connecting the dots: decision making for next-generation products

1 Life Technologies™ Proprietary |

From Innovation to Execution Case Study from Life Technologies Vanee Pho PhD, MBA

Silicon Valley Product Management Association August 7, 2013


Who Am I?

Senior Product Manager at Life Technologies MBA, Rady School of Management, UCSD, 2007 Post Doctoral Fellow at UCSF, 2003-2005 PhD in Psychology, Boston University, 2003


What We Do at Life Technologies


Agenda Innovation to Execution: Case Study from Life Technologies

Path to Innovation

> Design thinking > Understanding the marketplace > Market analytics to differentiate the product > Positioning to win the market


Situation

Context Consultants predict that

product growth market is expected

2009 Life Technologies acquires Biotrove’s OpenArray system for $80M

Opportunity Need to assimilate

acquired technology User workflow is not

optimal


The Power of qPCR & OpenArray® Technology

Genetic Validation and Screening



Path to Innovation



The Design Challenge:

How might we enhance the customer experience by improving the workflow from ordering, experimental set-up and through data analysis?


| Life Technologies Proprietary & Confidential |

Challenging Workflow Insert OpenArray Plate into Glass Slide

Use Tweezers to Push Plate

Seal with Glue


Using Design Thinking Examine “How Might We...” to understand pain points and

customer needs

Synthesis: •100% Team Activities •3 days/week (6-7 hr/day) no “in and out privileges” •Storytelling •Themes •Opportunity Areas •HMW statements?

1-2 weeks 2-3 weeks

2-weeks 2 weeks

Pre-Kickoff: •Looking-in on current projects •Scheduling visits •Observation Guide

Observations: •On-site observations •Requires travel •2 team members/visit •Photos/recording/notes •6-10 external sites

Build: •3 days/week (6hr/day) •Brainstorm HMW

•extended team •Develop concepts •Prototype concepts •Limited feedback:

• 1-2 customers • internal

May April June


We discovered that……

……… customers are excited by Life

Technologies acquiring BioTrove and have high expectations.


Excited by Life Technologies acquiring BioTrove

“OpenArray is quite a contrast to what I usually get from AB. AB is really polished.”


We learned that…..

………this is an Artisanal Workflow with many steps using non-standard lab techniques and non-standard tools.


This is an Artisanal Workflow

“ Are you kidding me? I have 16 chances to make mistakes.”


This is an Artisanal Workflow

“I do feel like we are making Valentines cards for kids.”


We found out that…

…the user’s skill in executing the workflow has a large effect on data quality.


Data Quality

The exact same genotyping experiment gives significantly different results when performed by skilled hands of Internal QC vs Field Trainer in OpenArray.

Internal Quality Control Field Trainer


We observed that…..

…………many instruments are sitting idle.


Instrument Sitting Idle

“It is hard to teach the OpenArray workflow to interns. I can trust the 7900 and it is so easy to use.”


Instrument Not Maximized

“I couldn’t get other groups interested in OpenArray until we got the robot.”


We heard that….

…feedback is key…users want to track progress throughout the workflow and when and why something went wrong.


Feedback is Key

“The most important thing is to track samples and AB just leaves it up to you.”


The OpenArray Journey Represents a Framework of Opportunities

Does not meet expectation

Somewhat meets expectation

Meets expectation

Delight

Disposal of Arrays

Workflow Steps

Purchase OpenArray

Learn the

workflow

Assay/Array

Ordering& Receiving

Results

Results Genotyping and Gene Expression Cycling Genotyping

Data Analysis

Gene Expression Data Analysis

Results

Results Experimental Setup

Encasing

Genotyping and Gene Expression Cycling Genotyping

Data Analysis

Loading



Path to Innovation



• Is there a market and how big is it?

Know the Market Space to Make Informed Decisions Current Portfolio

Opportunities Competition

• Conduct SWOT analysis, read the annual reports • Consult sales reps for competitive info

•Inconsistent branding, multiple software platforms •Crowded in various market segments •Requires RoHS compliance updates to hardware

Market Landscape

•Know your customers and the application space


Analytics to Validate the Market and Differentiate the Product

Is there a market for such a large throughput? Do they

have the budget and are they planning to buy in the near future?

Are customers interested in another instrument and how can we make the instrument unique?

How much are customers willing to pay?


Applied Biosystems’ Real-Time Open Array is the most commonly considered mid-density instrument for future purchases in North America and the

Illumina Bead Array is the 2nd most common

What brands/models are being considered? - North America Planned Purchases -

N=89

% o

f Res

pond

ents

Market Segment Life Tech Real

Time Open Array

Illumina Bead Array

Illumina iScan

Nanostring nCounter

Fluidigm Biomark

Sequenom MassARRAY Analyzer 4

Fluidigm EP1 Other

Academic (non Core) n=32 50% 31% 13% 25% 13% 9% 9% 13%

Biotech / Pharma / Product Development n=24

58% 29% 17% 21% 21% 13% 13% 13%

Service / Core n=11 45% 27% 18% 0% 0% 18% 18% 27%

Industrial (Non Pharma) n=2 50% 0% 50% 0% 0% 0% 0% 50%

Government n=14 57% 50% 14% 14% 14% 7% 0% 14% Public Health n=6 50% 17% 17% 0% 0% 33% 17% 17%


About 1/3 of the sampled facilities expect to purchase an average of 1.3 mid-density instruments within the next 3 years

Do you believe your department will purchase any new mid-density instruments within the next 3 years?

- North America -

Avg # of Unit

1.2 1.0 1.2 1.0 1.0 1.5 1.3 % o

f Res

pond

ents

said

YES

Avg # of Unit

1.4 1.3 1.4 1.2 1.1 1.0 1.3 1.2

% o

f Res

pond

ents

said

YES


Reliability and Data Quality are the two most important mid-density instrument features.

What are the most important features? - North America Overall -

N=183

Most Important

Least Important

Most Important

Least Important

77% 60% 53% 40% 42% 45% 16% 34% 23% 26%

11% 20% 13% 15% 6% 6% 4% 5% 5%

% of respondents ranked it Top 5


The concept is well received 45% of the respondents gave a rating of 8 or above

High Interest

45%

How interested are you in using this new real-time PCR instrument? - North America -

Overall N=183

Average Interest Level = 7.0

Academic (non Core) (n=57)

Biotech /

Pharma (n=54)

Service / Core Labs

(n=23)

Industrial (Non

Pharma) (n=9)

Government

(n=26)

Public Health

(n=8)

Avg Interest 6.9 7.2 7.2 5.9 7.1 6.9

% of High Interest 44% 43% 52% 22% 53% 50%

Affymetrix / Illumina

(n=64)

BioRad /

Roche (n=85)

Fluidigm /

Nanostring

(n=11)

Life Tech

(n=114)

Life Tech-only

(n=43)

Open Array / ViiA7 (n=10)

Avg Interest 6.9 7.1 6.8 7.0 7.0 7.4

% of High Interest 45% 46% 36% 44% 42% 60%

Very Interested

Not Interested

at all

384 well +

(n=71)

96 wells or under (n=112)

Avg Interest 6.9 7.1

% of High Interest 38% 50%


Optimal Price ~$110,000

Price where an equal # of respondents think it is

Expensive, but still possibly a buy

and Too Cheap to be of OK quality

Price where an equal number think it is a Bargain and Expensive

Price where less than 50% Think it is Too

Expensive to Buy and before Price Sensitivity becomes high

% o

f Cus

tom

ers

Global Van Westendorp Pricing Analysis - Initial Purchase: 12k Data Points or 384w* -

N=94

*Respondents who would purchase 12,000 data points or 384-wells block type

Optimal QuantStudio™ 12K Flex Price Is $110k

Price where less than 75% Think it is Too

Expensive to Buy Point

of Inflection ~$140,000

Max. Price $190,000

Min. Price = $85,000

Target AUP $140K


Proposed Instrument Concept

+ = Model scenarios: leverage past financial models, with

updated assumptions − How much of competitors share would we gain? − Would we lose customers? − Would there be cannibalization of the other instruments or existing

bundling promotions?



Path to Innovation



QuantStudio™ 12K Flex Target Segments

0.0

50.0

100.0

150.0

200.0

250.0

Mar

ket S

ize

(US$

M)

Academic PI

Applied Markets CRO

Therapeutic Area Group

TL & Hosptial Group

Academic Core

Mid-density (un-allocated)

Industrial Ag

Clinical & Service Lab

BioPharma Core

Genome Center

Scalability Driven Flexibility Driven Speed & Throughput Driven

Key Customer Segments

Academic PI (non-Core) Biotech startup

Academic Core Translational & Hosptial Group Biopharma Therapeutic Area Group CRO Applied Markets

Genome center BioPharma Core Clinical & Service Lab Industrial Ag

Key Applications

• Candidate mRNA & miRNA analysis

• CNV • SNP genotyping • dPCR

• Pathogen detection • GEx (both candidate & targeted

discovery; mRNA & miRNA) • dPCR

• SNP genotyping • Pathway analysis/targeted

discovery • miRNA profiling • Biomarker screening

Entry configuration

• 96- or 384-well block • Multiple block purchase (OA with either 96/384-well or TAC block)

• OA block

$45M

$227M $208M


Scalability Driven Flexibility Driven Speed & Throughput Driven

Key Value Drivers

• Low throughput need initially with intent of scaling toward mid-density in the future

• Consistent results/minimize variability

• Requires flexibility to investigate variable number of targets & samples per project basis

• Faster decision making • Workflow ease • Reliable results • Low cost per sample

• Desire a focused set of targets with ultimate goal of screening thousands and thousand of samples

• Low cost per data point • Faster decision making • Reliable results

Entry Level Instruments

QuantStudio 96 or 384 well QuantStudio OA plus TAC/384W/96W QuantStudio OA

Value Proposition

With limited resources, you can get the most reliable results and plan for the future with the most scalable qPCR instrument on the market today

You need the right answers quickly - get high quality data fast with the most flexible qPCR instrument on the market today

Your time is precious and people are counting on you, screen the right set of markers quickly with the best in class mid-density platform on the market today

Benefits

• Integration of TaqMan Content • Robust light technology/block

design • Easy workflow;

• 5 interchangeable blocks • Easy workflow with minimal

hands on time • LIMS/automation capability

• 12,000 data points in 1 hr 40 min runs • Best in class mid-density workflow • Integration of fixed & custom TaqMan

content

Target Segments & Value Propositions


Mid Density Price/Value Strategy Mix

1 Premium Strategy

2 Penetration Strategy

3 Superb-Value Strategy

4 Overcharging Strategy

5 Average Strategy

6 Good-Value Strategy

7 Rip-Off Strategy

8 Cream-Skimming

Strategy

9 Cheap-Value Strategy

High Medium Low Hi

gh

Med

ium

Lo

w

Life QuantStudio 12K Flex AUP $140K

Sequenom AUP $205K

Fluidigm EP1 AUP $120K

Fluidigm Biomark HD AUP $190K

Wafergen AUP $110K

NanoString AUP $237K

BeadXpress AUP $90K

Roche LC1536 AUP $200K

Life NT Cycler AUP $86K

PRICE

*Value parameters defined in “Value & Pricing Matrix” detail slide in appendix


QuantStudio™ 12K Flex OpenArray® Plate Workflow


Results One Year After Launch

2012 AOP 2012 Actuals

Unit Actuals vs Plan Overall Install Base

Recent Opportunities Regional Breakdown


Lessons Learned More Application Focus at Launch

Realize Project Scope & Breadth Early Understand Sales Compensation Structure

Strategize Product Replacements and Discontinuance Plans


Thank You!

K. Ridley Quantstudio Technical Specialist

Life Technologies, Asia-Pacific


The QuantStudio™ 12K Flex Real Time PCR System is For Research Use Only. Not for use in diagnostic procedures. © 2013 Life Technologies Corporation. All rights reserved. The trademarks mentioned herein are the property of Life Technologies Corporation and/or its affiliate(s) or their respective owners.

connecting the dots: decision making for next-generation products

Technology

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