This project tracks the development of coronary artery disease interventions, ranging from early method of cardiac bypass to balloon angioplasty to the development of biomedical stents. Analyses of the competitive climate in the biomedical stents industry is discussed. New market and technology strategies are proposed for a regional MNC to leverage domestic industry infrastructure within emerging economies accompanied by a projected 30% growth in CAD due to increased consumption trends and lifestyle factors, e.g. smoking.
2. SNAPS Group Members
Chan Kah Inn, Darryl
Choo Jun Quan, Stefan
Bjorn Mattias Lindfors
Phua Geok Bee (PanYumei)
Tan Chye Huat
Tang Shu Ling
Soon Yew Boon
3. Presentation Outline
Introduction to Coronary Artery Disease
Evolution of Technologies for disease treatment
PTCA as Disruptive Technology to CABG
Coronary Stents: BMS, DES, Bioabsorbable stents
Evolution of Stent Design
Stent Industry Overview & Market Analysis
Introduction to Abbott Vascular & SWOT analysis
Challenges & Managing the Innovation
4. What is Coronary Artery
Disease?
A type of heart disease which
occurs when the coronary
arteries become narrow due to
the build-up of fatty deposits
called plaques
Coronary arteries supply the
heart with oxygen and
nourishment
5. Disease Prevalence
Grim Statistics
Leading cause of death
globally
Estimated 17.3 million died in
2008
By 2030, almost 23.6 million
will die yearly
80% of deaths occur in low
and middle-income countries
Source: WHO report Global Atlas on Cardiovascular Disease Prevention
and Control, 2011
6. Distribution of Economic Wealth
Blue Circled Areas on World Map Denote
where current healthcare interventions are
focused
Strong Co-relation between
Cardiovascular Diseases and Low per
capita GDP
7. Drivers for Coronary Revascularization
Technologies Evolution
Demographics
Ageing Population
Increase of cardiovascular patients
(Lifestyle changes)
Demand for Technology
Enhance Lifestyle
Save life, Decrease pain, Improve
health
Lower morbidity and mortality rates
8. Evolution of Coronary
Revascularization Technologies
1960s
1977s
1987
Today
Coronary Artery
Bypass Grafting
(CABG)
• Invasive surgical procedure
• Arteries or veins from elsewhere
in the patient's body are grafted
to the coronary arteries
• Surgery is usually performed with
the heart stopped, necessitating
the usage of cardiopulmonary
bypass
9. Evolution of Coronary
Revascularization Technologies
1960s
Percutaneous
Transluminal Coronary
Angioplasty (PTCA)
1977s
1987
Today
• Minimally Invasive procedure
• PTCA involves only a small incision through which a
balloon-tipped catheter is threaded
• Upon reaching the point of blockage, the balloon is
inflated to restore blood flow
• However, less effective compared to CABG
• Higher revascularization rate of 21% (CAGB –
6%)
10. Performance
- Lower restenosis rate
Procedure rates
/1,000 population, age 45+
S – Curves for CABG and PTCA
•
PTCA
At the start, PTCA’ s efficacy is
below that of CABG
BUT
CABG
•
PTCA
Market demand
•
CABG
•
Time
PTCA has important key
attractions
• Minimally invasive
• Fast recovery from
procedure, short hospital
stay
• Costs less
PTCA was welcome by
patients & adopted rapidly by
cardiologists as gold standard
for CAD treatment
Incremental improvements
eventually rendered PTCA’s
performance acceptable by
main market
11. How does PTCA affect
conventional medical practice?
Disruptive in job scope of cardiologists
Need to learn new skills and techniques
Steep Learning Curve: Cardiologists
specialized in coronary intervention
Knowledge conversion
Internalization: From Explicit to Tacit
knowledge
Learning & acquiring new tacit knowledge in practice
12. Evolution of Coronary
Revascularization Technologies
1960s
1977s
1987
•
Coronary Stents
•
Today
Stents are tiny mesh tubes that are left
in coronary arteries to keep blockages
from recurring.
Stents significantly reduced post-BA
complications of restenosis
13. Evolution of Coronary
Revascularization Technologies
• The success of Stents has
subsequently bolstered it to
become the dominant design
in the coronary
revascularization industry
• Battle for the stent market
shares
1960s
1977s
1987
Stents WARS!!
Today
15. Evolution of Stents Design
Stent Prototype
(1985)
Establishment of
Stent’s Radical
Design (Early 1990s)
• Created from copper wire and solder
by Dr Julio Palmaz [Innovator]
• J & J [First Mover] – No Experience
• 1st COMMERCIALIZED Design
• Numerous Stent Designs
• Palmaz-Schatz Stent’s Construction
• Slotted Tube
• [Dominant Design]
Wallstent
Wiktor
GR Flex-Stent
Palmaz/Palmaz- Schatz
elgiloy
tantalum
stainless steel
stainless steel
Form
wire
wire
wire
tube
Fabrication
braid
bend
bend
EDM
Geometry
braid
helical rings
clamshell
slotted tube
Material
16. Evolution of Stents Design
• Flexibility = Deliverability or Contourability
• New Fabricating Technologies
• Photochemical (PC) etching --Addition of flexible connector
[Incremental Innovation]
Improvement–
Flexibility (1995) • Laser micromachining – Now preferred fabricating technique
Improvement–
Geometry
(1997)
• Open Cell / Closed Cell Stent Design
• Palmaz-Schatz stent and its successor, the “Crown” by J & J (A)
• Closed Cell = Inflexible = Not Good
• MultiLink stent by Guidant (E)
• Open Cell, Flexible = Good , Leading the Market for 5 years
17. • Breakthrough appearance of stents eluting antiproliferative drugs
• Overall reduction in restenosis rate of between 70% to 85%
Addition – Drug
Eluting Coating • Modular Innovation
18. Image obtained via World Wide Web at
http://www.art-stent.com/Images/Img-003-Big.jpg on 20 Oct 2011
Bioasorbable
stent
• Stent support vessel with minimum local tissue aggravation
• Stent serves as scaffold construct that facilitates dynamic reconstruction of
vessel tissue lining- “Laws of Tissue Engineering” (SH Teoh)
• Stent dissolves when tissue healing is almost complete
• Architectural Innovation
19. S-Curves - Stents
Performance
2006: reported that DES
pose an increased risk of
late stent thrombosis
Bioabsorbable Stent
2009: Abbott
2nd phase
clinical trial
Drug-Eluting Stent
(DES)
2006: 1st phase
clinical trial
Bare Metal Stent
(BMS)
2002: reduction of
revascularisation, benefit
of DES over BMS
Effort / Time
1986
1994
2006
21. Quick Industry Facts
The stent industry is highly competitive, due to
historical average 85% gross margins (2005)
Competition between firms mainly on basis of customer
relationships and product quality
High barrier to entry, requirements:
Manufacturing capability,
Relationships with physicians and FDA,
large sales force and brand
22. Quick Industry Facts (cont.)
High learning curves: FDA-approved
manufacturing process hard to surmount
No Network Externalities: Only externality being
brand reputation
Commoditization, mature market:
DES stent price drop from
2003 price of $3000 to
2011 price of $1400
23. Acquisitions show that…
The stent market is maturing
The decline in the number of operating
companies and the price drops indicates a
transition into a process innovation phase
Merger and Acquisition is the only viable
option for most small start-ups
32. Acquisitions 2006
Guidant
The 2nd worst deal in US history according to
Fortune Magazine, claiming that Boston Scientific
paid too much for Guidant
Boston
Scientific [5]
34. Technology and Industry Drivers
Newer Drug
Delivery
Mechanisms
Newer
imaging
Modalities for
better
Visualization
Demographics
Increased
Efficiency
and Efficacy
Potential for
Cheaper Stent
Platforms?
Introduction of
New Drug
Device
Combinations
35. Technology: To contract or integrate?
Dominant Design Paradigm: Paradigmatic Phase
Stents are hollow, mesh-like, elongated
structure, biocompatible, crimped on
Strong Appropriability
a stent delivery system
Regimes of Appropriability
Usually Strong Appropriability
Efficacy of legal mechanisms of protection
Complementary Assets: usually Specialized/Cospecialized assets
Vertical (Dis)integration
Channel Strategy
Factors include time-to-market,
price of stent (buy or make),
controlling the quality of stent,
incentives and options, etc.
Complementary Assets
Generic
Specialized
Innovator
captures most
of the value.
Innovator &
owners of
specialized
assets share
value.
Contract/
Outsource
Integrate
36. Network of Learning & Innovation
• Locus of innovation of
stents -- found in networks
of learning
• Large-scale reliance on
inter organizational
collaborations
Dedicated
• Invest / work closely with
universities
• Keen eye on potential
technology development
• Clinical Trials /
Evaluation with research
hospitals
• Purchase Rights to
Universities’ ideas
Research
Institutes &
Universities
• Exploration
• New radical
developments
• Knowledge
• Innovation
Vascular
Firms
Established
Pharmaceutical
Firms
• $$$
• Regulatory Savvy
• Inadequate facilities for
Basic R &D
• Manufacturing
• Marketing / Licensing
• Supply / Distribution
• Mergers & Acquisition
• Exploitation
37. Abbott Vascular
Division of Abbott (nutritional & pharmaceutical
products)
Global Leader: Cardiac & Vascular Care products
HQ at Northern California
Acquired Guidant vascular device division in
2006
Flagship product: XIENCE V (DES)
38. Abbott Vascular’s Success
Acquired Guidant’s vascular device division in 2006 with the
Xience V DES technologies, patent assigned to Abbott
Strategic move to gain entry into the coronary stent market
Pursued R&D (clinical trials) on Xience V and Ziomaxx DES.
Plans were to launch both stents & grab market share in the
rapidly growing DES market
In 2006, clinical trial showed Xience V as superior to Taxus DES
by Boston Scientific
Abbott withdrew Ziomaxx DES development program, focused
efforts for immediate launch of Xience in European countries,
followed by launch in the US. Time-to-market urgency crucial to
stay ahead of competitors
39. SWOT Analysis
Industry Leader
Global Presence
Heavy investment in R&D for product
innovation
Investment in Training & Education
Leverage via relationship with Industry
Professionals
Excellent clinical trial results for Xience V
(DES), shown to be superior to Taxus DES
by Boston Scientific
S
W
O
T
40. SWOT Analysis
Product Recalls: Powersail
Recent negative limelight
for incentivising a cardiologist,
Dr Mark Midei to implant its
stents
S
W
O
T
42. SWOT Analysis
W
O
Tight Regulatory Approvals
S
T
Late stage Thrombosis
and Major Adverse
Cardiac Events (MACE)
Mediated with
Surgical Imaging
Technologies such
as Portable
Ultrasound devices
Image obtained from
http://www.sciencephoto.com/image/2704
83/530wm/M3900535Angioplasty_techniques-SPL.jpg
43. How can Abbott capture a larger market ?
• Cost of Bare Metal Stent: ~$800
• Cost of Xience V Drug Eluting Stent:
~$1500-$2000
• Cost of Abbott’s Bioabsorbable
Stent: >> Xience V
Image obtained from “Controversies in Cardiovascular Medicine”
http://circ.ahajournals.org/content/114/16/1736.full
http://online.wsj.com/article/SB10001424052748704471904576230671702390088.html
44. Shifting the Battlefield: From Upper Class to Middle Class
Per Capital Income
Population
296 million
Disrupting
the Top:
1 billion in
headroom
Measured Leap
Downward- 2011:
2.4 billion in
Headroom
The
Bulgeoning
Middle
Class”
$30,000
723 million
$10,000
The “bottom
of the top”
2,397 million
$4,000
2,692 million
:
• Middle Class experiences major burdens with CABG Procedures. In developing countries,
surgeons may be ill-equipped to perform these procedures.
:
,
;
•Middle Class is expected to boom from 2 billion population to 5 billion in 2030.
• Tremendous upside potential once the firm finds a disruptive foothold at the bottom.
45. Disruptive Innovations as a Strategy- Abbott
Performance
Middle
of
Pyramid
Bottom of
Pyramid
Top of Pyramid
CABG
Reduced
surgical
complexities
Increased
Cost
Accessibility
Angioplasty
DES
BMS
Purples (XIECE V) and
Orange (BVS) by solid
arrows- currently
adopted by Abbott
Second growth wave: Reduction in Surgical
Complexities
Purples and Orange
dotted arrowsstrategies that Abbott
can adopt
Effort- Time
Third growth wave: Accessible Treatments to Emergent Economies
46. R&D, Networks and Alliances
When Resources are
Abundant
Systemic Innovation
R&D
Joint- Collaboration with distribution
companies to maximize market
penetration (With Caution)
Reduced time to market
Reduced costs to market
Interconnected framework for
success
Modular Innovation
Drugs and Drug Release
Technologies
Research and Operations Base
Leverage- Singapore a
biotechnology and Trade Hub.
Partnerships with Universities
and RIs
• Make larger R&D of
bioabsorbable stents
scaled in dimensions for
other biological
applications
• Centralize Research
Facilities in --- Drug &
Device Coupling
• --- Device Compatibilities
with Imaging
Specialized
Complement
ary Assets
• Freedom to Operate &
Protection
• IP Filing for new drug- device
couplings Where to File?
• Systemic Innovation+ Control Is
Important
• Acquire & Integrate
complementary assets
operations
•Integrate with Contract
Manufacturing Organizations
Alliances
•Get governments to
endorse large scale clinical
trials Overcoming
Regulations
•Work with Group of
Doctors in Hospitals-->
Establish De- Facto
47. Integrating complementary assets of stents
manufacturing, faster workaround of CE Mark and FDA
approvals
To remain as #1 leader in
Cardiac Interventions.
Target new, emerging
geographical markets
Reduce complexity of
techniques and use of
stents
Catch disruptive
waves for medical
innovations in
minimally invasive
surgeries
Establish de facto
standards of new
biodegradable stents.
Conclusions
There is at least 1
CAD is going to rise
intervention afforded
from 47 million DALYS by low- income
to 82 million DALYS in countries. (WHO)
2020. Where should
Abbott Aim?
Will Abbott’s stents be
made available and
affordable?
Notas del editor
involves only a small incision through which a balloon-tipped catheter
Coronary stents, eventually disrupt the CABG Market to become the dominant mode of treatment in the market.Procedure rates for CABG and PTCA in New York State, 1982–2000. Source: SPARCS database, 1982–2000
Internalization = Learn by doing
2002: The reduction in the need for new revascularisation procedures has been the main clinical benefit of DES over BMS2006:reports began to hit the U.S. market that (DESs) might pose an increased risk of late stent thrombosis for some patients.
Bare Metal Stents -> Drug-Eluting Stents -> Polymer Coated DES
Bare Metal Stents -> Drug-Eluting Stents -> Polymer Coated DES
Source: MedMarket Diligence, LLC; Report #C245, "Worldwide Drug-Eluting, Bare Metal and Other Coronary Stents, 2008-2017."Drug Eluting Stents Segment Largest and Fastest Growing Segment in the Coronary Stents Market. Continues to lead the global coronary stent market, with a contribution of 83% towards it in 2009. The global segment is expected to reach $5.6 billion in 2016 after growing at a CAGR of 3% from 2009-2016.Source: Source: Report #C245, "Worldwide Coronary Stents Market, 2008-2017," published May 2009 by MedMarket Diligence.http://mediligence.com/blog/2009/05/05/drug-eluting-bare-metal-and-absorbable-stents-segment-growth-2009-and-2017/
1.000,00
Interventional cardiology medical device industry is similar to pharmaceutical or biotech industry, it is governed by regulatory approval such as U.S Food and Drug Administration (FDA).
the technological breakthroughs that level the playing field on the exploration front also create new opportunities for established firms in exploitationSmall firms require large firms’ financial support and regulatory savvy, while larger corporations desire access to the research prowess of smaller companies.