A New Valuation: How Regulatory is Becoming an Increasingly Valuable Asset

Hal Stowe, Senior Manager, Regulatory Intelligence
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I spend a lot of time with startups and their founders. In each interaction, I’m almost certainly asked “what makes an innovative startup, an investable startup?”. As a regulatory person through-and-through, I always find it interesting when the question is posed. Regulatory is almost always the silent partner, with intelligence and strategy contributing major wins to minimal fanfare. My feedback previously was that every variable is critical in a startup’s pursuit of commercial success. A statement which I still believe holds true. However, in this new market where major capital is allocated in later stages, and risk minimization is critical for founders to attract said capital – that feedback has changed. Yes, it’s still true that each variable in medical device development is critical for success, from engineering and clinical, to reimbursement
and commercial strategy.

The new differentiating factor, in my opinion, is a company’s investment in (and utilization of) a robust regulatory intelligence and strategy program. A program which has been proven to identify risks and provide solutions, before they arise. A program that prioritizes the imperative of building rapport with regulatory authorities, as trust is one of the most valuable assets in Medtech.

The funding of Medtech innovation is changing, as is the regulatory environment surrounding it. For companies across the development spectrum – capital will never cease to be invaluable. What is changing in value is a company’s ability to leverage regulatory intelligence, policy, and strategy to de-risk critical decision making – a positive reflection on a company’s ability to endure the path toward commercialization, and successful exit.

Considerations for developing a robust, though nimble, regulatory program vary for early-stage startups and late-stage, and near commercial companies. For investors, the ability to synthesize the effectiveness of a target’s regulatory program in the diligence program brings a wholly separate set of considerations. In this white paper, we’ll assess those key considerations for start-ups at various phases, as well as those which facilitate maximum value extraction for investor diligence teams . . .