David Hochman 0:03
There are a lot of obstacles to advancing therapeutic devices and new medical device innovations. It is hard to be an entrepreneur. There's a lot of them here, we're going to hear from Sue a few. In the next few minutes. We've heard from a lot already. For traditional medical devices, the challenge of building a company has gotten harder and harder. We did some research, it's taking over $60 million, on average, to bring a technology to success if you can bring it to success. And it's generally because entrepreneurs are being asked to take their products further and further, mainly in the device sector to commercialization. Over 85% of the companies that successfully exited in the last decade, had to commercialize their product, not just develop it. And why is that? It's really because on the other side, there are significant challenges that impact the buyers the strategics ability to acquire development stage technology. Most importantly, we overlook how they are constrained by their own r&d budgets. When you look at the top 20 medical device companies, on average, they only spend 7% of their revenue on r&d. So anything that they acquire, while it is still in the development stage has to fit within that actually relatively small budget. And they have to make room for other programs. That's why most of the time strategics like to buy companies after they're already commercialized. So the burden for all of us who want to innovate is getting bigger and bigger. So at orchestra, we decided to pursue a different business model that we think can help overcome or visually drive a tunnel through this big mountain by forming strategic partnerships, risk reward sharing partnerships, between us as an innovator or enabling partnerships with other companies with the strategics and thinking long term, going hand in hand. And really, we study what happens in biotech all the time, and are trying to bring some of those ideas here to med tech. So we think we can do a better job through partnerships that can help bring products to patients faster, but also allow us to focus on what we do best, which is product development, and allow our partners to do what they do much better than we'll ever be able to do, which is to commercialize and distribute these solutions to patients and physicians when they're ready. We have two programs that are already partnered our lead programs called Avi M therapy, it's a treatment for hypertension, that gets integrated into a pacemaker. We have great data and we're now enrolling our pivotal trial. But most importantly, we are partnered with the dominant market leader and pacing, which is Medtronic, who we have significant upside alongside Medtronic. Our second program also about to enter a pivotal trials called virtue sirolimus angio infusion balloon here at novel differentiated noncoding treatment for artery disease that targets both coronary and peripheral indications. Large established markets also have great data ready to go into a pivotal and our partner with karuma, the largest Japanese global medical device company who were well funded and actually a publicly traded company. So we think our business model has significant benefits for all participants that allows us to think differently, we're thinking about cash flow through royalties, focusing on development while outsourcing commercialization and being able to do more than one thing as a company. We want to leverage the partnerships in order to impact patients faster. But as we talked about, our partners need our help to drive growth, while outsourcing both r&d work and r&d expense within that narrow r&d budget. So so we are looking also actively at other opportunities, really turret looking at things that target large established markets, where the technology can both be clinically impactful, but commercially disruptive, and fits the model where there's enough upside and margin where you can form a long term partnership. And while our existing programs were developed internally, we're actively looking at acquiring technology that we can partner or looking at structuring royalty base r&d partnerships with strategics around external assets. So we're happy to talk to companies that you might find our model interesting. We're doing a lot of that this meeting.
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