They are approved in Europe, however Europe is fragmented for...

They are approved in Europe, however Europe is fragmented for device companies and reimbursement is a country by country process. More about the regions in the announcement below from 6/15

AirXpanders spots Australia as key market for expansion
June 5, 2015

Australia a smart region for young device companies to move into. Dodson has become well-versed on the topic of international expansion, particularly with regard to Australia. The Australian Therapeutic Goods Administration (TGA) approved AirXpanders’ needle-free, patient-controlled tissue expansion system, the AeroForm, in November 2013. Following three open-labeled, prospective clinical trials, the TGA awarded AirXpanders reimbursement on the Australian Governmental Prosthesis List in December 2014. And just last week the company launched an IPO in Australia, seeking to raise A$36.5 million ($28.06 million) and to list on the Australian Securities Exchange.

The company developed the AeroForm as an alternative to the traditional tissue expansion method for women undergoing breast reconstruction after a mastectomy. Typically, women going through this process visit their doctor for frequent saline injections for up to six months. The AeroForm is designed to allow the woman to gradually inflate the expander herself at home instead of going through weekly doctor visits and needlebased saline injections. The system consists of a self-contained tissue expander and a small hand-held wireless remote control.

The device uses compressed carbon dioxide that is gradually released through a small internal valve, in place of saline injections, to fill the expander. After a standard procedure to implant the expander, the patient is able to inflate the expander herself at home by waving the remote over the implant area to allow it to communicate with the implant.

WHY AUSTRALIA?
“We selected Australia not only because of lower regulatory hurdles but also because of similarities between the Australian market and the U.S. market,” Dodson said. Such similarities include surgeon training, the reimbursement process, developing best practices from a surgeon’s perspective, and learning how to work through a hospital system to get a new device installed. “Because of the similarities in that market, what is achieved there is directly portable over to moving into a market like the United States, for example,” Dodson said. “The list of similarities really goes on and on.” While it is more common for U.S. companies to look at the European markets first, going the Australia route isn’t unheard of. Dodson said HeartWare (Framingham, Massachusetts), a company that makes miniaturized implantable heart pumps, was one of the first companies in the device space to do initial trials in Australia and other companies have followed suit. “The linchpin for us in taking a look at Australia as a key market to move into is really the data receptivity, which is incredibly high for submissions that are going into the FDA or for other regulatory bodies around the word,” Dodson said. “We took this as an opportunity to not only complete our clinical trials, but to also take a look at our early-stage commercial marketing as well,” Dodson said.

In order to manage device delivery to the Australian market to ensure that surgeons have the device available, AirXpanders has taken a direct sales approach and hired a country manager in Australia with additional territory managers. “Additionally, we established a strong logistics group to import the devices,” he said.

TRANSLATING AUSTRALIAN EXPERIENCE TO THE U.S.
The company’s foray into the Australian market has helped AirXpanders position itself for success in the U.S. In April, the company completed patient enrollment in its U.S.-based, multi-center, prospective, randomized, controlled, openlabel pivotal study of 150 patients using the AeroForm tissue expander. The XPAND study was designed to directly compare outcomes in two-stage breast reconstruction, including successful expansion to implant exchange, average number of days to achieve the desired expansion, total reconstruction time, pain and patient satisfaction with AeroForm versus traditional saline expanders. The company received an investigational device exemption from the FDA to launch the XPAND study in 2011 (Medical Device Daily, Sept. 10, 2011), after completing its feasibility trial in Australia. Dodson said AirXpanders anticipates having FDA approval by the end of the year.

GOING INTO ASIA
Dodson said AirXpanders has also targeted several Asian markets to move into, including Japan, South Korea, and China, but he added that those markets are becoming increasingly more regulated and it takes a bit longer to bring a device to market there. “In order to be successful there you have to partner with very strong local dealers to help you navigate the regulatory pathway and to gain access to major key opinion leaders,” he said. The company plans to use its anticipated FDA approval to serve as a basis for its regulatory submissions in Asia, Dodson said. Finding a suitable Asian partner should not be a problem for AirXpanders though. “One of the good things about having a very attractive highly-differentiated device is you have no shortage of people who want to work with you in those markets,” he said.

WHAT ABOUT EUROPE?
Device companies face a different challenge in Europe. “While Asian markets are more regulated, the European markets are more fragmented,” Dodson said. “There are [also] greater price pressures there, which is something for a lot of medical device companies to think about.” It is common for device companies to secure a CE mark before taking a product through the FDA process, but Dodson said that securing the CE mark is just the beginning of the commercialization process in Europe. “Then you have to establish a key base of users . . . unless you bring the right surgeons, prestigious surgeons, on board first than your traction is limited,” he said. He added that a mistake many companies make after receiving CE mark is to rush into marketing the product in Europe. “A good bit of work has to be done upfront in order to understand the reimbursement landscape in each country,” he said. Reimbursement is just as important, if not more so, in international markets than it is in the U.S., Dodson said. The five key European geographies for medical device makers to think about are the UK, Italy, France, and Germany, plus the area of Belgium, the Netherlands, and Luxembourg (Benelux). “But each require a very separate effort . . . one can’t expect to be an over-night success,” Dodson said. That makes those markets less ideal for smaller companies, he said.

WORDS OF WISDOM
So how does a device company decide on an international market strategy? According to Dodson, keeping a tight focus on the company’s goals is key. “First pick your market and understand what your objectives are before you move into that market,” Dodson said. “Are you trying to start your clinical trials? Get receptivity? Develop best practices?” If the answer is “all of the above”, the company’s scope is probably too broad. “Focus not only on the individual country, but on what you are trying to achieve,” Dodson said. Another piece of advice Dodson said he would give to a device company preparing to move into an international market is to have feet on the street. “You have to have either a local agent or a direct representative to serve as your key point of contact in that market,” he said. Trying to do international business remotely from the U.S. doesn’t always work, he added.
“The final thing is logistics. Logistics are absolutely critical, shipping product from the U.S. to other countries is amazingly expensive so in order to be able to service those markets effectively you have to invest and research to deliver products from within the region. Get a local company that deals with importation and shipping and can manage lot traceability,
he suggested. A more expensive route is to set up a brick and mortar facility in the targeted country, but that strategy is often cost-prohibitive for smaller companies. Another important consideration when developing an international strategy is to decide on what type of sales model to adopt. AirXpanders has decided to primarily go with a direct sales strategy in Australia, Dodson said. For other parts of the world, a distributor model might work better. And in some countries the best approach is a hybrid of those two models. “It’s about really understanding not only about the market, but also how you want to go to market,” Dodson said. “That is critical because it impacts everything.