A client was presented with a new infectious disease technology opportunity and needed to decide whether or not to invest in the development of this technology (and to what level any investment should be).

The questions to be answered:

• What specific outcomes can be identified?
• For which types of patients or conditions will the outcome improvements be seen?
• What is the extent or magnitude of the outcomes?
• What is the market potential for this new diagnostic?

With the retrospective study approach, EAC performed a historic review and analysis of 110,000 patient records to extract key clinical parameters. Under clinician guidance, the collected data included vital signs, lab results, hospital locations, diagnoses, severity of illness and outcomes. The data were used to construct a clinician-validated clinical pathway which in turn was converted to a mathematical model that enabled clinicians to hypothesize the impact of any intervention and treatment changes that would have occurred if the new technology had been available.

By determining where in the pathway the new diagnostic would have an impact, we assessed the extent of the impact on economic outcomes including length of stay, treatment decisions, patient improvement and cost of care. The calculated intrinsic value was then extrapolated to the US market as a whole to determine the overall market potential.

The analysis of the large sample size supported that the new diagnostic improved patient outcomes and significantly reduced the cost of care. These results helped to gain support for clinical trial sites and supported the next level of fundraising for the company, who continued investment and development of the technology (which ultimately received FDA approval). The study also provided a foundation for other business modeling, such as determining expected clinical usage and adoption rates. as well as pricing strategies.

As part of the diligence for an acquisition decision that would enable entry into a new market segment, a company sought insight and validation of the market potential in order to confidently proceed.  Key considerations were  the impact on the target market from products currently on the market, the opportunity associated with a next generation solution that was in development, and expected performance of all products against competition.

The questions to be answered:

• What is the market size and growth rate, by segment?
• Who are the current competitors in the market and what is their share?
• What is the level of satisfaction with the existing products?
• What is the likely acceptance of new technologies in this particular market?
• How valid is the target company’s forecast?

To assess the market, EAC built a comprehensive market model based on an informed analysis of industry reports, company information, EAC databases of companies with historical performance over 10 years, and shared internal forecasts. To further validate assumptions, EAC also conducted primary research with laboratory managers to gain real-time input on the trends in the specific market, the perception of the company and their products and likely acceptance of the new technology.

EAC’s due diligence work provided the company with a detailed market assessment and forecast validation, including upside opportunities and downside risks at the market level and at the technology level. We also provided an estimate of the impact of adding the new technology and product line to the company’s existing portfolio. As a result, the company proceeded with the acquisition, which was successfully completed, with assimilation of the new product line into their portfolio and continued market growth.

A company was in the process of expanding the available menu on its small, point-of-care testing platform and needed a better understanding of the value of the assays in order to finalize the pricing strategy.

The questions to be answered:

• What is the price sensitivity as it relates to reimbursement?
• What are the trade-offs between price and assay performance?
• How will features/technology impact the likelihood of adoption?

EAC implemented a conjoint analysis approach and developed an on-line survey that was delivered to nearly 200 respondents who manage POC testing in hospitals and physician offices in the US. Examples of the attributes that were tested include: ease-of-use (e.g., CLIA waived vs Moderately Complex), portability, assay performance (e.g., PPV and NPV targets, sensitivity and specificity), technology options, and price points. The deliverables included market simulators that enabled the company to test preferences across respondent type, institution size and CLIA license level to test market shares and preference for various product configurations (including competitive offerings) at a specific price points.

With the market simulators, EAC worked with the company to model different price points to determine the price elasticity for each assay and the impact it was likely to have on expected market share. As a result, the company was able to confidently set an optimal price for each assay that was higher than planned, while still achieving market share expectations.