Context is Everything

An accurate understanding of the market landscape is the only way to understand where you’re at and where you need to go.

Situation: An implantable technology had experienced strong early double digit revenue growth and was considered to be a promising multi-billion dollar market opportunity. A significant, unexpected and prolonged decline in revenue growth rates had raised serious concerns about the business.


Background:

  • Approximately 1 million people in the U.S. suffer from this debilitating condition
  • Device implant volume of 3,000 per year
  • Patients who received the therapy experienced dramatic quality of life improvements
  • Primary clinical evidence was a pivotal trial of just 75 pts. supplemented with 5 year data
  • Very few implanting physicians due to the high skill requirements, but all were strong advocates with their peers
  • Average physician treating indicated patients did not believe in device therapy and did not refer pts. to implanters

What our analysis uncovered:

  • Total net indicated prevalence ~ 250k patients; net incidence was ~ 20k/year (~2% CAGR).
  • U.S. Annual revenue potential was $600M (initial implants + replacement devices)
  • Initial (denovo) implants were actually flat, with revenue growth coming exclusively from replacement procedures
  • The opportunity was less than 10% penetrated and adoption had completely stalled
  • Awareness with the average physician was nearly universal, but adoption (the referral rate) was near zero

Conclusions:

  • Good market potential, significantly under-penetrated, but not a multi-billion dollar U.S. opportunity
  • Adoption completely stalled with just the early adopters, with no participation from the broader market
  • Structural barriers included: weak trigger for device consideration, insufficient evidence, and negative bias of referrers

Recommendations:

  • Fund large new clinical trial (include broad base of referring physicians)
  • Develop more definitive test for identifying indicated patients
  • Invest in targeted market development programs to drive adoption with average physicians

Results:

  • Additional investment was secured against the identified structural barriers, especially clinical evidence
  • Denovo implant volume has grown significantly and sustainably
  • Seven years later, U.S. penetration was 50%