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Low-Cost Diagnostics Monitoring Technology

Periodic Reporting for period 1 - DIADEM (Low-Cost Diagnostics Monitoring Technology)

Reporting period: 2015-06-01 to 2015-10-31

The main objective of DIADEM project has been the identification of the best go-to-market strategies for BluSense POCT technology. In order to identify the best approaches for penetrating the market, we have performed a thorough analysis of the market segments in EU and US, analyzing the reimbursement system, the distribution models and the competition landscape. We have performed a research on the largest distribution and GPOs in Germany, Italy, Scandinavia and US, analyzed their market shares and distribution pricing and strategies. In order to characterize the promising market segment of pharmacies, which more and more offer off-the-counter blood testing for HbA1c and cholesterols, we decide to run a market survey on the field interviewing 50 pharmacies in Northern Italy.

The aimed outcome of the project was to obtain a comprehensive overview of the addressable market segments, so to prepare a successful market launch strategy to be refined in the months to come. Additionally, we aimed at having a on-field feedback from direct users on BluSense technology value proposition, technology features, and product specifications.

We believe the combination of multiple blood tests and multiple type of analysis into a single platform to be the key need in the current POCT landscape. This challenge requires a significant boost in terms of performance compared to the existing products in the market, both in terms of core technology capability, assay development, reagent production and integration in disposable cartridges. We aim at creating value focusing on these areas and implementing the most appropriate regulatory and product commercialization strategy. The products developed at BluSense have been proven to have significant market-access capabilities, supported by the following value prepositions:

1 - One step, more robust: A single-step assay, which requires the minimum amount of sample exchange and reagents, thus minimizing the complexity of the microfluidics.
2 - One drop of blood, high sensitivity: In terms of sensitivity and robustness, this technology competes with enzyme-linked immunosorbent assay test (ELISA) with possibility of multiplexed.
3 - One reader, multiple tests: The same readout unit will be used for all immunoassays - not limited to HbA1c – through the opto-magnetic readout method.
4 - Consumer electronics for POCT: the product uses mainly off-the-shelf components derived from Blu-ray optical units (OPU), enabling large-volumes and low-cost device production.
5 - Simple and smart cartridge: The microfluidic consumables are based on centrifugal microfluidics, therefore eliminating the need for pumps and tubing. One test per cartridge or multiple tests per cartridge are easily designed through modification of the microfluidics structures.

Therefore reliable, rapid and cost-effective risk detection, allowing intervention and disease prevention through point of care blood testing (POCT), is not only beneficial for the patient but would reduce hospitalization costs, thus enabling a more sustainable healthcare system.Few main adoption barriers nowadays prevent large-scale adoption of POCT technologies:

A - Lack of versatility & sensitivity: POCT devices can measure just very few parameters as most of current technologies are limited in sensitivity and multiplex analysis. Different machines may have to be purchased for different blood tests, when available. For low-concentration biomarkers, hospital labs are in most of the cases the only available solution.

B - Large amount of sample required: More advanced tests, targeting low concentration biomarkers are mostly not compatible with a single drop of blood from a finger-prick. The need of specialized phlebotomist hampers the adoption of POCT test, e.g. at GPs offices and at pharmacies.

C - Equipment Cost: a family doctor purchasing a POCT currently spends on average between €3,000 and €10,000 on the equipment. At an average rate of 5-10 tests a week and at an average profit of €3/test (examples surveyed in densely populated middle-class EU areas), it requires over 2 years for paying back the initial investment.

D - Tedious operability: Most of the devices in the market still require manual sample preparation steps. These procedures need a trained operator and are very prone to procedural mistakes. A survey conducted with Danish General Practitioners (GPs) especially showed concerns over tedious manual calibration processes of many of the current POCT devices in the market.

E - Lack of connectivity: Surveys show that most of POCT operators complain about the tediousness of manually reporting the test results generated (often still on paper) by the POCT equipment. Newly-designed products have to focus on data integration and accessibility for operators and patients, including automated maintenance services and consumables stockpile management.

Evaluating and confirming the above assumptions have been the major task of the DIADEM project, which brought BluSense technology's value propositions in front of a audience of final users.
During the DIADEM project we have performed a thorough analysis of the POCT market addressable by BluSense, including detailed identification of market segments, distribution models and distributors, reimbursement structure and competition analysis. Thanks to the work performed over the past months we have identified very promising market segments and market-access points, resulted in a go-to-market strategy which will be implemented in the months to come.
In details, we have performed the following tasks, which resulted in detailed reports describing the individual blocks of information vital to BluSense go-to-market strategies:

1. POCT & HbA1c market overview

2. POCT & medical device distribution

3. Germany – feasibility report in HbA1c POCT
- Healthcare market overview
- Reimbursement & cost structure
- Distribution of POCT in Germany
- HbA1c distribution and cost structure

4. US – feasibility report in HbA1c POCT
- Healthcare market overview
- Reimbursement & cost structure in US
- Distributors of medical devices in US
- HbA1c tests in US pharmacies

5. Italy – POCT market access in pharmacies
- Research study-case in 40 pharmacies

6. Competition landscape
- POCT devices in the market for HbA1c

As the project ‘s outcome strictly aimed at commercialization and market access for BluSense POCT technology (and for the devices), considerable effort has been placed in the strategic definition of the following key go-to-market aspects:
• Go-to-market access points identification: market research, customers interviews and promotion plans for accessing the first entry-market points (EU), and further scale-up access points (US)
• Distribution strategies, short-term: definition and implementation of action plans for distributing 10-50 machines in GPs offices and pharmacies in Italy and Germany
• Distribution strategies, middle-to-long term: strategic planning for market expansion in rest of Europe and Asia for the HbA1c & lipids panel and devices. Strategic planning for reaching 5,000 active devices by 2019.
• Licensing strategies: identification of large diagnostics players to promote opportunities to license the outcome technology to large players in the POCT field.

The outcome of the DIADEM project has been a very positive response from the market and its users towards BluSense value propositions. We have identified very promising market segments in which BluSense can attract early adopters and sell directly products and consumables so to perform the first market-access entry. Furthermore we have identified the main organizations which deals, sell and distribute POCT devices in EU and US, which will be the target of BluSense middle-term market-access strategies.

Besides confirming a strong interest for BluSense technology in the pharamcies market, we have addressed an interesting market of general practitioners (GPs), starting from the Scandinavian segment: the initial target market will comprise the Danish general practitioners (There are 3600 GP’s in Denmark), with a later expansion in the Scandinavian, EU and extra-EU market. GPs studios and larger clinics may invest in more versatile POCT platforms (they typically “invest” via equipment rental agreements so that the investment is conducted by ways of the test price). The area is overseen by the regional authorities and they do step in vis-à-vis the GP’s if they believe that too extensive testing is conducted. The GP’s are currently lacking a test that is capable of screening the population that potentially is suffering from several un- or ill-defined clinical inflammations, and as well as easy-to-handle tools for HbA1c and lipids. The GP’s are remunerated per visit conducted, by public funding and co-pays by patients are very limited with respect to general visits. The GP’s receive DKK 135 for a regular visit and can charge extra for diagnostic tests conducted. Most of the diagnostic tests are lab-based parameters and the GP will send the plasma sample to an external lab for analysis and can charge an extra fee for this service. With respect to biomarkers measured, the only widely available POCT test is currently CRP. On average, a clinic with a patient base of 4,000 patients will conduct some 5 CRP POC tests per day. This amounts to some 2 million CRP POC tests annually.
The outcome of the DIADEM project is the identification of a solid plan for accessing the European POCT market, and an initial assessment of strategies to expand globally. Thanks to the effort put by BluSense managers during the DIADEM project, a clear segmentation of the market, including cost structure, revenue stream forecast, and regulatory pathway have been identified. BluSense now holds a solid knowledge of the POCT landscape at a European level, including an analysis of the latest trends in the use of POCT in pharmacies, GPs offices and clinical labs. We have conducted a thorough analysis of the competition landscape, and targeted the main drawbacks of current solutions in our technology value propositions. We have conducted a wide on-field analysis of market opportunities in pharmacies, having interviewed 50 small and medium-sized pharmacies with a clear commercial goal. Most of interviewers responded positively towards BluSense technology, often stating interest in becoming early adopters when the device will be ready after CE certification.

This project application is well in line with the “healthcare and clinical research” goal of the European innovation line, which aims at the development of faster and more precise diagnostics. In addition, a strong focus in the healthcare ecosystem is given to technologies capable to enhance prevention, and which can provide prognostics information to the different stakeholders. This project represents a unique opportunity for the European healthcare & medTech ecosystem. It is designed to match the key capabilities of medTch SMEswith production and commercialization of in-vitro diagnostic assays with a novel technology, which leverage on low-cost Asian-produced electronic components. This is an innovative perspective, which is expected to boost the competitiveness of the industry on the global scale by focusing on advanced biotech solutions rather than low-tech development. By joining local academia, companies and hospital in the same R&D effort, we expect to create value, impact, new competences and solid growth.

In the recent Horizon 2020 program the development of new diagnostics (more sensitive, robust and selective) for improved clinical practice plays an important role. Innovation in this area is expected to drive the development, translation and uptake of existing, new or evolving and often complex technologies. The overall goal is that improved clinical decisions based on new and improved diagnostic tools and techniques should lead to better health care while contributing to the sustainability of the health care system. The specific technical innovation goal of this project – i.e. a new point of care inflammation panel – is well in line with the recent worldwide efforts to fight the rising antibiotic resistance. The WHO last year noted the need for new diagnostic advances to improve the speed of patient testing. Current tests take too long to run (up to 20h), so physicians often forego them and prescribe broad-spectrum antibiotics. Fast POCT test on multiple parameters would lead to more targeted drug treatments helping to safeguard current medication. Several policy plans are now aiming at more efficient POCT diagnostics to fight this burden.