Business model for Microbial Detection
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These slides use concepts from my (Jeff Funk) course entitled Biz Models for Hi-Tech Products to analyze the business model for a real-time microbial detector from Instant Bio-Scan. This detector provides real time information on the existence of microbes in water using a laser- and photo-sensor-based system. Photo-sensors can identify microbes faster and with higher accuracies than can conventional systems that may take weeks before an analysis is done. Instant Bio-scan is targeting water treatment and pharmaceutical plants.
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Business model for Microbial Detection
- 1. Business Model for Instant Bioscan “Real Time Microbial Detector” Cheng Kah Heng A0082075H Shahnawaz Pukkeyil Shamsuddin A0098486H Ho Wai Chi, Gary A0082062N Tan Tze Chung Christopher A0046244L Jason Fan Yang A0098546M 1
- 2. Presentation Outline 2 Introduction Company Profile Industry Background New Technology Working Principle Value Proposition Market Segment Customer Classification Customer Selection Value Capture Scope of Activities Strategic Control Future Activities Customers Conclusion
- 3. 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. 3
- 4. Background Need 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 Mhuman deaths annually. http://www.who.int/water_sanitation_health/diseases/burden/en/ http://www.epa.gov/nheerl/articles/2006/waterborne_disease/waterborne_outbreaks.pdf OUTBREAKS 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% 4
- 5. Background Need for Real Time Monitoring System http://www.epa.gov/nheerl/articles/2006/waterborne_disease/waterborne_outbreaks.pdf 2-7 days 5 Lack of real time feedback for microbial presence in water treatment process Water Treatment Process Sensor IN OUT Feedback - +
- 6. Background Collecting water sample Water Treatment Plant Control Points Recreational Facilities Conventional Technique – Water Sampling 6
- 7. Collecting water sample Transporting to Lab Central Laboratory Water Sample Background Conventional Technique – Sample Transportation 7
- 8. Collecting water sample Transporting to Lab Preparing water sample Filtration Centrifuge Chemical Staining Culturing Bacteria Background Conventional Technique - Sample Preparation 8
- 9. Collecting water sample Transporting to Lab Preparing water sample Inspecting under microscope Cultured Bacteria Observe under microscope Counting Bacteria Background Conventional Technique – Sample Observation 9
- 10. Collecting water sample Transporting to Lab Preparing water sample Inspecting under microscope High Cost Long processing period Human Error Low Accuracy Background Conventional Technique 10
- 11. Instant Bioscan - Products Instant Bioscan – Real Time Monitoring Products 11 RMS-UM Portable Version RMS-ON90 Onsite Version Optical Technology Instantaneous result Inert vs. Biologic
- 12. Instant Bioscan - Products Instant Bioscan – Working Principle Measures Universal “Bio-markers” (NADH and Riboflavin) in Bacteria and Fungi.
- 13. 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 13 RMS-ON90 RMS-UM
- 14. Competition Instant Bioscan vs. other microbial detectors 14 Remote monitoring Sample Preparation 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 ATP bioLuminescence NO YES NO LOW YES
- 15. Customer Selection Market Segment & Customer Classification Food and Beverage Plants Testing Labs Health & Beauty Plants Pharmaceutic al Plant Homeland Security Water Treatment Plants 15 Customer With Most Money Base (High/Low Demand) Customer Need Base (High Demand) Customer Want Base (Low Demand)
- 16. Customer Selection Water Treatment Plant Pharmaceutical Plant 16
- 17. Customer Selection Demand 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.pdf http://water.epa.gov/infrastructure/watersecurity/lawsregs/initiative.cfm 17
- 18. Customer Selection How 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. 18 Cost for year if tests are conducted 2 times per day SGD 1 million
- 19. Customer Selection How can IBioScan reduce cost in Water Treatment Industry ? 19
- 20. Customer Selection How 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 20
- 21. Customer Selection Demand in Pharmaceutical Manufacturing Plant Initiative from FDA •Process Analytical Technology initiative (PAT) • Pharmaceutical cGMPs for the 21st Century initiative Increasing Cost of microbial monitoring Reduction 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) 21
- 22. Customer Selection How 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 months 22
- 23. 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 23 Direct Sales Lease Trial
- 24. Future Value Capture 24 Direct Sales Lease Trial Service License •Revenue from service provided •“Pay as you use” model •Revenue from Licensing fees Service License
- 25. Current Scope of Activities Vertically Integrated Technology Improvement Product Development Manufacturing/ Assembly Marketing And Sales Local Distribution After Sales Services 25
- 26. Future Scope of Activities Vertical Disintegration Technology Improvement 26 Product Development Manufacturing / Assembly Marketing And Sales Local Distribution After Sales Services Customer Out-Source
- 27. 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 27
- 28. Future Market Segment CUSTOMERNEEDS CUSTOMER TYPES ARTICULATEDUNARTICULATED SERVED UNSERVED Rural Areas Recreational Facility 28 Food & Beverage
- 29. Future Potential Markets: Rural Areas 29
- 30. Source: World Health Organization Future Market Segment Rural Areas - Global Sanitation Coverage 30
- 31. Source: World Health Organization Future Market Segment Rural Areas - Global Drinking Water Coverage 31
- 32. 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
- 33. 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 Segment Rural Areas – Current method of monitoring 33
- 34. Future Market Segment Rural 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
- 35. Future Potential Markets: Food & Beverage 35
- 36. 36Source: Sonia Francisco & Anand Gnanamoorthy, Frost & Sullivan Future Market Segment Food & Beverage
- 37. 37Source: MarketsandMarkets Future Market Segment Food & Beverage
- 38. Future Market Segment Demand 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) 38
- 39. 39 Future Market Segment How 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 water 2. Compounding ingredients 3. Carbonating product 4. Filling product 5. Packaging. Source: http://www.solarnavigator.net/solar_cola/soft_drink_canning_process.htm 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 months
- 40. Future Potential Markets: Recreational Parks 40
- 41. Future Market Segment Recreational Parks 41 • Public Swimming Pools – 24 Swimming Pools1 in Singapore • Water Theme Park – Wild Wild Wet, Sentosa Watercove2 etc
- 42. Future Market Segment Recreational Parks 42 • Chemical1 (trichloramine and cyanogen chloride)/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
- 43. Future Market Segment Recreational Parks– Current method of monitoring 43 • 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
- 44. Future Market Segment Recreational Parks 44 •Lower Cost •Assurance to Public Pool user on Water quality •Less Transmission of Infectious diseases Key Consideration: Swimming Pool Testing Conventional versus Instant BioScan
- 45. SWOT Analysing 45 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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