Mark Street-Docherty, CEO of Elucigene Diagnostics – which has just received a Queen’s Award for International Trade – gives his top tips for exporting around the world.
Mark Street-Docherty, CEO of Elucigene Diagnostics
Think global to buck Brexit inertia
The average industry revenue growth for UK companies working in in vitro diagnostics stands at 7%. For the last two years, Elucigene has outstripped that by a factor of four.
A major factor for this has been our unrelenting focus on expansion into international markets.
In the NHS we have an unrivalled opportunity for testing and certification. And as a business we’re committed to pushing for innovation developed domestically, to be adopted here and improve patient outcomes.
For the majority of the 4,000 medtech companies based in the UK, however, selling into the NHS alone will not provide the reliable volume necessary for rapid growth.
Brexit is undoubtedly throwing up uncertainty, with potentially shifting trade tariffs dominating the headlines. But falling victim to inertia as a result is a mistake.
The Queen’s Award is evidence that Elucigene has been growing sustainably in international markets for the last three years. Below are my top five tips to succeed with international trade:
Think globally from day one
A product which may be perfectly tailored for your domestic market, may be completely unsuitable in another country, rendering it unusable on a wider scale.
Some of the most costly missteps I’ve witnessed in the industry have been brought about by blinkered product development.
By thinking globally from day one and developing a product for multiple markets you give yourself the scope for growth.
As a rule of thumb, we examine a minimum of five international territories when designing a new product. With more than 25 current products in 50 countries, there are a slew of different procurement requirements and regulatory hurdles to consider.
Target the right territories
Beware of targeting markets which may be either in vogue, or seemingly devoid of competition – there may be a reason for that.
Japan and China can seem attractive on initial inspection, but whether they’re suitable to base an export strategy around is debatable.
Look at patient demographics in countries and look at reimbursement systems – is there an existing one in place and who is the gatekeeper? Reimbursement decisions can be made at national level, but they can also be taken regionally.
From experience, we’ve found Australia, Canada and South America to be rewarding markets and all of our core diagnostic products meet the standards for those territories.
Play to your strengths
A key driver behind Elucigene’s success has been a resolve to play to our strengths.
Casting your net too wide from day one is a mistake we frequently see. Instead, focus on a few select areas which you can establish a market-leading position in.
In addition to selling into the aforementioned three markets, we could have simultaneously gone down the FDA approval route from the outset, and made straight for the US.
But by focusing on Europe – a market and IVD regulatory landscape we had good experience of – we’ve been able to cement a 50% plus market share of the cystic fibrosis testing market with our CF-EU2v1 assay.
Put all of your efforts into one area before diversifying into cross selling opportunities and maximising existing relationships.
A stable revenue stream and solid bottom line provides the base to kick on and explore the next market.
Manage distribution relationships
One of the biggest mistakes in the in vitro diagnostics market is inexperienced companies signing distribution agreements, and then naively thinking they can leave the agent to it.
Your product my start life in an ISO accredited state-of-the-art manufacturing facility. But if it hitches a ride in the back of a taxi in 35 degree heat once it arrives in the destination country, it somewhat renders that in vein.
Work closely with distribution partners and develop longstanding relationships with good visibility of their processes.
When it comes to finding new partners, the Department for International Trade and your local chamber of commerce can both offer invaluable advice.
Find the right backer
Finally, it’s critical to find that right backer. A specialist investor with knowledge of the sector has obvious benefits. But regardless, it’s key that they understand the various reimbursement models, along with the time required to develop products and become profitable.
Making forays into far flung markets doesn’t come cheaply. It’s crucial that the investors buy into your long-term international expansion plans – and the ability of the management team to deliver on them.