Connecting the Dots: Decision Making for Next-Generation Products

1Life Technologies™ Proprietary |
From Innovation to Execution
Case Study from Life Technologies
Vanee Pho PhD, MBA
Silicon Valley Product Management Association
August 7, 2013

Who Am I?
 Senior Product Manager at Life Technologies
 MBA, Rady School of Management, UCSD, 2007
 Post Doctoral Fellow at UCSF, 2003-2005
 PhD in Psychology, Boston University, 2003

What We Do at Life Technologies

Agenda
Innovation to Execution: Case Study from Life Technologies
 Path to Innovation
> Design thinking
> Understanding the marketplace
> Market analytics to differentiate the product
> Positioning to win the market

Situation
Context
 Consultants predict that
product growth market is
expected
 2009 Life Technologies
acquires Biotrove’s
OpenArray system for
$80M
Opportunity
 Need to assimilate
acquired technology
 User workflow is not
optimal

The Power of qPCR & OpenArray® Technology
 Genetic Validation and Screening

Agenda
> Design thinking

The Design Challenge:
How might we enhance the customer
experience by improving the workflow
from ordering, experimental set-up
and through data analysis?

| Life Technologies Proprietary & Confidential |
Challenging Workflow
Insert OpenArray Plate into
Glass Slide
Use Tweezers to Push Plate
Seal with Glue

Using Design Thinking
Examine “How Might We...” to understand pain points and
customer needs
Synthesis:
•100% Team
Activities
•3 days/week (6-7
hr/day) no “in and
out privileges”
•Storytelling
•Themes
•Opportunity Areas
•HMW statements?
1-2 weeks
2-3 weeks
2-weeks
2 weeks
Pre-Kickoff:
•Looking-in on
current projects
•Scheduling
visits
•Observation
Guide
Observations:
•On-site observations
•Requires travel
•2 team
members/visit
•Photos/recording/no
tes
•6-10 external sites
Build:
•3 days/week
(6hr/day)
•Brainstorm HMW
•extended team
•Develop concepts
•Prototype concepts
•Limited feedback:
• 1-2 customers
• internal
MayApril June

We discovered that……
……… customers are excited by Life
Technologies acquiring BioTrove and
have high expectations.

Excited by Life Technologies acquiring
BioTrove
“OpenArray is quite a
contrast to what I
usually get from AB.
AB is really polished.”

We learned that…..
………this is an Artisanal
Workflow with many steps
using non-standard lab
techniques and non-standard
tools.

This is an Artisanal Workflow
“ Are you kidding me? I have
16 chances to make
mistakes.”

This is an Artisanal Workflow
“I do feel like we are making
Valentines cards for kids.”

We found out that…
…the user’s skill in executing the
workflow has a large effect on data
quality.

Data Quality
The exact same genotyping experiment gives significantly
different results when performed by skilled hands of
Internal QC vs Field Trainer in OpenArray.
Internal Quality Control Field Trainer

We observed that…..
…………many instruments
are sitting idle.

Instrument Sitting Idle
“It is hard to teach the OpenArray
workflow to interns. I can trust the
7900 and it is so easy to use.”

Instrument Not Maximized
“I couldn’t get other
groups interested in
OpenArray until we
got the robot.”

We heard that….
…feedback is key…users want to
track progress throughout the
workflow and when and why
something went wrong.

Feedback is Key
“The most important thing is
to track samples and AB
just leaves it up to you.”

The OpenArray Journey Represents a Framework of
Opportunities
Does not meet
expectation
Somewhat meets
expectation
Meets expectation
Delight
Disposal of
Arrays
Workflow Steps
Purchase
OpenArray
Learn the
workflow
Assay/Array
Ordering&
Receiving
Results
ResultsGenotyping and
Gene Expression
Cycling Genotyping
Data Analysis
Gene
Expression
Data Analysis
Results
ResultsExperimental
Setup
Encasing
Genotyping and
Gene Expression
Cycling Genotyping
Data Analysis
Loading

Agenda
> Design thinking

• Is there a market and how big is it?
Know the Market Space to Make Informed Decisions
Current Portfolio
OpportunitiesCompetition
• Conduct SWOT analysis, read the annual reports
• Consult sales reps for competitive info
•Inconsistent branding, multiple software platforms
•Crowded in various market segments
•Requires RoHS compliance updates to hardware
Market Landscape
•Know your customers and the application space

Analytics to Validate the Market and Differentiate the
Product
 Is there a market for such a large throughput? Do they
have the budget and are they planning to buy in the near
future?
 Are customers interested in another instrument and how
can we make the instrument unique?
 How much are customers willing to pay?

Applied Biosystems’ Real-Time Open Array is the most commonly considered
mid-density instrument for future purchases in North America and the
Illumina Bead Array is the 2nd most common
What brands/models are being considered?
- North America Planned Purchases -
N=89
%ofRespondents
Market Segment
Life Tech Real
Time Open
Array
Illumina Bead
Array
Illumina
iScan
Nanostring
nCounter
Fluidigm
Biomark
Sequenom
MassARRAY
Analyzer 4
Fluidigm
EP1
Other
Academic
(non Core) n=32
50% 31% 13% 25% 13% 9% 9% 13%
Biotech / Pharma /
Product
Development n=24
58% 29% 17% 21% 21% 13% 13% 13%
Service / Core n=11 45% 27% 18% 0% 0% 18% 18% 27%
Industrial
(Non Pharma) n=2
50% 0% 50% 0% 0% 0% 0% 50%
Government n=14 57% 50% 14% 14% 14% 7% 0% 14%
Public Health n=6 50% 17% 17% 0% 0% 33% 17% 17%

About 1/3 of the sampled facilities expect to purchase an average
of 1.3 mid-density instruments within the next 3 years
Do you believe your department will purchase any new mid-density
instruments within the next 3 years?
- North America -
Avg # of Unit
1.2 1.0 1.2 1.0 1.0 1.5 1.3
%ofRespondentssaidYES
Avg # of Unit
1.4 1.3 1.4 1.2 1.1 1.0 1.3 1.2
%ofRespondentssaidYES

Reliability and Data Quality are the two most important mid-
density instrument features.
What are the most important features?
- North America Overall -
N=183
Most
Important
Least
Important
Most
Important
Least
Important
77% 60% 53% 40% 42% 45% 16% 34% 23% 26%
11% 20% 13% 15% 6% 6% 4% 5% 5%
% of respondents ranked it Top 5

The concept is well received
45% of the respondents gave a rating of 8 or above
High
Interest
45%
How interested are you in using this new real-time PCR instrument?
- North America -
Overall
N=183
Average Interest Level = 7.0
Academic
(non
Core)
(n=57)
Biotech
/
Pharma
(n=54)
Service
/ Core
Labs
(n=23)
Industrial
(Non
Pharma)
(n=9)
Gover
nment
(n=26)
Public
Health
(n=8)
Avg
Interest
6.9 7.2 7.2 5.9 7.1 6.9
% of High
Interest
44% 43% 52% 22% 53% 50%
Affymetrix
/ Illumina
(n=64)
BioRad
/
Roche
(n=85)
Fluidigm
/
Nanostrin
g
(n=11)
Life
Tech
(n=114
)
Life
Tech-
only
(n=43)
Open Array
/ ViiA7
(n=10)
Avg
Interest
6.9 7.1 6.8 7.0 7.0 7.4
% of High
Interest
45% 46% 36% 44% 42% 60%
Very
Interested
Not
Interested
at all
384 well +
(n=71)
96 wells or under
(n=112)
Avg Interest 6.9 7.1
% of High
Interest
38% 50%

Optimal Price
~$110,000
Price where an equal #
of respondents think it is
Expensive, but still
possibly a buy
and Too Cheap to be of
OK quality
Price where an equal number think it is a
Bargain and Expensive
Price where less than 50%
Think it is Too
Expensive to Buy and before Price
Sensitivity becomes high
%ofCustomers
GlobalVan Westendorp Pricing Analysis
- Initial Purchase: 12k Data Points or 384w* -
N=94
*Respondents who would purchase 12,000 data points or 384-wells block type
Optimal QuantStudio™ 12K Flex Price Is $110k
Price where less than 75%
Think it is Too
Expensive to Buy
Point
of Inflection
~$140,000
Max. Price
$190,000
Min. Price
= $85,000
Target AUP $140K

Proposed Instrument Concept
+ =
 Model scenarios: leverage past financial models, with
updated assumptions
− How much of competitors share would we gain?
− Would we lose customers?
− Would there be cannibalization of the other instruments or existing
bundling promotions?

Agenda
> Design thinking

QuantStudio™ 12K Flex Target Segments
0.0
50.0
100.0
150.0
200.0
250.0
MarketSize(US$M)
Academic PI
Applied Markets
CRO
Therapeutic Area
Group
TL & Hosptial Group
Academic
Core
Mid-density
(un-allocated)
Industrial Ag
Clinical & Service
Lab
BioPharma Core
Genome
Center
Scalability Driven Flexibility Driven Speed & Throughput Driven
Key Customer
Segments
Academic PI (non-Core)
Biotech startup
Academic Core
Translational & Hosptial Group
Biopharma Therapeutic Area Group
CRO
Applied Markets
Genome center
BioPharma Core
Clinical & Service Lab
Industrial Ag
Key
Applications
• Candidate mRNA & miRNA
analysis
• CNV
• SNP genotyping
• dPCR
• Pathogen detection
• GEx (both candidate & targeted
discovery; mRNA & miRNA)
• dPCR
• SNP genotyping
• Pathway analysis/targeted
discovery
• miRNA profiling
• Biomarker screening
Entry
configuration
• 96- or 384-well block • Multiple block purchase (OA with
either 96/384-well or TAC block)
• OA block
$45M
$227M
$208M

Scalability Driven Flexibility Driven Speed & Throughput Driven
Key Value
Drivers
• Low throughput need initially with
intent of scaling toward mid-
density in the future
• Consistent results/minimize
variability
• Requires flexibility to investigate
variable number of targets &
samples per project basis
• Faster decision making
• Workflow ease
• Reliable results
• Low cost per sample
• Desire a focused set of targets with
ultimate goal of screening thousands
and thousand of samples
• Low cost per data point
• Faster decision making
• Reliable results
Entry Level
Instruments
QuantStudio 96 or 384 well
QuantStudio OA plus
TAC/384W/96W
QuantStudio OA
Value
Proposition
With limited resources, you can get
the most reliable results and plan for
the future with the most scalable
qPCR instrument on the market
today
You need the right answers quickly -
get high quality data fast with the
most flexible qPCR instrument on
the market today
Your time is precious and people are
counting on you, screen the right set of
markers quickly with the best in class mid-
density platform on the market today
Benefits
• Integration of TaqMan Content
• Robust light technology/block
design
• Easy workflow;
• 5 interchangeable blocks
• Easy workflow with minimal
hands on time
• LIMS/automation capability
• 12,000 data points in 1 hr 40 min runs
• Best in class mid-density workflow
• Integration of fixed & custom TaqMan
content
Target Segments & Value Propositions

Mid Density Price/Value Strategy Mix
1
Premium Strategy
2
Penetration Strategy
3
Superb-Value Strategy
4
Overcharging Strategy
5
Average Strategy
6
Good-Value Strategy
7
Rip-Off Strategy
8
Cream-Skimming
Strategy
9
Cheap-Value Strategy
High Medium LowHighMediumLow
Life QuantStudio 12K Flex
AUP $140K
Sequenom
AUP $205K
Fluidigm EP1
AUP $120K
Fluidigm Biomark HD
AUP $190K
Wafergen
AUP $110K
NanoString
AUP $237K
BeadXpress
AUP $90K
Roche LC1536
AUP $200K
Life NT Cycler
AUP $86K
PRICE
*Value parameters defined in “Value & Pricing Matrix” detail slide in appendix

QuantStudio™ 12K Flex OpenArray® Plate Workflow

Results One Year After Launch
2012 AOP
2012 Actuals
Unit Actuals vs Plan Overall Install Base
Recent OpportunitiesRegional Breakdown

Lessons Learned
More Application Focus at Launch
Realize Project Scope & Breadth EarlyUnderstand Sales Compensation
Structure
Strategize Product Replacements and
Discontinuance Plans

Thank You!
K. Ridley
Quantstudio Technical Specialist
Life Technologies, Asia-Pacific

The QuantStudio™ 12K Flex Real Time PCR System is For
Research Use Only. Not for use in diagnostic procedures.
© 2013 Life Technologies Corporation. All rights reserved.
The trademarks mentioned herein are the property of Life
Technologies Corporation and/or its affiliate(s) or their
respective owners.

Connecting the Dots: Decision Making for Next-Generation Products

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