Is it time for Timm? (a case history)
Article first published online: 28 FEB 2011
© 2011 THE AUTHOR. BJU INTERNATIONAL © 2011 BJU INTERNATIONAL
Volume 107, Issue 5, pages 851–852, March 2011
How to Cite
(2011), Is it time for Timm? (a case history). BJU International, 107: 851–852. doi: 10.1111/j.1464-410X.2011.10136.x
- Issue published online: 28 FEB 2011
- Article first published online: 28 FEB 2011
This represents a first for the pharmaceutical review. I have had to resort to the well-known symposium filling tactic of a case history, albeit with a difference as it does not directly involve real patients (then again, maybe that is not so different. I remember with particular affection Professor Porst’s history of the ‘banker with erectile dysfunction’). My case history is that of Timm Medical currently part of the Actient Pharmaceuticals (http://www.actientpharma.com) family. The recent acquisition of Timm Medical serves to highlight the desire for the pharmaceutical industry to offer their customers (in this case the urologists) a spectrum of products. Like everything else done by the pharmaceutical industry, there is only a modicum (or should that be an iota) of altruism attached to this strategy; it does, however, fall short of ‘channel domination’. At best, that would be considered to be morally and ethically questionable strategy. At worst it could result in the well-known Monopoly board manoeuvre of incarceration without passing ‘Go’.
To understand the value of the acquisition of a device company to the pharmaceutical industry, we have to look back into time (or should that be Timm). Timm Medical was the brain child of the serial entrepreneur Gerry Timm. The term serial entrepreneur has become somewhat hackneyed but in Gerry’s case is well merited. He has created and sold American Medical Systems and has a new incarnation as GT urological. Looking at the company name of the latter and Timm Medical, one can assume that there is little false modesty about the man. But then again when you have made yourself and others multi-millions, it does not really matter does it and anyway he socialises with urological surgeons.
Timm, the company not the man, was created to develop and market medical devices to urologists as therapy and diagnostics. Part of the logic was that medical devices are easier and less costly to take through regulatory approval than a prescription drug. This can be as little as half the time of a drug and ≈1/20 the cost, representing a very good return on investment (ROI), assuming there is reasonable market potential. It is worth noting that even in the urology space there are several multi-billion medical device companies, e.g. Medtronic and Ethicon/Johnson and Johnson. Others come and go as quickly as AUA abstracts are prepared. A couple of decades ago there was another major player, Endocare and it was to them that Gerry sold out (perhaps in all senses of the term). This represented classical merger and acquisition tactics in the 1990s. One company acquires another for the products, strips out cost (i.e. make people redundant) and the whole organisation becomes much more profitable. It is usually much more cost effective to have an established field force sell (detail in sales jargon) three or four products rather than one or two. However, this assumes there is complementary fit over the product range, i.e. the customer base is the same.
The problem for Endocare was exactly that, i.e. the spectrum of products and the lack of fit in the eyes of the field force. On one hand, they had an established market for cryosurgery equipment (hundreds of thousands of dollars per unit) with the new portfolio of RigiScan ($3000) and vacuum therapy systems (VTS, $1750), VTS consumables (a few dollars) and an on-line store. It has been calculated that the cost to the Veterans Affairs (VA) health care system of purchasing one cryosurgery setup could have kept all the VA’s VTS clients supplied in perpetuity. The mix of products proved untenable and combined with the decline in interest in cryosurgery, as new AUA abstracts on new technology appeared, Timm Medical came up for sale (at bargain basement purchase price or a bit like as far as Endocare were concerned having negative equity in your asset).
At that time, along came Plethora Solutions Plc. who had the USA rights to a potential treatment for premature ejaculation (PE; PSD502) and an injectable for erectile dysfunction (Invicorp). The fit with Timm’s product range seemed near ideal, in a therapeutic context and in the context of the type of physician being detailed (the urological surgeons and their support staff). It was projected that a highly motivated sales force of <50 could get to the potential high prescribers of the products in this urological sub-speciality. In Plethora’s eyes there was no difference from the strategy that led to the acquisition of Timm by Endocare; detailing three or four products on a fixed-cost basis made considerable commercial logic. Although the marriage between Timm and Plethora was consummated, no viable long-term outcome resulted. This was certainly not due to a lack of effort by Dave Talen and Tom Hopper in sales and marketing at Timm, who all but implemented a marketing plan for PSD502 and Invicorp. Unfortunately for them, Plethora sold the USA rights to the PE spray (PSD502) to Shionogi Inc. and the residual development programme for Invicorp was delayed. As a result there was no longer the intended synergy of products between Timm and Plethora, and Timm were sold off once again. This time the purchasers were Paul Capital a group of investment bankers (in the literal and not Cockney sense). The assumption presumably was that in the medium term another pharmaceutical company active in the urology/andrology field would want to obtain access to the well tried and tested Tim sales infrastructure.
This has proved to be the case as evidenced by the announcement of by Actient Pharmaceuticals that Timm is now part of their family. Actient already have marketing rights to intracavernosal prostaglandin (alprostadil, Edex). The Chief Executive Officer of Actient, Ed Fiorentino, is an old hand in developing urological markets in the USA and generating good ROI to shareholders. On this basis it is highly likely that the Timm field force will be used in the frontline to generate revenue. At last we may be entering the era where the theory that one field force can successfully market drugs and devices will be rigorously tested. Assuming this is the case, and I have every expectation, knowing the Timm field force, that it will be, it will be interesting to see what happens to Timm next. Will Actient continue to build up the infrastructure or will they sell on a successful sales infrastructure to a bigger player. Only time will tell for Timm.