As part of the Synergy series, I am looking at collaborations between IP strategy and other facets that feed into the overall plans, goals and operations of a start-up company.  Where does IP fit into the puzzle with these other pieces and how can they work together?  Today’s blog is looking at the interaction between global market analyses and the development of a strong global IP portfolio.

As a new start-up sitting in the US, it can be easy to forget that the market goes beyond the country’s borders.  Given the multitude of priorities calling for attention, it can be tempting to put off planning for the rest of the world.  However, there are key benefits to taking a global view at the early stages. And there are also consequences for ignoring the potential of the wider world.

This pro-active global planning comes with a price tag – in internal resources or the cost of an outside consultant . So how to get the maximum advantage from the undertaking? Think about markets not only as the longer-range plans of where your product or service will be sold, but also how this information will guide earlier decisions like clinical trialing requirements, strategies to support pricing and reimbursement, and also patent protection.

To consider these synergies, I spoke with Betty Pio, a partner in the life sciences division at Simon-Kucher & Partners,  a company that specializes in growth strategies, including helping companies explore opportunities in global markets and focus their strategies in the different markets.[1]

Some examples of market analyses that are helpful at the early stages of a start- up

Competitive landscape – Who are the most likely competitors? This may differ across regions.  Consider beyond similar technology offerings.  Different approaches to the same problem (e.g., different classes of mode of action or even different procedures to treat the same disease or indication) can still be your competition.

Market size – How big is the market in each of the potential regions of interest and how much of the market will accessible to your offering?

Market landscape – What are the factors that define each market? Who are the players and their offerings? What other elements, such as regulatory requirements, pricing, and structure of the country’s healthcare system, define access to the potential markets?  Each of these factors may vary in importance and substance as you move from region to region.

Early value proposition – How should your product be positioned, and what implications does that have on opportunity size and development strategy?

How do these factors come into play in a company’s R&D planning?

Let’s take the example of a new drug.  Countries have different requirements for clinical trials, and different benchmarks for pricing and market access.  Understanding these differences can focus key resources early on in collecting the right type of data and tailoring efforts for a successful product approval and launch. There are instances where for example, in the US, comparison of a new drug to a generic or a placebo is sufficient.  However, in the EU, absent a demonstration that the drug is a better option to other marketed drug options, your drug may struggle to gain acceptance.  In Japan, safety issues, even above better efficacy, can be a driving market force.  Recognizing these differences, different types of trial design and data may be appropriate.

It also is tempting for companies to target a country simply because it offers a large target population for the intended treatment.  However, market size may not be the only factor at play. Pricing and reimbursement potential can sway the choices as well.  Take China which has a large population and thus potentially a large market.  China has a totally different market structure where you need to consider access to the relevant healthcare resources and the patient/family availability to afford out-of-pocket costs, which is very different than other markets where you might be seeking full reimbursement and the vast majority of people will have access to the healthcare system. Instead, markets with smaller target populations but higher reimbursement or pricing models may be a more fruitful choice for your initial product launch (though this is not always the case).

When should a company embark on market analysis?

There are a lot of possible markets in which to launch your product or service. And choosing them all, or even just the big ones, may be too much of a financial stretch for a start-up.  So how to select between the options?

As R&D develops and heads closer to commercialization, different types of analysis become beneficial.  Let’s take again a drug development example, one where the drug could be targeted to treat several diseases. Selecting between drug indications will be aided by an early look at the market for each, the market size, a forecasting of what is achievable and the competitors currently in the space.

As a drug moves out of R&D and into the clinical phase, around the time point for starting a Phase 2 trial, more product-focused considerations come into play. Phase 2 marks the period when a company starts to consider its early value proposition. For companies intending to commercialize directly, without engaging a partner, the patient/customer journey also comes into play .  This analysis looks at market-shaping activities for positioning the product at launch, for example, work to increase diagnosis rates, shorten the time from symptom presentation to diagnosis, educate referring physicians, and publish on the scientific validity of new endpoints.

As the drug then moves to later stage Phase 3 trials, further detailed analyses are appropriate.  These include customer segmentation and targeting, and positioning strategy.  The company then embarks on a full pricing and access assessment for entering its first target markets and undertakes planning for launch and sales and marketing in the various regions.

These later analyses are underpinned by the earlier marketing assessment.  The earlier pre-clinical analyses help guide R&D, clinical, regulatory, and IP decisions that will support the later phases of detailed strategies and ultimately, the product launch.

The synergies with developing a global IP protection strategy

The early planning for a global strategy is also key for an intellectual property protection strategy. On the IP-side of things, losing sight of the global potential can have dire consequences.  For instance, pursuing patents only in the US (a common strategy of some universities) can mean few or no protections outside of US borders.  This can reduce the attractiveness of the start-up to investors and potential acquirers.  Yet, budgets are limited, so how to select the countries or regions for patent protection?

The market analyses described above, especially the steps that can be taken at the early stage for market landscape, competitor analyses and value proposition, can help guide an IP strategy.  Depending on the product and its technology, there will be markets that will be key, others that are “nice to have” if budget allows, and some that are likely unnecessary.  Additionally, the market-driven selection of countries can help shape your patent claiming strategy, because countries differ in what can be patented and the requirements for scope and types of supporting data.

There is also an interplay with selected countries and disclosure strategy.  In the US, and many other countries, there is a grace-period that allows for public disclosure of the information about the product (or a sale) before a patent is filed.  Not so everywhere.  Importantly, the European Patent Office offers no grace period.  If Europe is at all in your strategy, filing prior to any public presentations, testing or sale is key.  By giving consideration to the regions of market interest early on, the company can shape and time its activities, such as its publication strategy, to gain visibility and traction in the key countries while maintaining IP protection.

Additional strategic benefits

There are additional benefits of an early market assessment along with a synergized IP strategy.  One of these is in attracting partnerships and investors.  Attention to the global market can help showcase a well-thought out strategy and a realism in going from innovative concept to a commercial product.  Additionally, with regard to future partnerships, some leg-work upfront to including key markets of target partners in your strategy can make your start-up a more attractive catch.  On the flipside, ignoring the realities of a global strategy and losing potential competitive and IP advantages in key regions can diminish your potential strategic value as an acquisition.

 

For more information on the offering of Simon-Kucher & Partners, see https://www.simon-kucher.com/ or contact Betty Pio directly at betty.pio@simon-kucher.com

 

The content of this blog is for informational purposes only and does not offer legal advice. Circumstances are fact-specific and you should consult an attorney for legal advice concerning your individual issues.

[1] IngensityTM IP and Simon-Kucher & Partners are independent businesses, with no agency for profit between them.