# Presentation: 079151

## FDA Stakeholder MeetingOn Implementation of MDUFMA Review Performance GoalsMay 22, 2006

**David Douglass**
**Delphi Ventures**

## Overview

- Role of venture capital in medical device innovation
- NVCA’s recommendations on MDUFMA Performance Goals
- Provide a streamlined pathway for the commercialization of medical technologies for quicker patient to access to innovative medical technologies
- Save and improve the lives of patients
- Help drive down the cost of health care expenditures

## Role of Venture Capital in Medical Device Innovation

## What Does A Venture Capitalist Do?

**What Does A Venture Capitalist Do?**

- We Create New Companies, Often Based on Revolutionary Technologies
- High Tech
- Medical
- We Provide Capital for the Earliest Stages of Start-Up Companies
- Board Directors and Corporate Officers
- Most of Us Have Been Entrepreneurs or Technologists Ourselves

## The U.S. Venture Capital Industry

**The U.S. Venture Capital Industry**

| At Year End | # Venture Firms | Capital Under Management |
| --- | --- | --- |
| 1970 | 28 | $1B |
| 1980 | 89 | $4B |
| 1990 | 398 | $31B |
| 2000 | 887 | $223B |
| 2004 | 897 | $261B |

## VC Industry Remains an Institutional Asset Class

**2003 Sources of Venture Funds**

**VC Industry Remains an Institutional Asset Class**

- Pension Funds

- Endowments &
- Foundations

- Individuals &
- Families

- Financial &
- Insurance Companies

- Corporations

**42%**

**25%**

**21%**

**10%**

**2%**

- Source: 2003 data from 2004 NVCA Yearbook, prepared by Venture Economics, page 22

## U.S. Venture CapitalContribution to the U.S. Economy

**U.S. Venture Capital****Contribution to the U.S. Economy**

- Venture-Backed Companies Represent 10% of The U.S. Economy in 2003:
- 10.1 Million U.S. Jobs
- $1.8 Trillion of U.S. GDP
- Between 2000 and 2003, Venture Backed Company Employment Grew Employees 6.5% While U.S. Private Sector Jobs were Down 2.3%
- Venture-Backed Companies Represented More Than 40% of All IPOs Between 1970 and 2003
- Venture Backed Companies Spend More Than Twice as Much on R&D as Non-venture Companies

## VC Investing: 1998 to 2004Life Science Investing Up Almost 2x

**VC Investing: 1998 to 2004****Life Science Investing Up Almost 2x**

**1998**

**2004**

- $ Billions

**0**

**20%**

**40%**

**60%**

**80%**

**100%**

**$14.0**

**$3.5**

**$3.4**

**$13.5**

**$6.1**

**$1.7**

- Source: PricewaterhouseCoopers/Venture Economics/National Venture Capital Association MoneyTreeTM

## Patient Capital

- Venture capital plays a vital role in life science innovation
- Many innovations have revolutionized the practice of medicine
- Over 100 million Americans have been positively affected by venture backed medical innovations
- Venture capital combats American’s leading causes of death
- Venture capital backed life sciences companies contribute to the U.S. economy

## Focused on Start-Ups and R&D

- = Innovation

- Source: NVCA Money Tree

## Venture Investing Drives Revolutionary, Life Saving Innovation

**Venture Investing Drives Revolutionary, Life Saving Innovation**

**100%**

**100%**

**Revolutionary**
**Innovation**

**	****e.g.**
**New Stent Coating**
**Defibrillator Battery****Life Extension**

**Evolutionary**
**Innovation**

## The Revolutionary Innovations ofVenture-Backed Medical Device Start-Ups

**The Revolutionary Innovations of****Venture-Backed Medical Device Start-Ups**

**Notes:**
100M plus Americans have been affected by a venture-backed medical innovation Ex:  Pacemaker, AEDs, Herceptin, ENBREL, MRI, pulse oximeter, blood glucose monitor (nvca)

Venture capital investments combat chronic diseases that account for seven of the ten leading causes of death in the United States. 
Seventy percent of all health care costs are dedicated to the treatment of these diseases

Source: Patient Capital:  Improving the Lives of Millions 2004

## Spinal Nucleus Replacements
Dynamic Spine Stabilization
Intervention Treatment of Peripheral Atherosclerosis
Biodegradeable or Novel Stents
Neurostimulation(Pain, Epilepsy, Depression)
PFO Closure
Vulnerable Plaque
Cartilage Repair
Stabilization of Heart Failure
Interventions for AMI
Interventions for Acute Stroke
3rd Generation AAA Gaffs
Artificial Retinas
3rd Generation LVADs
Acute Interventions for DVTs

**Spinal Nucleus Replacements**
**Dynamic Spine Stabilization**
**Intervention Treatment of Peripheral Atherosclerosis**
**Biodegradeable or Novel Stents**
**Neurostimulation****(Pain, Epilepsy, Depression)**
**PFO Closure**
**Vulnerable Plaque**
**Cartilage Repair**
**Stabilization of Heart Failure**
**Interventions for AMI**
**Interventions for Acute Stroke**
**3rd Generation AAA Gaffs**
**Artificial Retinas**
**3rd Generation LVADs**
**Acute Interventions for DVTs**

**>15**
**>15**
**>15**
**>15**
**>10**
**>10**
**>10**
**>10**
**>10**
**>10**
**>  5**
**>  5**
**>  5**
**>  5**
**>  5**

**Current Medical Device****VC Investment Focus**

**Project**

**Companies**

## Points to Consider | MDUFMA Performance Goals

## FY2007 MDUFMA Performance Goals

_**PMA Decision Goals**_
*(a) 80% of submissions received in fiscal year 2006 will have an FDA decision in 320 days*
*(b) 90% of submissions received in fiscal year 2007 will have an FDA decision in 320 days*
**(c) 50% of submissions received in fiscal year 2007 will have an FDA decision in 180 days**
_**510(k) Decision Goals**_
*(a) 75% of submissions received in fiscal years 2005 and 2006 will have an FDA decision in 90 days *
**(b) 80% of submissions received in fiscal year 2007 will have an FDA decision in 90 days**

## CDRH Performance

**FDA has met most MDUFMA performance goals (GAO 9.05) and will likely continue to meet or exceed future, modest goals**
**But such goals only marginally improve the time to market of PMAs and 510(k)s-and do not substantially accelerate the availability of novel technology or foster innovation**
**Accelerating the commercialization of novel technology improves health outcomes and can reduce expenditures**

## Key Considerations

**Novel technology submissions deserve particular attention and may be an appropriate focus for revised MDUFMA performance goals and fees**
**CDRH should not meet 510(k) performance goals through the increased issuance of NSE decisions**
**Review cycle goals and shorter timeframes for later review cycles would encourage collaboration and earlier resolution of issues**

## “Novel Technology”

**Novel technology is a small but vital subset of total annual submissions, and poses a special challenge:**
**To CDRH staff and advisory committees who may lack clinical and regulatory experience**
**In designing and executing appropriate clinical trials**
**Policies to improve the review of novel technology could include:**
**Earlier participation by senior CDRH officials **
**Involvement of outside experts**
**Explicit, ambitious meeting management and goals**
**Flexibility in advisory panel composition**
**Greater flexibility in trial design**
**Reduced cycle times**

## FDA Regulation: Trends and Consequences

**Regulatory Path More Difficult**

**And Much More Costly ...**

**More Unpredictable**

## Summary

- FDA can help commercialize novel technologies more timely and help drive down health care expenditures
- Provide a clear approval pathway for innovative technologies
- Meet 510(k) performance goals with more timely reviews instead of increased issuance of NSE decisions
- Early resolution of issues and greater collaboration and would shorten review cycles and approval timeframes