1. 0
Cohort 1 Team 3
Gaby Sanguineti, Stephanie Schreiber,
Mia Shandell & Eddie Vogel
Total Number of Interviews to Date: 38
Interviews Conducted, Day 4: 8
SWiNTsplint
Improving the bone healing process in spine fractures

2. 11
Business Canvas – Day 4
Partners
• Labs specializing in
nanomaterials
engineering
• Incubators
• Orthopedic research
specialists
• Contract research
organizations (CROs)
Activities
• Design the product
• Design clinical trials
• FDA approval
- “Combination
Product”
- Primary mode of
action: biologic 
BLA ($2mil)
- 4-8 years
• Manufacture product
• Sales/Marketing
• Distribution to
hospitals
• Educate physicians
• Build relationships
with investors,
potential acquirers
Value Proposition
• Improved healing for
spinal fractures due to
an implant that
promotes bone
growth, resulting in:
• Orthopedic
Surgeons: Improved
outcomes, ease of
use, reduce feelings
of “what did I do
wrong”, reduced cost,
confidence in patient
conversations that
treatment / healing will
go according to plan;
• Facilities: Reduced
overall cost of care,
improved quality,
filling surgeon
request, being the ‘go-
to’ hospital, being an
innovator in a
specialty area
• Patients: Faster
healing, reduced
incidence of
subsequent nonunion
Customer Relationships
Get:
• Scientific advisory board
• Conferences, magazines,
hospital product fairs
• Sales reps
• Develop relationships with
key opinion/thought
leaders– co-develop, early
adoption
• Target CMEs (continuing
medical education
programs)
Keep:
• Ongoing education
Grow:
• Expand product
indications
Customer Segments
Multi-sided market:
• Orthopedic
Surgeons: key
opinion and thought
leaders
• Facilities: hospital
sourcing divisions
• Patients with spinal
fractures –
Supplement to an
initial fracture
treatment plan
(surgery)
- Initial focus on
spinal surgery
(common
patients: males
who work as
physical
laborers, 40-60).
• [Investors]
• [Acquirers]
Resources
• Patents / Licensing
agreements
• IP lawyer
• Orthopedic surgeons
• Scientists
• Manufacturers
• Marketing / Sales
• Materials
• Lab space
• Manufacturing space
Channels
• Inpatient facilities
• Outpatient facilities
• Ambulatory surgical
centers
• Skilled nursing facilities
(SNF)
• Inpatient rehab facility
(IRF)
Costs
• Patents
• Clinical trials (!!)
• Research and development: lab space, labor, equipment
• Production costs: manufacturing space/equipment, labor
• Materials (i.e. nanotubes, molecular biology tools)
• Marketing / sales force
• Physician education
Revenue Streams
• Hospital payments
• Group Purchasing Organizations (GPOs) – drug wholesalers

3. 22
Learnings and Next Steps
What We Thought What We Did What We Learned What Next
Price is the primary driver of
hospital administrator
decision-making
Talked to hospital
administrators and
surgeons
Administrators will approve more
expensive products:
• Surgeon tends to be primary driver of
decision
• Want to be the ‘place patients want to
go’
• Particularly in areas where hospital is
‘known for’, want to be on cutting edge
Identify examples of
more expensive
products that were
approved
Hospitals and surgeons
make decisions about which
products to purchase
Talked to hospital
administrators and
surgeons
Decisions are made via a steering
committee that includes representation
from many hospital functions (finance,
reimbursement, clinical, sourcing)
Talk to more
administrators
SWiNTsplint would distribute
its product through a
wholesaler
Talked to hospital
administrators and
drug distribution
experts
Since the product is new/ innovative with
fairly small volumes in the early years, we
would manage our own distribution
Talk to product
managers at med
device companies about
distribution decision-
making
Drugs are ordered in bulk by
hospitals from drug
manufacturers
Talked to hospital
administrators about
drug pricing
decisions and
negotiation
For new/ innovative products,
administrators will often negotiate
arrangements such as ‘on demand’
ordering and trial periods (e.g. try it in 5
patients, analyze financial and clinical
outcomes, then decide on larger order)
Ask other biotech
startups what deals
they’ve created with
hospitals
Surgeons learn about new
drugs from literature and
conferences / trade shows
Talked to surgeons
and administrators
Trade shows / conferences are key for
getting surgeons excited about new
products
Discuss marketing
tactics with biotech
companies; identify key
spinal trade shows

4. 33
Revenue Stream: Value-Based Pricing
SWiNTsplint will be sold on a per-unit price – we learned from surgeons and
reimbursement experts that it can save ~7k on average per treated patient
Cost of Care: Bone Fuses Cost of Care: Bone Does Not Fuse
$150 Pre-op consultation with surgeon
$27,000 Spinal fusion surgery
$27,150 Total episode
$150 Pre-op consultation with surgeon
$27,000 Spinal fusion surgery
$1,450 6-month CT scan
$120 6-month follow-up
$1,450 1-year CT scan
$120 1-year follow-up
$30,000 Second spinal fusion surgery
$60,290 Total episode
Higher-risk, receive SWiNTsplint during surgery
SWiNTsplint saves:
$33,130 in patients with bone non-fusion
$7,245 per patient across treated population
Spinal Fracture Population Receiving Surgery
Sources: Primary interviews, ModernHealthcare, New Choice Health. Assumes SWiNTsplint is implanted into 40% of the highest risk spinal
fusion patients and prevents second surgery in 75% of patients that would have suffered a nonunion (10% of surgical population).

5. 44
Cost Analysis vs. Competitor Price (Benchmarking)
Our primary product cost will be materials as SWNTs are expensive—but our
cost is still well within the range of our closest competitor’s price
Average Cost/Unit: $3000
Materials: $2000
• SWNT - $1200
• Gel - $750
• Growth Factors - $15
Labor: $800 (5 day process)
• One Lab Tech
• Salary: 18/hour (8 hour/day) - 720
• Benefits: 80
Facilities (Epibone incubator rate) - $200
• Rent: $1000/month - 8 hours/day open –
5 day production - $165
• Utilities (5 day period) - $35
SWiNTsplint Medtronic INFUSE
Average Price/Unit: $5500

6. 55
Channel: Direct Distribution to Hospitals
Spinal Fracture
Patient
Orthopedic
Surgeons
Biotech / Life
Sciences
Company
Key Insights:
• Given the type of product
and expected volumes, we
would likely manage our
own distribution selling
directly to hospitals
• Once hospital decides to
purchase SWiNTsplint, we
would negotiate on price
– Discounts are typically
given on price
• Since the product is new /
innovative, we may
negotiate “trial” sales and
on-demand distribution
• Product will be reimbursed
as a “medical benefit” and
not distributed through a
specialty pharmacy
Health Insurance
Companies
Hospital
Administrators
$
Copay
Insurance
coverage
$
Reimbursement
for product
Treatment
Product
recommendation
ProductProduct price
(net)
$
Marketing
Outofpocketexpenses
$

7. 66
Channel: Hospital Decision-Making Process
Spinal
Fracture
Patient
Orthopedic
Surgeons
Biotech / Life
Sciences
Company
Health
Insurance
Companies
Hospital
Administrator
s
Surgeon develops
interest in product
Surgeon
discusses with
Chief of Specialty
Surgeon submits
request to
hospital
administrators
Hospital
Steering
Committee
convenes
Negotiations
and
procurement
• Surgeon is introduced
to product
– Frequently at trade
shows
– Spinal in
November
• Reviews literature /
studies
• Decides he or she is
interested in trying
out the product
• Surgeon discussed
product with Chief of
his or her specialty
• Receives sign-off
from Chief to move
forward in
procurement process
• Surgeon submits a
standard form to
hospital sourcing
• Hospital sourcing
prepares for Steering
Committee:
– Reviews literature
on product
– Competitive
assessment: cost
and efficacy of
other products in
the market
– Checks
reimbursement
– Discuss with
finance team
• Steering Committee
typicaly comprised of
all service lines and
various functions
within the hospital
– Clinical
– Finance
– Reimbursement
– Sourcing
• Meets ~1x/ month
• Debates adding the
product “to the shelf”
• For newer products,
decision process is
typically 2-3 months
• Sourcing negotiates
price with drug
company
• For new/innovative
products, may not
submit a full purchase
order upfront
– May say, let‘s try it
in 5 patients,
review results and
then decide on
larger order
– May also order on
demand when
patients are
scheduled for
surgery

8. 77
“Get”
Strategy

9. 88
Advertise at orthopedic conferences
(AAOS, ORS)
Advertise in orthopedic journals
(JBMR, Spine)
Present at biotech
product fairs
Choose KOLs as principal
investigators in journals

10. 99
Identify respected scientists
to advise on product
Help spread word of
progress and potential
Build reputation
amongst
scientific/medical
community

11. 1010
Advertise amongst
established KOLs
Target medical residents
through seminars and
educational visits

12. 1111
Effective method for
educating doctors
Taught by objective
medical experts
Surgeons are required
to attend workshops

13. Appendix

14. 1313
Customer Segments
• ~28k US orthopedic surgeons
• Older generations tend to be
less willing to try newer products
than younger (on average)
– Even if reimbursement,
regulatory approval in place
• Always think “what did I do
wrong” if surgery doesn’t go well
– Highly motivated by success
– Difficult conversation to have
with patient if surgery or post-
op doesn’t follow the plan
• Product that improves likelihood
of success makes physicians
more confident in pre-op, in
operating room and in post-op
• 5,723 hospitals in the US
• Sourcing / procurement
departments make decisions on
which medical products to make
available
– Heavy input from doctors
• Hospitals are a low- and
declining-margin business
– Administrators motivated to
keep costs down
– Paid a single fee for each
hospital admission based on
procedure – incentivized to
keep length of stay down
• More than ~700k patients per
year suffer a spinal fracture
• Risk of bone not fusing – and
need for a 2nd surgery – is high
– Higher if patient has
comorbidities, smokes, more
elderly, physical labor
• Healing process is very lengthy
and painful
– 3-7 days in hospital
– Can be 6 months before
physical activity allowed
• Cost of each surgery is ~$27k
– Patients may have a high
deductible ($6k-$8k)
Orthopedic Surgeons Spinal Fracture PatientsHospital Administrators
Sources: Primary interviews, American Academy of Orthopedic Surgeons, Department of Orthopedics and Rehabilitation at Yale, ModernHealthcare

15. 1414
Value Proposition
• Improved likelihood of
success in spinal fracture
surgery
– Reduce feelings of “failure”
(even if not surgeon fault)
– Easier to interact with
patients when operating
and treatment is going
according to plan
• Increased confidence in
interactions with patient
– Since healing takes 3+
months, feel more confident
reassuring patient in month
3 even if not fully healed if
have faith in product
• Reduced overall cost of care
– Particularly for hospitals in
value-based contracts
– Avoid second surgery
• Higher quality ratings
• Reduced healing time – back
to work / on feet sooner
• Reduce pain from nonunion
fracture
• Avoid second surgery to
repair a fracture
Orthopedic Surgeons Spinal Fracture PatientsHospital Administrators

16. 1515
Clinical Trial Process
Source: Pharmaceutical Research and Manufacturers of America, FDAReview.org, Parexel Statistical Sourcebook
Preclinical Clinical Approval Market
Phase I Phase II Phase III
Description • Evaluation of
implant’s toxic
and
pharmacologic
effects through
laboratory animal
testing (rabbit)
• Shows that the
implant is
biologically
active and is
reasonably safe
for human
testing
• Initial
introduction
of new drug
into humans
• Tests safety
• 20-100
volunteers in
clinical trials
• Unethical,
have to do
spinal
surgery
• Studies the
effect of the
implant in
patients with
spinal
fractures
• Tests safety,
dosing,
efficacy
• 50-100
injured
patients in
trials
• Can’t do
placebo!
• 2 clinical
trials to prove
the implant is
safe and
effective in
the target
population
• Also tests
side effects
• 1,000-5,000
injured
patients in
trials
• Can’t do
placebo!
• Review of ALL
pre-clinical and
clinical data,
approval by
FDA
• Known as
Phase IV
• Post-market
surveillance
Cost Varies based on
amount of R&D
~$15 million ~$25 million ~$90 million Varies by
market
Varies by
duration
Time 3 to 5 years 0.6 to 2 years 11 to 14 years4 to 8 years
Submit BLA, Pre-
IND meet with FDA
End of Phase II
meet with FDA; if
positive, move to
Phase III

17. 1616
Clinical Trial Design (Phase II – Safety/Efficacy)
Estimated
Enrollment
Spinal fusion rate of targeted vertebral bodies (L5-S1), evaluated by CT scan [Time Frame: during 12-15mo. after
surgery]
Rate of (serious) adverse events with a potential relation with SWiNTsplint [Time Frame: 24-27mo. after surgery]
Inclusion /
Exclusion
Primary
End-Points
Study Type Interventional, single group assignment model, randomized, double-blind (subject, outcomes assessor)
Secondary
End-Points
Reduced incidence of 2nd surgery due to non-union, evaluated by CT [Time Frame: during 12-15mo. after
surgery]
Reduced incidence of re-hospitalization [Time Frame: During the first year (12-15mo.) after surgery]
Reduced pain, evaluated by visual analogue pain scale [Time Frame: During two years (24-27mo.) after
surgery]
Spinal fusion rate after two years [Time Frame: Two years (24-27mo.) after surgery]
100 patients
Endpoint
Classification
Safety/Efficacy study
Primary
Purpose
Treatment
Conditions –
active
comparator,
experimental
Patients who require
surgical graft for L5-S1
spinal fractures
SWiNTsplint
Ilial crest
autograft
Randomization Autograft/SWiNTsplint both implanted in one patient, randomized side of injury

18. Product Company Status
INFUSE Bone Graft Medtronic - Reached $900 million in sales in 2011
- 2011 review of product revealed many unlisted side
effects (including high risk of cancer, sterility, nerve
damage, etc.)
- Hundreds of lawsuits filed
BIO Osiris
Therapeutics, Inc.
- Acquired by NuVasive, Inc. for $35 million in 2008
- Strategically partnered with Stryker Corporation in 2014
- Evidence presented that this is no more effective than
other current allograph products
Spinal-Stim Orthofix - 2008 earnings: $170 million
- Lawsuits filed for misleading providers of device effects
- Effectiveness remains inconclusive from review studies
- Half of fracture patients make use of product
Proxies
Similar attempts at solving the bone fracture fusion problem
Medtronic INFUSE Orthofix Spinal-Stim

19. 1818
Market Size
Market Description
Total Available
Market
Bone Graft Substitute Market
(Biomaterials)
Total Served
Market
Bone Graft Substitute Market
for Spinal Fusions
(Biomaterials)
Target Market Bone Graft Substitute Market
for Nonunion Spinal Fusions
(Biomaterials)1
Source: Millenium Research Group, 2014. 1. Estimate of 10% based on orthopedic surgeon interviews.
Total Available
$1.6 B
Total Served
$1.12 B
Target
$112M
With our changed goal – augmenting
existing surgical technique and not just
treating non-union, our market expands a
to graft substitutes for spinal fusions

20. 1919
Type of Business
Intellectual Property - Niche Market
Intellectual Property
Copyrights
Patents
Trademarks
Designs
Trade Secrets
Utility Patent Timeline
Provisional
0 months
Cost: ~$10k
Full
12 months
Cost: ~$25k
National Stage
30 months
Cost: ~$40k
Total Time
30 Months
Total Expense
$100-150k

21. 2020
Proposed Experiments
Key hypotheses Proposed experiment Pass/Fail
In making product purchase
decisions, hospital administrators
balance several factors including cost,
outcomes and surgeon satisfaction
Interview hospital sourcing divisions
to understand better decision-making
process
Pass: Hospital administrators identify
factors beyond direct cost of material
as being important
Fail: Direct cost of materials is only
factor
There is a subset of orthopedic
surgeons willing to try “cutting edge”
technologies and be a champion for
our product in the market
Interview orthopedic surgeons to
identify surgeons on the “cutting
edge” of research
Pass: We are able to identify 3-5 key
opinion leader surgeons in the
orthopedic market
Fail: We are not able to identify
10% of spinal fracture patients
experience a non-union post-
procedure
Interview orthopedic surgeons
specializing in spinal injuries
Pass: 10% or more patients
experience non-unions
Fail: <10% experience non-unions
Product will be classified as a
Combination Product (BLA) by the
FDA
Interview people that have worked in
the FDA
Pass: Our product is classified as a
Combination Product (BLA)
Fail: Product classification is different.
The DRG fee for spinal procedures
(and our potential share) is large
enough to justify R&D and operating
costs
Talk to insurance companies about
bone fracture DRG rates and
research pricing for bone fracture
episodes
Pass: DRG fee is large enough to
cover the cost of the material
Fail: DRG doesn’t completely cover all
the costs and patient might have to
pay out of pocket.
The primary patient demographic for
our product is middle-aged males
Interview orthopedic surgeons Pass: Primary patients are middle-
aged men
Fail: Primary patients are NOT
middle-aged males.