Periodic Reporting for period 1 - PoC-Cycle (Innovative Molecular Diagnostics point-of-care device for MRSA)
Reporting period: 2014-09-01 to 2014-11-30
In a feasibility study conducted within the EU Framework Programme for Research and Innovation (Horizon 2020, SME instruments, Phase 1) main stakeholders were identified and interviewed, FTO-analyses were performed with respect to potential infringements of foreign patents of the complex co-operative technological development and access to all IP, Know-How and marketing rights for those parts developed in cooperation were secured. To proof performance of the technology, initial market entry shall be addressed by a screening test for MRSA , a health care acquired infection with wide spread and growing negative impact to European patients and health care systems. The study resulted in a business plan for the the period from prototype establishment via clinical evaluation study to market entry (TRL 6 to TLR 9) that also includes a first commercialisation strategy for the European market. The planning contains some minor technological adjustments, reveals freedom to operate for all major aspects of the technology, addresses the concept for assembly/production of consumables and related processors as well as conception of the clinical evaluation process. Market access shall be realised by partnering with laboratory service providers in order to avoid market share competition of PoC testing and laboratory testing as well as to use the partners’ established customer contacts and distribution opportunities.
FRIZ Biochem, a privately held company with well-experienced staff, founded and managed by Dr. Gerhard Hartwich, developed CYCLE®, a unique Molecular Diagnostic (MDx) testing platform suited for Point-of-Care testing. To proof performance of the technology, initial market entry shall be addressed by a screening test for MRSA , a health care acquired infection with wide spread and growing negative impact to European patients and health care systems. Main objectives of the feasibility study were:
- Identify main stakeholders such as end-users / partners for performance evaluation and distribution
- Undertake a market study adressing also quality of technological concept
- Update a freedom-to-operate report
- Elaborate a business plan
Market opportunities for FRIZ Biochem’s CYCLE® technology were analysed using the stakeholders as sources to analyse market size, market situation, market entry strategy, price policy and marketability of the platform technology for Molecular Diagnostics (MDx, a segment of In Vitro Diagnostics) in general as well as health-care acquired infections like MRSA in particular. Though MRSA screening at the Point-of-Care (PoC) will be the first product launched on basis of CYCLE® technology, it is suited for the widest possible range of applications. The cost proposition of the system facilitates access to about 50% of the current $ 5 billion MDx market. Additionally, it is an enabling technology at emerging growth regions for testing in developing countries where infrastructure and health care situation offer a number of interesting opportunities for PoC systems versus central lab testing.
While the strategic advantage of CYCLE® Diagnostics arises from the opportunity of combining integrated workflow with multiplex testing, suited for the widest possible range of applications for clients at central labs and the Point of Care, the ultimate success will be driven by the cost proposition of the system: based on inexpensive CMOS-based sensor technology, the consumables offer a paradigm shift in the cost structure of MDx technology.
- significant cost advantage over leading competitive systems
- reduced hands-on time (1 min.)
- lowest turn-around-time for commercially available systems (30 min.)
- first real closed system (highest security / minimum risk of contamination)
- laboratory quality results at the Point of Care
For the feasibility study main stakeholders were identified and interviewed, FTO-analyses were performed with respect to potential infringements of foreign patents of the complex co-operative technological development as well as accessability to all IP, Know-How and marketing rights for those parts developed in cooperation. The study resulted in a business plan for the period from prototype establishment via clinical evaluation study to market entry (TRL 6 to TLR 9) that also includes a first commercialisation strategy for the European market. The planning contains some minor technological adjustments, reveals freedom to operate for all major aspects of the technology, adresses the concept for assembly/production of consumables and related processor as well as details of the clinical evaluation process.
Market entry may be accomplished by any model within the range of external distribution, co-operative partnering with e.g. laboratory service providers or by establishing a sales joint venture as well as an own sales force. For a strategic point of view partnering with laboratory service providers seems highly attractive due to avoiding market share competition of PoC testing and laboratory testing as well as using established customer contact and distribution opportunities of renowned and internationally operating laboratory service providers.
Conclusion of the action:
(i) Action Resources:
Technological readiness, market opportunities, market access, price policy and marketability for FRIZ Biochem’s CYCLE® technology were analysed using internal Know-How as well as several external sources including hospital management, quality managers and hygiene representatives:
- Frost & Sullivan (2010): Strategic analysis of the Global In Vitro Diagnostic Market.
- Frost & Sullivan, N7C4-55, Frost & Sullivan (2013): Global Point-of-Care Testing Market.
- TriMark (2013): Point of Care Diagnostic Testing World Markets.
- DxInsights (2013): The Essentials of Diagnostics Series: Molecular Diagnostics
- IVD Marketreach Enterprise Analyses (2013): Molecular Diagnostics Market Trends and Outlook
- Robert-Koch-Institut (RKI), Epidemiologisches Bulletin, 4. Februar 2013 / Nr. 5
- BMBF Begleitforschung ""Mobile Diagnostiksysteme""
- European Health Initiatives (e.g. MRSA-net, e.g. European Center for Disease Prevention. 2012. SURVEILLANCE REPORT Antimicrobial resistance surveillance in Europe; European Antibiotic
Awareness Day and Antibiotic Guardian)
Private Communication with Stakeholders for health care acquired infections / MDx:
- Dr. G. Grenner, former CTO, Roche Diagnostics
- Dr. B. Wimmer, CEO International, Synlab Group
- Prof. U. Reischl, Institut für Mikrobiologie und Hygiene, Univ. Regensburg
- Prof. Auckenthaler, CMO, Synlab Group
- Dr. Andresen, Director New Business Development Sysmex Europe GmbH
- Dr. Timm Böcker, hygienist, Herz- und Kreislaufzentrum, Rotenburg a.d. Fulda
- Dr. Andreas Lindauer, LaborTeam W AG, Switzerland
- Prof. L. Holdt, Institut für Laboratoriumsmedizin, LMU München
- Prof. F. Gebhardt, Klinikum rechts der Isar, TU München
- Dr. M. Motz, CEO, CTO, Mikrogen Diagnostik GmbH
- 15.09.2014 - 17.09.2014: 2. Münchner Point-of-care Testing Symposium, Klinikum rechts der Isar, Technische Universität München
FTO-analyses were performed with respect to potential infringements of foreign patents of the complex co-operative technological development using prior art considerations by
- FRIZ Biochem’s in house prior art revealed during more than 15 years of research and development
- Patent office’s search results revealed in respect to more than 25 inventions of FRIZ Biochem
- FRIZ Biochem’s search results in respect to ""embedded chemicals for PCR"" and ""detection of MRSA using PCR""
- searches performed by patent law firm Graf Glück Kritzenberger covering the topics ""cartridge"", ""microfluidics"", ""embedded chemicals for PCR"", ""PCR"", ""layer construction of DNA-chip"",
""MRSAsequences"", ""detection of MRSA using PCR"" and ""contacting of DNA-Chip""
- searches performed by patent law firm Zeuner, Summerer, Stütz covering the topic ""CMOS based biochip"" in cooperation with FRIZ Biochem’s internal search results,
Know-How of Prof. R. Thewes, developer of the CMOS-chip and a professional FTO-search of the Swiss Patent office.
Accessability to all IP, Know-How and Marketing Rights for those technological aspects developed in cooperation is securable by contract.
Objectives, Concept/Approach, Impact:
Objectives as well as concept and approach were adapted according to the market survey and FTO-analyses: The general platform technology development is completed and the concept seems to be highly competitive, though some minor adjustments concerning chemicals deposition inside the cartridge have to be realised which also results in a modified production concept.
A MRSA screening is the preferred option to access the market, especially due to the fact that MRSA prevalence still is a European-wide challenge only to be overcome with a reliable and cost effective Point-of-Care system. MRSA dissemination thus can be significantly reduced related to a declining number of new infections and MRSA caused deaths. Current systems can hardly compete with central lab testing performance - and cost wise limiting market penetration as well as qualification for a screening test.
A sound clinical performance evaluation is inevitable not only because it is a prerequisite for CE marking but also because it is an ultimate marketing instrument for IVD/MDx tests, especially if central lab performance can be offered at the Point-of-Care at central lab pricing. The clinical performance evaluation study for a MRSA screening is planned in cooperation with Synlab Group, the leading laboratory service provider in Europe for human and veterinary medicine as well as environmental analysis. With its head office in Augsburg/Germany, the company has branches in Germany and in 19 other countries in Europe as well as in Turkey, Saudi-Arabia and Dubai. The synlab network comprises around 300 facilities, including 175 full-service laboratories, reference laboratories, smaller routine laboratories and hospital laboratories. The Group consists of around 7,000 employees and generated revenues of approx. EUR 700 million in 2013. Key data are agreed upon with Dr. B. Wimmer, CEO. Additional studies are planned with one to two university hospitals (Prof. F. Gebhardt, TU Munich; Prof. L. Holdt, LMU Munich) and a key account. Current estimates for practical execution result in the need of app. 1000 samples for direct comparison to a lab PCR assay as well as app. 600 samples for comparison with culture. The actual design of the clinical performance evaluation study will occur in joint coordination.
Realisation / Market Access of the complex interdisciplinary development shall and will be secured by the company’s sole governance, since FRIZ Biochem is part of a large informal network of renowned research institutes, clinical research organisations, hospitals as well as biotech and pharmaceutical companies.
Due to the low equipment costs and to avoid investment based entry barriers, the marketing and sales will be based on the consumable “cartridge” only. Even the consumable’s COGS are highly attractive and allow a price policy that is competitive with respect to analyses at the central laboratory as well as penetration and growth of the MRSA PoC screening market.
Market entry may be accomplished by any model within the range of external distribution, co-operative partnering with e.g. laboratory service providers or by establishing a sales joint venture or an own sales force. For a strategic point of view, partnering with laboratory service providers seems highly attractive due to avoiding market share competition of PoC testing and laboratory testing as well as using established customer contact and distribution opportunities of renowned and internationally operating laboratory service providers. A disadvantage of such a model is, of course, missing control of market strategy, end-pricing and missing direct consumer contact to establish one’s own business culture, customer loyalty and direct response to their needs. Therefore, FRIZ Biochem will try to enter the market by partnering as well as direct key account management.
Details of the conclusion of the action with respect to objectives, concept and approach as well as impact are described in the enclosed business plan (Market Entry Business Planning 2015 - 2018).
During the feasibility period cooperation partners for final technology realisation and validation were secured, major workpages are identified and an implementation concept was compiled. A viable market entry strategy with identified key accounts and cooperation partners for marketing sales is designed and the financial needs to sucessfully enter the MDx market are addressed.
Financial requirements to realise the objectives of the actual business planning are app. EUR 3 million. Main expenditures, besides costs for Human Resources existing and being established (Business Development, Marketing, Sales), are investments for the pilot assembly line (EUR 0.3 million), production of components (CMOS masks, CMOS run, mold tool, injection molding, processor devices: EUR 0.5 million) and external costs for performance evaluation (EUR 0.3 million). EUR 0.5 million shall be allocated by own resources due to profits from the company’s standard business (outlicensing, sales of special chemicals, services; revenues 2014: app. 500,000 € at app. 80% margin) as well as a EUR 2.8 million funding by SME instruments phase 2 (to be submitted by Dec. 17, 2014).