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After this we can fill in the blank business canvas and see the whole picture of how the business would operate. It is however important to understand that the whole landscape will change once and if the therapeutic passes clinical trials, as this will take around 10 years. Therefore this business model canvas would change, and exists more to give an understanding of the current situation, to see whether such a product is viable. The business model is fairly standard for such a therapeutic, however certain other options were explored to add to the canvas. This model and any model we can build would also be completely dependent on receiving a patent.
 
After this we can fill in the blank business canvas and see the whole picture of how the business would operate. It is however important to understand that the whole landscape will change once and if the therapeutic passes clinical trials, as this will take around 10 years. Therefore this business model canvas would change, and exists more to give an understanding of the current situation, to see whether such a product is viable. The business model is fairly standard for such a therapeutic, however certain other options were explored to add to the canvas. This model and any model we can build would also be completely dependent on receiving a patent.
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Revision as of 02:17, 16 October 2018

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Entrepreneurship

Overview

While developing our therapeutic, we always had the patient and their needs in mind. There would be no point in developing our project if there is no value proposition that our therapeutic could provide.

We had developed the theory behind our project in June 2018, however after the UK iGEM meetup at which we spoke to Ben Reeves - an ex-iGEMmer, who co-founded Customem along with multiple members of the Imperial 2014 team, we thought that there may be some potential in looking to take the therapeutic to market in the future.

Since then we have spoken to many people, and at the start we were strongly convinced that getting a patent would be the first step. However what we realised after speaking to experts is that it is in fact beneficial to look for one post-iGEM rather than before, and to take the openness of the competition and conference as a blessing rather than a hindrance where everything gets put in the public domain.

Instead we chose to focus on the needs of our potential customers (which involves more parties than patients) and come up with a good value proposition, find out more about the different avenues of taking a medicine to market, and plan out the business model canvas (which will change with time post-project).

This section of the wiki does naturally strongly overlap with Product Design which is key in the Value Proposition Design, as well as with Human Practices which is key to understanding the law regarding taking medicines to market, therefore there may be links to certain parts of those pages. We hope that this section would not only show our plans and considerations, but could also act as a manual for future iGEM teams considering entrepreneurship.

The Methodology

After speaking to OUI when initially considering applying for a patent, they recommended that we follow the business model canvas methodology offered in ‘Business Model Generation’ by Alexander Osterwalder and Yves Pigneur. We also considered ‘Value Proposition Design’ by the same authors in order to come up with a proposition around which to centre our model.

While building our value proposition and business model canvas, we stayed in touch with OUI, and constantly involved the customers in all our decisions.

Why do we need a value proposition?

The value proposition is important in order for us to understand that what we are offering is truly needed in the market. This helps get everybody in the team be aligned towards a common goal post-project.

Why do we need a business model?

We need the business model to understand how we will go about delivering our therapeutic in the real world in the most efficient way to reach people who will benefit most greatly from it, while still making the venture sustainable.

Business Value Proposition

It is key to consider what the customers want in order to determine the best value proposition to provide. This would help validate the need for the idea , and would maximise chances of creating a therapeutic that would be used. We used a number of techniques to understand what each customer segments wants. To understand patients, we used mainly the journalistic approach, interviewing patients with some desk research. When understanding doctors’ and the NHS needs, we primarily used the desk research approach with some interviewing, while with understanding the needs of the general public who influence the NHS decision, we mainly used the desk research approach due to time constrains.

From this we created customer profiles and a value map, which shows how we address the customers’ needs and wants. Every customer's value map will be under their collapsible bar.

Customer Profiles

Customer profiles help us understand what we can help a customer achieve. All jobs, pains and gains are arranged in order of importance with the most important ones being near the top.

Value Map

The value map helps look at how our therapeutic addresses the customer needs. The pain relievers and gain creators need not touch on every pain and gain, but need to address some in great detail

Patients

When interviewing patients, we used a number of techniques to understand their needs and potential gains. We used a technique called speedboat analysis to help patients understand what they are most struggling with in order to build a proposition around it. This technique allowed patients to visualise their struggles, and put them in a more concise way. It works by making patients imagine their life as a boat and the different struggles being represented by anchors
From interviews, including those using this technique, we created a customer profile for patients.
From this we could tailor the value map of our therapeutic to see where it could address the needs of the patients better than many current treatments.

Decision Makers

We spoke to Chris Butler from Nuffield Department of Primary Care Health Services GP to find out that they would start prescribing a new medicine if there are results showing that there were successful clinical trials and that NICE had published guidance recommending the prescription of the medication in the first instance. He said that the actions of the local CCG (clinical commissioning group) ultimately determines what medication he is able to prescribe to patients, but then he assesses each case on a patient by patient basis based on clinical need and obviously the ultimate decision lies in the hands of patients. He said that most doctors would be hesitant to switch patients to a new treatment if patients are already satisfied with current treatment and their symptoms are largely controlled. We also used the NICE website and our interview with Dr Michael Morrison from HELEX to understand how NICE and CCGs make decision on when to prescribe certain medication. From this we created both a customer profile and value map. However the pains and gains were not separated, since NICE and CCGs have a checklist of what they go through to select a new drug, rather than specific needs.

Influencers

Next we looked at the parties that would influence the decisions of NICE and CCGs externally. This would include the media and the public. |Therefore we created customer profiles and value maps for them

Hypothesis

From our research and interviews, we found that in severe cases of IBD, patients struggle to live a normal life with their disease affecting them in even the most basic actions. This shows that a therapeutic that could prevent flare ups with minimal side effects is required. However a therapeutic addressing this alone would not cause organisations in the UK such as the NHS to start purchasing it. A new therapeutic on the market would need to affect patients on whom the current treatments do not work and would need to be cost effective. We believe that our therapeutic will succeed because it could work for some patients who are not affected by current treatments (although we cannot be 100% certain yet), while it would also hold fewer side effects than current immunosuppressants. In order to make this an attractive proposition to NICE and NHS, we would have to make the therapeutic cheaper than £20,000 per adjuster-life-year (refer to glossary)

Laws and Regulations

Before we could proceed to analyse the business model environment, we need to look at the laws and regulations surrounding our therapeutic. Without going through these, we would not be able to reach the business model stage. Therefore on the business side, the priority is to go through the clinical trials which can take 10+ years, after getting a patent. These can be costly: phase 2 clinical trials cost $15,800,000 and in phase 3 cost $14,500,000 for gastrointestinal diseases.

Regulation Flowchart

Regulatory Bodies

In order to understand how to navigate the laws and regulations in different countries, we created a document to investigate the various regulatory bodies

Pediatric Trials

If we are to start providing this therapeutic to children, we would need to carry out pediatric trials, which carry a host of new regulations (in note format)

Business Model Environment

What it is

In order to conceive a business model, we need to analyse the environment that it is being put in place at. This would mean looking at the external factors that could affect key decisions in the building of it. This would include the industry forces, key trends, market forces and macroeconomic forces.

Each of the external factors is then separated into sub-factors in order to help analysis.

Key Trends

Industry Forces

Competitors

This helps understand the key established competitors

- Several large and medium-sized companies compete in pharma
- Most companies struggling to create new products
- Trend to consolidation through mergers and acquisitions
- Major companies buy biotech and smaller companies to fill product pipeline
- Several companies are now starting to build on open innovation processes

New Entrants

This helps find the new players and helps understand if they compete with our business model.

- Few new players in pharmaceutical industry over last decade
- New entrants are mainly non-patented drug companies, especially from India

Substitute Products and Services

This helps find potential substitutes to our value proposition, including from outside markets

- Prevention, however Crohn’s and IBD is not understood well enough yet for prevention
- Patent-expired drugs replaced by low cost generic drugs

Suppliers and other Value Chain Actors

This helps understand the key players in the value chain

- Large use of research contractors
- Biotech firms are important new product generators
- Doctors and healthcare providers
- Insurance companies
- Bioinformatics providers
- Laboratories

Stakeholders

This helps understand who may influence the organisation and business model

- Shareholder pressure forces drug companies to focus on short-term goals
- Governments/regulators have a strong stake in actions of pharmaceutical companies because healthcare services play pivotal role
- Lobbyist and social enterprise groups campaigning for lower cost treatments
- Scientists, who represent core talent of drug manufacturing industry

Conclusions

Large pharmaceutical companies struggle with creating new products, and are looking for new products to fill their pipeline. At the same time, there are very few new pharmaceutical companies, with most simply reproducing older drugs for cheaper. This could mean that there could be interest from larger firms should we get a patent and take it far enough in clinical trials.

Also the analysis of suppliers and other value chain actors helped us understand that we should target doctors and insurance companies as customers too as they play a major part in the use of therapeutic, and in fact play a much larger role than patients do.

Market Forces

Market Issues

This finds the key issues in the changing market on the customer and offer perspectives

- Increasing healthcare costs
- Emphasis shifting from treatment to prevention
- Treatments, diagnostics, devices and support services are becoming a single product
- Emerging markets are increasing their share in the pharmaceutical industry
- Shift towards more personalised treatments

Market Segments

This helps find the major market segments and look at how much potential there is in them

- Doctors and healthcare providers (insurance, NHS etc)
- Governments and regulatory bodies (we have a flowchart for this)
- Distributors
- IBD and Crohn’s patients
- Strong potential in emerging markets
- US and Europe still main market
- ‘The highest reported prevalence values were in Europe (ulcerative colitis 505 per 100 000 in Norway; Crohn's disease 322 per 100 000 in Germany) and North America (ulcerative colitis 286 per 100 000 in the USA; Crohn's disease 319 per 100 000 in Canada). The prevalence of inflammatory bowel disease exceeded 0·3% in North America, Oceania, and many countries in Europe. ‘

Needs and Demands

This helps identify what is needed in the market, ie what customers need (refer to customer interviews and value proposition)

Switching Costs

This helps understand what factors influence customers switching to a new product

- Patent means that only one company can provide a certain benefit
- Low cost to switch to another company’s patent-expired drug
- Large amount of detailed information about different treatments available online
- Deals with governments and large-scale healthcare providers increase switching costs

Revenue Attractiveness

This helps understand the pricing power

- High margins on patent-protected drugs
- Low margins on generic drugs, but not much complexity in manufacture
- Healthcare providers and governments have growing influence on the prices
- Patients have very little influence on prices
- Price needs to be lower than £20k for NHS to take on

Conclusions

This shows that we need to provide an exclusive benefit in order to get patients and doctors to switch to our therapeutic. However in order to provide the exclusive benefit, a patent is absolutely necessary.

We would also have to make the price per patient lower than £20k in order for the NHS to take the therapeutic on.

The emergence of the market in developing countries could provide extra opportunity to move into.

Macroeconomic Forces

Global Market Conditions

This helps us understand the current macroeconomic conditions

Decreasing GDP growth in Europe, Japan and USA
Slower growth rates in China and India
Uncertainty as to when recovery will occur

Capital Markets

This explores how the current capital market is positioned in relation to our needs

- Lots of venture capital available
- In 2016, 936 deals were completed, delivering €4bn in investments.

Commodities and other resources

This looks at current prices and price trends for resources needed for the business model to succeed

- Competition for prime talent
- Employees seek to join pharmaceutical companies with positive public image

Economic infrastructure

This explores the current economic infrastructure of the market in which the business operates

- Specific to region company operates
- In the UK and europe there is PRIME etc

Conclusions

The UK and european economic infrastructure is strong is helping bring a potential medicine through clinical trials to market and help it find investment, with a very strong venture capital scene, through which investment could be obtained. The main drawback however would be the large cost of clinical trials.

It could also be very useful to focus on public initiatives as a company in the future (post trials), since that could help attract employees to join the company.

Business Model Canvas

How do we make it?

According to the business model canvas methodology, we will analyse:
- Customer segments
- The benefits our therapeutic will provide
- The business model environment our therapeutic would be built in
- The channels of delivery of our therapeutic to patients
- The relationships that we will need to establish with patients
- Revenue streams, so we could make the business model sustainable
- Key resources, ie the resources we need to offer and deliver our value proposition
- Key activities, what we need to do to deliver our value proposition
- Key partnerships, ie who we need to partner with to carry out our key activities
- Cost structure, ie the way we sell our value proposition

After this we can fill in the blank business canvas and see the whole picture of how the business would operate. It is however important to understand that the whole landscape will change once and if the therapeutic passes clinical trials, as this will take around 10 years. Therefore this business model canvas would change, and exists more to give an understanding of the current situation, to see whether such a product is viable. The business model is fairly standard for such a therapeutic, however certain other options were explored to add to the canvas. This model and any model we can build would also be completely dependent on receiving a patent.

Customer Segments

MVP

Since our product is a therapeutic, it is required to have gone through a number of clinical trials. This means that we cannot create a real minimum viable product, apart from models of the final variant. Therefore to create an minimum viable product, we created a mock-up of a yoghurt pot, a yoghurt drink, a capsule and an injection. We took this to interview the public at the natural history museum. The public there, although had some interest in science, mainly had generic knowledge of the subject. From that survey, we found that people did prefer the yoghurt drink by a negligible margin ahead of capsules. However many relevant points were raised by people who picked capsules, such as it would be easier to transport and store. Therefore we used this test to decide that we will create a final product in the form of capsules, which would be freeze-dried. Our visit to Cell and Gene Catapult reinforced this (more on final product in Product Design)

What now?

The value proposition analysis shows that there is a clear need for a drug like ours.

After iGEM the main priority is applying for a patent. However as mentioned earlier, we talked to OUI (our tech transfer office), who said that more data is needed, with which their lawyers agreed. Therefore our focus will be to getting more data and improving the project design further. This would be done in a similar way to Customem, who came out of Imperial's 2014 iGEM team and with whom we have been in close contact. They took another year's of individual research from their team members before becoming a startup.

As per their example, we have decided that it is too early to consider team structure before any patent is obtained.

After this we would turn to clinical trials and look to start communicating with regulatory bodies as early as possible.

Only when we would be approaching the end of trials would the Business Model Canvas come into play.

Glossary

Adjusted life year - measure of overall disease burden, expressed as the number of years lost due to ill-health, disability or early death. It was developed in the 1990s as a way of comparing the overall health and life expectancy of different countries.
Business Model Canvas - a strategic management and lean startup template for developing new or documenting existing business models.
Cell and Gene Therapy Catapult - a centre with the core purpose of building a world-leading cell and gene therapy sector in the UK as a key part of a global industry. They help cell and gene therapy organisations across the world translate early stage research into commercially viable and investable therapies.
Creative Commons - Creative Commons is an American non-profit organization devoted to expanding the range of creative works available for others to build upon legally and to share.
Creative commons(CC) attribution license 4.0 - The intellectual property license iGEM uses. You may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.
Macroeconomic - a branch of economics dealing with the performance, structure, behavior, and decision-making of an economy as a whole.
MVP - A minimum viable product (MVP) is a concept from Lean Startup that stresses the impact of learning in new product development.
NHS - The national health service within the United Kingdom, it is free to use for all citizens.
NICE - The National Institute for Health and Care Excellence (NICE) provides national guidance and advice to improve health and social care in the United Kingdom.
OUI - Oxford University’s tech transfer office.
Patent - A patent is a form of intellectual property. A patent gives its owner the right to exclude others from making, using, selling, and importing an invention for a limited period of time, usually twenty years.
Patent Pool - Patent pools can be defined as an agreement between two or more patent owners to license one or more of their patents to one another or to third parties.
Tech Transfer Office - office dedicated to identifying research which has potential commercial interest and strategies for how to exploit it.
Value Chain - A value chain is a set of activities that a firm operating in a specific industry performs in order to deliver a valuable product or service for the market.
Value Proposition - an innovation, service, or feature intended to make a company or product attractive to customers.

References

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