APPLICATION FORM START INNOVATION 2014

Transcription

1 APPLICATION FORM START INNOVATION 2014 Company Name: IVTech srl Field of Activity: in-vitro diagnostic Contact Persone: Tommaso Sbrana Phone:

2 Executive summary Company profile: IVTech is a spin-off stemming from the University of Pisa. It was founded in 23/01/14. The team is composed by Eng. Tommaso Sbrana, CEO, a PhD in biomedical engineering, involved in technology transfer, Eng. Serena Giusti, R&D Manager, a PhD in biomedical engineering, expert in design of actuated bioreactor and environmental control strategy, Eng Giorgio Mattei, R&D Manager, a PhD in Chemical engineering, expert in scaffolds and prof. Arti Ahluwalia, Shareholder associated professor in biomedical engineering at University of Pisa and expert in in-vitro models. Business idea: recent European Union directives (Directive 2010/63/EU; Communication from the Commission to the European Parliament and the council on animal tests, 11/3/2013) are aimed at the drastic reduction of animal tests. Besides the ethical issues involved in animal experimentation, these tests under-represent the human environment and are very expensive in terms of both experimental costs and times. Unfortunately, animal tests are currently the only method to evaluate the response of a complex organism to exogenous substances. In-vitro cell cultures are now being considered as alternatives but are far away from the complexity of human tissues or organs. The aim of IVTech is to provide systems that enable the biologists to realize more relevant in vitro models. These new methods will allow a closer mimicking of patho-physiological environments for obtaining more representative data of human response, with a consequent reduction of animal tests. Moreover, thanks to our innovative technology, we propose the substitution of the obsolete standard culture chamber (multiwell) for in-vitro models. Our strong knowhow in the design of in vitro supports enable us to follow the customer from the first phases of an in vitro model design to the technical supports and follow up in using the IVTech systems. We are going to organize workshops and practical demonstrations to teach how proficiently to use our products, and disseminate our advanced in-vitro methods. Market opportunity: potential customers of the technology and services offered by IVTech are: i)r & D centres of pharmaceutical and cosmetic companies, ii) Public or private research centres working in the field of in-vitro research, iii) Food producers, who need to test their new products and iv)universities. Because of latest EU directives, cosmetic companies are forced to identify alternatives to animal tests. Our systems meet this need directly. The economic and time saving factors (approximately 300 mln $/year and 1 week of experiment vs months) deriving from the reduction of animal tests represents a key point to attract pharmaceutical companies. Other companies or organizations which work in the field of in-vitro cell culture also need more relevant low cost and easy to use models. The current in-vitro standard technology is obsolete and need innovative technology to substitute traditional methods of cell culture. We meet this need with our products. Competitors: the competitors are the producers of cell culture systems, such as: Applikon Biotechnology, Dasgip, Kiyatec, Cellec Biotek AG, Kirkstall LTD, Ibidi. Morever we plan to penetrate the worldwide market with packages composed by different modules such as the cell culture system, a pump, a motorized loop and an environmental control. Thus we have to mentioned also the producers of this kits as competitors. They are: Okolab, Essen Bioscience, Life technologies, Cm technologies. Investment needed: Given the strong know how in the field of in-vitro technology and the high market demand of related products, we expect a very fast growth of our company. In 2 years we will penetrate the worldwide market. In 5 years we expect 17 Mln revenues. With an investment of 800,000.00, we propose to cease the 30% of IVTech assets to potential investors. The investors exit strategy can be achieved in 5 years.

3 Application form Name & generalities IVTech s.r.l., founded in January Its administrative and legal head offices are in Massarosa, via di Bagnaia 414. The team & company asset Eng. Tommaso Sbrana, PhD: founder and CEO. Expert in the design and characterization of bioreactors. He has been actively involved in technology transfer since Eng. Serena Giusti, PhD student: R&D Manager. Expert in the design of actuated bioreactors and environmental control strategies. Eng. Giorgio Mattei, PhD student: R&D Manager. Expert in design and characterisation of scaffolds for 3D cell culture. Prof. Arti Ahluwalia: founder and shareholder. Associated professor in Bioengineering at the University of Pisa and expert in in-vitro models. The market need Nowadays, more than 500 million dollars and an average of 7 years are spent for testing molecules, drugs or biomaterials during the so called preclinical phase (in-vitro + in-vivo tests), in order to select new compounds and assure their safety before studies on humans. If these tests are not predictive enough of the human response, companies will lose money and time. Moreover, the latest EU directives are focused on the reduction of animal tests. In particular, the Directive from the Commission to the European Parliament and the council on animal tests (11/3/2013) prohibits the sale of cosmetics tested on animals in EU. These directives have forced cosmetic companies to search for alternatives. Other companies or organizations which work in the field of in-vitro cell culture also need more relevant, low cost and easy to use models. However, the current in-vitro standard technology is obsolete and innovative features are needed to substitute traditional methods of cell culture. The IVTech systems meet this need directly. Our products can substitute traditional in-vitro technology, increasing the relevance and correlation of data with human physiology. This will promote the reduction of in-vivo tests, providing economic and time saving factors (approximately 30% of the costs of the pre-clinical phase and 1-2 weeks of experiment vs months of time). These are key points to attract pharmaceutical companies. IVTech: answering to needs Stemming from the School of Engineering of the University of Pisa, IVTech is a start-up focused on the design, manufacture and marketing of advanced technology for in-vitro cell culture. The IVTech team has over 8 years of experience in dynamic 3D cell culture. The start-up has three main objectives: i) to produce and market innovative systems to substitute obsolete in-vitro technology; ii) to customize our products to meet the customer s desires; iii) to disseminate our ideas and know-how through workshops. Our products enable the customer s smooth transition from simple static cell culture systems to dynamic multi-organ 3D models. The company offers a wide number of different systems to enable the implementation of cell experiments under various configurations, reducing the number of operation needed to achieve the desired results. IVTech s innovative and patented cell culture systems are all transparent, modular and simple to assemble. Moreover, they are compatible with microscope stages and permit live imaging. Current products are:

4 LiveBox 1 (LB1) (Figure 1a), a modular single flow transparent bioreactor for 2 and 3D culture, consisting of a silicone chamber with an inlet and an outlet for recirculation of the culture medium. LB1 be used to mimic metabolic tissues, such as liver, kidneys, pancreas; LiveBox 2 (LB2) (Figure 1b), a modular double flow transparent bioreactor with a membrane insert to simulate physiological barriers. This bioreactor mimics the environment of physiological barriers, such as lung, skin, intestinal epithelia; Pipeline products undergoing development are:: MultiDyn (Figure 1c) a patented tansparent smart plate containing multiple culture chambers connected to each other, which combines the advantages of the multiwell plate with our technology. It represents the future for in vitro technology, combining standard cell culture protocols with the advantages of bioreactors. Live Monitoring Box (Figure 1d), a kit with MultiDyn and a purpose built compact pump for use in the incubator. Live Bench Box (Figure 1e), a bench kit which allows incubator-free use of Multidyn. Integrated environmental control avoids the need to move bioreactors from the incubator to the microscope and plate reader and reduces the space required for additional instrumentation. LB1 and LB2 are made of poly-dimethylsiloxane and have been tested in several European laboratories. They are reusable but transition to disposable systems is planned once manufacturing with injection molding begins. Products will be distributed in kit formt LB-Basic kit: 3 LB1, all the material to set a fluidic circuit, an extractor to disassemble the cell culture system after the end of an experiment. Price: LB-Advanced kit: 1 LB2, 2 LB1, all the material to set two fluidic circuits, an extractor. Price: Should a pump be required by the customer, we also offer a customized system compatible with the LBkits. This add-on increases the price of the kits by 150. A B C D E Figure 1. IVTech products. A) LB1, B) LB2, C) Multidyn, D) Live Monitoring Box, E) Live Bench Box. IVTech is committed to providing customers with the latest advancements in in-vitro technology. A road map to release a new module each year is planned, starting with the LB-kits and the LB-pump in June 2014 to the launch of Live Bench Box in Figure 2 illustrates the road map. Figure 2. Road map to release a new module each year. In June 2014 the LB-kits +LB- pump will be on the market, in 2015 MultiDyn will be released, in September 2015 Live Monitoring Box will be ready and in September 2016 the Live Bench Box will be launched

5 Moreover IVTech provides customers with training, follow-ups and workshops. Summary analysis of the market Market estimation: the worldwide in-vitro diagnostic market is worth 34 billion euro. The estimation for the cosmetic & pharmaceutical market is 1.4 billion dollars in 2015 [BCC estimation 2010]. An estimated 500 mln is spent on in-vitro technology and tests [Biomerieux estimation 2011]. IVTech will start distribution and supply to the European market till After this period Live Monitoring Box and Live Bench Box will be used to penetrate the worldwide market, attracting the attention of 7% of global cosmetic and pharmaceutical market volume in Customers profile: potential customers of the technology and services offered by IVTech are: R&D centres of pharmaceutical and cosmetic companies; Public or private research centres working in the field of in-vitro research; Food producers who want to test their new products; Contract research organisations; Universities. Table 1 summarizes the customer profiles and markets Turnover Market volume Interest in training R&D in pharmaceutical and cosmetic High High yes companies (n global) Centres for testing of medical devices high Mid-high yes Food Producers medium Mid-high yes Universities; Research centres ( 500 global) limited Mid-high yes Table 1. Customer profiles and correlated market Competitors: an analysis of our main competitors has been conducted examining companies that deal with the implementation of organ models in-vitro. Six main competitors have been identified: 1. Applikon Biotechnology, a Dutch company that develops benchtop bioreactors providing a culture chamber in which the fluid is put under stirring for mechanical movement of blades immersed, or handling of the chamber. It is the manufacturer of micro-matrix, an automated system for environmental control in which a 24- well plate is inserted and monitored in real-time, and offers a wide range of monitoring systems. 2. Dasgip, a German company specializing in modular bioreactors that can be used to study more than one tissue at a time. Offering automated control systems, they realize both the software and hardware of their systems. They are manufacturers of sensors that are integrated with the culture chambers as well as mixing systems external to the culture chambers. 3. Kiyatec, the U.S. company producing the 3D kube, one of the most interesting objects in the market for low- volume modular bioreactors. They are also specialized in patch implantation. 4. Ibidi, the leading German manufacturer of transparent cell culture chambers and extremely low volumes. They offer a wide range of highly competitive products for performance and price. The size of individual objects do not allow for true 3D structure. 5. Cellec Biotek AG, a Swiss company which manufactures easy to use perfusion bench systems. 6. Kirkstall LTD is the producer of the Quasi-Vivo system (patented by the research group of Prof. Ahluwalia, University of Pisa). The proposed systems are not transparent, but easy to use and can be sterilized several times. There are other companies which produce systems comparable to our Live Bench Box. In particular four companies offer integrated fluidic systems with motorized loops for imaging, and environmental control:

6 1. Okolab, an Italian company selling transparent systems for cell culture integrated with a wide range of microscopes. The versatility of the proposed systems is one of their strengths. 2. Essen Bioscience, a USA company with 20 years of experience in design and development of optical monitoring systems for traditional cell culture systems and compatible with the incubator environment. 3. Life technologies offers modular kits comparable in dimensions to our Live Bench Box. 4. CM-Technologies, a UK enterprise with 10 years of experience in development of kits equipped with motorized loop and environmental control Compared to the companies mentioned above, IVTech combines innovative technology with the organization of training courses, tutoring and workshops, and the design of custom made solutions. The competitors are focused on a small and restricted line of products, while IVTech products are more flexible and allow the realization of a high number of multi-organ in-vitro models enabling real-time monitoring of the cell culture environment by direct imaging and integrated sensors. Moreover they can be integrated with pumps and additional modules. To understand the positioning of IVTech compared to competitors listed above, we have analyzed the price and the efficacy of the systems. Each product has been scored according to these criteria (Figure 2). Figure 2. Position of flagship products offered by the competitors based on price and efficacy There are disposable and reusable systems on the market. Our cell culture systems are reusable and show the highest efficacy and the lowest price of this category. However we plan to switch to disposable systems, in particular for MultiDyn, once we pass to large scale production. Following the same reasoning we have analysed the competitors for our Live Bench Box (Figure 3). Figure 3. Position of flagship kit products offered by the competitors based on price and efficacy We estimate a selling price of 5,000 which is lower than the others on the market. The Live Bench Box will thus surpass competitors in both price and performance. Internationalization prospects of the business In-or out license: in a first phase (till the end of 2015) IVTech will concentrate on the European market. For large scale production IVTech will out-license the realization of the devices for injection moulding. We

7 estimate penetration of the worldwide market in 2016, when the Live Bench Box is launched. In order to respond rapidly to market needs, the company s R&D activities will be maintained, while the production phase will be externalised. Communication strategy: our communication approach is based on: marketing (sending brochures to potential customers), telemarketing (to establish relationships and to schedule meetings), social campaigns (using Linkedin profile and Youtube channel) and direct meetings (one to one sales). For the first 2 years a a trial and buy strategy (free products will be released for a short trial period) will be pursued to enable customers to gain confidence with the products. Workshops will be also organised to display the technology and train customers. Finally participation in scientific conferences either through booths or oral contributions is foreseen as a key strategy to disseminate products and germinate interest. Distribution and sales: The distribution of the products will be out-licensed to national or to worldwide distributors. Currently an agreement with Kirkstall Ltd. is being drawn out. In fact, our systems are compatible with the Quasi Vivo commercialized by Kirkstall. This UK-based company has a wide network of contacts and distributors that IVTech can exploit. The plan: our milestones Briefly, our milestones are: Phase I ( ): Launching and establishing the spin off; Enlarge corporate assets, including an expert or mentor in business management and a specialist in market distribution; Consolidate patent extensions; Establish IVTech on the European market, selling products to cosmetic and pharmaceutical companies. The first products that will be proposed are the LB-kits equipped with a pump. Once MultiDyn is ready in 2015, marketing will focus on this product. Live Monitoring Box, which integrates a pump in the system, will be ready at the end of 2015; Establish an enterprise network to consolidate our position with key partners, such as producers of electronic components, scaffolds and cells, as well as distributors; Organize workshops; Business Angel search and return on investment. Phase II (from 2016): Large scale production, expansion to the global market; Release of Live Bench Box; Search for venture capitalists; Promote the worldwide substitution of multiwell plate with our systems through publicity campaign and workshops; Reach the customers through worldwide distributors; Consolidate the infrastructure of IVTech, in order to expand the team with experts in sales and marketing. Stage of development of the project IVTech was founded in January 2014 and is a spin-off of the University of Pisa. The LB systems and MultiDyn are owned by the University and licensed to the company for 20 years. Both patents will be extended to other territories through Patent Cooperation Treaty (PCT). The products are: LBs bioreactors - ready for the market Pump for the bioreactors -> R&D phase MultiDyn - R&D phase

8 Motorized loop -> R&D phase Environmental control -> R&D phase All the products have been tested in research projects and we are currently looking for a cosmetic or a pharmaceutical company for industrial testing of our systems. Macro economic-financial projections over the five years Five year revenues have been estimated on the basis of target market characteristics and the expected increase of the company productivity starting from the second year and 2015 (1 st half) launch of LB-Kits in Europe 2015 (2 nd half) launch of Live Monitoring Box in Europe 2016 global launch of Live Monitoring Box 2016 Live Bench Box Annual sales growth 20% In 2018 we aim to cover 7% of the global market During the first phase ( ) we expect a fairly slow increase in revenues from the commercialisation of our products in Europe market as the company establishes itself. In the first year, we expect a negative EBIT (about 3,000 ), due legal and administrative costs and to employ specialists (CEO), promotion of our products, R&D of MultiDyn, purchase moulds and disposable materials. In the second year the costs will be due to the employment of a market specialist (50 K ), purchase materials for Live Monitoring Box. In 2016 we have to face the costs to purchase moulds for large scale production (at least 300 K ) and to employ 2 R&D managers (50 K each one). On the other hand, we estimate a fast and exponential growth of revenues in the second phase ( ) after the products are launched on the global market. In five years we expect to reach 17 Million revenues and an EBIT of about 10 Million, figure 4. Major costs and revenues are reported in Table 2. Year Economic preview Sales revenues [ ] 46, ,000 4,662,000 15,296,700 16,576,800 Production costs [ ] 8, ,875 2,165,495 6,324,659 6,854,352 Personnel costs [ ] 12, , , , ,000 Commercial costs [ ] 20, , , , ,546 General costs [ ] 3,000 3,000 4,000 30,000 30,000 Total costs [ ] 44, ,845 2,519,545 6,765,703 7,394,898 Taxes[ ] - 7, ,036 2,701,355 2,909,565 EBIT [ ] -3,294 23,112 2,119,541 8,507,196 9,156,884 Net income [ ] -3,694 15,469 1,444,613 5,806,849 6,254,420 Table 2. Major costs and revenues Table 2 reports the revenues from sales, the cost of production which take into account the acquisition of moulds, the material and the use of machines. Personnel costs are referred to administrative, marketing and R&D managers salaries. Commercial costs are due to the participation to worldwide events such as congresses or workshops and our marketing initiatives. General costs are for an accountant. In the general costs for 2017 and 2018 costs for renting a storehouse are included. Taxes are calculated taking in consideration the IRES and IRAP.

9 Figure 4. Estimation of the revenues stream and EBIT in the next five years.. Capital requirements and allocation (macro) of the resources in the event of funding The principal market objective is to become a global reference point for advanced in-vitro techniques and alternatives. Two stages of development have been planned to achieve this goal: Phase I: Investment Required: 250,000. Period: 01/01/14-31/12/15; Phase II: Investment Required: at least 550,000. Period: 01/01/16-31/12/18. A good working relationship with the investor or investors would be extremely important to help IVTech mature and learn from those experienced in business management. During the first phase our target market is the EU community. Expected costs are: 20,000 - purchase equipment such as professional 3D printer, vacuum oven, precision balance, etc. 10,000 - purchase material + moulds used to produce the systems 20,000 - extend the patents 10,000 - organization of 2 workshops 5,000 - publicity campaign based on social networking, mailing lists, newsletters, brochures, publication in specialized magazines, free samples 30,000 - participation in 2 international conferences 40,000 - development of MultiDyn, pump module and Live Monitoring Box 15,000 - employment of a part-time specialist dedicated to production 50,000 - employment of a full-time expert in marketing 50,000 - employment of a full-time engineer (CEO of IVTech) IVTech is registered on the Assobiomedica, Toscana Life Sciences and, Enterprise Europe Network databases. During the second phase our target market will be expanded worldwide. Cost estimates for this period are: 50,000 - full time employment of 2 specialists dedicated to the system production and test 100,000 - full time employment of 2 engineers dedicated to R&D (Eng. Serena Giusti, Eng. Giorgio Mattei) 50,000 - full time employment administrative staff 300,000 - moulds and agreement for the injection moulding manufacturing of our products 30,000 - worldwide publicity campaign 50, international conferences The break-even point will be reached 1 year from their launch on the market. Revenues of 17 million are expected by 2018, after products have been launched on the global market.

10 Identification of the type of investor partners We are seeking both a business angel and a venture capitalist. A business angel will be crucial to mature the company and consolidate our team and background, while the venture capitalist will be key to expand the IVTech market worldwide. Exit strategy Up to 30% of IVTech assets will be released to investors, for an investment of 800 k. Given our extensive know how in the field of in-vitro technology and the high market demand of related products, we expect rapid growth of IVTech. In 2 years IVTech will have penetrated the worldwide market. In 5 years revenues of 17 Million are expected. The exit strategy can thus be achieved in 5 years.