Is your medical device idea viable?

Is your
medical
device
idea
viable?

What are you going to get?
No matter how good your idea
is, if people aren’t going to buy
it and invest in it, it isn’t going to
be a success.
During the course of this ebook,
we will take you through the
important decisions that will form
the basis of your
business plan.
The journey won’t be the same
for everyone but the steps
are going to be similar. Some
of the decisions will require
more thought than others and
your attitude towards risk will
determine your route. It also
depends on whether this is your
first foray into medical devices
or you have been there before.
Either way, starting with the
basics is never a bad thing.
Once you have completed these
tasks, you should have a clearer
understanding of whether or
not your idea can give rise to a
successful medical device.
If your findings are positive,
you’ll also have the foundations
of a business case to make
to investors.

Contents
Part 1: Market Research
Part 2: Business Considerations
Part 3: Engineering Feasibility
Part 4: Manufacturing
Part 5: Funding

Market research should be the starting point
to any business endeavour.
The amount of information and ease of
communication nowadays means that you can
explore the needs of your potential customers
even before you have a solid idea of what
your medical device is going to be.
The simplest way to break down market
research is in to a series of inputs and
outputs. Each of the following activities are
inputs. Keep an eye on the outputs because
they’re going to come back as inputs later on
in the viability assessment process.
#1 Market Research
01
Part1:
MarketResearch

Speak to the people that are going to be using
your medical device. That might be nurses,
specialist clinicians or GP’s. Focus on finding
out as much as you can about current clinical
practice (this will be very important when it
comes to marketing your device later on.)
This may also inform
any upcoming changes in
clinical practice.
Discussions with
potential users
02
Part1:
MarketResearch

Discussions with
potential purchasers
It is a common misconception among
inexperienced market researchers that
the person using the device is the
only ‘customer’.
While the end user (the consumer)
is important, so too is the person
responsible for purchasing. Try to
identify who makes the final purchasing
decision and how they are influenced.
In the US, reimbursement is usually a
key factor in market acceptance. Try
to find out early whether you are likely
to be able to achieve a reimbursement
code for your device.
Key Definition:
Customer- The person who makes
the purchasing decision
Consumer- The person who uses
(consumes) the product or service
03
Part1:
MarketResearch

Conducting a preliminary
IP search at this early stage
serves two functions:
1. It tells you whether there is any current
IP around your idea. This feeds into the
engineering specification whereby you may
have to work around existing IP.
2. It gives you an indication of whether you
may be able to protect your idea. When
approaching investors, this will be one of
the ways that they assess how valuable your
business is.
Intellectual Property
(IP) Search
04
Part1:
MarketResearch

Preliminary
regulatory
requirements
During your market research you should have
an idea of the likely regulatory strategy for
your device. If you are selling in to the USA,
knowing whether your device is likely to need
510(k) clearance or PMA approval will affect
your time and costs to get to market.
FDA regulatory pathways:
510(k) - A pre-market notification, known as a
510(k), depends on demonstrating equivalence
with a device that has already been approved.
This is generally a faster process than a PMA.
Pre-market Approval (PMA) – A PMA approval
process is used for new or modified devices for
which no equivalent FDA-cleared device exists.
This is a longer process and usually requires
clinical trials to be undertaken.
05
Part1:
MarketResearch

Competitor research
and analysis
Just because other products exists doesn’t
mean you should avoid a market; assuming
you can provide something of value.
If you want to be successful in your target
market, it is not enough just to know who else
is there. You also need to know what they are
doing and how they are doing it so that you
can figure out how to create something better.
Remember that 'better' depends
on the needs of the customer
and consumer.
06
Part1:
MarketResearch

As well as competitors with similar devices to
yours, be aware that there may also be new
technologies emerging that can diagnose or
treat the same thing in a different way. These
technologies are probably harder to find as
there likely won’t be anything commercially
available yet.
Attending academic conferences and university
events is a good place to find out what basic
research is going on in your area.
Emerging competitive
technology investigations
07
Part1:
MarketResearch

"You’ve got to understand
and choose the customers
you want to serve. Don’t just
go after everyone. Define the
target market carefully through
segmentation and then really
position yourself as different and
as superior to that target market.
Don’t go into that target market
if you’re not superior"
Some final words of wisdom from marketing
thought-leader Philip Kotler:
08
Part1:
MarketResearch

Part 2: Business
Considerations

"In part one we gave
you an overview of the
market research tasks
you should undertake
as the first step to
identifying whether
your medical device
idea is viable."
09
Part2:
BusinessConsiderations

You now have an idea of:
• What your potential end users need and how disruptive your
device might be.
• Who will purchase your device and how they make that
decision
• What IP already exists and whether you can add value to your
business by protecting your idea
• The likely regulatory pathway for your device
• Who your competitors are, what competing technologies are
emerging and how you can offer something better
Make sure you have your results from Part 1 to hand
because some of the outputs will be inputs for Part 2.
10
Part2:

One primary measurement of the risk level of
pursuing your idea is whether realization of
your idea requires skills outside of those that
you have internally.
This could be skills such as particular
engineering or scientific disciplines or
business functions such as manufacturing,
logistics and marketing.
Once you understand the skills and assets
required to realize your idea you can make
decisions on whether you might need to hire
and/or outsource and assess the investment
required to do so.
1. What are your
core skills?
11
Part2:

Using an Ansoff Matrix, such as
the one on the next page, is an
easy way to identify the risk level
of your growth plan.
The risk level of the idea will
depend on which of the four
quadrants within the matrix the
business strategy for the new
idea represents. The quadrants
relevant to your new idea will be
those on the right hand side as
these relate to new products.
Product development is the less
risky of the two strategies as
this involves bringing a new
product to your existing market.
Diversification on the other hand
is approaching a new market
with a new product and is
therefore more risky.
If you are a start-up or spinout
company and you don’t have
an existing range you can still
use the matrix. Just take ‘existing
market’ to mean a current
competitive market and ‘new
market’ to mean a need that
hasn’t been met by other
products yet.
This should be informed by the
output of your competitor and
user research from part 1.
2. Are you aiming at new
or existing markets?
12
Part2:

13
Part2:
Markets
Products
Ansoff Matrix

3. How will the
Technology be
exploited?
STOP! Before reading this section, remind
yourself of the results of your IP search
from part 1.
There are a number of options when it
comes to exploiting your new medical
device idea and the route that you take will
shape your overall product strategy and
business plan.
Some of the most common strategies are:
• Start a new business
• Develop and license the technology
• Develop and sell the technology
Often companies will eventually carry
out more than one or all of the above as
their business progresses. You might not
know how things are going to turn out in
the long-term but setting out your short to
mid-term aim is paramount.
14
Part2:

15
Part2:
Strengths Weaknesses
Opportunities Threats
Send in the
S.W.O.T team
While it may seem a little old
school, a SWOT analysis is a neat
way of bringing all of the internal
business and external market
research considerations together in
one place:

Part 3: Engineering
Feasibility

Parts 1 and 2
focused on the
Business, now we
move on to the
Engineering
16
Part3:
EngineeringFeasibility

Go back and complete
parts 1 and 2 before you
read part 3.
Parts 1 and 2 led to creating your SWOT analysis. This is made
up of the results of your market research and business analysis
and will give you a clear picture of the internal and external
environment around your medical device idea. In parts 3 and
4 we now get in to the nuts and bolts and start to think about
engineering and manufacturing your device.
17
Part3:

While you are unlikely to have explored the
Engineering elements of your medical device
idea in too much detail at this stage, there
are still good reasons to start thinking about
your design:
• Investors will need some level of assurance
that it is possible for your idea to be made
in to a working product.
• The level of engineering difficulty will
help to inform the level of investment
required and ballpark timescales for
commercialization.
• The engineering feasibility is a fundamental
part of the business plan and strategy
Here are 5 questions you should
ask yourself to assess early
Engineering Feasibility
#3 Engineering
Feasibility
18
Part3:

1. Does your device
require completely
new technology?
If your idea builds on existing, proven
technology, the development process may be
simpler than that of a completely customized,
never-before-seen device or one that pushes
existing technology beyond where it is
normally used.
If there is existing technology, look
back over your IP search in part 1 as
you may need to design around
other patents.
19
Part3:

2. What regulatory
requirements does
your device need
to meet?
Having already assessed the regulatory
requirements in part 1 you can begin to delve
deeper into the specifics around your device
in relation to the development process.
Regulatory standards such as ISO 13485
set out clear guidelines as to the processes
that a medical device development lifecycle
must include in order for the end result to
be compliant.
A good starting point is to know what
class of device your idea would be.
Each class has different requirements for
documentation, verification and validation. 20
Part3:
Remember the rules are
different in different countries.

3. Who is going to
design and develop
your device?
Look back over your core skills from the
business considerations in part 2. Do you
have all of the necessary skills in-house or
do you need to outsource part
of the development?
If you are going to outsource it is worth
beginning some initial discussions with
potential design and development partners.
This will allow you to draw on their
experience and might also provide some
new insights that you hadn’t thought of.
Note: You probably won’t get much
input without paying the design
company but keep in mind that their
involvement adds credibility to your
business plan, especially where
investors are concerned.
21
Part3:

4. What are the
major engineering
risk areas?
Addressing and mitigating
engineering risk is both a
regulatory requirement and
good business sense.
You need to set an acceptable
level of risk within the
development program and
then decide how you (or your
outsourcing partner) is expected
to de-risk to achieve this level.
Two common examples of
de-risking are:
1. Developing proof of
principles to prove certain
elements of the system.
2. Building development
prototypes to further allow you
to develop the technology (e.g.
if it involves chemistry) before a
device is developed.
22
Part3:

5. How will you
manage the project?
Whether you outsource all or part of the
development of your device or do it all
in-house, your project is going to have to
be managed.
If you are a start-up you will almost certainly
use contractors for some elements of the
device design and development.
Make sure you set out the responsibilities of
all parties involved and be clear from the
start as to how you will know if someone isn’t
meeting your needs.
23
Part3:

The 5 questions above will feed into a
requirements document that will allow like-
for-like comparison if you are outsourcing or
will provide a way to properly brief internal
engineers so that they can scope the project.
If you go ahead with your idea the specification
becomes part of the Design History File too.
Create a
requirements
specification
24
Part3:
Consider carefully EVERY feature
of the device and ask yourself:
1
Does the user need it?
2
Does it add value?
3
Could you wait until Version
2 to add it?

There is a big
difference between
something that can
be designed and
prototyped and
something that can be
manufactured in volume
at the right cost.
25
Part4:
Manufacturing

Where are we now?
We have now assessed the market, your business and have an
appreciation of the initial engineering considerations. The next
thing you are going to need to think about is how your device
is going to be manufactured.
We’re going to stick with the format of the last 3 parts in the
ebook and give you another set of questions to stimulate your
thinking around manufacturing your medical device.
As always, it will help you to read over your answers from the
previous parts again- we’ll be referring back to them.
26
Part4:
Manufacturing

As with the Engineering considerations in
part 3, it pays to think about manufacturing
early on.
A basic appreciation of the likely
manufacturing requirements for your
device adds to the overall view of where
you’re trying to head and also helps you to
constrain your design team.
#4 Manufacturing
27
Part4:
Manufacturing

1. What are you
going to charge?
Your market price will be affected by the
manufacturing and engineering costs.
Returning to market research in part 1, what
price are your customers willing to pay for
a product like yours? What does the current
alternative cost (if there is one)?
Eventually the manufacturing costs (labor,
materials etc.) are going to have a
considerable impact on the price that
you charge.
Of course, you won’t have a detailed cost
model yet or perhaps even an idea of the
components you will use however your early
engineering feasibility work may help you to
determine a very rough ($100’s, $1000’s
etc.) estimate of an end price.
28
Part4:
Manufacturing

2. How will
your device be
assembled?
With the advent of 3D printing,
robotic assembly etc., manufacturing is
constantly evolving.
The manufacturing process that is best suited
to your device will depend on things like the
size, complexity and volume requirements.
For example, if you are considering a device
that will sell in high volumes, automation may
be preferable over manual assembly.
29
Part4:
Manufacturing

A note on Automation.
While Automation is ideal for high volume, low
margin products, you must take in to account the
level of investment necessary. Speak to automation
specialists early on to get an idea of quite how
complex the set up might need to be and consider
starting with manual assembly and moving to
automated manufacturing once volumes are sufficient
to cover the costs.
30
Part4:
Manufacturing

3. What are the
regulatory requirements?
You will notice that regulatory affairs have come up
time and time again during this ebook. This is
because it permeates everything we do in the
Medical Device industry from early concept
development to customer service.
In terms of Manufacturing, the class of your device
(which you will know from part 3) and the way in
which it will be used (part 1) will have associated
regulatory requirements for manufacturing.
Is the device used in an operating theatre? If so, it
might need to be manufactured in a cleanroom. It
is returned to you to be serviced? Then you need a
decontamination procedure.
You can find out much of this information by talking
to a notified body or a regulatory affairs consultant.
31
Part4:
Manufacturing

4. How will you make
sure that your device is
manufacturable?
Having the right people on the team will
ensure that you create a product that has been
engineered for manufacturing. If you don’t get
this right early on you risk developing something
that works technically but can’t be made in to a
commercial product cost-effectively.
Ideally the engineers (in-house or within a
product design company) need some experience
in your area. Not necessarily on exactly the same
product as yours but as close as possible in terms
of materials and application.
32
Part4:
Manufacturing

33
Part4:
Manufacturing
5. Domestic or
Overseas?
There is much debate in the MedTech
industry around Offshoring and
Onshoring and overseas v.s.
domestic manufacturing.
People have different reasons and
opinions but your motivation should be
based on what is best for your product.
It is too early to make any definite
decisions yet but you should at least
appreciate that at some point you will
need to weigh up your options.
We would recommend speaking to a
variety of people within your industry
that have been there before (LinkedIn
Groups and specific networking events
are a good place to start) to find out what
worked and what didn’t.

We now move on to
Funding, the final piece in
the puzzle of determining
if your Medical Device
idea is viable.
34
Part5:
Funding

ITL VA’s funding top tips
A quick Google search will give you a list of funding options
available and the relative pros and cons so instead we’re going
to draw on the experiences of our clients to give you some tips
you can apply straight away in your next investor meeting.
You’ll notice we don’t talk about crowdfunding. Don’t worry,
we haven’t forgotten it, it’s just that currently crowdfunding is
still finding its feet when it comes to the FDA so it seems a little
premature to give any solid advice. Keep an eye on the industry
press though; crowdfunding has worked for some MedTech
start-ups already.
35
Part5:
Funding

Because you are at an early stage we will
focus on how to get the initial injection of cash
required to get your idea off the ground. This
usually involves meetings with Angel investors
and others offering seed capital.
#5 Funding
36
Part5:
Funding

What do investors want to know?
37
Part5:
Funding
A recent article from MedCity News lists the preliminary
things Investors will want to know.
• Why is your product necessary?
• Is there a clinical need for your product?
• Are there existing competitive products?
• Who will use your product?
• Who will buy your product?
• How big is the market?
• What are the associated regulatory issues?
• Does the technology work?
Luckily for you, because you have followed parts 1-4 in our
ebook you can already answer all of these questions.
Now that you are armed with the information, let’s look at
how you can increase your chances of success.

Tip #1 Make them
feel comfortable
You should already have a relationship with a
design house and a manufacturing company
(if you have followed our advice in parts
3 and 4) so you may be able to use their
facilities to host investor meetings.
This gives the investor a clear indication
that you have done your background
research and shows that you have
already made progress in terms of
commercial arrangements.
Furthermore, the engineers can act as another
level of reinforcement around the technology
and manufacturing feasibility and can likely
field some of the investor’s questions for you.
38
Part5:
Funding

Tip #2 Investors aren’t always
experts in your technology
While you should have engineers on hand it may be
better to put the management team rather than just the
techies in front of your investors. The investors need to
understand the business vison and get a positive feel
for your company on a personal level.
Remember, you’re not just selling your technology;
you’re selling your business.
Make sure that you explain your technology at an
accessible level. If the investor happens to be more
knowledgeable this will come out in their questioning.
39
Part5:
Funding

Tip #3 Understand your
investors’ appetite for risk
Look back over the investment history of your
investors, what have they put money into before?
Is medical a new market for them or are they
seasoned veterans?
All of this will give you a good indication of
what level of risk they will accept and therefore
whether you are a good fit for each other.
40
Part5:
Funding

41
Part5:
Funding
Tip #4 Don’t just focus
on Angel funding
First and foremost, investors want to make
money. Equally, they don’t want to lose money.
Giving them answers to all of the questions at the
beginning of this article will go most of the way
to establishing your business case but that doesn’t
mean an angel investor is going be able to or
want to offer you all of the money you need.
If you have multiple sources of capital this is
likely to be a less risky investment, especially if
the other funding is coming from grants.

Tip #5 It doesn’t
have to be a one
horse race
42
Part5:
Funding
You might only be pitching one product for
now but that doesn’t mean your technology
isn’t applicable anywhere else.
If you can you show a long-term growth
strategy to broaden the portfolio of
products or applications, this can really
resonate with investors because it shows
you aren’t only offering one source of
(risky) revenue.

Product Development | Product Design
| Manufacture | Aftersales
sales@itlva.com | +1 804-381-0905
www.itlva.com/contact
Contact ITL Virginia Inc.
What’s next?
Now that you have finished our series of
articles it’s over to you.
Collecting all of the information and
answering all of the questions we have
given will help you to put together a solid
business plan that you can take to investors.
If you have any more questions on any
of the articles or need to speak with a
design and manufacturing company we
would be happy to help.
click here to
contact us

Is your medical device idea viable?

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