Start Up Biotech

Biotech start-up makes critical pivot to achieve success!

This sales build-out success story is an example of how dramatic our interventions can be, as our sales turnaround was the critical factor in the company's very survival. Sales revenue grew from $50,000 in its first year (prior to our engagement) to $500,000 in the year during and immediately following our engagement. By following our recommendations, the company was able to sharply improve its sales performance- so much so that it secured its mezzanine funding from the University of Maryland as a result of its growth trajectory.

The company's lab test won fast-track approval by the FDA, so it seemed to make sense to target the laboratories that would perform the test. Unfortunately, they completely missed the bigger health care picture that held the secret to their success. No one within the company understood the health care delivery process or the payer reimbursement model that would ultimately determine adoption of the new test. Our analysis uncovered that the lab test (designed to help transplant patients and others with compromised immune systems) could only be provided to a patient during the course of treatment if a transplant surgeon ordered the test. In other words, lab managers couldn't order the test! The decision-maker in the buying decision was the transplant surgeon, not the lab manager.

With fast-track approval from the FDA, and a void in existing clinical diagnostic tools, our client expected lightning fast adoption of their revolutionary diagnostic test. While the experts predicted aggressive sales, the Company couldn’t get out of the gate. First year orders hit a meager $50,000. Our consultant was hired to assess the root causes of sluggish sales and implement corrective measures, to put the company on a path toward healthier growth.

The 200% Company completed the following for the Company:

• We conducted a disciplined audit of sales team performance and the laboratory market; we concluded that the Company was selling to the wrong market and the wrong customer. Our client built a team of laboratory specialists to sell the test to clinical laboratories, but failed to realize that the diagnostic test must be ordered by a physician. Unless the ordering physician could be persuaded to use the new diagnostic test as part of the patient protocol, no laboratory could run the test.
• We directed a complete overhaul of the sales team, which meant replacing the Sales VP who was highly-qualified, but lacked the health care background to lead a team selling to the medical profession.
• We hired a new team of salespeople with extensive medical-surgical sales experience.
• As a result of the business pivot we recommended, we had to create new job descriptions, compensation plans, sales messaging, marketing materials.
• We conducted intensive training for new sales and operational staff who had to learn the dynamics of the health care delivery system, which was far different than selling equipment to laboratories.
• We identified how medical services were purchased and reimbursed by health plans. We helped the company contract with industry experts to negotiate payor and provider contracts so that the lab test would be considered eligible for reimbursement.
• We found that the test required a very expensive piece of laboratory equipment that few laboratories owned. We encouraged the company to remove barriers to adoption by providing the lab testing equipment directly to the laboratories used by prescribing physicians.

Our insight into the healthcare delivery system and our expertise at navigating the start-up sales process helped make the critical pivot to achieve success and ensure the Company’s survival. Sales increased tenfold from $50,000 to $500,000 in the first year. As a result of this remarkably fast pivot, our client successfully secured mezzanine funding form the University of Maryland, which fueled the next level of growth for our client.