2013 Oct 28, 2013: Hotel Zetta, SF,CA/USA ©2013 Qmed Consulting STACKING THE ODDS OF INNOVATION IN YOUR FAVOR.

Innovation Commerce Innovation Commerce: Every new product is as unique as the innovation it delivers -Determines the innovations unique value for market decision-makers. -Provides credibility to innovation and documents market potential. -Defines what clinical and economic evidence is needed to demonstrate such value. -Significantly increases the probability of calculating realistic sales targets and reaching them. -Leads to faster revenue growth. ©2013 Qmed Consulting

antia therapeutics antia therapeutics: -Privately owned, founded in 2007 -Device: Easyx TM Liquid Embolic -Purpose: provide a liquid embolic system with clearly identified competitive advantages for minimally invasive image-guided embolization of hyper vascular Lesions -Status: Pre-Clinical ©2013 Qmed Consulting

Introductions Global Alliance Team Helene Quie, Owner Qmed Consulting, Clinical Affairs, EU Melissa Martinson, President of Technomics Research, Biostatistics and US Health Economics Ernesto M. Nogueira, Owner Value Connected, Commercial Healthcare EU, S. America, Middle East Naresh Kumar Pagidimarry, Co-founder 8c Healthcare, Bioengineering CRO, India Mike Winegar, Owner Winegar Consulting, Regulatory Affairs, Global Autumn Ediger, Senior Principal Advisor, Qmed Consulting, Clinical Regulatory Affairs, EU & US ©2013 Qmed Consulting

We provide full-service medical device CRO services to people who change healthcare Qmed Services Regulatory Affairs Clinical Affairs Quality Management Commercial Healthcare Concept & Product Development EU Authorized Representative ©2013 Qmed Consulting

Our Expertise Trusted Subcontractor Qmed Consulting is the Scandinavian subcontractor to Top 40 medical device companies and global CROs since its establishment in 2006. Trusted Partner to Hospitals and Investigators It is of high importance to Qmed to build trusted relationships with hospitals. Qmed employees have daily contact to health care personnel. We have a working relationship to more than100 hospitals globally. ©2013 Qmed Consulting

Economic and Statistical Analysis of Healthcare Technology ©Technomics Research 2013

Introduction to Technomics Research Melissa Martinson, MS PhD President MS Statistics / PhD Health Services Research (U of MN) Adjunct Assoc. Professor, Univ. of Minnesota & St. Cloud State Univ. Teaches economic modeling 15+ years in major medical device and pharmaceutical firms 10 years consulting to medical products industries and managed care Technomics Research is dedicated to the demonstration of the value of healthcare technologies in support of regulatory approval, coverage, reimbursement, and rapid dissemination into the market. ©2013 Qmed Consulting

Founder has 16 years of experience in Healthcare in sales, marketing and market access functions KCI Johnson&Johnson GlaxoSmithKline Brazilian Ministry of Health World Health Organization MBA from the University of Texas at Austin Current Clients A brief introduction ©2013 Qmed Consulting

Solve2Access Holding B.V – Member of the Global Alliance Team Sung koo Tompot Founder Stephan Heumann Founder “”We help medical companies demonstrate the value of their products, develop market access and increase sales”” Together we have about 20 years working experience in the healthcare sector. We have an extensive knowledge in Reimbursement, Clinical and HTA strategies and we can execute our strategies to the market with our marketing skills. We are Healthcare Commercial Experts ©2013 Qmed Consulting

8C Healthcare is first of its kind Bioengineering CRO in India exclusively for: -Medical Device Clinical Development -Pre-Clinical / Clinical Research Management 8C Healthcare is founded by group of experienced Biomedical Engineers, Clinical Research and Regulatory professionals trained and worked in US MedTech Industry. Overview ©2013 Qmed Consulting

Some key factors make a market attractive Source: GlobalData, validated with Primary Research Size and growth rate Barriers to entry Possibility to generate sales traction 2013© ValueConnected, All rights reserved ©2013 Qmed Consulting

Which will take the company to its commercial goals Source: GlobalData, validated with Primary Research Increase value Reduce risk Accelerate adoption 2013© ValueConnected, All rights reserved ©2013 Qmed Consulting

Assessing the attractiveness of the largest markets Source: GlobalData, validated with Primary Research National reimbursement system Demands French evidence data Some key decision-makers with strong influence Well-prepared surgeons base France National reimbursement system Open to international evidence Some key-decision-makers with strong influence Well-prepared surgeons base Germany Regional reimbursement systems Open to international evidence Fragmented decision-makers across 21 regions Variable levels of surgeons base Italy NOW LATER ©2013 Qmed Consulting

Moving forward – demonstrating the value of Antia Source: GlobalData, validated with Primary Research Decision- makers Influencers Value positioning Pricing 2013© ValueConnected, All rights reserved ©2013 Qmed Consulting

Winegar Consulting, Inc. Intended Use The Antia Easyx™ Liquid Embolic System is a polymer in liquid with an intended use for embolization through small lumen delivery systems (microcatheters, needles). Injected as a liquid, it subsequently provides a solid cast of the vessel lumen after precipitation in body tissue, where the solvent dissipates in the body. Delivery occurs under controlled flow and allows for occlusion of hypervascular lesions, such as brain arteriovenous malformations or dural arteriovenous fistulae. ©2013 Qmed Consulting

Winegar Consulting, Inc. Predicate Device(s)  EUROPE  Onyx® LES  Indicated for embolization of vascular lesions  Onyx 18 (6% EVOH)  Onyx 20 (6.5% EVOH)  Onyx 34 (8% EVOH)  Onyx® HD-500  Indicated for the treatment of intracranial aneurysms  20% EVOH  US  Onyx LES  Indicated for pre-surgical embolization of brain Arteriovenous Malformations (bAVM)  Onyx 18 (6% EVOH)  Onyx 34 (8% EVOH)  Onyx HD-500  Humanitarian Device, indicated for large, wide-neck aneurysms  20% EVOH ©2013 Qmed Consulting

Country Cost of Clinical Trials Relative to the United States United States1.00 Australia0.67 Argentina0.65 Germany0.50 Brazil0.50 China0.50 Russia0.41 Poland0.39 India0.36 Source: The National Center for Biotechnology Information Winegar Consulting, Inc. ©2013 Qmed Consulting

 Pros  Costs  Large population  Motivated researchers  Cons  Data use/credibility  Regulatory barriers, including US export  Relatively new regulations  801(e)(2) export process for Class III devices  Varying standards of care Winegar Consulting, Inc. ©2013 Qmed Consulting

 Protocol Design  Data collection based on study size/goals  Assume device/protocol changes will be made over time  Country/Site Selection  Consider real costs  Data use and credibility  Regulatory Considerations  Understand site/country timelines and requirements  Engage FDA early Winegar Consulting, Inc.

Clinical Research Management First-in-Man Studies Safety / Pilot Studies CE Mark / Pivotal Studies Post-Marketing / Market Access Studies Cost Time Quality

Antia Easyx ™ * FIM / CE Mark Study in India -Well experienced Neuro-Radiologists / Interventional Radiologists / Vascular physicians with high interest towards medical device clinical research. (Published on the use of Onyx) -Clinical practices are on par with US/EU practices & standard of care -Easy to train these physicians as they are adaptable and flexible in terms of new product clinical research. (Establish Product KOL’s within country) -Provides access to large patient population for faster enrollment but at the 1/3 rd cost of studies in US/EU (Cost Savings) -Offers flexibility in terms of implementation of design changes during the study (Conduct R&D studies to save time & money with assurance to data quality)

*8C Healthcare – Bioengineering Team -Support FIM / CE Mark studies (at Indian centers) in terms of technical aspects, product safety and complete study management. -Works closely with product R&D team on design changes during the ongoing study as needed. (can act as local R&D team) -Ensures Study Data Credibility / Quality and Confidentiality. (addresses the concerns of data originating from India) -Compliance to global clinical research standards and practices on par with conduct of study in US/EU. (addresses the concerns, the way study is being conducted in India) -Support with regulatory submissions for ministry of health and Ethics committee as per local requirements. (advantage of faster regulatory approvals)

EASYX CHALLENGES IN US MARKET AND STUDY DESIGN FOR CE MARK

Antia Easyx Challenges in US Market 1.FDA approval using a minimum of data and time, especially since European data will likely contain few AVM resections. 2.Differentiation of EasyX from competitors’ products when providers make a purchase decision.

CE Mark Study Design Primary Efficacy: Percent AVM Reduction Primary Safety: Complete accounting of safety profile Statistically speaking, FIM can roll directly into CE Mark Study

Selected Clinical Experience for Predicate Device – Onyx® LES Jahan R 2001 (CE Mark study) SSED Onyx Arm 2005 Van Rooij 2007 Weber 2007 Saatci 2011 # of Patients23464447350 Demographics M/F8/1520/2626/18 31/16206/144 Mean Age40 42NA34 Average AVM14.5 cm 3 13.6 cm 3 3.9 cmNA % Reduction in AVM 63%98% achieved ≥ 50% reduction 75%84%NA Death0%6%2.3%NA1.4% Permanent Morbidity 4%NA4.6%NA7.1%

FIM  CE Mark Study Design Strategy Jahan R 2001 (CE Mark study) SSED Onyx Arm 2005 Van Rooij 2007 Weber 2007 Saatci 2011 # of Patients23464447350 Demographics M/F8/1520/2626/18 31/16206/144 Mean Age40 42NA34 Average AVM14.5 cm 3 13.6 cm 3 3.9 cmNA % Reduction in AVM 63%98% achieved ≥ 50% reduction 75%84%NA Death0%6%2.3%NA1.4% Permanent Morbidity 4%NA4.6%NA7.1% ~ 80% reduction in AVM ~ 5 - 10% death and permanent morbidity rate Estimates with CIs, not hypothesis tests Targets for Easyx :

US FDA Pivotal Trial Non-inferiority 1:1 RCT versus Onyx. N in each arm. Efficacy hypothesis: % AVM reduction is no worse that X% less than Onyx Safety hypothesis: % mortality and major morbidity no worse than X% higher than Onyx

HEALTH ECONOMICS: EUROPE (DE, FR) VS USA

Feature of Cost- Effectiveness U.S.GERMANYFRANCE Insurance / Payment  Even under the Affordable Care Act (AHA), about 5% of the U.S. population will remain uninsured.  A variety of insurers cover the U.S. population. About 50% is commercial and 50% is public (government is the payer).  Payment by insurers is determined by billing codes; technologies that fall under the same codes are paid the same. (See billing codes below.)  Only 0,1 to 0,3 % of the German population are uninsured.  A variety of insurers cover the German population. About 87,2% of the population is covered via a basic health insurance plan, 10,5% are private insured and 2,3% are covered by other insurances for example the German Army or welfare aid.  Acute care is covered for 100% via DRG’s and special codes for new technologies and treatment options  Homecare treatment is covered by different catalogues (doctor, nurses, therapists) for treatment (Treatment codes and groups) and materials.  Universal coverage, social model with contributions based on income levels.  French Government pays for 75% of all medical costs.  Supplemental coverage comes mostly from “mutualities” which are not-for- profit private insurers. Insurance/Payment

Feature of Cost- Effectiveness U.S.GERMANYFRANCE Effectiveness  All insurers state that they do not consider costs when determining coverage, but only consider effectiveness.  All insurers act like they do consider costs.  Most insurers are willing to look at cost- effectiveness arguments.  Most insurers are not strongly persuaded by QALYs as the effectiveness measure. They like natural measures of effectiveness, even though this limits the comparisons to treatments with similar effectiveness measures.  Federal Joint Committee (G-BA) issues directives for the benefit catalogue of the statutory health insurance funds (GKV) for more than 70 million insured persons and thus specifies which services in medical care are reimbursed by the GKV. In addition, the G-BA specifies measures for quality assurance for inpatient and outpatient areas of the health care system.  The insurers follow the quality and payment guidelines from the GBA, but there are some options for exceptions if the Health Technology Assessment for a new product or treatment option is not finished.  Because of the economic crisis different European countries start to analyze the new and existing products and treatment options considering the therapeutic benefit, medical necessity and economic outcome. The German GBA is proud to have the toughest HTA process in Europe.  The physician or nurse can choose the treatment option if there is no directive from the insurance company or the GBA  Very relevant aspect to French decision-makers, as evidence must be demonstrated with French data.  This focus reflects the need for demonstrating the product works under the French practice, not necessarily with French patients. Effectiveness

Feature of Cost- Effectiveness U.S.GERMANYFRANCE Costs  Because of the high cost of care in the U.S., most insurers prefer cost-saving technologies over cost-effective technologies (higher cost but better outcomes).  The costs of a technology are not limited to the use of the technology, but can include downstream healthcare costs.  Because of the cost explosion in the German healthcare system payers try to force hospitals to cost savings. This has a tremendous impact on the purchasing prices. At the same time health insurers in cooperation with the German HTA body GBA try to save costs by requiring medical and economic effectiveness.  Depends on the perspective: hospital budget vs reimbursement.  Hospital budget: extensive focus on pricing, must justify with strong evidence.  Reimbursement: cost relevant if product is more expensive than alternatives. Costs

Feature of Cost- Effectiveness U.S.GERMANYFRANCE Perspective  Since healthcare payment is fragmented, insurers do not care about the societal perspective. They are about healthcare costs from their perspective (i.e., payments).  The value argument must be made to the healthcare stakeholder who bears the cost of using the technology. This is not always the insurer, although for new technologies it usually is.  If there are many similar technologies paid under the same billing codes, then it is the provider who cares about the cost of a particular technology. In this case, make the value argument to the provider.  Because of the aging population all insurers, hospitals and German authorities are interested to find solutions for society. The reason is that all healthcare stakeholders receive taxes, fees or indirect payments from the German population.  The German government modifies and readjusts the healthcare sector to guarantee that every citizen gets the best treatment considering the therapeutic benefit, medical necessity and economic outcome  Healthcare system perspective is the most relevant.  All reimbursement submissions must estimate the impact on public resources with technology adoption. Perspective

Feature of Cost- Effectiveness U.S.GERMANYFRANCE Payment (Billing Codes)  Payment by insurers is determined by billing codes; technologies that fall under the same codes are paid the same. (See billing codes below.)  Some billing codes are controlled by the insurers and some by the American Medical Association (AMA).  To get a new CPT code (controlled by AMA), which allows physicians to be paid for using a technology, it is often important to have influential physicians to argue in favor of the technology.  All DRGs are organized, controlled and calculated by the InEK institute (Institute for the Hospital Remuneration System).  Everyone can apply for new DRG’s (InEK institute), procedure codes (OPS, via DIMDI institute), diagnosis codes (ICD, via DIMDI institute). To be successful it is better to apply via medical societies or German KOLs.  Homecare reimbursement is more stable and does not change every year. Mostly the score of a service will change.  Hospitals use the French DRG system called GHS.  Other providers use a variety of methods from DRG-like codes to fee- per-day for prospective payments. Payment (Billing Costs)

Feature of Cost- Effectiveness U.S.GERMANYFRANCE Level of Evidence for Reimbursem ent  The level of evidence required for coverage and payment is usually much lower than for market release (controlled by FDA).  CMS (the Medicare insurer) has some special conditions for payment for new technologies that do not require much evidence up-front. o New technology add-on payments o Coverage with evidence development  The level of evidence required for coverage and payment is higher than for market release (controlled by GBA).  The GBA normally except only the highest three evidence levels for acute and homecare treatment / products.  Very relevant, as French authorities are very demanding.  However, a strong level of evidence will not help much if the study has no French data in it. Level of Evidence for Reimbursement

Feature of Cost- Effectiveness U.S.GERMANYFRANCE Health Economic Data for Cost- Effectiveness  It is usually cheaper to collect health economic data during a clinical trial than to conduct a separate study to do so.  Many insurers see RCTs as too controlled to reflect costs under natural settings, and prefer observational results. If you collect economic data as part of your clinical trial, there are ways to address this.  Often FDA requires a post-approval trial; this can be an excellent venue to collect health economic data in a more naturalistic setting.  Because insurers are not terribly interested in QALYs, it may not be necessary to collect a lot of quality of life (QoL) data.  Because insurers are interested in their own costs, in many studies it is only necessary to collect billing codes and a small amount of outcomes data.  Every new clinical trial (Acute and Homecare) must include health economics data.  Because the GBA is currently examining existing products regarding economic and medical effectiveness, it may be the case that economic effectiveness data need to be reassessed.  Pharmacists (Hospitals) are excellent source for cost data considering economic analysis.  Hospitals place a strong focus on HE studies and are willing to make their own analyses in spite of other studies performed nationally. Health Economic Data for Cost-Effectiveness

Clinical Strategy Clinical Evidence Economic Evidence Technological Challenges Budget Challenges Commercial Perspective

#1 challenge for medical products in the market Justify the price of their products 2013© ValueConnected, All rights reserved ©2013 Qmed Consulting Especially when adequate reimbursement is not in place

There are two possible answers 2013© ValueConnected, All rights reserved ©2013 Qmed Consulting Immediate positive impact on revenues Medium and long-term issues –Pressure for further price cuts –Weak differentiation point –Quality of service Does not create Value Results may not be immediate Medium and long-term opportunities –Educate and develop market –Build trust –Unique market position Justifies Price Lower PriceDemonstrate Value

And what is value? 2013© ValueConnected, All rights reserved ©2013 Qmed Consulting Perception coming from the market Benefits to different stakeholders Comparable to alternatives Measurable/quantifiable Combines relevant Clinical & Economic aspects OK, and how can I communicate value?

2013 Big Picture Innovation Commerce ©2013 Qmed Consulting EU = 32 INDIVIDUAL COUNTRIES REGULATORY STRATEGY = MARKET DATA + REIMBURSEMENT PLAN CLINICAL STRATEGY = CLINICAL DATA + ECONOMIC DATA IMMEDIATE REVENUE = SELLING TOOLS BEFORE REIMBURSEMENT

Qmed Consulting ApS Ørnevej 2 4600 Køge TEL.: +45 56 64 10 10 Mail: info@qmed-consulting.com www.qmed-consulting.com

2013 Oct 28, 2013: Hotel Zetta, SF,CA/USA ©2013 Qmed Consulting STACKING THE ODDS OF INNOVATION IN YOUR FAVOR.

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2013 Oct 28, 2013: Hotel Zetta, SF,CA/USA ©2013 Qmed Consulting STACKING THE ODDS OF INNOVATION IN YOUR FAVOR.

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