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NovoTTF-100A is a portable, investigational medical device developed for treatment of recurrent glioblastoma. NovoTTF-100A makes use of alternating electric fields, called "Tumor Treating Fields (TTF)" to disrupt the division of cancer cells while preserving the surrounding healthy cells. The discovery of TTF is a break through success in cancer cure as it lessens the side effects caused by chemotherapy and radiation.
What is the meaning(s) behind the product or service?
NovoTTF-100A will be used to treat and in some cases cure recurrent glioblastoma.
Potential Meanings: physical, health, religious and emotional sustenance, providing feelings of being needed, being listened to, supports artistic and creative needs, facilitating control over the environment, providing entertainment, providing feelings of status, superiority and elitism, providing a sense of stewardship, providing feelings of closeness to the earth and being organic, providing a sense of altruism, provide feelings of adventure, supports gender needs, providing security and comfort, facilitating and assisting the completion of some work or home task, providing familial support, the product or service helps us to learn and adapt, it helps us to change location, it provides opportunity for communication and networking, and of course be a source of satisfaction and happiness.
Identify potential product and service attributes, features and functions. Here are some ideas for the attributes, features and functions:
Price: How much does it cost? $10,000 to $15,000 per month for a two year treatment cycle.
Quality: How well does the product conform to the product specifications? As per the specifications the clinical trials have shown that there is minimum side effect and NovoTTF-100A has been successful in destroying the cancer causing cells.
Reliability: Does the product or service perform as it is supposed to over the expected life of the product or service? NovoTTF has performed as expected during the clinical trials.
Ease-of-Use: Is the product easy to use and can consumers learn to use it without much trouble? Currently it's not very easy to use as the device is bulky and unconventional. The oncologists and neurologists need to learn the method of usage as they are not familiar with using a hardware device to treat patient. With some amount of training the physicians and patients will be able to use it easily.
Performance: Is product smaller, faster, greater capacity, better resolution, more convenient, compatible, and adaptable?
Which features and functions are unique or distinguishing? The unique feature of NovoTTF-100A that sets it apart from other conventional cancer treating methods is minimal side effects.
Design: Is the external form attractive, is it visually, tactically, audibly, olfactory attractive,
is the product packaged properly, does the product suggest a certain meaning? The NovoTTF-100a is a portable, investigational device. The device is currently a bulky hardware piece but with further improvements in the design this problem can be overcome. The device is intended for continuous home use by patients.
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.
Destroy cancer causing cells
Reach the root of affected tissue
Points of Difference and Differentiators (PODs): List the features and functions of a product that distinguish it from the competition.
No harm to healthy surrounding cells
Negligible side effects
Can be used to cure multiple types of cancers
Blue Ocean Features and Exciters (BOFs): List the features and functions that could be used to develop a new Blue Ocean market.
No harm to healthy surrounding cells
Can be used to cure multiple types of cancers
Negligible side effects
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.
Long duration of usage of device.
Irritation to skin due to friction of electrodes.
Bulky size of device.
Organizational and Industry Analysis Template
Give a brief description of your business model including what products or service you are producing or will produce?
NovoCure proposes a cutting edge technology for treatment of recurrent glioblastoma cancer. We have designed a medical device, NovoTTF-100A, which offers a new way to battle brain cancer. The device uses alternating electric fields; "Tumor Treating Fields" to disrupt cancer causing cells and at the same time protects surrounding healthy cells.
Describe your target customers and the size of the market?
Our target customers are patients suffering from recurrent glioblastoma cancer. In 2009 around 20,000-25,000 cases were reported from US, Europe and Japan. We can further expand our customer segment to patients suffering from other cancers once we get successful clinical trials results for other cancers.
List and describe your current competitors?
Schering-Plough is one of our core competitors and is a leading player in the brain cancer market. Temodar is a drug by Schering-Plough that is used widely for treating brain cancer.
List and describe your potential competitors?
Oncology companies like Novartis, Eli Lily, BMS, Amgen, Celgene, AstraZeneca etc will soon explore the brain cancer market.
Who will you purchase materials, components or other inputs from?
NovoCure is very particular about hiring its employee. Employees are key components of NovoCure. Employees skilled in electrical engineering, physics, mechanical engineering can be hired either in US or Israel.
The electrodes required for manufacturing NovoTTF-100A would be purchased from a Israel based company
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)?
Remarkable treatment results from clinical trials.
Negligible side effects.
Strong experienced leadership and senior management.
Support from key personnel in the field of brain cancer, Dr.Stupp and Dr.Gutin.
Potential of being used on multiple types of cancers.
What are your weaknesses (products, R&D, supply chain, brand, pricing, core competencies, resources, infrastructure, scalability & interfaces)?
Additional funding required for next phase of clinical trials.
Lack of comfort level on usage of hardware for treatment of cancer amongst oncologists and neurologists.
Unrecognized brand name for NovoCure.
Longer duration of wearing NovoTTF-100A device on head by patient.
What are the opportunities (growth, market share, product lines, Blue Ocean, complimentary products, lock-in, brand, & first mover adv.)?
Ability to use the device for multiple cancers (one compound multiple targets)
Lack of current availability of treatment for recurrent glioblastoma.
What are the threats (substitutes, emerging technologies, new entrants, economic climate, government regulations, and social/culture issues)?
Uncertainty of acceptance from oncologists and neurologists.
Other established oncology based companies would soon explore the recurrent glioblastoma market.
Strategy canvas for new product compared to competitor or industry (price & quality are example attributes)
Use the FAD template to add key attributes to the strategy canvas (You can continue the table if you need more attributes)
BOF: Blue Ocean Features and Exciters POD: Points of Difference and Differentiators
POP: Points of Parity and Must-Haves EXT: Extinct, vestigial features and dissatisficers
Meaning of product or serviceâ†“
Ease of usage
Destruction of unaffected healthy cells
Business Plan Template (Do this second)
What is your mantra (3-10 words on why your company should exist)?
Highest quality cancer care through new therapies and research.
What is the overall mission of the business (1-3 sentences on what your company does or will do and your target customers)?
We strive to serve patients by transforming the power of physics into therapies that restore lives. We aim at finding answers to some of the world's unmet medical needs. We continue to pursue innovative science and new opportunities beyond our targeted disease.
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 will generate our profit by initially introducing NovoTTF-100A device in combination with Temodar which is an established drug for brain cancer treatment. This ways we will reduce initial cost of introducing NovoTTF-100A in market. We will then offer price differentiated treatment to different segments of customers (discussed in recommendation 3).
What are your goals & objectives over the next 3 months to year (2-6 phrases on precise performance intentions)?
Attract philanthropy foundations to raise capital required for next phase of clinical trials.
Contact as many physicians as possible who prescribe Temodar to promote use of NovoTTF-100A by end of next month.
Analyze supply that would be required once NovoTTF is launched based on demand and make the production proposal ready by month end.
What tactics will you use over the next 3 months to a year to reach your objectives and mission (2-6 phrases)?
Develop a marketing plan to introduce NovoTTF-100A to oncologists and neurologists. Present papers in medical conferences.
Apply the strategy of price differentiation for different customer segments.
Reduce the duration of wearing the device on head by patient by further R&D.
Expand the company by hiring new employees.
NovoCure case analysis:
NovoCure Ltd. is a privately held company that is dedicated to bringing a completely new treatment for cancer into clinical use. NovoCure was founded by Dr. Yoram Palti in 2000 to further develop his research in alternating electric fields. NovoCure proposes a cutting edge technology treatment for recurrent glioblastoma cancer with negligible side effects which is very unique to any type of cancer treatment. Under the efficient leadership of Dr. Palti and Asaf Danziger (CEO, NovoCure), the company has designed a portable medical device, NovoTTF-100A, that offers a new way to battle brain cancer. The device uses "Tumor Treating Fields" technology to disrupt cancer causing cells. What differentiates it from other cancer treatments like radiation and chemotherapy is that it does not harm the healthy cells that surround the cancer causing cells.
NovoCure had achieved a break through success in treating and even curing cancer. The clinical trial results so far have all been in favor of NovoCure. But to carry out next phase of trial additional finance was required. Though the clinical trial results were all very positive, the potential financers were skeptical as the Sep 2008 financial crisis had hit the market and the market conditions were very confusing. The financers were not willing to take any risk.
There were other challenges that the company faced. The physicians who treated brain cancers were oncologists and neurologists. They were not trained in physics and had very little knowledge of electrical engineering. They were hesitant in using NovoTTF-100A as they were not used to prescribing their patients a hardware device. NovoCure did not have an established brand name. Many physicians thought of it as a small Middle East company that had come up with an idea that sounded like quackery because past experiments with hardware devices had failed. There were other challenges related to product delivery like choosing a product delivery method that would be convenient to oncologists and neurologists, establishing billing and payment system, negotiating reimbursement rates with payers, ensure reliable product availability etc.
The following section discusses recommendations for NovoCure Ltd. that would help them overcome some of the above problems.
Recommendation 1: Choice of Financer
NovoCure had three different options to raise additional required finance for next phase of clinical trials. Raise additional venture capital, Attract a strategic investor and Attract venture philanthropy. Following table enlists the pros and cons of these options.
Raise additional venture capital
Attract a strategic investor
Attract venture philanthropy
Many venture capitals are ready to fund pharmaceutical industry. With NovoCure's global reach it was easy to find such venture capitals.
Easy to market along with other chemotherapy drug. Leverage the brand name of established pharmaceutical to promote NovoTTF-100 A.
Significant funding from U.S. Foundations like Bill and Melinda Gates foundation, Michael Milken's foundation.
Due to crashing financing market VCs were unwilling to take any risk and were at stand still.
Strategic partner would want distribution rights for NovoTTF. NovoCure team was not ready to license the rights outside the company.
My recommendation would be attracting venture philanthropy. In 2008 the total assets of just top 10 US philanthropic foundations had reached over $110 billion. These foundations are established by successful business people for social benefit. Such foundations encourage innovative treatments that could lead to breakthrough results in curing the disease. With the clinical trials result it is easy for NovoCure to convince such foundations. Also, NovoCure has had previous experience with handling angel financers. This way they need not license the distribution rights outside the company and protect their intellectual property.
Recommendation 2: Implement "One Compound, Multiple Targets" strategy to attract financers (Blue ocean strategy):
The market value of a cancer drug depends on how efficiently it can be used to cure multiple types of cancers. The concept "One Compound, Multiple Targets" implies that one compound (drug, treatment etc) should be useful to cure multiple target diseases.
Most of the cancer drugs available today are very specific to a particular cancer type. Huge capital is spent on R&D of drugs today. So the sponsors for the research would want to maximize the output of the treatment. If same therapy can be used to cure multiple cancers, the sponsors would be more interested in investing in such research. The consumer segment will not be restricted to any one type of cancer patients. Instead different market segments can be exploited. The profit earned would be higher as for same capital invested in R&D, multiple types of cancers would be targeted. E.g. Say $1 billion was spent on research of treatment for brain cancer and expected profit after the drug is launched is say $2 billion in first five years. Now if the same treatment with some variation can be used to cure some other type of cancer say lung cancer, the research cost would still be around $1 billion but the profit would be $2billion + $X billion (where $X billion is the profit estimated from lung cancer treatment). Thus $2billion + $X billion > $2 billion.
NovoCure will have created an uncontested market space by implementing this strategy. With lesser efforts in marketing and promotion, it will achieve same results as after marketing multiple products. Thus NovoCure will save money in promotion of the treatment. This money can be put to further research.
Recommendation 3: Price differentiation through different cost structures for different customer segments:
This recommendation suggests having different price structures for different segments of customers. I suggest following classification of patients based on health plans for different price structures:
Medicare: People who are aged above 65 years
Medicaid: Individuals and families with low income and resources
War Veterans: People who have served in armed forces
Cash: Individuals who do not use any health plans and would pay independently.
Others: Individuals who do not fall under any of the above plans.
Using above classification, different price structures should be proposed. For people falling under Medicare plan the treatment cost should be low. The resistance of these people is very low and usually success rate of treatment is also less. Hence the lower cost for this segment. As a social responsibility towards society, treatment should be provided to people in Medicaid plan at a very minimal price. These people can't afford very expensive treatments. For war veterans government provides lot of financial benefits. But as a moral service, the cost of treatment for such individuals should be kept average. For individuals falling under cash and other plans, the cost should be kept high. These individuals do not need any exceptional benefits as they usually belong to upper class of society and can afford expensive treatments.
There are dual benefits out of this strategy. First by differentiating prices, the company is helping individuals who actually need financial support. Second it helps in building a brand image of the company as a socially responsible company. Since the company is in early stage of its instantiation, all these factors will help in brand building. Currently the company is being pursued as a small scale Middle East company by many oncologists and neurologists. Building brand will help the company over come this disadvantage.
Another way of differentiation would be based on duration of treatment. The longer the treatment duration, the lesser should be the cost. The cost should be lowered as and how treatment proceeds. Say if the treatment lasts for 5 years, the cost of 5th year should be less than cost of 4th year. That ways we lock-in the patients so that they do not look for other sources of treatment at the same time benefitting them with reduced cost.
The results of all the clinical trials so far have been very favorable for NovoCure. All NovoCure needs is a strategy to raise additional capital required for next phase of clinical trials. Also NovoCure needs other strategies for promoting and marketing NovoTTF-100 A in the market once they get FDA approval. Attracting a philanthropy foundation to finance the needed capital will solve the financial problem and next phase of clinical trials can be carried out. This strategy has been explained in recommendation 1 of above section. To promote NovoTTF-100 A in the market NovoCure can adopt different strategies. One of them is providing NovoTTF-100A treatment at different price to different segment of customer. Price differentiated schemes always work as they cater to needs of specific customers. This has been explained in recommendation 3 of above section. And last but not the least, expanding the NovoTTF-100A market to other type of cancers will attract new financers. This is discussed in recommendation 2 provided above.