Product Launch and Lifecycle Management Guido Sandulli Director

Product Launch and Lifecycle Management Guido Sandulli Director of Marketing – Merit Medical PRESENTATION TITLE | DATE

Agenda • • • Background Academia vs Real World Marketing’s Role Pre-Launch – Upstream Marketing Product Launch Lifecycle Management Launch PRESENTATION TITLE | DATE Growth Maturity End of Life

Background Decision Resources - Boston MA 1995 -1999 § Pharmaceutical Industry Market Research and Strategy Consulting IBM Life Sciences – San Francisco CA 2001 -2005 § Product Management/Marketing Management – Life Sciences IT Applied Biosystems / LIFE -- Foster City CA 20052012 § Strategic Planning/Product Management – molecular testing Merit Medical – South Jordan UT 2012 -current § Director of Marketing – Medical Devices PRESENTATION TITLE | DATE

Academia vs Real World How to apply academic concepts? “It works in practice…. but does it work in theory? How to learn from real world experience? “This one time, we did this thing…. ” PRESENTATION TITLE | DATE

Role of Marketing vs Sales vs R&D – Marketing is often the last one to the party R&D already has an idea about what they want to build Sales already has an idea about who they want to sell to Marketing – identify where the value is being created – and plan the most efficient way to communicate and deliver it PRESENTATION TITLE | DATE

Market – Human Identity DNA assays • • • DNA tests used by law enforcement – DNA profile from criminal suspects put into databases Samples from crime scenes analyzed and matched to suspects Used to generate evidence and investigative leads PRESENTATION TITLE | DATE

Market Background – Human Identity DNA testing products • Public and private contract labs use reagents, instruments and software to perform DNA analysis and deliver usable DNA profiles Testing reagents are extremely profitable – pharma-like margins • DNA Extraction • • Quantitation Amplification Detection Data Analysis Customers are employees of government law enforcement agencies Typically from science Ph. D background, often with long term government service PRESENTATION TITLE | DATE

Pre-Launch – Upstream Work Understand customers’: § Segments § Problems § Priorities Build Value Proposition and Targeting Plan § Which segment are you targeting? § How can you reach them? § What do you say to them? PRESENTATION TITLE | DATE

Challenges facing forensic laboratories More and more samples Difficult and damaged samples Political pressure to reduce backlogs Shortage of trained scientists Increasing quality standards Workflow bottlenecks § System validation § Sample preparation § Data analysis and report writing PRESENTATION TITLE | DATE

Upstream Work – Customer Segmentation Databasing § Predictable § Standardised collection § High yield, high quality DNA § High throughput, continuous-flow processing PRESENTATION TITLE | DATE Casework § § § Unpredictable Highly variable samples Low yield, low quality DNA Mixed source Aged Batch or custom processing

Upstream Work – Example: Identifiler Plus Market research is your friend – use it early and often Review the user specs – the value designed into the product is what you need to communicate Key Requirements of a Forensic Casework Analysis Kit PRESENTATION TITLE | DATE

Identifiler® Plus Example Better results from tough samples Old Kit New Kit Enable more uses for tests PRESENTATION TITLE | DATE

Pre-Launch – Value Proposition What is the value your product is delivering? Solve more cases, fewer wasted reagents, enable more DNA investigations Who is realizing the value? Society at large? Political leadership? Lab Management? Who is the decision-maker and who gets to weigh in? Lab Management? – Law enforcement leadership? PRESENTATION TITLE | DATE

Setting the Price Value Extraction – how do we keep the value we created? • Pricing on value – how do we calculate this? Forensics -- investigation time saved – § $500, 000 for successful rape investigation § $40, 000 for successful burglary investigation Pharma – clinical benefit and cost savings over current gold standard Medical Device – Procedure time saved § Typical cardiac cath lab costs $1600 per hour PRESENTATION TITLE | DATE

Setting the Price • • • Value extraction – what additional value are customers getting? Price discrimination – can we package the value in a differentiated way to different customers? Competition will try to commoditize – how to prevent? Package hardware, software, and services together Price at Premium to gold standard Avoid price war with competition PRESENTATION TITLE | DATE

Know your channel • • Sales Channel Selection -- do your sales teams know the right people? What if the channel you have isn’t the right one? • • Crime lab staff often not allowed to have access to email or web access Travel budgets for crime lab staff extremely limited How do you reach your target audiences? Road Shows PRESENTATION TITLE | DATE Conferences Celebrity Endorsements

Test Launch • • Limited release in 1 region vs. mass global launch Test the assumptions in your plan Extract the info you need Adjust and scale Test Sites candidates were prioritized based on § Access to compelling casework samples § Threat to existing business § Opportunity for competitive win Data from test sites confirm superior performance in difficult DNA casework samples. PRESENTATION TITLE | DATE

Launch Roll-Out Repetition! Launch Plan from 2009: • • NA sales training scheduled for week of July 6 2009. Communicate to US customers during roadshows in July-August 2009 Customer-facing presentation and Forensic News article distribution to field by end of August Formal US Launch at ISHI in Oct Follow-on presence at ISFG and AAFS in Seattle in Feb 2010. Old Kit PRESENTATION TITLE | DATE New

Launch - Logistics “Amateurs talk tactics – Professionals talk logistics”. -- Old Army saying Goals • Support launch – but limit inventory carrying cost and scrap • Limit risk of quality failure • Limit risk of backorder • • 1 st Lot– only enough to support test site evaluation 2 nd Lot– enough to support test site adoption 3 rd Lot – support single-region launch Additional builds over next year to support additional regions. • Manage expectations of executive team! PRESENTATION TITLE | DATE

Product Lifecycle – Growth Establish strong market share as quickly as possible by: 1. Global Expansion – China, Russia, South Africa 2. Market Development – New applications enabled by new product 3. Line extensions -- additional product R&D PRESENTATION TITLE | DATE

Product Lifecycle – Growth Geographic Expansion • Large countries with focus on security • Channel development needs to be done very carefully! • Focus marketing on localized needs • China – trafficked children • Russia – terrorism • South Africa – sexual assault • Training and Lab set-up are bigger needs • Needed to develop professional services team to support PRESENTATION TITLE | DATE

Product Lifecycle - Growth Market Development – Property Crime New Product enabled the analysis of more samples § Made analysis and investigation of property crime much easier than before, however…. . § Average property loss from burglary is $2, 000 – investigation and prosecution cost of over $40, 000. § How to convince law enforcement to use DNA in property crime? § Pilot programs to demonstrate value – can catch one perpetrator for multiple crimes! § Once a program is started, likely to stick with our product. PRESENTATION TITLE | DATE

Example: Denver Burglary DNA Project Denver focused on the use of DNA in solving property crimes and found: • • $36. 8 million in property loss was avoided and $5 million in police costs were saved over 2 years. $90. 50 was saved for every $1 spent on DNA testing. Cases with DNA: • Eight times more likely to be prosecuted • Three times more likely to result in a conviction • 10 times longer prison sentences for home burglars and 6 times longer for commercial burglars The burglary rate in Denver dropped 26%. Prior to the Burglary DNA Project, property crimes had increased by about 5% annually. SOURCE: “Using DNA to Solve High Volume Property Crimes in Denver: Saving Money, Lowering Crime Rates and Making Denver Safer. ” The Prosecutor, July/August/September 2008, ISS No. 0027 -6383, National District Attorneys Association) PRESENTATION TITLE | DATE

Product Lifecycle – Maturity Fight commoditization – preserve value extraction • Highly profitable assay business draws strong competition • As later entrants, try to mimic performance and compete on price • Attempt to commoditize market as much as possible • As global economies slowed, governments seek cost savings aggressively How to prevent head-to-head price comparisons? PRESENTATION TITLE | DATE

Product Lifecycle - Maturity Delay commoditization by building/buying the workflow components competitors didn’t have: • Instrumentation: • Services: • Training • Validation • Lab set-up • Instrument service contracts and warranties • Lab Automation • Offered together at bundled price – difficult to break bundle or compare line-item pricing PRESENTATION TITLE | DATE

Product Lifecycle – Decline Goal – maximize value extraction prior to end-of life Repurpose: • different application • different customer/geography • different channel PRESENTATION TITLE | DATE

Authentifiler. TM Example • Old Product discontinued • Components reassembled, rebranded for new application • • • PRESENTATION TITLE | DATE New Channel New Pricing Value proposition and marketing plan completely different

Product Lifecycle – End of Life Raise prices! • Offset operational inefficiencies • Help motivate users to move to new generation product Make available as build to order only • Limit inventory carrying cost • Motivate users to move to new generation product Provide advance notice of discontinuation and offer introductory offer on new product Be disciplined enough to go through with it! PRESENTATION TITLE | DATE

Thank You Questions? PRESENTATION TITLE | DATE