Planning for GrowthPrepared for:InVivo Core, CTSI February 25, 2010

Background - In Vivo Therapeutics Core

About InVivo Therapeutics Core•Established within IU Simon Center in 2007 to provide investigators with cost-effective and comprehensive services to facilitate the development and testing of novel pharmacological & cellular therapies •Led by Dr. Karen Pollok and team composed by a full-time manager (Tony Sinn) and technical staff (Jayne Silver and Barbara Bailey)

Project Focus•Planning for growth •Emphasis in marketing strategy 2

Executive summary

Findings•IVT needs more resources to meet growing demand•Internal pricing is accurate and acceptable to customers•Customers are extremely satisfied with IVT•IVT risks underpricing and queuing if it takes on private sector customers now

Recommendations•Add additional FTEs proactively, especially staffers who can assist in model development•Create marketing materials that emphasize trust, personal connections and quality•Obtain board approval to study feasibility and pricing for private sector customers

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CORE UTILIZATION

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The core has increased the number of studies done by 700% and the amount of revenue by 30 times in the last 2.5 years

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* Assume the growth rate is 30%

  2007 2008 2009 2010

# of studies 4 19 32 42 *

Growth rate N/A 375% 68% 30%

Amount billed ($) $2,475 $60,010 $75,914 $98,688 *

Growth rate N/A 2325% 27% 30%

Based on In Vivo’s customer survey, 42% of researchers expect to increase their mice usage and 51% expect it to remain the same.

The top three clients account for 50% of studies and 74.8% of service revenue

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The core is also handling more work per FTE than ever before

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  2007 2008 2009 2010

# of studies 4 19 32 42 *

# of staff 1 2 2 2

Studies per person 4 10 16 21

In 2008, In Vivo requested another full time position be added to help the core advance in level of service and quality.

* 2010 forecast based on 30% growth rate

The core needs more resources to cope with growth

• Model development is a “crown jewel” of IVT’s services. It will likely consume a greater percentage of time as new clients come online in the future

• There is minimal backup capacity to handle holidays, sick-time and weather-related issues

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MARKET SURVEY

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Interview with 6 Principal Investigators

Contact Name TitleMelissa Fishel Research Assistant Professor IU School of Medicine

Rebecca ChanAssistant Professor of Pedriatics and of Medical & Molecular Genetics

Jamie Case Assistant Research Professor of Pedriatics Christie Orschell Research Professor of MedicineLindsey Mayo Brain cancer working group active participantJingwu Xie Pancreatic cancer working group leader

Survey done by InVivo Therapeutics (IVT)

Surveyed: Principal Investigators and all lab personnel served by IVT during last year (anonymously)Number of surveys sent out: ~100Number of people who respond the survey: 24

Key survey questions •What kind of services are you currently using from In Vivo Therapeutics?•How satisfied do you feel about the services mentioned in the previous question?•Rank the following criteria when considering lab services:

•Quality•Relationship•Price•Location•Wait time

We interviewed six current customers and analyzed IVT’s survey data from 24 customers

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•All participants claimed to be “very satisfied” with IVT core •The main drivers of level of satisfaction are: quality of service and trust/reputation

Direct survey to 6 Principal Investigators

“Trust is very important. If I do not trust the lab, I prefer to conduct the tests by myself since it is a waste of money and time when job is not done properly. I trust IVT because their researchers are detail oriented, knowledgeable, and have great technical skills” (Melissa Fishel, Research Assistant Professor IU School of Medicine)

“I use In Vivo because of their consistency.  I know when I use their services that the experiments will be done right.  They are very good technically and using them builds efficiency because we know the studies are accurate, so we don’t have to do as many.” (Rebecca Chan, Assistant Professor of Pediatrics and of Medical & Molecular Genetics)

IVT’s customers identified trust and quality as the top two benefits of using the IVT Core

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•23 out of 24 participants will recommend the services of the core to a colleague

•100% of participants consider that core personnel is easy to reach and readily available for study design consultation, changes in animal orders or changes in study protocol

•2 out of 24 participants mentioned that some mice orders are often on backorder (“Boy J” colony)

Survey done by InVivo Therapeutics (IVT)

“Always helpful and willing to meet and discuss research design”“Very quick to reply my messages”“The core provides outstanding services for the community and should be strengthened”

Customers were satisfied overall, with few complaints

What customers said

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•Even though price is a very important criteria when choosing a lab, it is not the first criteria for any of the 6 principal investigators. Trust and quality of service are first•21 out of 24 participants believe that IVT’s costs (mice & studies) are reasonable. (2 skipped question and 1 replied that cost for weekends are high)•Customers consider that other labs are 4 to 6 times more costly than IVT•Main IVT “competitor” is researchers setting up the study themselves, but they prefer the core because IVT is faster and less expensive

“Other institutions are not even close to the services that IVT provides. Costs are unbelievably reasonable (3 to 4 times less than other places per mouse) and if you want you just pay a reasonable fee for service and do not have to actually do the study by yourself” (Lindsey Mayo, Brain Cancer working group active participant)

Pricing for internal customers is widely acceptableRisk of under pricing external customers

Price is not the first “buying” criterion for current customers

Therefore, marketing communications should emphasize trust and quality rather than cost/benefit

• Personal contacts– Networking events– Conferences– Personal phone calls

• Written communications– Type-written letters– Printed brochures

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• Profiles of researchers who used IVT– Emphasize benefits of

model development– Include technical details

• CVs of technicians and director

• Customer experiences (“testimonials”)

What to avoid: mass emails, anything impersonal

MESSAGE FORMAT MESSAGE CONTENT

Next steps

• Distribute brochure to current customers for feedback, then enhance before launching to a wider audience

• Discuss “external customer” strategy with Mary Murray, and seek board approval to study it further

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