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Product or Service Description (what will it do?)
NovoTTF-100A is a non-invasive portable medical device for the treatment of cancer using Tumor Treating Fields (TTF). It arrests the spread of cancer and can be used alone or in conjunction with surgery, chemotherapy, and radiation.
What is the meaning(s) behind the product or service?
To relieve suffering of cancer patients through the best and the most effective treatment.
Identify potential product and service attributes, features and functions.
Price - $10,000-$15,000 per month
Quality - The quality of product is excellent. It confirms to the initial product specifications. It does not infuse any pain or side effects like chemotherapy, radiations or other drugs.
Reliability - No device related serious adverse events were observed in over 400 patient-months of cumulative exposure to NovoTTF-100A treatment.
Ease -of-Use: The device is portable and can be carried in a tote. The four electrodes (resembling bandages) will be fixed on a patient's scalp and replaced weekly. Patients have to just charge the device since it is battery operated. This can be done while they are asleep or stationary. The device can be used without much trouble. Once fitted, patients will be able to continue with their normal activities.
Performance: The product weighs six pounds and can be carried in a tote. The battery life is 3-4 hours per charge. It is very convenient to carry the device. It might be a little heavy for some patients. With improvements in battery technology, the system would become lighter and smaller, fitting into a small backpack.
Design: The four electrodes used on a patient's scalp resemble bandages. This does not look quite attractive and can be modified in the future to look better since the patients have to be wearing them for long hours. The device containing the battery is fitted into a stylish tote. In the future with innovations in technology, the size and weight of the device can be reduced and fitted into a small backpack.
List the attributes and features that will be focused on and in particular those that reinforce the meaning.
Points of Parity and Must-Haves (POPS): List the attributes, functions and features that most of the products in a category usually have.
Should be approved by FDA
Should effectively treat cancer.
Minimal pain and side-effects
The equipment should not have any technical problems, even if they do should be easily fixed
Points of Difference and Differentiators (PODs): List the features and functions of a product that distinguish it from the competition.
No pain and side-effects.
Can be used in conjunction with surgery, chemotherapy and radiations.
Patients either goes to the hospital or a NovoCure representative comes over to the house to change the electrodes weekly.
Blue Ocean Features and Exciters (BOFs): List the features and functions that could be used to develop a new Blue Ocean market.
Innovation - Use of electric fields to treat cancer cells. Electric fields was used earlier but was never successful. Tumor treating fields is not being used by any current treatments for cancer.
Not worried about lock-in of patients because the patients will find us due to seriousness of the disease and lack of good treatment options.
Side effects and pain are almost negligible whereas these are common other treatments.
Treatment can be taken at home.
Extinct and vestigial features (EXTs): List the attributes and functions that are no longer necessary or on the verge of becoming extinct.
Dissastisficers (DIS's): List the attributes and functions that can cause some consumers to avoid using a product.
Has to be worn by patients round the clock, disconnecting it for two thirty minute period each day
Battery life is just 3-4 hrs per charge
Device weighs 6 pounds; some patients might find it hard to carry.
Organizational and Industry Analysis
Giv0e a brief description of your business model including what products or service you are producing or will produce.
Our flagship product, NovoTTF-100A currently treats new and recurrent glioblastoma, among the many types of brain-cancer. This is the first product of its kind to be used to treat cancer. The company has to transform itself from a research-based organization with only 38 employees worldwide into a commercial business.
TTFields is an oncology therapy that will be delivered by a piece of portable hardware. The hardware can be sold by physicians at selected hospitals and also at over 20 NovoCure centers worldwide. NovoCure will provide patients with round the clock technical support. Research will be carried out in the future to treat other forms of cancer and commercialize the same.
Describe your target customers and the size of the market?
There are over 20,000 cases of glioblastoma in U.S., Europe, and Japan. Other forms of cancer that could be treated by NovoCure therapy was estimated at 200,000 cases. Given the U.S.
reimbursements rates of $7,000-$15,000 over a month for several chemotherapy drugs, NovoCure could build a multi-billion dollar business with TTFields. NovoCure also expects its first European revenue at $10,000-$15,000 per month for a two-year treatment cycle.
List and describe your current competitors.
Dendreon - Dendreon Corporation (NASDAQ: DNDN) is a biotechnology company focused on targetingÂ cancerÂ and transforming lives through the discovery, development, and commercialization of novel therapeutics that may significantly improve cancer treatment options for patients.Â http://www.dendreon.com/about/
Avastin - is the first approved therapy designed to inhibit angiogenesis, the process by which new blood vessels develop and carry vital nutrients to a tumor. It is approved so far to treat certain metastatic colon cancers and non-small cell lung cancer. - http://www.sciencedaily.com/releases/2009/04/090406151551.htm
List and describe your potential competitors.
Radiosurgery: uses multiple beams of radiation to give a highly focused form of radiation treatment to kill the tumor cells in a very small area. Radiosurgery is typically done in one treatment, and in most cases you can go home the same day. Side effects may include fatigue, headache and nausea.
Axitnib: This drug "significantly extends" progression-free survival in the patient population studied and had a manageable safety profile.
Who will you purchase materials, components or other inputs from?
The electrodes are manufactures at a facility in Mexico that was owned by a company based in southern California. The equipment that consists of the power source, amplifier and the oscillator is manufactured in Israel.
SWOT (consider human resources, R&D, marketing, procurement, manufacturing, distribution, engineering, IT, finance, accounting, and legal)
What are your strengths (products, R&D, supply chain, brand, pricing, core competencies, resources, infrastructure, scalability & interfaces)?
Yoram Palti and Dr. Roger Stupp were the important leaders who had immense knowledge in Tumor Treating Fields and oncology.
First of its kind to treat cancer.
No pain and side effects infused by NovoTTF-100A
Can be used alone or in conjunction with surgery, chemotherapy and radiations.
What are your weaknesses (products, R&D, supply chain, brand, pricing, core competencies, resources, infrastructure, scalability & interfaces)?
The treatment cycle time for recurrent glioblastoma is 2 years. Approval by FDA would take long.
Product might not be approved by FDA as investigation might fail and additional funding might be needed.
Cumbersome for patients to use the device through the day.
Low batter life. 3-4 hrs of battery life per charge.
Patients might need technical support initially.
What are the opportunities (growth, market share, product lines, Blue Ocean, complimentary products, lock-in, brand, & first mover adv.)?
Blue Ocean market.
First mover advantage.
Set the bar for competing products.
Increase market share by treating other forms of cancer.
What are the threats (substitutes, emerging technologies, new entrants, economic climate, government regulations, and social/culture issues)?
Approval denied by FDA if investigations fail for recurrent glioblastoma after two year treatment cycle.
Difficult to find investors for additional funding due to bad economy.
Competitors or new entrants might come with substitutes or similar products.
Strategy canvas for new product compared to competitor or industry.
Meaning of product or serviceâ†“
What is your mantra?
To provide the best and most effective treatment for cancer.
What is the overall mission of the business?
To reduce the burden of cancer through innovative and collaborative research to provide outstanding cancer treatments, to relieve the suffering of cancer patients.
How will you make money in terms of product differentiation and/or being the low cost producer & what complimentary products and services will be offered in order to generate recurring revenues?
We have the advantage of introducing this kind of a product into the market first. None of the earlier treatments are as effective as NovoTTF-100A. The product is portable and do not cause any pain or side effects. It can be used alone or with other treatments. Treatment by Novo-TTF is quite expensive, but due to lack of good treatment options, this will not be a drawback. NovoCure also provides round the clock technical support. There is huge market for cancer treatments. Knowing this, the product is expected to be million dollar business. The products can be sold by physicians and NovoCure centers.
What are your goals & objectives over the next 3 months to year?
Launch NovoTTF100A as soon as it is approved by FDA. Spend around $3 million for advertisement campaigns. Sell at least 3000 equipments at a low introductory price. Provide round the clock technical support. Increase the sales by at least 10% in the next 2 years. Develop improvements in the device based on customer feedback.
What tactics will you use over the next 3 months to a year to reach your objectives and mission?
We will leverage the fact that we are first to the market with this product. Build brand name through advertising, conferences and awareness of the product. We will hire employees as there are only 38 employees currently working with NovoCure. Open NovoCure centers worldwide. Ours is a blue ocean market as we have the advantage of launching such a product first and therefore build our brand name. We will strive to achieve the best and most effective way of treating cancer.
Case Analysis and write-up
NovoCure, Ltd is a privately held medical device company focused on developing the Novo-TTF100A device, a non-invasive portable medical device for the treatment cancer. The company's technology uses alternating electrical fields, called "Tumor Treating Fields" (TTFields). TTFields are the brainchild of Yoram Palti, M>D./Ph.D., a specialist in electrophysiology and biophysics. WFD Ventures, founded by Bill Doyle were the early-stage investor in NovoCure in April 2004 investing over $25 million in three separate rounds to undertake pilot clinical trials for the treatment of certain brain cancers and cell lung cancers. Dr. Palti chose Asaf Danziger as NovoCure's CEO.
The device Novo-TTF 100A is being developed for patients with new and recurrent glioblastoma, a common form of brain cancer. The FDA has not cleared the use of Novo-TTF in U.S. as the results for recurring glioblastoma are still pending since the treatment cycle lasts 2 years. NovoCure estimated that $35 million would be needed to file PMA application for recurrent glioblastamo, complete the non-small
lung cancer pilot trial, and complete the two-year enrollment of newly diagnosed glioblastamo. In case, FDA did not grant NovoCure the PMA for recurrent glioblastoma, another $13 million could be required to commercialize the NovoTTF-100A and bring NovoCure to positive cash flow. In the earlier rounds of investments, Doyle's WFD ventures had invested $25million and angel investor Perlhagen had led first two rounds. To raise new money Doyle considered various new approaches for additional funding.
RECOMMENDATION 1- Attract a strategic investor.
Novo-TTF100A could be used in conjunction with surgery, chemotherapy or radiations. Doyle expected to generate significant interest among the manufacturers of chemotherapy agents. The elements of strategic fit with chemotherapy manufacturers were apparent. Pharmaceutical companies have sophisticated, global distributions to market therapies and drugs to oncologists and patients. As Novo-TTF100A would be prescribed along with chemotherapies and used in conjunction with them, it would provide a high-value sale. TTF fields are not competition to chemotherapy and did not replace them. They enhanced the performance of chemotherapy treatment. These effects were proved in the results of the pilot trials. There is a very low chance that TTFfields would be replaced by new entrant or substitutes. As new drugs were developed as chemotherapy agents, TTFields will enhance the performance of these drugs. The commercial life of TTFields was expected to last for 15-20 years from market launch.
NovoCure should consider the option to attract in-house venture funds of the large pharmaceutical companies. There few major international pharmaceutical companies that NovoCure can approach. Pfizer is the largest pharmaceutical company in the world; they have been doing research in developing anti-cancer drugs. Pfizer will definitely be impressed by the progression of TTFields to treat cancer. Another good option of pharmaceutical company would be Johnson and Johnson. Doyle previously worked with them and could impress them with the results of TTFields in the clinical trials. These funds could bring not just equity financing, but also the credibility of having passed inspections by leading industry player. This would prove to be a stepping stone for NovoCure, particularly down the road when they think of going public by offering IPOs.
If Doyle could get these large-pharmaceutical companies to be key investors for additional round of funding, it could prove to be great asset for NovoCure.
RECOMMENDATION 2 - Lock-in of customers and price differentiation based on customer type.
There are various kinds of treatment available for cancer, but most of them lack good treatment. If NovoCure succeeds in winning the FDA approval, Novo-TTF100A would create a Blue Ocean Market and would be a breakthrough technology. There are different drugs present to treat cancer, but none like Novo-TTF100A which uses electric field named "Tumor Treating Field" to treat cancer.
Novo-TTF100A does not cause any pain and side effects, except for skin irritation on the scalp under the electrodes unlike other cancer treatments where patients suffer due to pain and multiple side effects. This product can also be used alone or in conjunction with services, chemotherapy or radiation. Lock-in of customers will not be difficult since the advantages of using Novo-TTF100A would be immense compared to other cancer treatments. Cancer patients throughout the world are well connected and therefore it should not be problem to attract customers. Since this product will be recommended along with other cancer treatments by physicians, generating a good customer base is not difficult.
Cancer treatments are very expensive and some cancer patients cannot even afford these treatments. Novo-TTF100A is priced anywhere in the range of $10,000-$15,000 per month. The product can be sold to customers at different prices based on the type of patients. Depending on the type of insurance coverage a patient has, the product can be priced appropriately.
There are patients who are covered entirely by the insurance which are purchased by patients. These patients can be charged the whole price of $10,000-$15,000 per month upon purchase of Novo-TTF100A. Some patients are covered by insurance sponsored by their company, in which only a percentage of the total cost is paid by the company and the rest is paid by the patient. These patients can be charged around $8000-9000. Patients who use government sponsored insurance like medicare or medicaid in U.S. which insures people below poverty line and senior citizens can be charged around $5000-$7000.
This sort of price differentiation would be a great boon to many patients who cannot afford expensive cancer treatments.
RECOMMENDATION 3 - Advertise the product with much more vigor:
I feel the product needs to be advertised to a much greater extent. Something that is not aware to the general public will not sell. Even though the PMA is still pending for recurrent glioblastoma, I feel that Novo Cure should go ahead and advertise the product.
Along with the common media for advertisement like print, television and radio, Novo Cure should target the internet medium for advertisement. The internet is fast spreading across the world and I feel there is no better medium than the internet. Every time a person puts a key word like cancer in Google or Bing in the advertisement section it should display NovoTTF-100A product. Also they should make it as a sponsored link in Google search. Thus when any search related to cancer is carried out, the first link that is displayed is related to Novo Cure.
Something that is lagging with Novo Cure is awareness, many people are not aware of the product. India and China could be a major market. Both these countries have a population in excess of one billion. Create awareness among the medical fraternity in these countries.
Another major channel could be medical magazines like the cancer research journal. These journals are not read by the medical professionals alone but also by the close family members of the people suffering from cancer. This would lead to awareness in the minds of the people. Creating awareness about the product should be the topmost priority of Novo Cure.
A special team needs to be designed with appropriate marketing skills. This team should be sent to various locations like India, China, and Africa so as to judge the current awareness about the product and create new markets for the products. The key designers of the product who have the complete domain expertise must visit various cancer institutes to create awareness.
Even though the product has not yet been approved by FDA, this initial publicity of the product will help in promoting and increasing sales of the product.
As I have mentioned earlier, Novo-TTF100A is a Blue Ocean market product and the first of its kind. The team at NovoCure has done a great job on this product so far. There are millions of cancer patients around the world. If Novo-TTF100A is approved by the FDA and in the future can treat and cure other types of cancer, this treatment will be a blessing in disguise for many patients who have suffered for number of years due to the deadly disease. With such a product, NovoCure should succeed in finding investors and at the same time spread awareness and educate people about what this product is capable of. NovoCure with their flagship product Novo-TTF100A might turn into a multi-million dollar business.