Business Model for Instant Bioscan“Real Time Microbial Detector”

Cheng Kah Heng A0082075HShahnawaz Pukkeyil Shamsuddin A0098486HHo Wai Chi, Gary A0082062NTan Tze Chung Christopher A0046244LJason Fan Yang A0098546M

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Presentation Outline

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Introduction Company Profile Industry Background

New Technology

Working Principle

Value Proposition

Market Segment

Customer Classification

Customer Selection

Value CaptureScope of Activities

Strategic Control

Future Activities Customers

Conclusion

Company Profile

Founded in 2011

CEO cum Founder Steward Manzer

Private held with 50 employees

Located in Tucson, Arizona, USA.

Specialized in Water Monitoring System

Primarily operates in Navigational, Measuring, Electro-

medical, and Control Instruments Manufacturing Industry.

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BackgroundNeed for Real Time Monitoring System

Estimated number of waterborne illnesses in the U.S. is 19.5 M/yr

4.1% of global diseases are accounted by waterborne parasites.

1.8 M human deaths annually.

http://www.who.int/water_sanitation_health/diseases/burden/en/http://www.epa.gov/nheerl/articles/2006/waterborne_disease/waterborne_outbreaks.pdfOUTBREAKS OF WATERBORNE DISEASES, European Environment and Health Information system

Common causative agents

Bacteria 44.9%

Viral agents 37.5%

Protozoa 4.7%

Chemical contamination 0.2%

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BackgroundNeed for Real Time Monitoring System

http://www.epa.gov/nheerl/articles/2006/waterborne_disease/waterborne_outbreaks.pdf

2-7 days

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Lack of real time feedback for microbial presence in water treatment process

Water Treatment Process

Sensor

IN OUT

Fee

db

ack-

+

Background

Collecting water sample

Water Treatment Plant Control Points Recreational Facilities

Conventional Technique – Water Sampling

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Collecting water sample

Transportingto Lab

Central Laboratory Water Sample

BackgroundConventional Technique – Sample Transportation

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Collecting water sample

Transportingto Lab

Preparingwater sample

Filtration Centrifuge Chemical Staining Culturing Bacteria

BackgroundConventional Technique - Sample Preparation

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Collecting water sample

Transportingto Lab

Preparingwater sample

Inspecting undermicroscope

Cultured Bacteria Observe under microscope Counting Bacteria

BackgroundConventional Technique – Sample Observation

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Collecting water sample

Transportingto Lab

Preparingwater sample

Inspecting undermicroscope

High Cost Long processing period Human Error Low Accuracy

BackgroundConventional Technique

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Instant Bioscan - ProductsInstant Bioscan – Real Time Monitoring Products

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RMS-UM

Portable VersionRMS-ON90

Onsite Version

Optical Technology Instantaneous result Inert vs. Biologic

Instant Bioscan - ProductsInstant Bioscan – Working Principle

Measures Universal “Bio-markers” (NADH and Riboflavin) in Bacteria and Fungi.

Value Proposition

Instant microbial detection - Within seconds

Low cost Testing Cost-No Transportation-No Chemical-No Trained technician-Reduce inventory-Decreased capital cost

Reduce human error-Reduce Loss of sample- Increase accuracy

Remote monitoring-Network connectivity-Automation-Low maintenance

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RMS-ON90RMS-UM

CompetitionInstant Bioscan vs. other microbial detectors

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Remote monitoring

SamplePreparation

Chemical Free Capital Cost Identification of Microbes

Instant Bioscan YES NO YES LOW NO

PCR/DNA/Genome NO YES NO

HIGH -MODERATE

YES

Flow Cytometry NO YES NO HIGH YES

ATPbioLuminescence NO YES NO LOW YES

Customer SelectionMarket Segment & Customer Classification

Food and

Beverage

Plants

Testing

Labs

Health &

Beauty

Plants

Pharmaceutic

al PlantHomeland

Security

Water

Treatment

Plants

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CustomerWith Most

Money Base(High/Low Demand)

CustomerNeed Base

(High Demand)

CustomerWant Base(Low Demand)

Customer Selection

Water Treatment Plant Pharmaceutical Plant

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Customer SelectionDemand in Water Treatment Industry

Legislation from European Union and US EPA Directives

•Water Framework Directive •Environmental Liability Directive•The Registration, Evaluation, Authorization and Restriction of Chemical Substances Directive (REACH).

Increasing Cost of water monitoring

Increasing trend in adopting online monitoring•78.9% of the utilities around the globe use some form of online monitoring tool

http://www.ewa-online.eu/tl_files/_media/content/documents_pdf/Publications/E-WAter/documents/2_E-Water_Namour_et_al_2012_corr.pdfhttp://water.epa.gov/infrastructure/watersecurity/lawsregs/initiative.cfmS m a r t W a t e r N e t w o r k s F o r u m, The Value of Online Water Network Monitoring, (2012).

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Customer SelectionHow can IBioScan reduce cost in Water Treatment Industry ?

Activity Cost per day

Sample Collection & Transportation SGD 400

Sample Preparations, Chemicals Reagents SGD 900

Trained Technician SGD 66

Other equipments and consumable SGD 200

SGD 1566

•Cost calculation of microbial monitoring in water industry.•The cost is based on detection of 3 specific type of microbial.

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Cost for year if tests are conducted 2 times per day SGD 1 million

Customer SelectionHow can IBioScan reduce cost in Water Treatment Industry ?

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Customer SelectionHow can IBioScan reduce cost in Water Treatment Industry ?

Unit Cost SGD 60,000

Cost of 3 unit per Plant SGD 180,000

Recurring cost per year SGD 130,000

Pay back time 6 months

Yearly savings SGD 900,000

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Customer SelectionDemand in Pharmaceutical Manufacturing Plant

Initiative from FDA

•Process Analytical Technology initiative (PAT)• Pharmaceutical cGMPs for the 21st Century initiative

Increasing Cost of microbial monitoringReduction in manufacturing time

Draft Guidance for Industry, PAT – A Framework for Innovative Pharmaceutical Manufacturing and Quality Assurance, FDA (2003).Draft Guidance for Industry, Formal Dispute Resolution: Scientific and Technical Issues Related to Pharmaceutical CGMP, FDA (2003)

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Customer SelectionHow can IBioScan reduce cost in Pharmaceutical Manufacturing Plant ?

Regular Monitoring USD 3.2 million

Est. saving from Real time monitoring USD 1.8 million

6 units per plant USD 300000

Pay back time 3 months22

Trail run to evaluate

•Revenue from rent of machine•Recurring revenue from

•Consumable •Service

•Revenue from sale of machine•Recurring revenue from

•Consumable •Service

Value Capture

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Direct Sales

Lease

Trial

Future Value Capture

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Direct Sales

Lease

Trial

Service

License

•Revenue from service provided•“Pay as you use” model

•Revenue from Licensing fees

Service

License

Current Scope of ActivitiesVertically Integrated

Technology Improvement

Product Development

Manufacturing/Assembly

MarketingAnd Sales

LocalDistribution

After SalesServices

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Future Scope of ActivitiesVertical Disintegration

Technology Improvement

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Product Development

Manufacturing / Assembly

MarketingAnd Sales

LocalDistribution

After SalesServices

Customer

Out-Source

Strategic Control

US and international patents • 1 Patent in Optical Technology• 1 pending critical design patent• Obtained Freedom to Operate

(FTO) position from counsel

Future Alliances• Currently Serving 3 of the top

25 pharmaceutical companies:Baxter, Novartis, Pfizer

USEPA Compliant• Mohawk Valley Water

Authority (US EPA approved facility)

• ~ 1 year for approval

FDA Compliant• 1-3 years for approval

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Future Market Segment

CU

STO

MER

NEE

DS

CUSTOMER TYPES

AR

TIC

ULA

TED

UN

AR

TIC

ULA

TED

SER

VED

UN

SER

VED

Rural Areas

Recreational Facility

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Food & Beverage

Future Potential Markets:

Rural Areas

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Source: World Health Organization

Future Market SegmentRural Areas - Global Sanitation Coverage

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Source: World Health Organization

Future Market SegmentRural Areas - Global Drinking Water Coverage

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No more open defecation.

Safe water in homes.

Sustainable water sanitation and hygiene

Inequalities in access eliminated.

Source: World Health Organization 32

WHO Post 2015 Target

1) Laboratory testing

2) Field Test Kits

Field Test Kits

Manual

Non-Continuous monitoring ~24 hours per test

Shelf life 6 months

Estimate cost per year ( testing 3 times daily)

US$6000

Trained Technician (per mth) US$2000

Expenditure per year US$30,000

Future Market SegmentRural Areas – Current method of monitoring

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Future Market SegmentRural Areas – Utilizing IBioScan for field testing

IBioScan Device

Automatic

Continuous monitoring 2-5 mins

Cost of device US$5000

Estimate cost per year for consumables

US$12000

Savings (per year) US$18000

With smaller, portable battery operated model of RMS-W specially developed for the rural areas:

• Cost of device can be reduced by 10 times to $5000

• Savings in capital cost ( no need for laboratory)

Attractive for WHO to implement in rural areas as it offers savings in assessment time , cost per test. And it offers a more sustainable form

of monitoring. 34

Future Potential Markets:

Food & Beverage

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36Source: Sonia Francisco & Anand Gnanamoorthy, Frost & Sullivan

Future Market SegmentFood & Beverage

37Source: MarketsandMarkets

Future Market SegmentFood & Beverage

Future Market SegmentDemand in F & B Manufacturing Plant

• Initiative from FDA

FDA Food & Beverages Rules and Regulations

• Increasing Cost of microbial monitoring• Reduction in manufacturing time• Reduction in excursion materials being shipped out

Draft Guidance for Industry, PAT – A Framework for Innovative Pharmaceutical Manufacturing and Quality Assurance, FDA (2003).Draft Guidance for Industry, Formal Dispute Resolution: Scientific and Technical Issues Related to Pharmaceutical CGMP, FDA (2003)

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Future Market SegmentHow can IBioScan reduce cost in F & B Manufacturing Plant ?

Soft drink bottling or manufacturing involves five major processes, each with its own safety issues that must be evaluated and controlled:

1. Treating water2. Compounding ingredients3. Carbonating product4. Filling product5. Packaging.

Source: http://www.solarnavigator.net/solar_cola/soft_drink_canning_process.htm

Regular Monitoring USD 3.2million

Est. saving from Real time monitoring

USD 1.8 million

6 units per plant USD 300000

Pay back time 3 months

Future Potential Markets:

Recreational Parks

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Future Market SegmentRecreational Parks

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• Public Swimming Pools– 24 Swimming Pools1 in Singapore

• Water Theme Park– Wild Wild Wet, Sentosa Watercove2 etc

Future Market SegmentRecreational Parks

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• Chemical1 (trichloramine and cyanogenchloride)/Bacterium2 generated by human usage through pee

• Rainfall affecting water quality of pool

• Debris from around the yard, such as leaves, flowers, grass and dust.

• Dead/Decomposed wildlife – for example, lizards or insects that occasionally drown in your pool.

1http://arstechnica.com/science/2014/03/study-finds-pee-in-pool-water-yields-toxic-byproduct/2http://www.medicaldaily.com/7-disgusting-facts-about-dirty-public-swimming-pools-246965

Future Market SegmentRecreational Parks– Current method of monitoring

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• Typically through Litmus strip method

• Test conducted Monthly1

• Non Real-time

• No test done on water chemical and bacterium (E. Coli)

• A Health Hazard to Human Health

Future Market SegmentRecreational Parks

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•Lower Cost•Assurance to Public Pool user on Water quality•Less Transmission of Infectious diseases

Key Consideration: Swimming Pool TestingConventional versus Instant BioScan

SWOT Analysing

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Conclusion

Strength

•Instant and accurate detection•Low cost•Remote monitoring

Weakness

• No microbial species identification• Limited standard recognition

Opportunities

•High potential performance•Huge potential market need

Threats

•Product detection reliability•Competition of similar new products•Public acceptance growth

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