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Catalyst - Fall 2011 - TYRX Transforms its Sales Force from Farmers to Hunters

In late 2009, before Robert White arrived on the scene at TYRX, Inc., the company’s sales charts resembled the cardiac monitor of a critical care patient. Sales of the Monmouth Junction, N.J.-based medical device companies’ flagship product, the AIGIS RX® Envelope, were flat-lining and in need of immediate resuscitation.

White stepped in as president and CEO of the company in January 2010 to restructure the sales force and realign the company’s overall strategy. Now, just over a year later, TYRX is a true leader in the field of implantable medical devices. In fact, the company recently announced that the AIGIS Envelope, an antibacterial technology that is used with implantable pacemakers and defibrillators to reduce surgical-site infection, has successfully been implanted in 20,000 patients in the United States.

The AIGIS Antibacterial Envelope is used to hold a pacemaker or implantable cardioverter-defibrillator, (ICD), creating a stable environment surrounding the device and leads after surgical placement. The Envelope is the first FDA-cleared combination drug+device product designed to reduce infections associated with implantable pacemakers and/or ICDs.

“When I got the call, TYRX’s Board of Directors wanted to take the company to the next stage but overall sales performance hadn’t lived up to the expectations,” said White, who came to TYRX from Medtronic Inc. in Minneapolis.

A quick assessment of “what they were doing right and what needed to be changed” and a refocused sales organization has made all the difference, he said.

TYRX’s 2010 sales roughly doubled year over year and TYRX is looking to almost double again this year, thanks to White’s expertise and interesting take on strategic sales initiatives that has truly breathed new life into the company.

Recognizing that there were many additional ways for TYRX to capitalize on its technology with other devices, White set out to prove to the finance community that his company is a long-term opportunity. “This company was burning a lot of cash. I knew we needed to trim the organization but my first priority was to restructure the way we were doing things. We needed a new way of getting the sales line going,” White said.

Getting His House in Order

TYRX’s sales organization was small; there were about a dozen people selling with a strategy that wasn’t worthy of the technology, he said. The AIGIS has incredible ROI and doesn’t require a lot of doctor hand-holding by sales representatives.

“In my way of thinking, there are two types of sales people in the medical device business: farmers and hunters. Larger companies with huge sales forces can have farmers: people who can cultivate a few relationships at hospitals, for example, and provide the best service to the doctors they know well.”

Literally, “sales farmers” plant the seeds and work a small part of the field, in this case, a few doctor-relationships. “As cases come up during the day in a particular facility, farmers are able to be on-site and at-the-ready to help doctors get the product into those patients,” White explained.

While it’s true that there are many medical devices on the market that require onsite programming, and therefore sales reps who are actually experienced medical technicians assisting doctors in the operating room, the AIGIS isn’t one of those devices, White added. “If that kind of hand-holding is necessary, it’s because there is plenty of competition for attention from doctors. Farmers know how to manage their individual relationships to make sure doctors choose their products.”

However, in smaller biotech companies such as TYRX, the farming philosophy doesn’t work. That’s where “hunters” come into the mix.

“Hunters specialize in cold calling. They can develop relationships rapidly, educate quickly and move on to find the next opportunity. At TYRX, we need the hunters.”

Hunters develop their markets using broader brush strokes. They educate doctors, make the sales case based on facts – in this case the reduction of cases of infection – and move on, growing sales and building business.

“Our device does exactly what it’s intended to do. It reduces risk of infection and that saves money, plain and simple,” White said. “Infections are bad for the patient and the hospital. If a patient develops an infection, it requires a longer hospital stay. Further, when patients are in the hospital they are at risk for other complications.”

The AIGIS Envelope contains rifampin and minocycline, antimicrobial agents which have been shown to reduce infection by organisms representing a majority of the infections reported in implantable pacemaker and defibrillator related endocarditis.

Statistics Tell the Tale 

 Implantation of cardiac implantable electronic devices (CIEDs) for permanent pacing, heart failure therapy, and prevention of sudden cardiac death exceeds 500,000 annual cases in the United States and is associated with a major infection rate from 0.5 to 7 percent.

“As the number of patients at risk for serious CIED-related infections continues to increase, it is reassuring to know that there is a product like the AIGIS Antibacterial Envelope that can help improve patient outcomes by reducing infection and the cost of treating infection,” said Grant Simons, M.D., FACC, and director of Cardiac Electrophysiology at Englewood Hospital and Medical Center in Englewood, N.J.

Suneet Mittal, M.D. and director of St. Luke's-Roosevelt Hospital Center’s Electrophysiology Laboratory in New York, first learned about the AIGIS Envelope at an industry trade show. He was eager to bring back information to his team.

“In our world, the most dreaded complication is device infection,” Dr. Mittal explained, “because any time infection occurs, the system must be removed. That becomes a serious issue of patient safety and care and financial liability for the hospital.”

As such, medical facilities are intensely focused on reducing infection risks to as close to zero as possible. Of course, over time, changes in best practices – from the administration of pre-operative antibiotics to changes in scrub techniques have made great strides. However, said Dr. Mittal, “it’s been hard to drive that infection rate lower than two percent in large studies.”

Until the AIGIS Envelope, Dr. Mittal maintains. His team at St. Luke’s Roosevelt has been using the AIGIS Envelope for over a year. There have been zero cases of surgical site infections when the TYRX product is used.

Dr. Mittal’s testimonial is one of many, says White. Great news since TYRX is hoping to commercialize devices that use the same technology in other parts of the body to protect patients from infection. On the horizon are devices that would be used in orthopedics and general surgery.

A Bright Future Based on Exciting Results

While White has exceeded the expectations of the TYRX Board of Directors – the company estimates that over 2 percent of all U.S. implantable pacemakers and defibrillator patients in 2011 will receive an AIGIS device – the CEO is now looking to the future.

White restructured the sales force, prioritizing territories, creating new sales strategies and putting in place a compensation structure that allowed the sales force to grow. He changed the commission plan to be aligned with the “hunter” type of sales representative and encouraged everyone on the team to be growth oriented.

But he also realized that a critical component of the hunter’s sales strategy is information. White worked diligently to make sure TYRX’s team went out hunting with the tools needed to make the most of every potential opportunity.

In April, TYRX’s “hunters” received great information that further illustrates the business case for the AIGIS Envelope. Results of a study of Medicare patients presented by researchers from the Mayo Clinic, the Johns Hopkins School of Medicine, and TYRX, at the American College of Cardiology 60th Annual Scientific Session, revealed that surgical infections associated with pacemakers and defibrillators led to a 3-fold increase in hospital stays, 55 to 118 percent higher hospitalization costs, an eight to 11 fold increase in mortality rates, and doubled the mortality after one year compared to pacemaker and defibrillator implantations where no infection occurred.

“Rising health care costs are at the center of the political and economic debate this year,” said M. Rizwan Sohail, M.D., assistant professor of medicine, Mayo Clinic College of Medicine, Rochester, Minn. lead author of the study. “However, efforts at cost reduction must begin by identifying the major driving forces behind the cost of patient care. In this study, we have tried to do just that for patients with cardiac device infections.”

Hospitals are undoubtedly concerned with patient care, first and foremost. Infections require additional hospital stays and an exponential impact on a patient’s quality of life – especially after what should be a relatively simple procedure.

At the same time, economics are a factor. The TYRX AIGIS Envelope offers hospitals a way to reduce infection, save lives and improve health to lower healthcare costs. It’s a simple equation that no one could argue with: the Envelope costs a facility about $800 and the cost of a hospital infection with regard to a pacemaker or ICD is $50,000.

“When infection rate is compared with how often it would use the Envelope with implanted medical devices, based on high-risk cases, the financial equation makes complete sense,” White said. “Patients are healthy and happy. It’s a win-win for all involved.

EisnerAmper's Catalyst: Fall 2011 

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