By Christine A. Wu, Research Analyst, LSN
On January 12, LSN gathered a panel of large medical device manufacturers at the RESI@JPM San Francisco Conference. Moderated by Greg Fleming, Investment Director of ALIAD, panelists from Becton Dickinson, Siemens Venture Capital, Abbott Ventures, and Johnson & Johnson discussed how they evaluate and engage with early stage medtech companies, their strategic approach to working with companies, and how early stage companies should approach them.
For all medtech companies, here is your final advice:
- Have an understanding of what the strategic firm is looking for. Albert Lauritano (Director of Business Development, Becton Dickinson) stressed the necessity of doing your homework, while Bill Welch (Senior Director, Abbott Ventures) further advised that “you need to help make it apparent to us how you see [your product] fitting in.”
- Work through the accelerators and innovation centers. Lauritano and Charles Bridges (VP, J&J) emphasized that reaching out to them through their centers may be the best way to determine quickly whether the technology matches their interests. Furthermore, these accelerators may be an avenue of great support—both strategically and financially—for the entrepreneur. Often, there are cross-expertise transfers, where if you have the idea but not the manufacturing facilities, the center can provide for your needs, allowing both you and the center to benefit synergistically. “If you have a company and you want a place to target and grow it,” Bridges explained, “[the innovation center] is a great opportunity.”
- Summarize the differentiating key elements: the team, the IP, the business model, and the regulatory pathway. All panelists stressed the importance of covering these key components in 4-5 bullet points in your pitch deck and material. According to Fleming, these points should answer why the team is well suited to develop the product; what the business model is; what IP and IP potential you have; and the overall regulatory process. “I should very quickly find out what you do and how,” Andrew Jay (Investment Partner of Siemens Venture Capital) noted. “Make it relatively short and to the point,” Bridges added.
- Have a good website. “70-80% of people who are thinking about a company check out their website,” stated Jay.
- Keep in mind that strategics are generally not financially driven. According to Welch, rather than focusing primarily on ROIs and the timeline to reach the next round, strategics focus more on making good decisions, creating good data, and producing good engineering to come out with a robust product. “Time horizons are as long as it takes to get done,” Welch said. “We do require timeline and budgets, but we know things happen, especially when these are high-risk propositions.” While providing the strategic support, medtech strategics oftentimes work with financially-driven VCs as well. “We do want to see we’re not the only ones that believe in the company,” Fleming concluded.
To hear more from this panel, check out this RESI video recap.