Financing And Infrastructure Requirements For Successful Implementation Of Barostim Neo System

Introduction to the capstone project

After the approval of the Barostim Neo System (BNS) comes to its funding. The innovation involves a considerable investment that CVRx, Inc. cannot finance alone. The company relies on investors and financial institutions to fund the project. The financing of CVRx, Inc. medical projects began in 2003. However, it is difficult to point the precise amount of funds that the company has invested in the BNS project. CVRx, Inc. raises funds collectively to finance its operations and projects (Cairns, 2019).

The leading investor in the BNS project is Johnson & Johnson Development Corporation (JJDC). JJDC is a capital investment company that was established in 1973. The company invests in medical devices, consumer health, diagnostics, and pharmaceutical. The objective of JJDC is to assist its affiliated organizations, such as CVRx, Inc., to provide innovative technology that supports the provision of quality medical services. Other investors of CVRx, Inc. are New Enterprise Associates, Inc., Gilde Healthcare Partners, Windham Venture Partners, Ysios BioFund I F.C.R, and Action Potential Venture Capital Limited. Likewise, CVRx, Inc. also raises funds from partner investors such as Josep L.l. Sanfeliu, Jay Graf, Juan-Pablo Mas, and John Nehra (PR Newswire, 2016).

CVRx, Inc. raises to types of funds, namely equity funds, and debt funds. Equity finances come from investors and partner investors, while debts funds are obtained in form of loan from financial institutions.

1. Equity Financing

As mentioned earlier, the financing of CVRx, Inc.’s, technological medical innovations are done by different investors. Financing of CVRx, Inc., projects by investors can be traced back to 2003. The company has raised over US$400 million from investors between 2003 and to date towards funding its medical technological innovations (Cairns, 2019). The funds have been broken down per year as shown below.

1. Debt Financing

In 2019 CVRx, Inc. secured a $20 million loan with Offord Finance LLC. Oxford Finance provides loans to companies that engaged in the provision of healthcare services. Therefore, CVRx raised over $113 million in 2019. The money was used to finance the development and trial of the BNS heart failure device (Paczkowski, 2019).

It is estimated that the cost associated with heart failure will increase to $69.7 billion in the United States by 2030. An increase in the cost will be reflected in an increase in the demand for BNS. Heart failure patients are expected to incur an estimated cost of $30,000 to acquire a single BNS. The price of BNS would be higher with the support CVRx has received from investors who are determined to provide quality life to Americans (Cairns, 2019).

Background and Environmental and Organizational Assessment

CVRx Inc.’s fiscal level varies each year. For instance, the fiscal level was $84 million in 2006 but increased to $93 million in 2019. The funds are used in product development, clinical trials, marketing, and commercialization. The company depends entirely on equity financing from its investors. On the other hand, the investors have a strong confidence in the performance of the company’s management. CVRx uses its elaborative plan to lure more investors into investing in its projects. In the case of a financial deficit, the company relies on financial institutions to seek adequate funding (Abraham, Zile, Weaver, & Butter, 2015).

The success of the BNS device is based on an elaborative infrastructure that is based on medical equipment, access to information, technology, governance, and organizational structure, and staff structure. Infrastructural support is essential because it will ensure effectiveness, timeliness, sustainability, patient experiences, efficiency, safety, and equity. The availability of appropriate medical equipment is vital for the implementation and sustainability of BNS (Chen, Tanaka, Howlett, & Jain, 2017). The management of medical facilities should acquire fit for purposes of medical equipment to supplement BNS (Donovan, 2019). Moreover, the success of the BNS requires evaluation of all its medical components. The components should be scrutinized from the development, procurement, and maintenance. Quality assurance will ensure the success of the BNS device. Acquiring the appropriate and necessary medical equipment will help CVRx Inc. perform within its corporate framework. Lastly, acquisition of appropriate medical equipment will help the company to address adverse incidents that are likely to arise from using BNS (Luxon, 2015).

Accessibility is also an essential component of successful implementation of BNS in the U.S. Accessibility refers to how quick heart patients will access to the BNS device. Information to both patients and employees of CRVx Inc. will ensure easy access to BNS devices. Regular access to information on BNS will provide the company with the required flexibility and reviews to ensure the optimal provision and continual development of the product (Chen, Tanaka, Howlett, & Jain, 2017). The technology ensures integrated and effective dissemination of information among patients, medical facilities and staff. Technology will also improve the efficiency of implanting BNS devices in patients. For example, an interactive database that allows easy access to patients’ information will enhance real-time provision of care. CVRx is considering developing an app which will provide guideline and information about BNS. The integration of information technology will improve provision of heart care and reduce errors (Luxon, 2015).

Proposed Product, facility, entity, or service

The biggest challenge that CVRx is facing is how to develop cheaper, better, and cheaper ways of ensuring the patients have access to BNS. The answer lies in organizational governance and processes. The company seeks to develop patient-centered system that focuses on providing sustainable and high-quality services. An effective organizational structure will ensure mitigation of predictable and unpredictable issues that might arise for using BNS (Consoli, Mina, Nelson, & Ramlogan, 2015). For instance, regular meetings with associated stakeholders such as FDA, Patients, and medical practitioners will allow review of outcomes, identification of limitations and bottlenecks, and responding to concerns. Effective organizational processes will ensure that services surrounding BNS implantation will be provided effectively and collaboratively (Donovan, 2019).  

Lastly, human resources is a vital component of successful development, implementation, and implantation of BNS devices. Human resources are required from the procurement of BNS components, manufacturing of the BNS devices, testing of BNS, implantation of BNS and promoting the new technology to the market. Therefore, CVRx should put in place a structure that ensures sufficient staffing (Chen, Tanaka, Howlett, & Jain, 2017). The company’s staffing structure consists of talented people who value research and education. The success of BNS depends on a continued professional development, which should be obtained from the human resource. CRVx also offers its employees better compensation packages, which has ensured high level of retaining top talents. Right incentives have created trust between management and human resource (Donovan, 2019).

In conclusion, the successful implementation of BNS depends on a diversified approach that brings together different stakeholders. Taking into account all the infrastructure requirements mentioned above will ensure that the company’s plan is executed smoothly. Moreover, the company will gain investors’ trust leading to more funds and efficient introduction of BNS into the market. Subsequently communication will play a key role in marketing BNS beyond the U.S. borders.

References

Abraham, W. T., Zile, M. R., Weaver, F. A., & Butter, C. (2015). Baroreflex Activation Therapy for the Treatment of Heart Failure With a Reduced Ejection Fraction. JACC: Heart Failure, 3(6). Retrieved from https://www.sciencedirect.com/science/article/pii/S2213177915001250?via%3Dihub

Cairns, E. (2019, August 9). Shock approval for CVRx . Retrieved from https://www.evaluate.com/vantage/articles/news/snippets/shock-approval-cvrx

Chen, Y.-W., Tanaka, S., Howlett, R. J., & Jain, L. C. (2017). Innovation in Medicine and Healthcare 2017: Proceedings of the 5th KES International Conference on Innovation in Medicine and Healthcare (KES-InMed 2017). New York: Springer.

Consoli, D., Mina, A., Nelson, R. R., & Ramlogan, R. (2015). Medical Innovation: Science, technology and practice. New York: Springer Science & Business Media.

Donovan, F. (2019, June 24). Medical Technology Focuses on Patient Engagement, Care Coordination. Retrieved from HIT Infrastructure: https://hitinfrastructure.com/news/medical-technology-focuses-on-patient-engagement-care-coordination

Luxon, L. (2015). Infrastructure – the key to healthcare improvement. Future Hospital Journal, 2(1): 4-7. Retrieved from https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6465866/

Paczkowski, W. R. (2019). Pricing Analytics: Models and Advanced Quantitative Techniques for Product Pricing. London: Routledge.

PR Newswire. (2016, August 09). CVRx® Secures $113 Million in New Financing. Retrieved from CISION PR Newswire: https://www.prnewswire.com/news-releases/cvrx-secures-113-million-in-new-financing-300310824.html

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