1. What Makes a Novel Technology Innovative?
(How to Create a Commercial Partnership)
Terry Fetterhoff
Head, US Chief Technology Office
Roche Diagnostics

2. Great to be back!

3. Roche at a glance Founded 1896 in Basel, Switzerland
Founding families still hold majority stake
Employing 88,500 people
Currently active in 150 countries on all continents
2014 – sales of 47.5 billion Swiss francs
2014 – 19 million patients treated with one of Roche’s top 25 selling medicines
2014 – 3 billion diagnostic tests performed
Clear focus on healthcare
Leadership in pharmaceuticals (#3)*
World’s largest biotech company (position #1)* with truly differentiated medicines in oncology, virology, inflammation, metabolism and CNS
Leadership in in vitro diagnostics (#1) and pioneer in diabetes management
Unique innovation model
But no position in Cytometry…
* Source: Decision Resources, Q4/2014

4. Innovation in Cytometry
Any Company’s Innovation Potential lies in it’s collective ability to identify and in-license technologies before the competition

5. ?
Innovation

6. Innovation in Cytometry
Definitions
Invention = A novel idea / technology / process
Innovation
= A really good invention

7. Innovation in Cytometry
Invention: Example

8. Innovation in Cytometry
Definitions
Invention = A novel idea / technology / process
Innovation
= A really good invention
= The commercialization of an novel technology
= The commercialization of an novel technology, integrated with the collective ‘know how’
= The commercialization of an novel technology that endows the customer with new capability

9. Innovation in Cytometry
Innovation Occurs when
Novel Technology is matched with Unmet Customer Need
Customer
Insight
Customer Needs
Pull
Push
Innovation
Space
Commercialization
Technology
Development
Novel Technology

10. Innovation in Cytometry
Matching Their Want with Your Have can be a Rare Event
What People Want
Aligned Interest
What Scientists & Engineers Make
Focused Alignment
Successful Alliance

11. Innovation in Cytometry
Innovation Occurs when
Novel Technology is matched with Unmet Customer Need
Valley of Death
Customer
Insight
Customer Needs
Pull
Push
Innovation
Space
Commercialization
Steps to Avoid VoD
Technology
Development
Novel Technology

12. Innovation in Cytometry
How do you Reach Out to the Right Business Partner?

13. 1. Understand your Commercial Partner
Innovation occurs across a business/technology continuum
Business
Operational Requirements
Well Defined Wish List
Strategic Migration
e.g. Unclear Development
Path
Fuzzy Strategy
Disruptive Technologies
New Market
White Space
Technology to Challenge Strategy or Migration Path
Point or Off The Shelf Solutions
Technology
New Dx Capabilities
Performance Improvement
Usability Enhancement
New Dx Platforms
Migration Strategy
Future State Vision
Emerging Technologies
Need for External Technology Source

14. Innovation in Cytometry
How do you Predict the Market Value of a Novel Technology

15. 2. Know and Defend the Value of your Invention
Framework for Technology Assessment
Company
Customer
Value Proposition
Market Share
Profitability
Protection
Freedom to Operate
Growth
Fit
Utility
Technology
Copyright
Intellectual Property
Uniqueness
Competition
Market Size
Cost
Capital
Commerce

16. 2. Know and Defend the Value of your Invention
Methods for Technology Valuation
Cost Plus
Assumes that the value of the technology is related to the cost of development
Comparable Market
Assumes that the value of the technology can be inferred by comparing to comparable technologies already on the market
Future Return
Net Present Value (NPV) based on anticipated revenue and costs calculated against a pre-determined cost of capital
Monte Carlo
Incorporates uncertainty by characterizing the range of potential future outcomes and interprets the NPV distribution for all scenarios, yet assuming a single course of action
Real Options
Decision tree analysis applied to the quantitative assessment of a business opportunity incorporating technical as well as market risk for each go/no go decision point

17. Innovation in Cytometry
So What About Clinical Cytometry?

18. Is Clinical Cytometry Receptive to Innovation?
Level of Investment
Number of Applications
Medical Need
Market Adoption
Value Based Pricing
Revenue Stream
Standardization
Clinical Cytometry
Diagnostic Sequencing
Level of Automation
Market Health Assessment

19. Summary
Innovation is the commercialization of an novel technology that endows the customer with new capability.
Commercial companies are more open to alliance with external partners for technologies just beyond their internal reach (expansive innovation).
Successful alliance requires common technology valuation based on objective assessment of unmet market needs.
Valuation of technologies for the clinical cytometry market is negatively influenced by various market factors, so inventors must understand and address respective market constraints.
Technology development has largely met the needs of clinical cytometry. The remaining unmet needs include a greater level of automation including data analysis, greater degree of standardization, and IT connectivity.
Greatest value to clinical cytometry offered from academia (inventors) is increasing medical value of new assays through evidence based improved health outcome.

20. I call my invention The Wheel, but so far I’ve been unable to attract any venture capital.