The 5% Market Share Mystery: The Tale of the Surgeon’s Journey

Medical Patents Broker Inc.
By Kenneth Pearce, President

Movement 1: The Idea To License

It was second nature for the surgeon to cut tissues, insert devices, and rearrange them. First, there was the idea: the device should be angled in reverse from existing devices. The structures behind the idea were scribbled on paper. This was the beginning and the surgeon was comfortable with it. 

However, at that moment, he was completely unaware of the twists and turns needed to get the device to market. He was in a different arena now, and would soon experience the "pain" that results from not knowing.

Movement 2: The Venture Capitalists

About a year after the grant of the first patent, one of the VC’s scouts happened upon the surgeon’s patent and noticed a line of continuation applications. She liked what she saw, pitched the partners an exclusive license deal, and enough of them agreed to invest $12MM to push the medical device through the CRO—anticipating an exit of at least 6x.

Believing the device was worth at least $10MM straight-up, the nervous surgeon swallowed his pride and executed the deal where he retained 100% ownership. Everything has risk, but doing nothing would never get his medical device to market. 

Movement 3: The Medical Device Clinical Research Organization (CRO)

Soon after the CRO began testing, it was determined that the device was sufficiently different from current Class II devices to be designated a Class III. The CRO correctly managed the classification, performed the required FDA testing, submitted verifiable data, and the FDA cleared the device for use. The VC funded the CRO throughout this critical phase.

Movement 4: The Midcap Manufacturer

This manufacturer had sufficient capital, manufacturing capacity, and a sales force to challenge the larger companies dominating the market. They also had a history of getting the job done when it came to CMS. The midcap was satisfied with its cut of the surgeon’s exclusive license, took the risk, purchased the rights from the VC, and started manufacturing the devices. The license was acquired after the medical device CRO’s approval and upon the VC’s satisfactory exit.

Movement 5: The Market Dominance (5% Share)

Solos don’t go from conception to market share by themselves. Such thoughts are fools’ gold. He had help—lots of help. After FDA certification, his findings were published in several medical journals. His writing caught the attention of his peers. The device shortened the procedure by 30 minutes, decreased recovery time by several days, and reduced the infection rate to less than 2%. These results got his peers’ attention, and the word spread virally in surgical circles.

Movement 6: The “Coda” Worth Millions

By keeping it simple, the crescendo is complete. The solo surgeon’s licensing royalty strings softly harmonize for cash flow from three continents. It is estimated that the surgeon has already received $22MM in royalties. And it only took fifteen years to compose the symphony.

The President’s Viewpoint

Sometimes it’s better to wait. At other times, it’s better to quit or do a one-eighty. Each transfer of a medical patent is different. When you are ready, Medical Patents Broker Inc. is here to facilitate your transfer.

At the end of the day, it still takes a bit of divine intervention to orchestrate technology to the patient.