Difference between revisions of "Team:Pasteur Paris/Entrepreneurship"

Key partners

A major part of our project was the designing step of our product. To do so, we have worked with customers and partners in this major step. We’ve been building long lasting partnerships with doctors, (Ministère de la santé) and researchers to make sure that our product could stand up to their expectations. Co-designing the product with our customers has helped us tailor its properties and how it functions in order to solve all of the problems our customers encounter daily. It also helped us establish a list of all the materials we would need to use in our device for it to follow the regulation about medical devices.

For example, today’s time consuming methods of bacterial diagnosis is detrimental to the rapid treatment of bacterial infections. Thus, designing a real fast diagnosis device will considerably help doctors for the administration of the right treatment to the patient.

The lack of portability for a lot of diagnosis devices is also detrimental to the accessibility to those methods in a humanitarian context. Thanks to Dr Pedro Clauteaux, we have designed our device based on his advices and his experience from his field work in South America (Amazon rainforest for example). His interview taught us that doctors in such context usually only bring the bare minimum for on place diagnosis, including a centrifuge, a microscope... In such context, we knew that we had to make our device as small as possible, and to make the sample processing as simple as possible. Thus, our work with SMC has made the automation step possible with the use of their engineered pumps and valves for milli/microfluidics systems.

Working with Dr Lebeaux has brought us a lot of knowledge about the needs of hospitals concerning diagnostics : distinguishing bacteria, from viruses or parasites is the first step necessary today. Moreover, determining the strain of the bacteria is a real added value for the treatment of the patient, even more when a follow-up analysis is possible in order to check the efficiency of the treatment, and thus Furthermore, he also told us that clinical trials could be done on non medical subjects in the first time in order to test the viability of our device, and then prove that it could be used in medicine and in human health diagnostics.

For the future, we will continue the partnership with SMC to produce the parts necessary for our product, including parts related to the micro-fluidic system. As for the beginnings of our business, we will assemble the devices ourselves, but we might consider using SMC’s expertise in assembly to outsource this aspect of our work. Furthermore, as SMC is already our main supplier in terms of electrical devices, we might establish a preferential contract with them. Furthermore, working with diverse research laboratories will allow us to expand our aptamer database more rapidly, and thus provide real solutions for our customers as soon as new discoveries are made in this field.

Value proposition

Specificity

Our new diagnostic method enables faster patient care with a diagnosis time reduced to only a few minutes; leading to the administration of suitable antibiotics, in a context where empirical large spectrum antibiotic therapies jeopardizes our reserve treatments, as presented in the new AWaRe campaign released by the WHO (click here to learn more). The bacteria we are focusing on are : S. aureus, E. coli, S. pneumoniae, E. faecium, S. enterica, P. aeruginosa and A. baumanii. This list is composed of the bacteria put in the watchlist of the WHO in this report.

Cost efficient

Moreover, we will reduce the economic impact of bacterial infections by fostering the use of more available antibiotics because more specific of the strain detected. Today, a bad treatment leads to a prolonged stay in hospital, additional costs in diagnostics and patient handling, in working hours for hospital staff… Enhancing diagnostic time will thus reduce considerably the time of stay for every infected patient with the help of an adapted early-on treatment.

Portability and ergonomy

The simplicity of use of our diagnosis device is a real added-value for our users. Beyond the rapidity of our method, it also distinguishes from competitors with its portability. Its total volume will not exceed 9 liters (20x15x30cm3) We have decided to focus on a miniaturisation and automation strategy for our analysis system to let doctors focus on the real problem : the health of their patient. Once the sample is inserted in the device, a pump will take mechanically push the system and make sure the sample can reach the electrodes, and then automatically wash the analysis system. All waste is then collected in a cartridge for easier waste treatment. We also give access to an easy to implement bacterial diagnosis in developing countries, by bringing a new, simple, portable and efficient method on the market. We give NGOs the opportunity to bring diagnostics to remote populations in hard-to-reach areas.

Customer segments

For our business, we have found that we have a three way segmented market: hospitals, NGOs and nursing homes.

Hospitals

Our first customer segment is represented by hospitals that use bacterial diagnosis as a recurrent method. The main challenge hospitals are going to face in the near future is the need to reduce the costs and times of patient stays due to infectious diseases. Our device is a real asset for our customers to facilitate patient care as well as the speed of diagnosis. Hospitals are prone to large expenses towards patient care, with an average of 1200$ per hospital stay due to resistant bacterial infection. In this context, our device could facilitate the financial management of those structures by bringing new diagnostics solutions to reduce the risk of treatment failure. Furthermore, the detection of bacteria nowadays requires 4 blood cultures that each cost up to 21 euros in France, whereas our device could bring down the detection of pathogens down to … euros per analysis.

Humanitarian organization

The second customer segment corresponds to NGOs working in conditions where it isn’t always possible to get access to laboratory equipment and analysis. Our device brings a simple solution for those organisations with a portable and resistant product, using a cutting-edge technology and a deeply thought choice of materials. We have worked around a very specific channel in order to bring our device to NGOs with very little budgets, with a location system described more precisely in the channels part of the canvas. (lien hypertexte)

Nursing homes

The interview with Ms. Sylvie Renard Dubois, member of the DGOS and doctor in the infectious diseases of the Bejin hospital, has brought to our attention that nursing homes are another customer segment quite different from the other two. The main problem of nursing homes is the fact that each patient comes with their own personal primary care physician. Facilitating the sampling and analysis of biological samples in such homes will reduce the risk of severe infections. A major concern remains the staining of the sample due to bacteria found on the skin or in the environment of the patient, which needs a thorough clean handled by the caretaker.

Analysis laboratory

The last customer segment that doesn’t take part in our three-way segmented market are private laboratories. We have interviewed a doctor from such structure in order to assess the needs and expectations of this potential customer for our device. Thanks to the answers of Dr. … we have concluded that our device will not be useful for this context. Today, analysis time is not a real problem for laboratories, in fact, administration tasks require more time to perform than the analysis itself; thus providing more rapid diagnosis won’t help doctors in their work, as the results can’t be given to the patients (often suffering from light infections from the urinary tract or in a blood sample) until the administrative work is done. We have thus discarded laboratories from our potential customer segments due to this problem.

Cost structure

In order to carry out our business successfully, we have listed the various costs, both material and human, that we must plan. First of all, there are the costs associated with the production of a machine, which would have a unit cost in materials of €2,927.78. The implementation of such a project also requires the provision of rent for a laboratory. In addition, it is necessary to plan the wages of 3 employees; knowing that we take into account the fact that this figure will be revised upwards as the company prospers. Other costs are to be expected, particularly with regard to the protection of our product with the filing of a patent and a brand name. These are significant costs at the start of a project, but they are essential to stand out from the competition and ensure that our value is protected. It is also essential to provide for CE marking in order to allow the product to be marketed in the European Union. Finally, for the first year, the expenses related to the company's registration must be taken into account. Thus, if we take all these elements into account, the company's operating costs will be €659,500.

We have planned not to sell any machines in the first year in order to carry out the various tests necessary to obtain marketing authorizations. As a result, we will have a deficit of €795,000 at the beginning of our second year. This deficit can be offset by raising funds or selling 5 machines in the first year and 15 machines in the third year with a cash flow of 52,000 euros. If we manage to raise 800,000 euros, then we will be profitable in the second year from 3 machines sold.

Revenue streams

In the case of bacterial infection treatments, the most important cost for hospitals is the added length of stay since it represents two thirds to three quarters of the overall additional cost. In fact, "patients infected with multi-resistant enterococcus have a three and a half day longer intensive care stay than patients infected with normal sensitivity enterococcus"[1]. Our device allows a faster diagnosis, and therefore a more adapted and faster treatment, thus limiting the length of stay. The adaptation of treatment is part of the fight against antibiotic resistance, which causes significant additional costs for hospitals. The additional cost of resistant bacterial infections averages €1100 per hospital stay.[1] The treatment of sepsis costs 3000 euros per day of hospitalisation, which is a significant cost and could be avoided by faster treatment. Finally, a 2015 report "All together, let's save antibiotics" notes that "France spends between 71 and 441 million euros more than its neighbours on antibiotic therapy in the city". Based on this data, we evaluated the price of our device to enable hospitals to reduce the costs associated with bacterial infections, more precisely when they are resistant. According to several sources, when looking at averages, the treatment for bacterial infections costs 2000€ per patient per day[1]. Our device allows to reduce the diagnosis from 4 to one day because currently it is necessary to perform 4 blood cultures with 24 hours interval. Sometimes 2 blood cultures are sufficient but to assess the accuracy and reliability of this method, 4 cultures are often required. Thus, these 3 days of difference represent a cost of 6000 euros for hospitals. We took as an example the CHU of Caen, which over 6 months, admits 1513 patients who are treated for a bacterial infection. Therefore, over a year, and for 3026 patients, our device saves the hospital 18 155 000 euros, not to mention the fact that the hospital stay will be reduced thanks to a faster treatment. From this amount saved, we based ourselves on a logic of 75% profit for hospitals and 25% profit for our business. We therefore calculated 25% of this amount saved, which corresponds to 4,538,750 euros in order to know at what price we could sell our machine. However, we want this machine to be in several copies in each establishment in order to allow a faster diagnosis. That is why we decided to sell our machine for 60,000 euros in order to allow the presence of at least 75 machines in the establishment.

The first year we will not sell machines because we have to obtain the CE marking beforehand, so we will not receive any of this sales revenue. However, we will be able to collect grants and raise funds. From the second year onwards, we will market the product and be profitable from 17 machines sold. However, if we can raise 800,000 euros to cover the costs of the first year, we can be cost effective in the second year from 4 machines sold.

Subsequently, we plan to integrate the rental of equipment into our business model, particularly for humanitarian organizations with lower resources. Before that, we would like to enable market entry in order to have enough income and a stable situation. In order for us to determine the price of a single diagnostic, it would require us to perform a viability study on our electrodes to assess their life time before failure and replacement.

¹ http://www.infectiologie.com/UserFiles/File/medias/enseignement/gericco/2015/2015-Gericco-Hemocultures-Dargere.pdf