Business Plan on a Bio-Tech product
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Business Plan on a Bio-Tech product

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A small bplan that we had developed just for fun as a part of a project on biotechnology.

A small bplan that we had developed just for fun as a part of a project on biotechnology.

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Business Plan on a Bio-Tech product Business Plan on a Bio-Tech product Document Transcript

  • BIOCARE LTD SlickStick B Plan for BioCare Ltd Pritish Jain, Pritesh Sankhe, Tarkeshwar Singh 4/21/2013 This document serves as the business plan for the product SlickStick being developed by BioCare Ltd. The document contains details of the product, detailed market research and financial projections along with the required startup capital
  • BioCare Table of Contents 1. Executive Summary ....................................................................................................................... 2 2. Company Description .................................................................................................................... 3 3. Products and Services.................................................................................................................... 4 4. SWOT Analysis ................................................................................................................................ 6 5. Marketing Plan ............................................................................................................................... 7 5.1. Market Size and Statistics ..................................................................................................... 7 5.2. Existing Market Players ......................................................................................................... 9 5.3. Target Market Regulations.................................................................................................. 10 5.4. Barriers to Entry .................................................................................................................... 11 5.5. Target Customers.................................................................................................................. 12 5.6. Prospective Partners ............................................................................................................ 12 5.7. Pricing Model ........................................................................................................................13 5.8. Distribution Channels............................................................................................................13 5.9. Target Industry Attractiveness............................................................................................ 14 5.10. Go To Market Plan.................................................................................................................15 6. Opportunity Estimation ............................................................................................................... 16 7. IP Protection Strategy .................................................................................................................. 17 8. Risk Analysis and Mitigation ........................................................................................................ 18 9. Operational Plan .......................................................................................................................... 20 10. Exit Strategy .................................................................................................................................. 21 11. Management and Organization Structure ................................................................................. 22 12. Start Up Expenses........................................................................................................................ 23 13. Financial Projections and Analysis .............................................................................................. 24 1
  • BioCare 1. Executive Summary More than 200 million people get diagnosed with Malaria every year and a significant number of them die. Most the victims who die are young children below the age of 5 or pregnant women. All these victims die inspite of the presence of highly subsidized malarial drugs. This example presents a very important problem that the world is facing where victims die of diseases for which drugs are already developed and being distributed. Lack of efficient and cost affective diagnosis is the principal contributing factor to this problem. Most of the current R&D funding and effort is directed towards drug development which has resulted in increasing costs and ineffectiveness of diagnostic tools. BioCare is a startup founded by three students of IIT Gandhinagar with the motto of ‘Building biotechnology for the underprivileged’. The company has a vision to create effective diagnostic tools that can be used by the poor and the illiterate effectively at the point of care. The first disease that the company wants to fight in its endeavor to become a leader in the field of point of care diagnostic tools is Malaria. The company is currently working on the R&D to create better Rapid Diagnostic Tool kits which are cheaper and can be used without any human intervention. The company’s first product ‘SlickStick’ is a unique combination of RDT (Rapid Diagnostic Test) dipstick and smartphone to ensure accurate analysis of Malaria. The product is aimed at solving three important problems related to malaria diagnosis. These are: a) Rapid diagnosis of malaria without human intervention, b) Predicting risks of epidemic prediction based on the test results of multiple patients and c) Maintaining patient history to suggest better drugs. While adhering to these aims the company aims to keep the cost of the product 50% lower than any other RDT kit available in the market. The company plans to handle both R&D and manufacturing itself to ensure maximum cost reduction. The current management structure of the firm has three founder members with multiple areas of expertise. The CEO and CMO of the company shall be Mr. Tarkeshwar Singh while the responsibilities of CTO and COO shall be taken up by Mr. Pritish Jain and Mr. Pritesh Sankhe respectively. The company’s current financial projections boast a healthy net profit margin of 10% in the first year which is expected to increase 15-16% in the long run. The Internal rate of return for the firm over the period of first four years is found to be 23% on an expected initial investment of around $2.2 million. The company shall have a debt equity ratio of 2:1 in the initial years. BioCare expects to serve the most underserved and underprivileged segment of the world effectively with its innovative and cost efficient products. 2
  • BioCare 2. Company Description Biocare is a medical technology startup founded by three undergraduate students of IIT Gandhinagar in 2013. The company is still in the early stages of idea development and is looking for funding for its research and development. BioCare has a vision of making healthcare products accessible to the underprivileged people in the world. The vision of the firm sets it apart from most other companies and startups in this domain that primarily focus on the developed world as a market. The company’s mission is to improve the health of people around the globe by focusing on developing diagnostic devices especially for the poor. Early, accurate detection is very important for administering suitable treatment as well as the prevention and control of the disease spreading through a population. Biocare is formed with an emphasis on inhouse R&D to develop a pipeline of products keeping the customer in focus. The first product ‘SlickStick’ developed by Biocare provides point-of-care rapid diagnosis of malaria using smartphones. The company’s mission statement further involves partnering with organizations dedicated towards improvement of healthcare conditions in African, Middle East and South East Asian countries. 3
  • BioCare 3. Products and Services Malaria is a curable disease. A major obstacle to effective malaria control is the lack of affordable and accurate malaria diagnostics, which has also led to misuse and abuse of anti-malarial drugs. Our product aims at providing affordable rapid diagnosis at point-ofcare level while also providing the disease outbreaks surveillance by use of the test data. The product comprises of a ‘SlickStick’ which is analogous to a dipstick used in Rapid Diagnostic Tests (RDT) and a smartphone based application. ‘SlickStick’: Rapid diagnostic tests (RDTs) or “dipsticks” are currently being used to detect antigens of Plasmodium species in blood or plasma. The older “dipstick” tests (Parasight-F, ICT Malaria P.f and PATH Falciparum Malaria IC Strip) detect only Plasmodium falciparum infection. All three assays detect histidine-rich protein 2, an antigen expressed only by P. falciparum trophozoites. However, the two newer tests (the OptiMAL assay, and the ICT Malaria P.f/P.v assay) have the advantage of detecting infection with P. falciparum or Plasmodium vivax. Our ‘SlickStick’ is developed to detect almost all the species of the malaria parasite namely Plamodium falciparum, P. vivax, P.malarie and P.ovale. The ‘SlickStick’ requires a blood sample obtained from a finger-prick. The ‘SlickStick’ works on the same principle of ‘immuno-chromatography’ which essentially relies on the capture of dye-labeled antibodies to produce a visible band on the strip of nitro-cellulose. The dye-labeled antibody (which is found on the strip) binds to a parasite antigen (from the blood sample) and the resultant complex is captured on the strip, forming a visible line (test line). These antibodies on the ‘SlickStick’ are targeted to detect the histidine-rich protein 2 of P.falciparum, a pan-malarial Plasmodium aldolase and the parasite specific lactate dehydrogenase. There are different lines on the strips and change of color of different combination of lines indicates different malarial infections. 4
  • BioCare Point-of-care smartphone Application: The strip is then placed on a color mat – supplied with the smartphone app and intended to normalize colors on the stick regardless of lightning conditions where the photo is taken. The app then quickly analyzes the strip and produces accurate and easy to understand results. Once the application identifies the blood sample, the data is made anonymous and is relayed to our web portal. This data includes the geo-location of the user which could allow scientists and even people to see trends as well as check out for malaria outbreaks on the web portal. No special training or expertise is required for the operation of the device. Also, this application eliminates user intervention and consequently any human errors in understanding the tests and the results. The app also allows user to maintain the patient/user diagnosis history for future use and this data may find useful for doctors for easy diagnosis of the patient. This application is scalable and can be extended for other health issues and even diseases. And eventually could take a form of a general health app for a user with monitoring and screening health tests and all the medical history at one place. The concept of ‘‘SlickStick’’ is also scalable as it could also be used to diagnose other diseases which could be identified using urine, blood or saliva samples. Based on which disease is to be diagnosed, relevant instructions can be followed on the smartphone app to get the results. The concept of having a centralized database and suggesting medications can be applied in the exact same way to other diseases as well. 5
  • BioCare 4. SWOT Analysis Strengths          Weaknesses  Innovative and unique Combination of Rapid Diagnostic Test and Smartphone. Lower costs – ‘SlickSticks’ would be cheaper. Integration with Smartphone provides a mechanism for epidemic prediction. Scalable – Potential of similar model for urine, blood or saliva tests. Data analysis will help in handling inventory better. In case of increased number of registered malarial cases, manufacturing of ‘SlickSticks’ would be increased. Digitalization of medical data/history – a step towards telemedicine. Drug recommendation which would be region specific Abundant R&D funding – Easy funding available from NGO’s and government schemes. Lack of vaccines – This has led to more demand for diagnostic tests.     Opportunities     Smartphone penetration in the target market. Accuracy of ‘SlickStick’ in comparison to microscopy tests is lower. Inability of the product to determine the parasitic count. Lack of existing distribution channels in the target market. Product is still invasive so there is a risk of needle injuries and blood collection. Threats  Current focus on malaria diagnosis to bring down the incidences of malaria gives rise to the adoption of RDTs Testing rate is around 77% currently implying that the rest of the market goes undiagnosed at the preliminary level. Increasing general focus on RDTs for monitoring and screening health issues. Weak Government regulations/FDA approvals implying faster product development and clinical trials.    6 Weak Patent protection may lead to duplicate diagnostic test kits. Low/negligible barrier to entry. Presence of existing established players. Behavioral issues: Technology adoption barrier to users in context of smartphone based diagnostic tests.
  • BioCare 5. Marketing Plan 5.1. Market Size and Statistics The target market for the product ‘SlickStick’ is horizontal and hence has a wide number of opportunities available. However during the launch the company shall be focused upon malaria diagnostic using non microscopic Rapid Diagnostic Tests. Some of the most important facts and statistics about that make Malaria an attractive initial target market are: i. 219 million cases of malaria were reported worldwide in 2010 and roughly around 660,000 deaths can be attributed to this endemic disease1. ii. More than 3.3 billion people in the world lead Malaria risk zones which primarily includes South Asia, Middle East, Africa and Latin America.2 iii. More than 80% of the Malaria cases are found to occur in 14 countries according to WHO report on Malaria.1 iv. Of all the Malaria prone countries, Congo, India and Nigeria contribute more than 40% of all the cases.1 A majority of the malaria affected individuals are children under 5 and pregnant women. Further a very high majority of these individuals fall come from the underprivileged sector making it more difficult for them to get access unsubsidized drugs. v. The WHO expects an overall reduction of Malaria incidence cases by 75% by 2015. India pledges to bring down the cases by more than 50% in the same time period.1 vi. The testing rate for Malaria in South Asia with the exception of India has been found to be 55% and in the African region it is found to be 47%. Globally the testing rate for Malaria is found to be 77% currently. This implies that a major amount of funding is directed towards providing treatment to those who may not even need them.1 vii. The current forms of diagnostic are majorly divided into two categories viz. Rapid Diagnostic Tests and Microscopic Examination of blood. The number of RDTs sold in the 2011 was estimated to be around 155 million and majority of it was distributed in Africa and South East Asia. The number of patients undergoing microscopic examination was found to 171 million and the major share of 108 million of this comes from India.1 viii. The estimates of total number of suspected malaria cases that requires diagnosis is pegged at 1 billion by the WHO.1 1 2 Source: World malaria Report 2012, World Health Organization Source: http://www.cdc.gov/malaria/malaria_worldwide/impact.html 7
  • BioCare ix. It has also been found that only 21% of the individuals who take heavily subsidized medicines for malaria actually have malaria3 x. The current cost of diagnosis using a RDT that uses immune-chromatography as the underlying principle is found to vary from $1.20 to $13.50 depending upon the country of diagnosis.4 xi. External international support to Malaria endemic countries to fight Malaria was pegged at $1.71 billion in 2010. Domestic funding at around the same time was found to be $625 million.1 The facts mentioned here clearly lay the importance of diagnostic testing for malaria. Most of the drug that is used for malaria is heavily subsidized and as can be seen a major chunk of it is used by those who do not have malaria. Hence the importance of having a cheap and effective diagnostic tool becomes imminent. The near term focus of BioCare shall be around creating products focused on making rapid diagnostic cheaper and more effective. Based on these the company shall fall under two different markets viz. In Vitro Diagnostics (IVD) market and Point of Care (POC) diagnostic markets. Both of these markets form a fairly developed and highly growing market segments. Some of the most important facts and statistics about these market segments are:  The world market for IVD products was pegged at $44 billion and is expected to grow at a CAGR of 7.8%. The U.S contributes roughly around 47% of the total IVD market.5  Asia is the fastest growing region of the global market and accounts to be 22.88% of the global market and is estimated to reach the market of $17.20 billion with a CAGR 11.3% from 2011 to 2016.5  The immunochemistry market is expected to grow at a CAGR of 6.8% during 2011-2018. It will be the largest revenue generator in the IVD market with an expected value of $25.5 billion by 2018. There are a total of 1,726 pipeline products in this category, which accounts for 59% of the total pipeline products in the IVD market.6  The Point of Care (POC) test market that is often considered as a subset of the global IVD market, was pegged at $13.6 billion in 2011. 7 3 Source: ‘Price Subsidies, Diagnostic Tests, and Targeting of Malaria Treatment: Evidence from a Randomized Controlled Trial’; J.Cohen, P. Dupas, S.Scahner; National Bureau of Economic Research, 2013 4 Source: http://www.malariasite.com/malaria/rdts.htm 5 Source: http://www.marketsandmarkets.com/Market-Reports/in-vitro-diagnostics-ivd-market-547.html 6 Source: https://www.asdreports.com/news.asp?pr_id=373 7 Source: http://www.bccresearch.com/report/point-of-care-diagnostics-market-hlc043c.html 8
  • BioCare  The POC market is expected to hit a size of $16.5 billion to $25 billion by 2016 by different market research firms.8  Blood glucose monitoring market contributed more than 70% of the total POC market.8  The sector shall see a rapid growth in self-testing segment of the POC market. 5.2. Existing Market Players Extensive trials on three commercial dipstick formats for HRP-2 namely ParaSight F, ICT Pf or Pf/Pv and PATH Falciparium Malria IC test have been performed, although there are now several other manufacturers of tests for HRP-2. The major players are Becton Dickinson, Amrad ICT and PATH. Becton, Dickinson and Company (BD) is an American medical technology company that manufactures and sells medical devices, instrument and reagents. BD is working towards fighting malaria by investing in a rapid diagnostic test to detect the most deadly strain, Malaria falciparum. BD is committed to improving the state of malaria diagnostics9. Amrad ICT is another company which has directed efforts towards improving the RTD diagnosis particularly for Plasmodium falciparum. PATH is an international nonprofit organization that transforms global health through innovation. PATH takes a dual approach to fighting malaria. They work with national and global partners to develop strategies to eliminate malaria, and they bring together public- and privatesector partners to accelerate the development of malaria vaccines. Rapid “Dipstick” Blood Tests for Detection of Malaria Plasmodium species Parasite antigen Sensitivity Specificity Assay (company; contact address) identified detected (%) (%) OptiMAL P. falciparum Parasite lactate 88-91 (P.f) 92-99 (P.f) P. vivax dehydrogenase 94 (P.v) 100 (P.v) P. falciparum HRP-2 95 (P.f) 89 (P.f) Flow Inc., Portland, ORWeb ICT Malaria P.f/P.v 8 Source: http://www.marketresearch.com/Renub-Research-v3619/Point-Care-Testing-Forecast-Global7320510/ 9 Source: GBCHealth http://gbchealth.org/member_profiles/1356 9
  • BioCare Plasmodium species Parasite antigen Sensitivity Specificity Assay (company; contact address) identified detected (%) (%) AMRAD ICT, Sydney, NSW, Australia P. vivax 75 (P.v) 95 (P.v) PATH Falciparum Malaria IC Strip P. falciparum HRP-2 96 99 P. falciparum HRP-2 94 95 P. falciparum HRP-2 90 97 Quorum Diagnostics, Vancouver, Canada Parasight-F Becton Dickinson Tropical Diagnostics, Sparks, MD ICT Malaria P.f AMRAD ICT, Sydney, NSW, Australia Lifelens Project: An innovative point-of-care smartphone application10 which uses a tiny lens giving 350 times magnification to analyze the blood cells at the cellular level. The smartphone application runs algorithms for identifying artifacts the malaria parasite within the red blood cells. 5.3. Target Market Regulations BioCare Ltd expects to establish itself as a biotech company dedicated to serve the underprivileged market in the world. The regulatory requirements in all of these countries are relatively less stringent and approval for the diagnostic tools is easier to get. Further the category of diagnostic tests has less stringent requirements in comparison to other biotech products like drugs, surgical tools, etc. It is important to note that the government regulations in many of the developing countries have been becoming stringent in unison with the global/international regulations and standards. This shall make it easier for the company to stay ahead of the curve in terms of regulatory requirements. For the current target market of Malaria RDTs, the company will have to meet the international regulations set up by the World Health Organization. These regulations are followed 10 Lifelens Project: http://lifelensproject.com/ 10
  • BioCare by almost all the developing countries and are less stringent than the FDA requirements of the United States or the European countries. 5.4. Barriers to Entry One of the most important checks that need to be made by any company before making the decision on entering a market is to look at the barriers of the entry. BioCare aims to focus on a different market segment in comparison to other biotech companies which means that the barriers to entry will be very different for BioCare in comparison to others. Some of the major barriers of the target market are:  Low Affordability of Target Market: This shall form one of the greatest barriers to entry. It implies that the companies targeting this section of the market will have to focus on keeping the costs of the products low enough.  Weak Patent Protection: In most of the countries that form the target market, the patent protections is weak which shall make it difficult form for companies to protect their intellectual properties from copying by other local companies.  Distribution and retail environment: In most parts of the target market, there is a lack of established distribution channels to reach the final consumer. Further, in many cases the target user may not be the one paying for the product; instead an NGO or the domestic government might be the procurers of the product. This implies that any company that wants to establish itself in this target market shall have to focus on forming partnerships with the NGOs and the local governments.  Absence of stringent Government Regulations: All of the target markets have fairly lenient government regulations; this shall make it easier for any company to enter the market reducing the barriers to entry.  Funding for R&D: As was mentioned in the section 4.1, a huge sum of money is diverted from the international community towards the underprivileged nations to fight the required diseases. A lot of this funding is diverted towards funding R&D for the diseases which acts as a potential capital resource for innovative startups in need for initial R&D funding. 11
  • BioCare 5.5. Target Customers The product ‘SlickStick’ is being designed to serve as a horizontal product. The supporting mobile app can be adapted to handle multiple disease diagnostics with minor modifications. Hence the target customers for the product shall be extremely varied and wide:  NGOs and Governments: In most parts of the world where people may not have access to smartphones, the customer for ‘SlickStick’ shall be the NGOs and Government organizations operating in those zones. They shall be the ones who will distribute test dipsticks to individual and then run the diagnostic on them using the smartphone.  Affluent Individuals: A growing trend in large parts of developed and developing world is self-diagnosis for several diseases like Diabetes. These target consumers can be directly reached to sell the dipsticks. As they are generally educated, hence the risks of any diagnostic fault due to human errors shall be minimized drastically.  Doctors and Private Clinics: Apart from the above two class of customers, doctors and private clinics shall also act as potential customers as the Rapid Diagnostic Tests make it easier for them to perform immediate diagnostic and suggest medication instead of waiting for the reports to come. 5.6. Prospective Partners Forming partnerships and alliances helps in risk mitigation for startups in the initial stages. The target market for BioCare provides a plethora of opportunities to partner with different kinds of organizations ranging from the NGOs to private companies. The partnerships shall be developed with the three basic aims: a) Reduction of risk due to absence of well-established marketing channel, b) Funding requirements for R&D, c) High initial capital requirements for manufacturing. The following shall be the major partner categories for the firm:  NGOs and Government Organizations: They shall help in achieving the first two aims mentioned above.  Private Companies: The partnership with private companies can be formed to meet any of the following aims: a) Outsourcing manufacturing, b) Marketing and distribution partnerships and c) Sharing R&D expenditure.  Private Clinics and Medical Associations of doctors: They shall form a very important partner to market and distribute the product to final consumers. 12
  • BioCare  Malaria Drug Manufacturers: Partnership with Malaria drug manufacturers can be used to mitigate marketing risk and reach the precise target crowd. 5.7. Pricing Model BioCare in the short term of 2-5 years aims at being in the industry of Rapid Diagnostic Tests. The pricing models for different products will vary depending upon the socio economic status of the target market. The company shall own all rights on the data being kept on its servers via usage the app in every case. The company shall have three pricing models for different kinds of products: i. Individual Consumer for diseases prevalent in underprivileged countries: The pricing for this kind of products will be based only upon the usage of the dipsticks. The app shall be available to download for free. The pricing model for ‘SlickStick’ shall be similar to this model. ii. Individual Consumer for diseases prevalent in developed countries: For this product and customer category, the app and the dipstick shall be sold in the form of a bundle on the first instant after which the users can buy extra dipsticks to continue regular diagnostics. Further the app in such a case shall have limitations on the number of profiles that can be made per smartphone. iii. Enterprise Customers: For big enterprise customers, the app shall be distributed for free in all cases and the revenue shall be generated only from the dipsticks. 5.8. Distribution Channels Distribution channels form a major contributing factor for the success of any product or company. The following is an exhaustive list of distribution channel for BioCare Ltd: i. Doctors and Medical Associations: Doctors and Medical associations shall form the most important and trusted distribution channel as they shall help in creating acceptance for the product among final user. ii. Private Clinics and Hospitals: Private Clinics and hospitals shall act as a major intermediary as well as customer for the product. iii. Local Malaria Drug Manufacturers: Partnerships with local malaria drug manufacturers can help in getting access to their well established distribution network. The partnership can also be used as a significant marketing tool. 13
  • BioCare iv. NGOs and Government Organizations: NGOs and government organizations shall form the largest distribution network in sub Saharan and other underdeveloped countries. Importantly they shall also be a major customer of the product or may help in subsidizing it to the normal users. v. Pharmaceutical store chains: Pharmaceutical store chains can be tapped in countries like India where they form a developed network. vi. Travel Kit Manufacturers: Travel kit manufacturers can be used as the distribution channel to reach the travelers from the developed world who plan to travel in Africa or South Asia. Most of these travelers prefer to have self-diagnostic test kits with them. 5.9. Target Industry Attractiveness The following is an analysis to judge the attractiveness of the industry in which BioCare wants to establish itself using the Potter’s Five Forces analysis:  Competition: The dipstick model in RDTs is already prevalent but as of now, no single product as ‘SlickStick’ (dipsticks working in combination of smartphones) exists in the market. The products of BioCare will be cheaper and will eliminate any user intervention or technical know-how that is currently required to some extent for diagnostic tests. Moreover, the product also helps to predict epidemic trends that would enable to take precautionary measures and prevent the spread. This product differentiation would help to minimize the competition threat.  Buyers Power: The buyer power in the target market is limited. Malarial epidemics are predominant is most areas of rural sub-Saharan Africa, endemic areas of Asia and isolated areas in Africa. The targeted buyers for our product are either individuals majorly from these areas or NGOs which do not function the same way as corporates. Hence the low buyer power makes the industry more attractive.  Suppliers Power: The supplier power for the firm shall vary depending on the amount of finished products need as raw materials for the final product. However the current plans for the firm are to manufacture all the products itself by using the basic raw materials which shall primarily be chemicals. The abundance or absence of these chemicals cannot be determined at this stage hence the supplier power cannot be fully gauged at this moment. However, the firm expects its supplier power to be quite low.  Potential Entrants: The barrier to market entry is negligible and the government regulations are not very strict. Also, the patent protection in the target market is weak. The potential entrants could be a possible threat. Hence in order to keep the competitors 14
  • BioCare at bay, the company shall constantly need to improve its partnerships while also looking out on different ways of scaling the developed model. The lack of distribution channel shall act as a deterrent to the potential entrants and the firm can create a barrier to entry by partnering with a lot of organizations and companies.  New substitutes: The advent of vaccines for malaria could pose a threat to the RDTs model but there hasn’t been a huge success in this area. Moreover, the mHealth (mobile health) market is growing rapidly and hence there are high chances of a new application based on the same ‘SlickStick’ model. For this, the company constantly shall be required to innovate on the existing product as per customer needs and partners and also develop a pipeline of products. This way the overall danger of new substitutes would be minimal. 5.10. Go To Market Plan  Initial Launch: The aim of the initial launch shall be to reach out to partners, distribution networks as well investors. Hence the initial launch shall be done on a platform like Medical conference or a Biotechnology products tradeshow.  Pre-Launch Partnerships: The pre-launch partnerships shall help in reaching out to customers so that the impact of initial product promotions can be maximized. These prelaunch partners shall primarily be the NGOs and the government organizations.  Initial Product Promotions: Initial product promotions shall be important to gain acceptability among the end users. Some of the most important tools for initial product promotions are Flyers, Posters, Newspaper Ads and Electronic Media (if budget permits).  Distributing test kit for free to doctors and public healthcare units: Distributing a test kit for free shall enable maximum usage in the first few weeks/months of the launch. This shall also help in creating demand for the future.  Launch in epidemic prone regions: The distribution channel and partnerships in the initial months shall be created to get access to malaria epidemic prone regions and the launch time shall be kept around the rainy season when there are the highest chances of malaria infections spreading.  Tie up with Local Malaria Drug Manufacturers: Tie up with local malaria drug manufacturers shall be helpful in reaching out to final consumer as well as creating awareness about the product by advertising on existing drugs. 15
  • BioCare 6. Opportunity Estimation Estimating a market opportunity with appropriate accuracy is the first step to the success of any startup or any new product. For BioCare’s first product ‘SlickStick’, the target market shall be the malaria epidemic prone countries. Based on the data found during the market survey, the expected number of people who need to be diagnosed every year for malaria is 1 billion. The cost of each ‘SlickStick’ is expected to be less than $0.60. Hence, the maximum possible potential for the Rapid Diagnostic Market around malaria can be roughly estimated as $600 million. The minimum estimate can be made by assuming that the number of Rapid Diagnostic Tests to be performed shall not exceed the current levels. The current number of Rapid Diagnostic tests performed every year is around 155 million. This means that the total market size for BioCare even in the worst possible scenario shall be around $93 million. Hence the opportunity size for the first product of the firm in terms of revenue can be projected to be from $93 million to $300 million. 16
  • BioCare 7. IP Protection Strategy Intellectual Property protection is very important for all technology companies and more so for the companies in the biotechnology sector. The IP protection strategy of BioCare Ltd consists of two major components:  BioCare shall apply for patent protection in countries where there are strict patent laws. This shall ensure that no expenses made towards patent protection go waste.  For products aimed at countries that have weaker patent laws, BioCare shall only focus on getting the patent protection in the country where the manufacturing is done. In the rest of the countries it would not apply for any patent protection. The products manufactured by BioCare shall be patented in two parts: a) The dipstick shall be patented as a product. b) The mobile app shall be patented as a technology process of capturing and processing data. In the initial stages of any product, the patents shall be filed only in the countries of R&D and manufacturing. 17
  • BioCare 8. Risk Analysis and Mitigation Knowledge of risks involved with any business is important for its survival in the face of the threats it faces. Some of the major risks that BioCare shall face in the initial few years can be looked into the following subheads.  Patent Protection Risks: Patent Protection risks are central to any biotech product. BioCare shall focus on mitigating the risks related to patent violation by having strong legal support systems. Further the firm shall continuously innovate on its products to stay ahead of the rivals who create a copy of its products.  Regulatory Approval Risks: Regulatory approval risks can be best handled by adhering to the standards set by the WHO for products that need to be launched in developing and underdeveloped countries. The regulatory requirements and rules shall also be kept as a major design parameter for the products to ensure all products meet regulatory requirements.  Research &Development Risks: Research and Development risks shall be handled by doing a thorough study of existing technologies before undertaking a research project. The R&D team shall also be divided in such a way that the focus is on both working on the existing project as well finding opportunities for future R&D.  Distribution Risks: The major target market for BioCare shall be the underdeveloped and developing countries where distribution channels for drugs are in the dormant stage or still developing. Handling these distribution risks shall be the key to achieve sales targets. The distribution related risks shall be handled by creating distribution partnerships with NGOs and private companies before the initiation of production.  Inventory Management Risk: The products being manufactured by BioCare shall generally adhere to seasonal and epidemic prone diseases which implies the demand for the product shall be very uneven. Hence managing the inventory shall be a major risk. The firm shall manage this risk by using the data analytics collected from the mobile app extremely efficiently to create demand projections.  User Adoption Related Risk: User adoption risk can be handled in part by the product development team which shall work in unison with patients and doctors and take their feedbacks in designing a product.  Marketing Research Related Risk: Marketing research is the key to understand the market and its requirements. However very often companies miscalculate their opportunity due to poor understanding of the target market. This brings disastrous results in terms of 18
  • BioCare failure to sell the product. At BioCare this risk shall be handled in two steps. Step 1 shall involve using market research firms in doing the market research and analysis. Step 2 shall involve forming R&D and production partnerships before going for R&D and production respectively. This shall lead to division of risk in between partners. 19
  • BioCare 9. Operational Plan The company’s operations comprise of three distinct components viz. Research and Development, Manufacturing and Marketing and Distribution. a) Research & Development: The focus of R&D team shall be to create a pipeline of products that can be launched one after the other. The R&D of the company in the initial few years shall be completely around Rapid Diagnostic Tests. The aim of the R&D teams shall be to cut costs of the existing RDT products and create RDT products for diseases where rapid diagnosis does not exist. The product concept of ‘SlickStick’ is scalable to other diagnostic tests related to blood, urine or saliva. While developing newer products, the focus would be on cutting the cost of the existing products and improving them especially the diagnosis accuracy. b) Manufacturing: The malarial epidemics are seasonal as well as vary with regions. The data analytics received from the mobile applications shall be used to predict seasons of high demand which shall enable the manufacturing department to meet market demands. In case of extremely high demands during the peak seasons, the manufacturing may be either outsourced with appropriate terms and conditions or licensed to an established manufacturing firm. c) Marketing and Distribution: Biocare would focus on creating partnerships with NGO’s and public hospitals for distribution. A major part of marketing would also be understanding and analyzing user behavior by means of analytics and also analyzing the field data. Product promotions would be achieved by use of posters and flyers in target regions. Newspaper ads and electronic media would also be employed wherever possible. 20
  • BioCare 10. Exit Strategy The exit strategy shall form as a last resort if everything else goes wrong with the current form of the company and its product vision. The sit strategies have been designed keeping in view the two core competencies of the firm which are a) Creating innovative dipsticks and b) creating IT solutions in form of mobile apps. The following are the different forms of exit strategy that may be used individually or in combination if the situation requires: a) Sell R&D in form of patents and intellectual property around the dipsticks to rivals and other probable clients. b) Migrate into development of hospital management solutions: The firm may be able to migrate into the domain of hospital management systems by using its second core competency of creating IT solutions. 21
  • BioCare 11. Management and Organization Structure The management structure of the firm has been divided into three major sections viz. a) Research and Development, b) Operations (Manufacturing and Data Analytics) c) Marketing and Finance. Each of these has been divided among the three founders to suit their individual abilities. Tarkeshwar Singh, CEO & CMO Tarkeshwar Singh is a senior undergraduate in the department of Electrical Engineering and holds a minor in Finance. He is passionate about Marketing and Finance and has experience pertaining to marketing and pricing of products. His further experience with launch and maintenance of mobile app based products shall play crucial role for the company. Pritesh Sankhe, COO Pritesh Sankhe is a senior undergraduate student majoring in Electrical Engineering with minor in Computer Science. His interests are Mobile and Web Application Development, Machine Learning and Embedded Systems. He is very passionate about building mobile apps and has experience of developing several mobile apps. His experience with manufacturing shall further help in running the manufacturing plants. Pritish Jain, CTO Pritish Jain is a senior undergraduate in the department of electrical engineering with significant interests in biotechnology and biochemistry. He also has internship experience in the domain of biotechnology products and diagnostic equipment manufacturing and design with Hospira Inc. This shall help him lead the Research and Development team to create a pipeline of products to be launched one after the other. 22
  • BioCare 12. Start Up Expenses The start expenses sought by the firm are to support the initial fixed assets and to maintain the minimum level of cash balance while also accounting the minimum inventory level, the payables and the receivables. The expected investment needed by the firm to perform R&D and create manufacturing facility with a capacity of producing more than 10 million test kits a year is $2.2 million. The firm’s capital structure shall have a debt to equity ratio of 2:1. However after receiving the initial funding the firm is expected to be self-sustainable for 3-5 years. The loan will be taken for 10 years and the repayment of loan shall start happening after the fifth year. 23
  • BioCare 13. Financial Projections and Analysis The detailed financial projections along with assumption are given in Annexure A named as ‘Financial Projections_Biocare’. Some of the most important facts and details about the financial projections are given below:          Required net initial capital of $2.2 million Total fixed costs expected to be $1.5 million Sales price of each dipstick is $0.60. The expected sales growth is 50% in the second and third year followed by 30% in the fourth. Gross margin on each dipstick is 55%. The receivables and payables period for the firm are 45 days and 30 days respectively. The firm shall maintain an inventory of 60 days. 10% of the total revenue is diverted towards R&D More than 21% of the total revenue is diverted towards sales and administrative expenses. The cash flow from operations is negative in the first year and turns positive the next year onwards. Financial Analysis Parameters:     Net Profit Margin: 10% NPV: $398,917 at a discount rate of 15% and initial investment of $2,185,500. Internal Rate of return found to be 23% The payback period for the firm is 3.5 years. 24