BPS Cardiac: Operational Plan
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BPS Cardiac: Operational Plan

BPS Cardiac: Operational Plan

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BPS Cardiac: Operational Plan Document Transcript

  • 1. THE UNIVERSITY OF TEXAS AT AUSTIN Operational Plan (OP-4: Final) Technology Enterprise Design and Implementation Central Venous Blood Pressure Measurement Medical Device: The BPS-Cardiac Team B (Chimera): Michele Gonzalez. Viridiana Omana. Marco Sanchez. Fernando Huerta. Professors: Brett Cornwell. Jeffrey Martin. Page | 1
  • 2. TABLE OF CONTENTS. 1. EXECUTIVE SUMMARY ------------------------------------------------------------------------------------------------ 3 2. THE OPPORTUNITY ----------------------------------------------------------------------------------------------------- 4 3. TECHNOLOGY ------------------------------------------------------------------------------------------------------------ 4 4. BUSINESS MODEL-------------------------------------------------------------------------------------------------------- 5 5. ENTERPRISE DESIGN & IMPLEMENTATION ------------------------------------------------------------------6 5.1. FINANCIAL PERFORMANCE. ---------------------------------------------------------------------------------------------- 6 5.2. MARKET PERFORMANCE. ------------------------------------------------------------------------------------------------- 7 5.3. MARKETING EFFECTIVENESS. ------------------------------------------------------------------------------------------- 8 5.4. INVESTMENT IN THE FIRM’S FUTURE. --------------------------------------------------------------------------------- 10 5.5. CREATION OF WEALTH. -------------------------------------------------------------------------------------------------- 11 5.6. HUMAN RESOURCE MANAGEMENT. ----------------------------------------------------------------------------------- 12 5.7. ASSET MANAGEMENT. --------------------------------------------------------------------------------------------------- 13 6. ANNEX 1 -- (FINANCIALS) ------------------------------------------------------------------------------------------ 13 Page | 2
  • 3. 1. Executive Summary BPS-Cardiac: A unique opportunity investment for a profitable disruptive technology that saves people lives in a cheaper, easier and painless way, here we can see the Fact Table that summarizes briefly the investment opportunity that will be executed in a operational plan. Executive Summary: Fact Table. Pain, Technology and IP & Regulatory Status. Financials.  Pain: The measurement of Central Venous Blood pressure (CVBP) is Revenues: $156.6 MUSD expensive, risky and painful. Net Income: $139.4 MUSD  Technology Status: A lab prototype fully functional has been tested and no need for further development is required. Ready for Cash Flow: $24.8 MUSD Manufacture Funds Required: $11 MUSD  Intellectual Property: Patent has been filed in USPTO.  Regulatory Requirements: FDA approval is planned. Commercialization (Target Market, Differentiators, Sales Channels) Key Dates  Goal: License the technology to a major Medical Device manufacturer. Raising Funds: Q4 2010  Target Market: Hospitals and Health ministers at state or federal level FDA Approvals: Q4 2012 at US Market. Starting Operations: 2013  Value Proposition: A Low cost, easy to use and painless medical device to measure Central Venous Blood Pressure (CVBP).  Differentiators: Low cost $5,000 USD vs. $400,000 USD and easy to use and non invasive procedure vs. invasive current solutions.  Positioning: For patients who are in Intensive Care or had a trauma accident that requires CVBP measurement. BPS-Cardiac is the only option that is cheaper, easy to use and painless.  Sales Channels: Direct Reps, with a strong background in Medical device Market Page | 3
  • 4. 2. The Opportunity When a person have been through a heart attack or a trauma accident in order to save their lives is very critical to measure Central Venous Blood Pressure. Nowadays the procedure to this measurement is risky, expensive and with pain because this procedure is done by an invasive catheterism method. The target market are public and private hospitals in US who attend people that requires the Central Venous Blood Pressure measurement to save their lives, trauma accidents and people who had a heart attack is critical to save their lives to perform the measurement in a continuously way to take preventive actions under critical situations at intensive care units. The foundations of the value proposition are based on: a) Significant Low cost vs. Value Proposition $5,000 USD vs. $400,000 USD. b) Painless technology: Current procedures are based on painless catheters with big needles. c) Easy to use and Install: Current solution requires heavy cost in training, installing the catheterization equipment. d) High d3ifferentiation through unique Intellectual property: A unique sensor and a proprietary algorithm that makes the technology possible. Additionally is a opportunity for a market size of 190K beds in USA that will represent an opportunity of $156M of revenue in the case of executing the operational plan. 3. Technology This new and disruptive technology is able to measure the pulse and also monitor mechanical activity in a blood vessel segment, by using the mechanical activity of both arteries and veins expansion of their walls. This gives us intravascular pressures curves similar to that obtained by catheterization. Fig 1. Fig. 1 This new and disruptive technology is based on magnetic markers attached to the patient skin, the signal obtained from the marker is recorded with a magneto resistor magnetometer in an unshielded room, equipped with an electronic circuit and a LabVIEW platform, then data is Page | 4
  • 5. digitized and into the computer, subsequently the signal morphology is analyzed thought the cardiac cycle described in Fig.2 Fig. 2 4. Business Model Value Proposition: A Low cost, easy to use and painless medical device to measure Central Venous Blood Pressure (CVBP). Profit Formula: a) Revenue Model: Volume X Price of BPS-Cardiac.Cost Structure: Mainly variable cost, and sales and marketing cost. b) Margin Model: Healthily Gross margin of 88% . The technology is based on software algorithms not on Hardware c) Resource Velocity: Patent & Approvals of FDA and USPTO before no later than 2013, inventory turnover of two months Key Resources: a) People: Sales Force, CTO, CMO, COO, CFO, CEO b) Technology: BPS-Cardiac c) Channels: Direct Reps. Key Processes: a) Processes: Product Design, product development, technology development, sales & marketing, manufacturing, logistics b) Rules & Metrics:: Gross Margin 88%, supplier terms of 60 days credit, 60 days of credit for customer c) Norms: Market size of 190K of intensive care beds in USA, with a sales take rate of 1.3% Page | 5
  • 6. 5. Enterprise Design & Implementation 5.1. Financial Performance. In this section we will describe the financial performance metrics required in order to ensure the operational goals and make the project of the BPS Cardiac viable. The metrics to be measured will be a) Revenues. b) Gross Margin. c) Net Income. d) Free Cash-Flow. In terms of responsibility the metrics will be assigned to different people in the organization Position Objective(s) Rationale CEO Revenues: $156.6 MUSD Achive financials objectives Net Income: $44.4 MUSD according to BOD Cash Flow: $24.8 MUSD expectations CFO Revenues$156.6 MUSD Maintain the financial health Gross Margin: $139.4 MUSD of the company Net Income: $44.4 MUSD CashFlow: $24.8 MUSD Marketing & Sales Revenues: $156.6 MUSD Achieve Sales objectives Page | 6
  • 7. The metrics will be measured quarter by quarter according to plan Figure 2, the complete P&L can bee seen in Annex 1. Figure 2. 5.2. Market Performance. In terms of market performance the main objective is how well all the commercial efforts performed by the firm. The BPS Cardiac it is part of the Catheterization Market as we can see in Figure 1. Figure 1. Page | 7
  • 8. Sales & New Customers Goals per Quarter. 2010 2011 2012 2013 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Sales - - - - - - - - - - - - 12,831,585 12,870,585 12,909,585 New Customers - - - - - - - - - - - - 257 257 258 2014 2015 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Sales 12,987,585 13,026,585 13,065,585 13,104,585 13,143,585 13,182,585 13,221,585 13,260,585 New Customers 260 261 261 262 263 264 264 265 The metric will be measured quarterly and the owner will be the responsible for Marketing & Sales. 5.3. Marketing Effectiveness. The marketing effectiveness will be measured in terms of how our commercial efforts have good performance and effectiveness in the market such as. The branding, sales cost, and close rate. Sales Funnels Goals. 2010 2011 2012 2013 Sales Funnel Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Gross Contacts - - - - - - - - - - - - 3,666 3,677 3,688 Effective Contacts - - - - - - - - - - - - 2,566 2,574 2,582 Proposals - - - - - - - - - - - - 1,027 1,030 1,033 New Customers - - - - - - - - - - - - 257 257 258 Page | 8
  • 9. 2014 2015 Sales Funnel Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Gross Contacts 3,711 3,722 3,733 3,744 3,755 3,766 3,778 3,789 Effective Contacts 2,598 2,605 2,613 2,621 2,629 2,637 2,644 2,652 Proposals 1,039 1,042 1,045 1,048 1,051 1,055 1,058 1,061 New Customers 260 261 261 262 263 264 264 265 Gross Contacts: 100% Effective Contacts: 70% Proposals: 28% Close Rate: 7% Branding Strategy: The efforts will be focused in three targets a) Physicians/Nurses b) Medical Institutional Purchasers. c) Scientific community focused on medical devices. In order to reach Physicians, Nurses and scientific communities and purchasers of hospitals the branding efforts will be performed mainly through events, tradeshows, conventions and magazines, such as: Media/Event Description Participation MD Expo Austin MD Expo Austin is the most Frequency: Yearly comprehensive conference ™ show for the medical equipment sales and Sponsor the event and have a booth service industry. The event will in the expo. showcase latest trends of innovations products and for related Responsible: Sales & Marketing. sector under single roof at the Renaissance Austin Hotel. IMD Expo IMD Expo, a dedicated medical Frequency Yearly devices design, engineering, material selections. Where institutional Sponsor the event and have a booth purchaser goes to see the newest in the expo. technologies in Medical Devices. Responsible: Sales & Marketing. American College Cardiologist Event where most prestigious Frequency Yearly. Yearly Summit cardiologist share their experiences in the cardiology field Sponsor the event and have a booth in the expo. Responsible: Sales & Marketing. Page | 9
  • 10. Each quarter the advertising will be performed and measured, we will look to invest in media and events where the cost per thousand impacts will be less that $30 USD in order to optimized the investment, such as Google adwords, AOL, American Heart Associations. The sales cost at the beginning of the plan should be around 35% and going down up to 29%, this metric will be measured every quarter. Additionally the close rate will be monitored in order to achieve the sales goals a close rate of 7% will be set for the sales force. 5.4. Investment in the Firm’s Future. The on investment in the future, will be set in two types of strategies a) R&D to look for new products and improvements b) Sales Offices The R&D activities will be measured annually with quarterly deliverables but due to the nature of the industry the main deliverables will be measured every year according to plan. Initiative Description Due Date/Investments for technology development Data Communication Have data communications via Q4 2013/$300 KUSD Ethernet, serial port or Bluetooth CRM connection Incorporate the wireless Q4 2014/$600 KUSD communication with the sensor New Application devices Have data communications via Q4 2015/$1 MUSD (personal device, physician Ethernet, serial port or Bluetooth office, etc) To CRM Improvements will be focused on R&D in the following subjects. a) Sensors communications (wireless). b) Device Connectivity to a Hospital intranet or CRM. c) New applications devices such as personal device or physician office device, etc. Sales Offices. The main market will be US, therefore in order to cover main markets such as Every Office a) Boston: Q1-2013 Page | 10
  • 11. b) New York: Q1-2013 c) Miami: Q2-2013 d) Atlanta: Q2-2013 e) Houston: Q3:2013 f) Los Angeles:Q3:2013 Every Sales Office will have in terms of headcount: 1) Sales Senior Manager: $120,0000 2) Four Sales Rep: $80,000 The cost of very office & Office Operations wil be $100K a year. 5.5. Creation of Wealth. In terms of wealth creation, there are two critical points a) Net Income generation b) Fund raising In terms of the project Net Income is very critical, this metric will be measured quarterly and the main responsible will be the CFO and the CEO. Additionally fund raising will be a critical activity because $11 MUSD of cash is required to succeed on the business as we can see in the chart. Metrics will be established suc as: Page | 11
  • 12. a) Due date to have the Investment and Technology Prospectus: August 2010 b) Road show for VC Investors : September/October 2010: Goal Make 50 presentations c) Due date for raising capital before Dec 31st 2010. 5.6. Human Resource Management. Corporate Culture: Will be based on innovation, flexibility, urgency sense, integrity and customer satisfaction. Advisory Boards: In order to have a great advisory board will be recruited to be part of the project: Tecnológico de Monterrey: a) Ozmar Zavaleta, PhD: Dean of the Business School (undergraduate programs) b) Jose Ramos, PhD candidate: Biodesign Technology Transfer Office. c) Clelia Hernandez, MBA: SME Business Support Program Director. d) Humberto Pena, PhD: Academic Entrepreneurship Director. e) Raul Ruiz, PhD: Academic Marketing Director. f) Manuel Farias, PhD candidate: Tec de Monterrey – Biodesign Program Director. Universidad de Guanajuato: Teodoro Cordova, PhD; Inventor of the technology IDZ and RFID Company: Hector Gomez. US General Manager. 2009 most innovative company in Texas. Alestra: Jorge Aragon. Strategic Planning Director. Alestra is an AT&T J.V. in Mexico. The hiring plan is the following: (Sales Reps OutSource the rest of the Staff Insource) Position Salary Starting Date CEO $250,000 Finance Sales & Marketing (HQ - CMO: $120,000 Q1: 2010 Chicago) Sales Rep: $80,000 Q1: 2013 Sales Reo: $80,000 Q1: 2014 Sales Rep: $80,000 Q1: 2014 Sales Rep: $80,000 Q1:2015 Manufacturing: $200,000 Q3: 2010 Sales Branch Offices a) Boston Every Sales Office will have in Q1: 2013 b) New York terms of headcount: Q1:2013 Page | 12
  • 13. c) Miami Q2:2013 d) Atlanta 1) Sales Senior Manager: Q2:2013 e) Houston $120,0000 Q3:2013 f) Los Angeles 2) Four Sales Rep: $80,000 Q3:2013 Manufacturing COO: $200,000 Q3: 2010 Operation Manager: $80,000 Q3:2012 Operation Manager: $80,000 Q3:2012 Manufacturing & Tecnology Q3:2012 Workers (4): $200,000 Regulatory CRO: $200,000 Q1:2010 Customer Service CSO: $200,000 Q3: 2010 Customer Service Manager: $80,000 Customer Service Manager: $80,000 Workers (4): $200,000 5.7. Asset Management. In terms of asset manager the metric and the focus will be in terms of inventory turnover period (two months) and this metric will be assigned to the CMO and the COO. Additionally proper admistration of patents should be done with the USPTO, fee patments and government notice should be managed for the following patents. Initiative Description Filing Due Date Data Communication Have data communications via Q1 2014 Ethernet, serial port or Bluetooth CRM connection Incorporate the wireless Q1 2015 communication with the sensor New Application devices Have data communications via Q1 2016/ (personal device, physician Ethernet, serial port or Bluetooth office, etc) To CRM 6. Annex 1 -- (Financials) Annex 1 -- P&L (Financials) -- USD Page | 13
  • 14. Annex 1 -- P&L (Financials) -- USD Page | 14
  • 15. Annex 1 -- P&L (Financials) -- USD Page | 15
  • 16. Annex 1 -- P&L (Financials) -- USD Page | 16
  • 17. Annex 1 -- Cash Flow Statement (Financials) MUSD Page | 17
  • 18. 2010 2011 2012 Cash-Flow Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 CashFlow From Operating Activities $ (0.13) $ (0.29) $ (0.38) $ (0.41) $ (0.39) $ (0.26) $ (0.26) $ (0.26) $ (0.48) $ (0.31) $ (0.42) $ (0.53) CashFlow From Investment Activities $- $- $- $- $- $- $- $- $ 0.08 $ 0.40 $ 0.20 $ 0.20 CashFlow From Financial Activities Activities $- $- $- $- $- $- $- $- $- $- $- $- Free Cahs Flow $ (0.13) $ (0.29) $ (0.38) $ (0.41) $ (0.39) $ (0.26) $ (0.26) $ (0.26) $ (0.56) $ (0.71) $ (0.62) $ (0.94) 2013 2014 2015 Cash-Flow Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 CashFlow From Operating Activities $ 3.65 $ 3.85 $ 3.87 $ 3.88 $ 3.86 $ 4.09 $ 4.10 $ 4.12 $ 4.07 $ 4.33 $ 4.34 CashFlow From Investment Activities $- $- $- $- $- $- $- $- $- $- $- CashFlow From Financial Activities Activities $- $- $- $- $- $- $- $- $- $- $- Free Cahs Flow $ (5.78) $ 3.05 $ 3.07 $ 3.08 $ 2.95 $ 3.28 $ 3.29 $ 3.30 $ 3.15 $ 3.51 $ 3.52 Page | 18