Innovation Competition as a Tool for Supporting Clinical Innovation

Transcription

1 Part-financed by the European Union (European Regional Development Fund) Innovation Competition as a Tool for Supporting Clinical Innovation Concrete Business Development Cases in the BSHR HealthPort Project Output from the Work Package 5 December 2013 Suvi Tuiskunen, Veneta Nieminen, Kati Takaluoma, Riikka Paasikivi Culminatum Innovation Oy Ltd Contact person: Riikka Paasikivi 1

2 Summary This report summarizes the winning business cases in two innovation competitions organized in 2011 and 2012 within the BSHR HealtPort project. The goal of the competitions was to boost the commercialization of clinical inventions by early idea evaluation and expert support in business development as well as by supporting early access to capital. The concept has proven to be efficient and the prize complements well the other available innovation funding instruments. The four winners of the first stage competition were Oxygen Soother, MODZ (previously Dr. Modz), ErgoFinger and GoodLife. The cases were evaluated based on four criteria; business potential, market size, entrepreneurial attitude of the team and superiority of the innovation. The aim of the competition was to support winners to achieve a proof-of-concept, help them with the business plan preparation and to clarify market opportunitis and to develop the idea towards a more mature business case. The theme of the second stage competition was Getting ready for the investment indicating that it was addressed to more mature cases that were already ready for finding venture capital financing. The competition prize was divided between two companies; TBD-Biodiscovery and Relaxbirth, which both act t on a niche market and have prospects of generating reasonable sales in the close future. In both competitions the prize the coaching - was tailored according to specific needs of the companies The innovation competition prize in the form of tailored support action was considered very practical and useful by the winners from both competitions. The goals were well achieved as several products have been launched or will be launched in the very near future. Another aim was to attract funding for the business cases and already several companies have been successful in acquiring or are in the process of negotiating investments or other type of research and innovation funding for developing the product further. Introduction Healthcare is not only a cost for society but also as a driver of a competitive and knowledge based health economy. The project "Business acceleration support and training bridging innovative SMEs and healthcare organizations to strengthen BSR health economy" (in short BSHR HealthPort) focuses on the interactions between health service providers and SMEs with the aim of enhancing innovation, reducing healthcare costs and promoting SME access to the BSR healthcare market. BSHR HealthPort promotes a strong and sustainable Baltic Sea Region health economy. BSHR HealthPort is co-financed by the Baltic Sea Region Programme and is part of the EU Baltic Sea Region Strategy flagship ScanBalt Health Region. In the BSR HealthPort project two innovation competitions have been organized for early phase ideas. The first competition was held in 2011 and the second in The objectives of the HealthPort Innovation Competition were to enhance the commercial utilization of the ideas and inventions from the health care sector, to promote the reduction of health care costs and SME access to the BSR health care market. 2

3 Figure 1: Stages of the HealthPort Innovation Competition The idea of the competition is that it is open to private person(s), teams and companies (SMEs) from the Baltic Sea Region (the Nordic and Baltic countries, Poland, Northern Germany and Northwestern Russia) in addition with the neighbouring region Northern Netherland. The scope of the competition is multidisciplinary. The award can be granted for ideas or inventions in the area of healthcare and medical technology (e.g. diagnostic and therapeutic tools and technologies, medical tools (e.g. syringe, patches), laboratory, ambulance and hospital equipment and technology), and related services. The idea or invention should allow the development and commercialization of a product or service concept that benefits patients and attract potential investors. The prize would be financial and coordination support for the business development to take the innovation further on in the development process. This is coordinated by the organizing clusters. The purpose of the prize is to provide the SMEs with different skills, most of which are not necessarily in the tool box of an individual SME, regional cluster or a health care professional. The outcome and experience gained created a concept for an annual BSR idea competition that is presented more in depth in a HealthPort report by Takaluoma et al. (2013). In the 1 st Innovation Competition four cases were selected as winners and received support for early business development such as POC, business plan preparation, team building, clarifying market opportunity and meeting with potential customers. Whereas in the 2 nd Competition the prize was targeted to more mature innovations that could benefit from support actions such as attracting private equity and venture capital financing and negotiation support with financiers. 1st Innovation Competition: From Idea to Business Case HealthPort Innovation Award was distributed to four winners at the ScanBalt Forum 2011 in Heringsdorf, Germany. The winners received early support actions in relation to proof of concept, business plan preparation, team building, clarifying market opportunity and meeting with potential customers. The coaching was tailored according to companies needs. The jury of the 1 st Innovation Competition evaluated Oxygen Soother, Dr. Modz, ErgoFinger and GoodLife as the most market potential cases that would also benefit from the expert coaching provided by the project. Oxygen Soother The Oxygen Soother is a fluid guiding system that consists of a soother with a built-in oxygen tubes. It supplies additional oxygen to small children and ensures children a better recovery. A child will have the comfort of the soother along with the benefit of the oxygen supplying therapy. The advantage of this solution is that the fluid guide consists of an adaptor that can be mounted on all available soothers. Commercially, the solution will be a good complementary 3

4 solution to other methods, which have shown their limits. The Oxygen Soother will be used for children using soothers, up to 3 years of age. The Oxygen Soother was developed by Ideas Clinic at the Aalborg Hospital in Denmark. Signe Bjørn, Anesthetic & Intensive Care Nurse, Department of Anesthesia, Aalborg Hospital, had the idea to use a soother to deliver oxygen to children. Søren Grøndahl Buch, Production Engineer, Aalborg Hospital Innovation Center participated in prototype development. Targeted market: Europe Priority countries: UK, France, Germany, Spain and Italy Targeted customers: public and private hospitals and clinics When entering the HealthPort Innovation Competition the development of Oxygen Soother was in the prototype stage and the team s target was to find partners for manufacturing, marketing and distributing the product. They had already been applying for funding and realized that more market analysis needed to be done. Thus the prize of the competition was used for developing a business development plan including a professional market analysis in order to get more reliable commercial information about target markets. The coaching was executed from September to October in After the market analysis was made the contemporary partner of the team chose to resign from the collaboration. Regardless of that, the team decided to continue with the project. The market analysis showed that there was a lot of interest towards the project and the team got confirmed they have a good product. Consequently, Aalborg University Hospital is currently working on the final prototype which is expected to be ready for clinical trials in Denmark and Spain in the beginning of the year The trials are estimated to take 6 months and include testing of medical and observational aspects of the product. What comes to partnership, they are looking for opportunities and have had several contacts with a company that works with anesthetic products. As an outcome from the coaching process the team can position itself better on the market. The process helped them to go more into details and thus to clarify their possibilities. It was a learning process for the team as it showed that they need to take the project further in a more efficient way. It means that aspects of e.g. projectization, distribution, commercialization and global market are taken into consideration. Project stages need to be recognized also when to go on and when to take a step back. A documented proof-of-concept is the key when convincing the investors. To reach something concrete a lot of commitment is needed. All in all, the coaching helped the team to go further with the development process. Oxygen Soother was requested to take part also in the second innovation competition, but they decided not to go forward to advanced support actions. MODZ (Dr. Modz) MODZ Oy was founded in Finland in 2009 and it operates in the niche market of diabetic juveniles. The first product to be commercialized is a unique diabetes management system for type 1 and type 2 diabetes care, called MODZ blood glucose meter (previously Dr. Modz). The ideas behind the blood glucose meter are based on real life experience and the needs of real end users. The MODZ makes the user's life easier with ease of use and intelligent features; it is e.g. motivating the user to keep up with the good balance of 4

5 care. The innovation is a blood glucose meter incorporated into a small mobile device with a touch screen. MODZ s design approach combines the latest medical research, the most appropriate new technologies and extreme user- friendliness. Salla Koski, CEO, originally a licensed physiotherapist Carina Rajala, CFO Mikko Tasanen, CTO Early support actions that MODZ Oy required were expert help for designing and administrating clinical trials needed for the CE mark. The coaching started in December 2011 and the company received support in applying for permissions, designing the research plan and making all the needed declarations for clinical trials. The planned trials however were never made in Finland but were later done abroad. In addition to the concrete material produced and complementing the missing skills in the company, the competition brought credibility and visibility to MODZ. The coaching was a complete learning process for the team. The company has received a product development loan from the Finnish Funding Agency for Technology and Innovation, Tekes. The product development phase is over and the company is waiting to receive the CE mark in the end of 2013, thus the company is in the launching phase of the product. MODZ Oy has signed a contract with a new shareholder in November 2013 so they will be receiving a new investment. The company has also been growing and able to complete its competences by hiring new staff. MODZ Oy was nominated one of the Red Herring Europe 2012 Winners. ErgoFinger ErgoFinger is an innovative aspirator device, coming in the form of a disposable finger-affixed aspirator tip. It promotes a better balanced musculoskeletal health enabling the desired ergonomic and correct work posture, thus helping to achieve a high clinical level of treatment. The finger-affixed aspirator tip is efficient and precise in removing the liquids without any particular effort by the dental professional and additionally it improves visibility of the working area. The more natural working posture prevents repetitive strain injuries and musculoskeletal diseases that are common in dentistry. The originators of the innovation are two dental hygienists from Finland. The innovation is a solution to an actual practical problem they face daily while working alone. Gunilla Taddeo, takes care of project s overall progress and documentation, and is in charge of planning and implementation of the project. She takes care of networking, contacts and communications. Marianne Granlund is in charge of marketing and customer interface. Her special strengths are stage presentations, networking, contacts and communications. The early support actions were executed between May and November in The process concentrated on product development: looking into cost-effective industrial engineering as well as finding suitable production material. As a result and the most valuable outcome, an excellent prototype including the design of manufacturing processes was developed. Furthermore, the process resulted in establishment of 5

6 the company ErgoMedi Oy. Also some business development coaching was done by the project personnel and the ecosystem. After the coaching the first end-user tests for POC were completed. ErgoFinger was classified into CE category I meaning the clinical studies are not required. However, the company is running usability tests that will be ready and reported in Cooperation with the coach is still ongoing the ErgoFinger is further developed and moreover, designing of a new product for the product family has already started. The company has received a remarkable investment in the autumn 2013 and the Finnish Funding Agency for Technology and Innovation Tekes is funding a project for planning the mass production. ErgoFinger has also received the support of the Foundation for Finnish Inventions and Runar Bäckström Foundation Scholarship in 2011 and 2012 for the development of the invention. ErgoFinger was launched in the biggest dental science event in Finland, the Finnish Dental Congress and Exhibition, held on the 7-9 November GoodLife GoodLife is a project of Agile Media Oy that offers tools for occupational wellbeing. Agile Media Oy was founded in 2008 in Finland. In the project mobile applications that support knowledge workers wellbeing in the working environment were created. GoodLife applications promote wellness by using scientifically proven methods combined with research results and long experience from gaming industry. The innovativeness behind GoodLife Micro Wellness Solutions comes from sports psychology/coaching and published brain research results combined with game development. Lauri Haiko, CEO and the inventor of the Goodlife service has more than twenty years experience in ICT business, software development and sports coaching. He has also six years and almost 100 cases experience from university research results commercialization. Antti Villanen, (consultant) one of the founders of Finnish game industry and has more than fifteen years experience in game development. He has also been part of many Finnish game industry international commercializing success stories. Agile Media Oy won the competition with their project GoodLife. As there already was a lot of business know-how inside the company, the prize was used for technology consulting aiming at proof of concept. The focus of the support actions was on developing a demo version of the product for pilot testing and the actions were completed in March Market launch of the first mobile application Agile Mouse Hand was in August 2012 in the Windows Phone marketplace. The first app was listed as no 1 in "health and fitness" category in Finland and in Nokia App Highlights (Now: App Social). Later on, two other applications were launched. During the support actions also company s business plan and marketing strategy were updated. Despite the successful support actions, the business volume of the product was too low in order to become profitable. Thus the further development of the applications is pegged for now and the company is concentrating on other software projects and business management consulting that has been the core of the company from the beginning. 6

7 2nd Innovation Competition: Getting Ready for Investments The HealthPort project partners scouted and recommended participants for the 2 nd Innovation Competition. Altogether 6 HealthPort Pilot Case application forms were received for commercial evaluation purposes. Five of these were product based innovations and one was a service concept. The Jury selected two cases as winners of the HealthPort Innovation competition: TBD-Biodiscovery s API/HPAPI development and production from Estonia and Relaxbirth Ltd s Relaxbirth Birthing System from Finland. The jury stated that both companies act on a niche market (high-potent oncologic APIs/birthing support device) and could generate reasonable sales already in The winners were entitled to tailor made support actions in the form of consultant services to speed up market entry and global sales and to attract financing. The award ceremony was in ScanBalt Forum that was held in November 2012 in Tampere, Finland. TBD-Biodiscovery TBD-Biodiscovery is an Estonian contract manufacturing and research company that helps pharmaceutical and biotech companies produce new drugs. It was founded in 2006 as a spin-off of the University of Tartu, Estonia. TBD-Biodiscovery has three areas of expertise: synthetic organic chemistry, Good Manufacturing Practice (GMP) experience and microbiology. They supply the main components of drugs, known as Active Pharmaceutical Ingredients (APIs). They are highly experienced in three classes or types of chemical compounds: anthracyclines and peptidomimetics, which are used as APIs for cancer treatment; and insect pheromones, which are used as biopesticides in agriculture. TBD has a well-educated and versatile staff in research, development and manufacturing. Andrus Tasa, CEO, PhD in genetics/microbiology Olga Tšubrik, Head of business development, PhD in Organic Synthesis Market: Germany, Finland, Switzerland, Latvia, the United States, Israel, UK, Russia, Italy, Austria, Sweden and Spain One of the project partners recommended TBD-Biodiscovery to take part in the idea competition. TBD- Biodiscovery was at the stage where they needed to define their future goals and decide what to concentrate on. The company was lacking international marketing and business development experience, which would be important in implementing their international partnership strategy. TBD-Biodiscovery used the HealthPort Innovation Competition prize funds for international business consultants to help them in reviewing the company s business plan. Target was to redefine their strategy and find investments for new growth. The coaching was divided between two coaches (Seppo Mäkinen from Taikon Advisor Oy and Eskil Söderlind from Avena Partners AB). The coaching consisted of discussing about the strategy, sales and marketing, preparing the presentations and discussing with investors and partners. Materials produced during the coaching were business plan, presentations and strategy. The work was done together in a communicative way. The most valuable outcome from the coaching process for the company is that they have found a very good strategic line to follow and they know now how to create value. They are very ambitious and ready to move 7

8 to the next level as a company. The coaches will be in the advisory board of the company which indicates that they have been very pleased with the collaboration. The current status of TBD-Biodiscovery is steady. They are expecting to receive an investment in the beginning of year The firm situation lets them concentrate more on thinking and they are looking investments for growth. Relaxbirth Relaxbirth is a birthing support device, which improves the childbirth process for mothers and personnel. Included are also service and training that are important part of the concept. Relaxbirth maximizes the mothers natural ability to give birth and helps the professional aid the mother in a most beneficial way. The system consists of the CE-marked device, method and training of the midwives and it was developed on the basis of user experiences. The method is based on decades of midwifery and practical experience as well as psychological, ergonomic and physiological expertise and skills. Relaxbirth Ltd. was founded in Finland by trained nurse and midwife Eija Pessinen. Jukka-Pekka Luostarinen, CEO Elina Kostiainen, Vice CEO Eija Pessinen, Vice CEO (Innovation and Training), Specialist nurse and midwife, BPS Marianne Ehrnrooth, BDO, Marketing and Sales Market: Nordics, Central and Southern Europe, Middle East and North America The aim of the coaching was to provide special know-how in regard to sales documents and attracting financing. By coaching they have been clarifying the market, product and competition aspects, identifying and contacting potential investors as well as preparing materials for VCs. The coaching has included legal advice and support for regulatory issues. Relaxbirth Ltd. has signed a strategic collaboration agreement with Global Connection Inc. in order to enter the US market, to obtain customers, distributors and financers. Relaxbirth Ltd. has also signed a distribution agreement with Atlas Medical LLC for Relaxbirth childbirth equipment sales for maternity hospitals in the United Arab Emirates. The first pilot hospitals in the area are already in place. Although the clinical trials are not compulsory for Relaxbirth, the company is running them voluntarily in order to become even more trustworthy. In addition to winning the 2012 HealthPort Innovation Competition, Relaxbirth Ltd. was declared winner of the 2012 Red Herring Top 100 Europe and Global Awards, given to promising new companies. In 2009, the European Union Women Inventors and Innovators Network (EUWIIN) granted its first prize to Eija Pessinen. Relaxbirth Ltd. also received an honorary mention of Helsinki city in the InnoFinland-09 Uusimaa-county competition. Conclusions The innovation competition prize in the form of tailored support action was considered very practical and useful by the winners from both competitions. The needs of the companies were very different depending 8

9 on their product or service. The evaluation of the needs and tailoring the support actions is thus very crucial to make the coaching effective. The innovation competitions are a good practice for starting companies. They have to clarify their strategy and message, and it is also a good way to increase the visibility of a young SME. The feedback from the evaluators and judges of the competitions is often very useful to clarify the company strategies and it is often beneficial to benchmark themselves with other companies. Attracting financing in the health care sector is usually a lengthy process which requires hard work. The process of searching for investors for each of the cases consisted of screening potential investors, contacting the suitable ones and finally meeting up with them to start the discussions. The overall results of the project in attracting financing were positive, as some companies signed new investor agreements and some are in the middle of investment negotiations. The overall experiences of the participating companies related to interaction with healthcare professionals were positive and they were asked for product demonstrations by both the public and private clinics. However, as pointed out earlier by Kuura and Edgar (2012), conducting a clinical trial is a major hurdle for a SME. The investment of a clinical trial is high and the process of getting the authorization includes many formalities. SMEs rarely have this experience in-house and also appropriate research personnel can be difficult to find. As a conclusion, in addition to funding also networks and contacts to experts in the regional and the BSR ecosystem are important for speeding up the market entry. One major challenge is the procurement practices. In the Baltic Sea Region it is the public sector that is the major purchaser of the hospital products and services, and they invite the companies to tender. The startups are not taken into this process. The issue is also discussed in more detail in the HealthPort report Procurement as major source of boosting innovation in the region (Edgar & Hermansson 2012). The authors state that since the health care sector developing innovative products and services is a crucial driver for the health economy in the Baltic Sea Region, in order to keep the region competitive also the legislation in regard to procurement processes need to be developed towards enabling and enhancing the utilization of innovation. References: Edgar & Hermansson Procurement as major source of boosting innovation in the region. Available at: th_care_n2clean-3.pdf Kuura & Edgar Major challenges for SME-s to be commercially successful. Available at: thport%20report%20- %20Major%20Challenges%20for%20SMEs%20to%20be%20Commercially%20Successful.pdf Takaluoma, Tuiskunen, Edgar & Viljainen Concept of an Annual Idea Competition in Healthcare in the Baltic Sea Region. Available at: CEPT%20OF%20ANNUAL%20IDEA%20COMPETITION%20%20%20% pdf 9