevention, early detection, and treatment. Prior to this new round of major acquisitions, if there were such as title as “most comprehensive and sophisticated AWC portfolio,” Acelity and S&N would likely have been the top contenders. After all, both companies boasted solutions for most key categories of AWC therapies, and each had several assets with significant market share in their respective categories (debridement, traditional NPWT, disposable NPWT, etc.). The timing of the above acquisitions couldn’t have been more exciting, as each firm bolted on multiple asset classes which too enjoyed significant account penetration and market share (single-use compression, film dressings, CTPs, etc.). The developments were almost like watching two racers neck-and-neck, when both simultaneously increase their pace. At the same time, the “rules” of the sport are evolving in real time, with reimbursement and pricing pressures, continuum of care, digital health and wearables, prevention, diagnostics, and the global markets shaping the terrain ahead. Although overshadowed by the massiveness of the 3M and Smith & Nephew deals, Misonix’s purchase Solsys Medical was also significant. Why? Because traditionally, most of the  major cellular and tissue product (CTP) / biologics / allograft / “skin sub” product firms’ portfolios are pure plays in that space (they might have different formulations or sizes). Likewise, debridement is a crucial wound care need, with relatively few options on the market considering how important proper wound bed preparation is for wound healing. Almost none of the other advanced products–CTPs, NPWT, dressings, ointments, rinses, and even diagnostics, are effective if they cannot come into contact with viable tissue (and if the “chronic” wound is not turned into an “acute” wound). At the same time, selling debridement products, especially those involving a capital equipment component like Misonix, can be complex. In this sense, at least on its surface, the combination is a good fit that significantly expands the reach and offerings of two companies that each benefit from the others’ portfolio and team. Although a smaller deal than the 3M and S&N ones above, care must of course be given to the actual integration efforts as well. The last two deals listed (Mölnlycke-M&J Airlaid and Urgo-Realm Therapeutics) are smaller and appear to be driven by control of sourcing, protection of intellectual property (IP), and other vertical integration considerations: Important roll-ups, but likely not to be viewed as game-changers. However, they also come just months after other important M&A activity by both Mölnlycke and Urgo alike–and

Like many of my wound care colleagues, I have experienced and worked with hundreds of wound care products. Some are basic yet effective, while others are both advanced and powerful. There are also many complex yet under-impressive options out there. Recently, I’ve had the pleasure of collaborating with a new innovation that really has the potential to disrupt the clinical, operational, and financial status quo: Granulox by SastoMed. At the recent SAWC Fall 2017 in Las Vegas, I sat down with Cofounder and CEO Michael Sander to discuss. Watch the interview below:   In summary, there is an unmet need for a product like Granulox: The role of hypoxia (lack of oxygen) in wound healing problems is well documented and affects most difficult-to-heal wounds to some extent. Existing topical oxygen treatments are not effective because even a very thin layer of water/exudate (which covers most wounds) blocks 99% of external oxygen from entering the wound bed. Current systemic and advanced treatments, such as revascularization surgery and hyperbaric oxygen therapy (HBOT) have their own unique risks, costs, and other limitations–though they can still be used with Granulox, which is an adjunctive treatment (and it can be used with almost any other products/procedures like xenografts, autografts, offloading, and most advanced cleansers and dressings to enhance their benefit). By leveraging the body’s natural mechanism of oxygen delivery (facilitated diffusion via hemoglobin), Granulox: Doubles healing speed. Eliminates slough recurrence in virtually all wounds within four weeks (it’s not a substitute for debridement, but it reduces/prevents the formation of new slough between dressing changes). Cuts pain in half without the use of drugs, patches, or gels. Does so for practically any wound etiology (type), is compatible with most other products and procedures, and without the added operational and financial burdens of many other advanced wound products. I also find it fascinating that it has been used on over 60,000 patients and sold in 31 markets (40 including in-process registrations) to date, not yet including the US–traditionally the largest wound care market by sales. When it arrives in the US (by far the largest advanced wound care market), its potential is enormous. As such, I’m very excited for this product to be available in the US as it works its way through the US FDA process. Until then, if a loved one or I were to have a complex wound and were still able to travel, I might even suggest they travel to Thailand, Malaysia, Germany, The UK, Poland, Turkey, Mexico, or the dozens of other markets where clinicians have access to this potential game changer. SastoMed also has some other innovative products and indications marketed as well as in their pipeline, too. The most impressive wound care cases and data I’ve seen in my industry career have come from combining Granulox with other well-known and accepted advanced therapies to “push the boundaries” of what even experienced clinicians believe is possible. Adding effective, easy oxygen delivery to the provider’s toolbox has really begun to raise the bar where it’s available. With increasing HBOT documentation and reimbursement pressures in the US market, additional scrutiny of cost per healed wound, and of course the skyrocketing number of chronic wounds, this reinforcement couldn’t have come sooner.   Update: Nine months after the original publishing of this article, SastoMed was acquired by Mölnlycke Health Care, a leading wound care and surgical solutions company.