Can you tell me about the evolution of Alvimedica since its founding a decade ago?
Alvimedica began as a start-up based on my father's idea to improve the quality of life. From a business standpoint, he looked at Turkey and saw that the country was importing 95% of medical devices. We acquired a small company and started to operate and manufacture catheters and balloons before moving into more sophisticated products. Around 2014, we decided that we needed to have a unique selling point, so we went out and acquired a company called CID, a spinoff of the Sorin Group in Italy, and started investing more in R&D. From there, we built our second factory in Çatalca. At present, that factory produces 900,000 drug-eluting stents per year. The annual demand in Turkey is around 350,000, allowing us to export the rest. At present, we export to more than 70 countries.
Why did Alvimedica acquire CID?
Within CID's portfolio is a unique drug-eluting stent called Cre8. The stent has a special selling point for diabetic patients, which is growing at a very fast rate. Our latest product off of the Cre8 line is the Cre8EVO. Its good market perception paired with our low production costs and high capacity indicate it will be a success.
What new products will you introduce in the near future?
Our R&D department is highly active. An exciting area we are entering is peripheral products. We will launch Nitides, a below-the-knee stent that works with the Sirolimus drug, by the end of 2019. We will also launch it in Europe before expanding globally. I am also excited about Cre8EVO, which is developing quickly, especially in East Asia.
Broadly, is your export strategy to first succeed in Europe before you go global?
Yes, we aim to succeed in our own region before expanding further. This strategy also helps from a regulatory standpoint. Regulations for drugs and medical devices across Europe are strict. There are ongoing checks, which helps us improve our standards. There are similar systems in place in the US, but the approval process there makes life hard for all foreign companies. As a normal-sized European company, we want to focus first on Europe and then on the rest of the world.
What is Alvimedica's growth strategy?
At present, our revenue is around USD50 million per year, and we expect to reach USD80 million by 2020. Our main objective is to help Turkey become a hub for the global medical device market. The government is aware of the potential and has decided to give incentives to the medical devices industry. So far, Alvimedica is the only company that is on the list to receive incentives, which will include incentives for funding and skilled workforce, such as specialized engineers, and support for R&D projects. We have already partnered with the University of Ankara to do research on the mitral valve we are producing, a project that falls under the R&D incentive program. From an investment standpoint, we also hope to go forward with our IPO in two years.
What are the biggest challenges you face in the area of R&D and workforce development?
R&D is not a big problem because we have been heavily investing in the area since the beginning. Finding the correct workforce has been a challenge in Turkey, which is why we are currently building a new vocational school near our factory in Çatalca to educate the workforce on biotechnology.
What are your primary objectives for the next 12 months?
The primary goal is to launch our Nitides product. Big companies that would like to distribute it have approached us, and this will bring even better news for Alvimedica. Another objective is to continue producing Cre8 in Turkey at a different level using automation.