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Disinfecting the Stethoscope membrane through a hi-tech UV device

Periodic Reporting for period 1 - STET CLEAN (Disinfecting the Stethoscope membrane through a hi-tech UV device)

Okres sprawozdawczy: 2018-08-01 do 2019-01-31

Problem/issue being addressed and social importance

STET CLEAN® is a revolutionary micro-electronic device equipped with UV-C LEDs invented, designed and created by egoHEALTH to allow hospitals and healthcare centres to disinfect stethoscope’s membranes quickly and automatically.
Currently, the process of stethoscope membrane disinfection relies on the use of cotton pads soaked in chemical disinfectants/alcohol, or disposable films/attachments on the stethoscope membrane that could alter the stethoscope sounds. For the first time, the innovation introduced by STET CLEAN revolutionizes the practices linked with the use of the most common medical instrument through application of LED UV-C technology. The innovation and know-how behind STET CLEAN overcome the limitations of what currently exists on the market. STET CLEAN is lightweight, portable, customizable, practical, technologically innovative, efficient (high operating speed) and effective, safe for the operator/ patient, cost-saving, eco-friendly (not disposable).
The proposed solution allows breaking down drastically the transmission of microbes and reducing the occurrence of nosocomial infections caused by stethoscope
Recent medical research proved how stethoscopes are contaminated as the hands of health operators and can easily carry germs, viruses and fungi from one patient to another and/or from doctor to patient. However, while there is a lot of concern for disinfecting the hands (disinfectants’ distributors affixed on walls), there is a very limited attention to stethoscopes.
The scientific literature shows that less than 25% of healthcare workers clean the stethoscope, for many reasons: lack of awareness and sensitivity, limited attention and bad practice. After an intervention of sensitization for disinfecting the stethoscope, the contamination rate would decrease from 78.5% to 20.2%. As Hospital Acquired Infections (HAI) are nowadays a huge worldwide problem because of health complications, mortality (140,000 deaths per year), length of hospitalization and increasing costs for treatments, STET CLEAN has the potential to highly contribute to reduce HAI. In Europe annual financial losses due to Hospital Acquired Infections (HAI) are estimated at €7 billion plus 16 million extra days of hospital stay; whereas for US hospitals the overall annual direct medical costs of HAI ranges from $28.4 to $33.8 billion for all urban consumers and $35.7 billion to $45 billion (for inpatient hospital services). Approximately 4.100.000 patients acquire HAI in the EU each year of which 30% are considered preventable by intensive hygiene programmes. The treatment of nosocomial infections is increasingly complex and costly, also due to the development of resistant microorganisms. The problem is particularly severe for the elderly, infants, debilitated subjects and immuno-deficient people.
The growing concerns for HAI, and increasing related costs, combined with the recent acknowledgement that stethoscopes are possible carriers of infection, makes it the right time to break into the market with a viable solution to prevent infections. In the world, there are about 40 million doctors/health professionals that use a stethoscope. In line with the growth in the global markets of stethoscopes (expected to reach US$386.7 million by 2020) and of UVC LED (expected to reach US$610 million by 2021), STET CLEAN has the potential for widespread adoption.

Overall objectives of the project

EgoHEALTH carried out a feasibility study, with the support of the SME phase 1 instrument, to assess what further steps around STET CLEAN could be made to fully exploit the innovation potential of the device and make a breakthrough into the Italian, European and international healthcare market.
In particular, the aims of the study were to:
1. Streamline production and evaluate STET CLEAN‘s scalability, with the aim of reducing production/final costs;
2. Analyse the target markets, the needs of user groups and the regulations in each target country to adapt the system to national policies and customer requirements;
3. Investigate market risks and establish corresponding mitigation strategies.

A series of specific objectives were set out, all along three main streams of analysis:
• Technical feasibility
o To make a better assessment of the current SoA and understand the potential development of the innovation:
o To analyse scalability of production of STET CLEAN, also in combination with STET CUBE (desktop version of STET CLEAN);
o To evaluate technical risks mainly related to the commercialisation aspects and mitigation strategy;
o To evaluate if further improvements of the design are needed/necessary to commercialise the innovation in the countries already identified for commercial exploitation;
o To investigate further technical developments and improvements related to the continuous/rapid technological advances of UV-C LEDs

• Commercial feasibility
o To test the acceptance of the proposed solution among targeted user groups in EU-international markets. The results will point out possible additional features that meet clients’ requirements. In particular:
o To further investigate the market risks and establish corresponding mitigation strategies;
o To further assess the current IPR status and future development;
o To perform a detailed market study focusing on extra profitable niches;
o To carry out an analysis of the potential partners for the SME phase 2 project.

• Financial feasibility
o To elaborate a detailed 5-year business plan to validate the commercialisation strategy and pave the way for the definition of the business model, route-to-market, penetration and marketing strategy:
o To accurately determine the expected costs and returns of investment;
o To assess the financial risks and corresponding mitigation strategies;
o To create the basis for an SME phase 2 project (improved business plan; definition of stakeholders).
The feasibility study was performed by egoHEALTH team, with the support of a group of key stakeholders/subcontractors, in the period from September 1st, 2018 to February 28th, 2019. The study aimed to analyse the technical, commercial and financial feasibility of STET CLEAN. The main results are summarised below:

Conclusions of the Technical Feasibility
The technical part of the feasibility study investigated the technological, technical and functional specifications of both STET CLEAN and STET CUBE to be developed in response to both advances in UV-C LED technology and the expectations of the market. Also, it looked at further ICT developments of STET CLEAN/CUBE.
The results of the technical feasibility analysis are quite interesting. If from the one side both STET CLEAN and STET CUBE have proved to be performant devices and appreciation is coming from the real market, on the other side it cannot be ignored that the latest developments in the UVC-LED sector are fast entering the market at very competitive prices. The comparison with the other disinfectant devices in the beauty and personal care sector (e.g. SUNUV), made it clear that several adjustments should be explored and introduced to make STET CLEAN and STET CUBE even more performant, universally usable, and at a competitive price.

Conclusions of the Commercial Feasibility
The commercial part of the feasibility study investigated the potential market for both STET CLEAN and STET CUBE in terms of clients and country coverage and analysed the current barriers to a wider commercial exploitation, identifying strategies to overcome them.
The results of the study are clear in asking for a much stronger communication and marketing strategy to make the products known, to explain what they contribute to (HAI reduction) and to make their cost-effectiveness compared to other available solutions more visible. Communication will also focus on the importance of disinfecting the stethoscope to avoid cross-infection, on the advantages of disinfecting by means of UV-C rays compared to other forms of cleaning, and on the certification of the validity of disinfection by UV-C with STET CLEAN and STET CUBE. A tutorial on the use of the tools will also be developed.
As for the communication channels, the strategy will aim at fine-tuning the current channels and open new ones. While it is certainly necessary to create greater visibility through participation in fairs, enhancing the site, and continue with the production of scientific publication, other activities are envisaged to boost STET CLEAN visibility on the market. Additional activities will be boosted, such as enhancing presence on social media (like LinkedIn and Twitter), direct contacts with potential clients through pilot installations at key hospitals, direct mailings to contacts in the sector, as well as ensuring the presence in professional publications relevant to the customers.
The key stakeholders the communication and marketing strategy will focus on are:
• Doctors and nurses – working towards awareness among them, while introducing the benefits they have in their daily use of the STET CLEAN (ease of use, hassle-free, safe, personal, etc…). Also, the possibility to identify and using a few KOLs to provide a convincing “case” to the others will be explored.
• Healthcare institutes – showing them how this product raises their ranking and prestige. This can be done via pilot projects, but also through a smart approach to hospital bid committees (in the US) showing them why this saves money and keeps them in the top of the hospital scale
• Health insurers –knowing the significant burden of hospitalization costs, these organizations may have a clear interest in devices like STET CLEAN, and even reimburse them to alleviate the heavy costs of HAI.

Conclusions of the Financial Feasibility
The financial analysis assessed the market price of STET CLEAN – in combination with STET CUBE - estimating the overall costs for the production and commercialisation of the device.
Currently STET CLEAN is sold at 139€ + taxes and STET CUBE at 149€ + taxes (price determined as to compensate for a series of production and commercialisation costs). The total costs amount to an average of 70€ per unit, which are sold to distributors at 90€an, egoHEALTH is producing only very marginal profit. However, the rather positive feedback received from the market– especially with the introduction of STET CUBE - is reinforcing the idea that STET CLEAN is a winning solution for the healthcare sector and that by creating a strong market demand there is a considerable business potential.
The pricing strategy is aiming to work on both the supply and demand side.
For the supply side, the aim is to define the best-selling price to be competitive on the market, considering both the production and commercialisation costs, but also the current prices of the available options for disinfecting stethoscopes present on the market. On the one side there is a good margin to reduce the production costs in the near future, as the price for LED has considerably decreased over the last couple of years and the STET CLEAN electronics can be further simplified, especially in view of a low-cost version of STET CLEAN and CUBE made with AAA batteries. On the other side, the rational is to keep a selling price which is attractive for the costumers and at the same time reflects the quality of the product and the high standards it ensures in disinfecting the stethoscopes. As for the demand side, considering that the cost also depends on sales capacity, a strong action is needed to increase the purchase of STET CLEAN and CUBE as distributors need minimum quantities to make better prices.
Considering the innovativeness of the product, the current lack of attention on stethoscope cleaning, along with new possible competitors progressively entering the market and marketing barriers, 1% market share should reasonably be achieved by in 5 years, corresponding to an estimation of 400.000 units sold.
These 5-year time horizon results are based on a progressive increase of interest on the STET products and a corresponding increase of sales, together with the optimization of the production costs that will allow for a price reduction over time. The forecast is further reinforced by the interest demonstrated over the last months in the combination of STET CLEAN with the new device -STET CUBE- by over 100 distributors worldwide. Under these conditions, it is expected that in 2020 a total of 10.000 units can be sold. Thanks to the SME instrument, we plan to progressively increase the units purchased to a total of 420.000 in 5-year time. This would enable to reduce the selling price to 70€ in 5 years and reach a total sales volume of about 36,5 M€.
• Creation of a further development of the device: using the same technology, STET CUBE is designed as a small cubic box, ready to use on the studio desk, on the hospital cart, or hooked to a wall, thanks to its special bracket. The new version was requested by the already engaged distributors of STET CLEAN to complete their offer to potential buyers. The feedback received from the distributors highlighted the fact that STET CLEAN could not meet the whole demand for stethoscope disinfection as it works only with the standard ones. In particular, there were limitations for cardiologist and paediatrics. On the other side, sometimes the only wearable version was considered as a limitation for its use. The desktop version (STET CUBE), can be used by a whole team of doctors and nurses in a whole department. At the moment STET CUBE is made available on the market to get feedback from the users on its functionalities and performance. The reaction is so far positive, with an indication to improve the LED’s blinking during the different phases of the disinfection process.
• Successful realisation of the feasibility study and definition of the main objectives and related activities for an SME phase 2 proposal. Through the SME1 and SME2, STET CLEAN seeks to upgrade the system optimising the production costs, deeply analyse the market requirements and accelerate the time-to-market for commercialising this technology in the health ICT systems sector. According to the results of the feasibility study (as summarised in the previous section), a series of activities have been identified to boost the production of STET CLEAN, STET CUBE and all their ancillary products, and make a breakthrough into the worldwide healthcare market. The planned workplan encompasses the key activities required to move from the feasibility study phase to a concrete action plan. The technical, commercial and financial feasibility having been proved, the project for the SME Instrument – Phase 2 is conceived to move forward in all these dimensions. Besides the “classical activities” (such as management, dissemination, etc.) four key work packages (and related tasks) have been identified:
- R&I, Prototyping and Deployment work package. It will continue the research and innovation of the engineering and electronics behind STET CLEAN and test new versions of devices. Also, new prototypes of ancillary products will be conceived, tested and produced. The activities will range from laboratory experimentations and testing (R&I) to prototyping and deployment. In particular, the following specific objectives will be pursued:
i. to adapt STET CLEAN and STET CUBE to the latest UVC LEDs advances (multiple LEDs emission frequencies);
ii. To adapt STET CLEAN and STET CUBE to AAA batteries;
iii. To finalise the research on colour-sensitive stethoscopes membranes to UV exposure (to combine STET CLEAN with highly innovative stethoscopes)
iv. To adapt the UV-C LED technology solution to other uses and create ancillary hygiene products.
- Communication & Awareness Raising work package. It will be dedicated to build a strong communication and marketing strategy to promote STET CLEAN and raise awareness of its benefits in combating HAI. Its cost effectiveness compared to the other available options will be further highlighted as well as its more reliable performance due to the UV-C use. Also, training on how it functions will be enhanced. Existing communication channels will be strengthened, and new, innovative ones will be conceived and implemented.
- Partnerships & Commercialisation work package. It will be devoted to building up a strong network of partnership, including a wide net of exclusive distributors worldwide. To do so, a thorough analysis of certifications and standards needed to enter in foreign markets will be undertaken and all IPR issues will be fully considered. From a commercial point of view, the results of the study made it clear that due to its dimension and expertise, egoHEALTH must rely on a strong network of partnerships. The structured cooperation existing with LightProgress and MedExpo proved to be successful as together they ensured the initial STET CLEAN production and the first entry into the market. Now that the products are progressively acquiring their own identity, the partnership should be enlarged, especially to widen the distribution channels. The ideal situation would be to reach a significant number of exclusive distributors able to cover different regions in the world in a capillary manner. Distributors would also be entrusted of the post-sell assistance, which they could perform directly and rapidly, although the devices don’t need maintenance. In practical terms, they can be compared to mobile phones: after several years they must be replaced, not because of LED obsolescence, but because of the natural end of the batteries. Although part of the analysis of the different certifications and standards that need to be accomplished to sell STET CLEAN on the foreign market has been accomplished, a more thorough assessment of the special regulations and restrictions that might prevent selling the product in some countries will be carried out. Depending on the results, commercialisation will be targeted to different geographical areas across the globe.