Category: Digital Health

Net Health Acquires Tissue Analytics

Today (14 May 2020), Net Health, a leading specialty health software firm with particularly successful market penetration in US wound clinics, announced the acquisition of Tissue Analytics. The entire TA team will remain and join the Net Health organization. This development is significant to the advanced wound care and adjacent industries for many reasons. By integrating the TA platform and team, Net Health will now have (among others): The ability to follow patients across all care settings: From the hospital, to home, and everywhere in between (including even DME [durable medical equipment], which it has already integrated for many manufacturers and distributors). Best-in-class EMR integration competencies. Strong data and predictive analytics capabilities (TA Cofounder and CTO Josh Budman will assume a leadership role which includes predictive analytics). Powerful clinical trials capabilities, which can now leverage vast amounts data from a massive number of outpatient wound care clinics and other care settings, combined with rich product, procedure, and outcomes data. Partnerships across top industry players, which Net Health and Tissue Analytics had independently developed, will now benefit from economies of scale (technical, analytical, and commercial alike). Tissue Analytics was backed by a broad range of institutional and strategic investors, including Dreamit Ventures, digiTx Partners, Chinese conglomerate Tencent, Mölnlycke Health Care, Intermountain Healthcare, and Penn Medicine. Net Health is a portfolio company of The Carlyle Group, Level Equity, and Silversmith Capital Partners. Lastly, it was a great honor to serve on the Tissue Analytics board of directors for the past two years. I look forward to continuing to collaborate with the combined Net Health and Tissue Analytics organization in other ways, as they continue to drive innovation in the wound care and specialty health IT space.

Net Health Acquires Tissue Analytics Read Post »

Followup Q&A from The Business of US Wound Care webinar

Followup Q&A to April 2020 Business of US Wound Care for Executives eLive Event [Video]

For those of you who joined our recent (April 2020) eLive interactive events on The Business of US Wound Care for Executives (with Healiant Wound Training Solutions), have no fear. Firstly, we have scheduled our upcoming events for May 28th and June 3rd, 2020 respectively. The May 28th session will be more strategic in nature–tailored more for senior management, marketing strategists, investors, and the like, perfect for those crafting their corporate, portfolio, or investment strategy in advanced wound care. The June 3rd session will mostly focus on short-term sales and marketing planning, as well as tactical execution. As such, sales managers, account executives, clinical product specialists, and relate supportive roles are most likely to benefit. Of course, for those seeking a 360 degree view of both the strategic and tactical dimensions of advanced wound care, attending both sessions is complementary and will provide those perspectives. There were so many astute questions from the participants at both events, that regardless of whether or not you joined, we’re making the follow-up Q&A available as a resource to all. Watch below: Finally, if you’re interested in a deeper due diligence of some of the themes discussed in the video above, check out the article I wrote back in November 2017, What the Recent Healogics Developments Can Teach Us About the Future of Wound Care. It still remains very relevant today, even 2.5 years after its initial publication (as of this writing), and despite the impact of COVID-19 on advanced wound care. Whether you joined our recent events, plan to join in the future, or have a stake in the implications of commercial and operational wound care developments, contact us to discuss your unique wound care business situation.

Followup Q&A to April 2020 Business of US Wound Care for Executives eLive Event [Video] Read Post »

A visualization of the reduction in weekly wound care clinic patient volumes in early 2020 vs. 2019

COVID-19: Preliminary Operational and Commercial Wound Care Insights

Advanced wound care’s position in the evolving COVID-19 landscape Global economies have been slammed by COVID-19 in the first part of the year. Some biomed sectors, such as PPE, respiratory, and telemed solutions, have seen unprecedented demand for increased production/availability and new innovation alike. On the other hand, orthopedics, plastics, and other service lines with a traditionally large mix of elective consultations and procedures, have absolutely been hit hard. Generally speaking, healthcare systems have taken a hit as they shift clinical resources from their most lucrative revenue drivers to critical care preparedness and treatment. However, when it comes to the supply and demand interplay of COVID-19 on the advanced wound care industry, the results are more nebulous. Even across geographies, the question of whether wound care is an “essential” service line is currently being interpreted differently, depending on who you ask. For example, in several countries across Europe, most wound care clinics are closed. In the US, most wound care clinics remain open–though a significant number are operating on a part time (ex: Tuesdays and Thursdays only, or only half-day hours). Of those operating on a full-time schedule, many are seeing significant patient volume reductions compared to the same period in 2019. From both operational and commercial perspectives, the implications are significant. Forward-thinking executives and investors need to understand and actively plan for the possible scenarios and consequences of their actions (or lack thereof). The operational data, on-the-ground insights, and their implications [T]he keenest wound care executives and investors use real world data not just for making claims about physical products (though that is important, too). By combining data analytics with on-the-ground insights to stress test operational and commercial hypotheses, firms can stay one step ahead of the news cycle. The result is the ability to out-plan, out-invest, and out-compete in the wound care arena, and to be prepared for the possible consequences of their moves. Anecdotally, year-over-year (YOY) volume reductions range from 10% to 40% or more. The figure below shows data, collected and analyzed by Tissue Analytics from across several US clinics that use its wound care measurement and assessment software. It shows a very clear YOY reduction in weekly patient visits of around 5% in early March 2020, steadily growing to 25% as of 17 April 2020 (the most recent data published as of this writing): According to Tobe Madu, the Tissue Analytics data scientist who conducted the analysis, “For this analysis we looked at outpatient clinics since these are the facilities most likely affected by the COVID-19 lockdown mandates. Only clinics that were fully integrated with Tissue Analytics as of the first week of 2019 were considered. The data points presented in weekly intervals corrects for daily fluctuations and reveals a clear decreasing trend for patient visits.” Of critical importance is also the notion of whether the reductions in patient encounters are among existing patients who may be told by their providers to come at less frequent intervals (ex: fortnightly instead of weekly), or perhaps the patients themselves decide to skip appointments, ostensibly due to COVID-19 fears. Likewise, relaxed US telemed reimbursement and restrictions allow for easier remote monitoring and consultations even as clinic-based visits dip. In such cases, we might expect to see a short-term stabilization once a new comfort level in terms of visit frequency vs. COVID-19 risk is met. Clinically, wounds may heal more slowly (lower frequency of debridement, fewer advanced product applications, less utilization of HBOT, etc.), but would supposedly still allow for effective patient triage in most cases. Alternatively, are patient volume reductions driven by a reduction in new wound care patient admissions to the clinic? In other words, are patients in treatment during the early months of of 2020 continuing to come as normal until healed (around ~8 to 15 weeks on average, depending on the case mix and clinical outcomes of the particular facility), yet new wound patients are hesitant to schedule their first appointment? If this is the case–which my gut told me is more likely–then we might expect a continued patient volume free-fall, combined with a major risk of tragic clinical outcomes (including amputation, sepsis, and death) from delayed treatment in the coming weeks and months. Many of these patients will eventually burden emergency rooms, inpatient acute care units, and SNFs, who will inevitably treat the fevers, weakness, elevated white blood cell counts, and other presentations as COVID-19 until test results and a full clinical assessment confirm that the patients’ neglected wounds are the more likely root cause of the symptoms. I asked Tobe from Tissue Analytics about my hypothesis: That patients already receiving treatment pre-pandemic may be likely to continue, but that new patients with wounds may not be scheduling new admissions. If so, then the drop in patient visit volume would be likely to continue beyond the current 25%. Tobe was able to work his data analytics magic to dig into this, too: Tobe further articulated what the above data visualizations tell us: “When we compare the pre-lockdown (wks. 3-11) and post-lockdown (wks. 12-16) period, new patients account for 15% of the decline in average outpatient clinic visits per week. Last year, for the same time period, new patients represented a mere 3% of the increase in total patient visits. The decline in new patient visits appears to be a legitimate concern moving forward even though new patients only represent ~10% of the patient population.” Of course, a larger facility sample size and a few more weeks of data would be beneficial. Likewise, Tissue Analytics’ outpatient customer base may skew towards larger, IT-resourced health systems. Having said that, the data pattern suggests one of two possibilities, either: We may not yet have seen a bottom for outpatient wound center visit volumes. Wound care center operations are fueled by new patient admissions. If new patients are not being admitted to post-acute settings (a good amount are likely ending up in acute settings), then we might expect an ~8-15 week lag for the most severe

COVID-19: Preliminary Operational and Commercial Wound Care Insights Read Post »

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

Underappreciated Advanced Wound Care Opportunities in 2020 and Beyond Read Post »

EWMA 2019 and Executive Industry Forum: Unlocking the Commercial Potential of the US & Asia

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

EWMA 2019 and Executive Industry Forum: Unlocking the Commercial Potential of the US & Asia Read Post »

Consolidation, M&A Integrations as a Competitive Advantage, and Other Advanced Wound Care Industry Insights from 1H 2019 and SAWC Spring [Video]

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

Consolidation, M&A Integrations as a Competitive Advantage, and Other Advanced Wound Care Industry Insights from 1H 2019 and SAWC Spring [Video] Read Post »

Perspectives on Smith & Nephew’s Announced Acquisition of Osiris Therapeutics Today

What happened? Smith & Nephew (NYSE: SNN) will be acquiring Osiris Therapeutics (NASDAQ: OSIR) for $660M. The investment, announced today, potentially repositions Smith & Nephew within the CTP (cellular and tissue-based products) space. If the deal goes through, it will be Smith & Nephew’s most significant M&A deal within that space since the acquisition of Healthpoint (Santyl, Regranex, and Oasis were the key products) for $782M in 2012. Speaking of Santyl, Israel-based MediWound–a firm that is also developing topical debridement products to compete with Santyl–has also announced news today: CEO Gal Cohen will be stepping down, after 12 years with the company. He will be replaced by CFO and COO Sharon Malka. Many are watching closely as MediWound–and some other players/products in the space–prepare to launch products which would compete with Santyl. Santyl has largely been considered a cash cow in the wound care space. But back to the Osiris M&A news: The CTP (also casually referred to as “graft” or “skin substitute”) space has been growing very fast over the past decade, virtually entirely driven in the US. The emergence of different technologies to extend the shelf life of such products has simplified logistics during this period as well. One of the major breakthroughs has been Osiris’ own development and implementation of Prestige Lyotechnology to keep living cells viable without the need (and cost/logistical hurdles) involved with cryo-preservation. What are some of the underappreciated points to consider? Most of the focus about the M&A announcement has been on: Existing sales/sales growth Strong R&D Clinical trial assets and know-how Potential synergies with S&N’s other divisions The above points are fair game and relevant for sure. Especially for non-wound care/regenerative experts, they look great on a whiteboard or slide deck. But digging a bit deeper, we can take a slightly more nuanced look at the potential pros and cons for S&N: Underappreciated points encouraging the acquisition For the types of products they focus on, the Osiris sales and marketing apparatus is among the best in the wound care and regenerative medicine industry. The ability to drive case-based (as opposed to tender-based) sales in both the surgical/acute and post-acute settings with complex, high-margin products, is not one to take for granted in this sector. With the proper integration, structuring, and execution, sales executives with those specialties could in theory accelerate sales of other advanced S&N products, including single-use NPWT (PICO) and some of the former Healthpoint portfolio as well. Much of S&N’s PICO commercial team in recent years has been made up of former Healthpoint executives. Side anecdote: perhaps the best wound care sales representative that called on me when I directed US-based wound care centers was a Healthpoint rep who joined Smith & Nephew as part of the 2012 acquisition. He stayed with Smith & Nephew for some time, and grew his territory’s business significantly. He eventually left S&N due to a perceived lack of advancement opportunities in line with his performance. S&N had among the most full-service and diverse advanced wound care portfolios pre-acquisition. Even compared to some of the other “Top 6” wound care companies, they have been able to offer deeper discounts in exchange for higher utilization of their portfolio. In some cases, they have offered orthopedic and wound care products together “at risk,” guaranteeing replacement products for surgeries at no charge, should the wound fail to heal. In the mid to long term, today’s acquisition may be used to further strengthen that offering. Despite being a multi-billion dollar segment and one of the fastest growing in healthcare, there are not many firms with significant revenues and commercial footprint, yet who are small enough for a major player to acquire. In other words, there are several large, and many, many small players, but not many mid-sized ones to feed an acquisition. Often, the ones who might be otherwise attractive targets find themselves caught up in legal, regulatory, reputational, or other crises. At the time of this announcement, Osiris does not seem to have any such issues. Underappreciated points challenging the acquisition As mentioned above, the Osiris commercialization team has an excellent reputation in the industry. S&N sees the Osiris workforce, of about 360 people, as relatively easy to integrate. Again, this may be a case of everything lining up nicely on the presentation and spreadsheet, but it could be more difficult in practice. Over the past couple of years, Smith & Nephew has lost many of their most talented executives, who often cite a slow-moving, bureaucratic, and risk-averse corporate culture as the reasoning. This corporate culture many not mesh well with the drive that is ingrained in so many Osiris account executives and managers. On the other hand, Smith & Nephew has gone through a senior leadership change in recent months as well. If the acquisition goes through as announced, it will be interesting to see how many of the top-performing Osiris sales and marketing executives are still around in the next few years. Perhaps the biggest unknown in the wound care regenerative medicine space is the issue of reimbursement. Recently, there have been some small but potentially foretelling reimbursement developments pertaining to CTPs in the US. Government and payer policy can be extremely tricky to predict, but this is a segment which is heavily influenced by it. Companies like Osiris Therapeutics, Organogenesis Inc. (NASDAQ: ORGO), Integra LifeSciences (NASDAQ: IART), and Acelity [update: 3M (NYSE: MMM) announced it would acquire Acelity less than two months after news of this S&N-Osiris acquisition broke] have historically led the sector with investment in R&D and post-market surveillance trials. However, regulators and payers alike are increasingly asking the question, “Is it enough?” Among industry, this is a tough one: On the one hand, most wound care patients have so many comorbidities that traditional pre and post-market clinical trials in this space are designed such that they exclude vast amounts of patients because traditional investigators otherwise do not know how to control for those variables. The result is that the enrolled patients–both in

Perspectives on Smith & Nephew’s Announced Acquisition of Osiris Therapeutics Today Read Post »

2019 AAWC Pressure Ulcer Conference 2019 Feb - Diligence Wound Care Global

Debrief: Association for The Advancement of Wound Care (AAWC) 2019 Pressure Ulcer Summit [Video]

The Association for The Advancement of Wound Care (AAWC) has just wrapped up its pressure ulcer summit in Atlanta, Georgia. Highlights included: The patient journey International participation and sharing of approaches (Switzerland, UK, Ireland, Mexico, and others) A pressure ulcer workshop Technical and scientific discussions Challenges and opportunities across the continuum of care Advocacy for policy changes (lobbying) Administration, operations, billing, and related session Showcasing of new technologies for prevention, early detection, and treatment Many attendees shared very positive feedback that they appreciated being able to dive deep into the pressure ulcer diagnosis, etiology, and treatment delivery, as opposed to covering many types of advanced wounds at a basic, surface level. In keeping with this approach, the next AAWC conference/education series will be a Wound Infection Summit to dive deep into the unique considerations for prevention and management of those wound types. Immediately following the summit, I had the opportunity to sit down with Kara Couch MS, CRNP, CWS. In addition to her active clinical role at The George Washington University Hospital’s Wound Healing and Limb Preservation Center and multiple scientific and editorial advisory board positions (including Today’s Wound Clinic together with Diligence Wound Care Global Managing Director Rafael Mazuz), she is also a board member and Secretary of The AAWC. We discussed a range of topics, including product standardization, organizational structures and collaboration models for wound care programs, KPIs and metrics, digital health, and prevention. Watch the full interview below:

Debrief: Association for The Advancement of Wound Care (AAWC) 2019 Pressure Ulcer Summit [Video] Read Post »

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

Investing in Advanced Wound Care? Avoid These 3 Costly Mistakes Read Post »

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.

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

Diligence Wound Care Global Managing Director Rafael Mazuz Joins Tissue Analytics Board as Independent Director

We’re thrilled to share this important announcement (read the official press release here). But even before getting into the details of the features and capabilities of the Tissue Analytics (TA) platform, it’s important to convey why we decided to stake our reputation on this particular innovative skin and wound care company in the digital health space. After all, we serve top wound care brands, from dressings and compression therapy, to negative pressure wound therapy (NPWT), to cellular and tissue products (CTPs), to pharmaceuticals, and everything in between. We work diligently to raise the bar for every client, for every product and service, across every market. Then why, when it comes to the mobile assessment, integration, and analytics segment, have we aligned with a specific firm? Because we see firsthand what they have delivered for our clients. Over the course of several years, we have had a chance to evaluate most of the solutions in this space, visited and worked with hundreds of facilities and clinicians, and advised scores of leading and rising product firms. This allowed us to see the platforms–and the teams behind them–operating in the real world of wound care business. Some companies had great teams but were clueless about market needs or security requirements to protect sensitive health data. Other solutions were overly cumbersome and expensive. Some simply lacked the honesty and integrity standards that are critical to our institutional investor, MNC / SME / startup, and trusted healthcare services partners and their brands. In contrast, Tissue Analytics is well-liked and has consistently delivered for wound care stakeholders, including real-world use cases such as: Objective, accurate, fast, and cost-effective multi-site clinical trials (obeservational + interventional; pre + post-market) resulting in faster and cheaper go-to-market execution Marketing strategy execution and long term brand value for a major global distributor launching new products across multiple markets simultaneously Turnkey full integrations across major EMRs (almost unheard of in the healthcare industry), resulting in faster deployments and fewer IT (expensive!) resources Exponential ROI from reduced operational, regulatory, and compliance expenses and penalties Connecting data from digital and smart diagnostics (perfusion, temperature, pressure, moisture, infection, etc.) seamlessly with EMRs, care navigators, and clinicians Empowerment of field-based, non-wound-certified clinicians via virtual wound care services (telemedicine) 3D rendering of wound depth and surface models without the need for external hardware attachments Best-in-class analytics capabilities, which opens up machine learning (ML), artificial intelligence (AI), risk sharing, and many other “holy grails” of wound care (and healthcare overall) As our clients increasingly dealt with forces and developments such as: Expiration of IP and (perceived) commoditization / lack of differentiation across multiple product categories High costs and enrollment periods for even small (<100 patient) trials at a small number of sites Difficulty for less-established players to penetrate the market Increased influence by healthcare systems, MCOs, and wound care management firms over purchasing and treatment decisions Reimbursement pressures and documentation scrutiny (in the US) Lack of options for treatment and usage data insights from across the continuum of care …we simultaneously observed and interacted with the TA team as a result of our normal business activities. It became clear that in the midst of such a turbulent era in the industry, TA is a hi-tech engine to help deliver the captain, crew, and passengers to their destination faster and more efficiently. It’s also the best solution to connect all of the new digital-enabled and smart devices, diagnostics, telemed services, and other emerging wound care innovations (and the data points they generate) with the providers and other stakeholders. Without a seamless conduit for that information, those solutions will struggle with real world adoption. TA is the front-runner to be that conduit. In the coming weeks and months, many more industry collaborations will be announced. They involve some of the most cutting edge companies in this space partnering with Tissue Analytics on impressive, next-generation initiatives that are raising the bar for the development and delivery of advanced wound and skin care. Many of the innovations in development and launching are great ones to integrate with the TA platform, too–removing obstacles to adoption of such solutions. In fact, multiple companies we work with are already eyeing TA as the cornerstone of their new product commercialization plans. Rest assured that regardless of whether wound care stakeholders leverage Tissue Analytics, another digital solution, or shy away from this dimension of the industry completely, Diligence Wound Care Global will remain a radar and GPS to guide them safely and with confidence. Update: As of April 2020, Tissue Analytics, Inc. has been acquired by Net Health, Inc. Become a keener wound care executive. Are you a health care, services, and/or medtech executive involved in skin and wound care? Do you have strategic, operational, R&D, or marketing goals that might be executed in a more successful, cost effective, and agile manner by leveraging new digital health platforms such as Tissue Analytics? Get in touch to discuss your unique wound care business challenge and whether Tissue Analytics might be part of the solution.

Diligence Wound Care Global Managing Director Rafael Mazuz Joins Tissue Analytics Board as Independent Director Read Post »

Is This The Most Innovative Wound Care Product Since Negative Pressure Wound Therapy? [Video]

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.

Is This The Most Innovative Wound Care Product Since Negative Pressure Wound Therapy? [Video] Read Post »

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

The Case for Emerging Market Wound Care Read Post »

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

Recent Wound Care & Regenerative Medicine Innovation Trends Read Post »

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

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