The Manufacturing Gap That Can Make or Break a Medical Device Launch

What does IDE’s New Product Supply & Assurance (NPSA) offer partners and where do you think it sits between design and the market?

NPSA offers partners and customers a safe and trusted pair of hands to help usher the first units of their products into the market. These early stages of production are not without risks, challenges, constraints and uncertainty. Volumes vary with market uptake, and client and customer feedback requires quick resolution to minimise negative impacts and maximise opportunities. IDE’s offering provides a guided transition from pilot production to successful launch for as long as you need us to provide those safe hands.

You’ve spoken about minimising negative effects and maximising opportunities. Was there a specific gap that you saw in the market where you believed you could add value?

I think the offering was the result of two types of experiences we were having: one with clients and the other when engaging larger CMOs and CDMOs.

With the first, many clients thought that once design specifications were complete and products were approved, manufacturing was a matter of getting quotes, selecting the lowest price and submitting an order. What we knew from over 23 years of product development and commercialisation was that, unless customers had gone through the manufacturing process before, they were not aware of the issues they would face during product launch or the true cost and impact that failing to manage those issues with agility could have on their commercial success.

In the second, we engaged with several CMOs and CDMOs on behalf of our clients and realised that many of them provided some really wonderful services and great capabilities, but their business models relied on keeping their floor space and equipment fully utilised, without disruption, to reap those benefits. Higher overheads meant they were geared up to manufacture at scale, which meant that our clients had a tough time providing the certainty and/or capital needed to meet their requirements and gain those benefits. It was hard to gain the CMOs’ attention; it was a bit “all or nothing”.

Our realisation was that, by offering a full suite of development and commercialisation capabilities geared around new products, new processes and managing uncertainty, together with a low-overhead manufacturing footprint, we could walk clients through these issues and reduce friction as they transitioned to pilot production.

IDE’s footprint and entrepreneurial mindset have allowed us to work alongside our partners, creating bespoke processes, taking on feedback and refining workflows. Although it might appear more expensive, this tailored approach is vital to many of our clients’ success. It has allowed us to support clients through launch issues, reduce friction and take advantage of opportunities in an overall cost-effective way.

This gap between client expectations and the traditional CMO model was the genesis of IDE’s NPSA offering, providing the skills and know-how needed to manage the uncertainty of early product launch with agility.

So the gap was around supply and assurance, particularly in this phase of uncertainty? Was there anything else you saw missing in the market?

Uncertainty is not just the realm of start-ups. We realised that even experienced companies with their own manufacturing capabilities experience uncertainty and need to make trade-offs that may affect their businesses negatively when they seek to launch new products. This could arise from the need to test market adoption, refine a design or process before scaling, or diversify product supply without affecting existing production and sales. Having someone like IDE who understands these needs and has the capabilities to adapt and meet them can minimise the impact of, or the need for, these trade-offs. Additionally, these companies need suppliers that understand the requirements and expectations of a regulated industry such as medical devices, and we believe IDE embodies all of these attributes.

You’ve spoken about larger CMOs and CDMOs and how they are great options when you have more certainty or confidence in sales volumes, and the capital that you can invest in scaling manufacturing early. Have you seen a situation where development has stalled out because a venture wasn’t in a position to commit to large scale manufacturing?

Yes, the most memorable example was our effort to get Atomo Diagnostics’ first product to market. In the very cost-competitive world of high-volume point-of-care diagnostics, we needed to produce Atomo’s first device at a competitive price and in large volumes. To achieve this, most of the larger CMOs we approached required higher capital investment in tooling, especially for automation, because Atomo’s innovative device was unlike other devices on the market. As an early start-up with a small customer base, this was difficult, and without this commitment we simply could not get the attention and pricing we needed. They would have been great options, but we could not commit—we were stuck.

So we embarked on building our own supply chain. We leveraged our existing supplier networks and applied our own know-how and resources to work with committed suppliers to produce the first products for the market. We ended up with a supply chain that utilised lower-cost tooling and facilitated higher-volume production through carefully developed manual assembly processes that required less upfront commitment. It was also flexible, so as we learnt about the product and process, we could easily modify and improve how we built the product. It also allowed us to bring new products online. It was difficult, but we established a base from which we could scale.

We’ve spoken a lot about assurance, it’s very much at the core of the promise that IDE has. What does staying engaged look like once the first batch has shipped?

Well, firstly, it means that we are always actively present with our clients. We assign a Venture Success Manager to each client, whose role is to continually monitor and engage with the client on all aspects of their product. They aren’t just there to provide quotes and take orders. They have broad skills and knowledge across product development and manufacturing, enabling them to discuss issues across that spectrum. They can also call upon and coordinate additional resources from within IDE. There are no hand-offs or handovers when mechanical, electronic or software product issues, production process issues or supplier issues arise. They are there to coordinate and manage any and all issues. This means we can quickly make changes to address problems as they surface and, importantly, make changes to leverage opportunities as they emerge. Through this process, production can be stabilised and improved, products can be enhanced, and costs can be reduced so that, as volumes grow, capital can be invested more confidently to scale up production.

Could you unpack what being geographically agnostic looks like when making delivery decisions?

Currently, we have two assembly facilities in two geographies—Philadelphia, USA, and Sydney, Australia—with a reliable supply chain in Southeast Asia. However, because of our lower overheads, we are not wedded to these locations or this supply chain. What we have established provides a great base from which to supply products into two of the world’s largest markets: the USA and APAC. This is a great starting point for many of our clients, as it is broad and flexible in what and how it can deliver.

However, we regularly add to our supply chain, given the breadth of products we develop and manufacture, and are more than willing to use our know-how and experience to add to or establish additional locations where required and are commercially necessary. This allows us to be agile and supply products in a fashion that is most advantageous to our clients. We do not try to fit them into what we have if it won’t work for them.

I wanted to end with one last question. What does NPSA mean for a venture five years from now, not just the first production run? What do those first steps look like as they move out of IDE’s care into another safe pair of hands?

Our NPSA offering is designed to help move you quickly into production, ironing out what needs to happen to make that possible. It’s the beginning of our journey. From there—are you facing more demand? Great, let’s scale capacity. Want to improve profitability? Let’s invest to make it cheaper. Want to improve the product to maximise your returns or make sure that your supply chain is more resilient? Sure, we’re here for as long as you need us and for as long as we provide value. That being said, if there comes a time when it makes sense to transition to a high-volume CMO, we will help you with that too.