Gluco Center Concept Paper 2009


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Gluco Center Concept Paper 2009

  1. 1. 2009 Business Plan Competition at The Merage School of Business The GlucoCenter™ Concept A Chronic Disease Management Model for A “One-Stop-Shop” Patient Focused Diabetes & Lifestyle Management Center By Manas Kanungo MBA, MS Bioeng, MSEE, BSEE Romilla Batra MD, UC Irvine - HCEMBA-09 Founder, IMM USA LLC Medical Advisor, IMM UC Irvine - HCEMBA-09 Assoc Program Director, IM Residency Program 914-831-3195 (Home/Office: NY) Director, Pav III Internal Medicine Practice 858-610-3060 (Cell Phone) Assoc Prof. of Medicine, UC Irvine, CA +1-949-307-6750 Nachiketa Das MBA, BSEE Brian T. Dao BS Information and Computer Science Financial & Strategic Advisor, IMM Logistics and Operations Advisor, IMM MBA London Business School & Int’l Univ. of Japan Managing Partner, Idea Labs LLC, Las Vegas, NV Sr. V.P. Lehman Brothers, New York +1-949-836-9579 +1-917-797-4937; David M. Ochi MBA, MPM, BS, BA Frank Basile Marketing & Strategic Advisor, IMM President & CEO Managing Partner, Idea Labs LLC, Las Vegas, NV Diabetes America Inc., Houston, Texas +1-949-400-OCHI 832-266-9963 CONFIDENTIALITY STATEMENT: This business “Concept Paper” including all its contents, ideas, proposals, and/or business concepts described herein are confidential and the property of IMM USA LLC and its rightful owner/s. This Concept Paper contains information solely for the purposes of participation in the 2009 Business Plan Competition at The Merage School of Business (“BPCMSB”) offered through the University of California Irvine’s Paul Merage School of Business and the Don Beall Center for Innovation and Entrepreneurship. Contents of this Concept Paper may be read, viewed, discussed, communicated, reviewed, analyzed, and evaluated by and between the authorized judges, members and participants of, and solely for the purposes of competing in, this 2009 BPCMSB competition. Recipient/s may not copy, scan, Fax, reproduce, divulge or otherwise communicate and/or distribute this Concept Paper in any form, in whole or in part, outside the purview of the intended purpose mentioned herein, without the expressed written consent of IMM USA LLC and/or its authorized representative/s. Recipient/s of this Concept Paper may only use any and/or all part/s of this Concept Paper, concepts, or its contents in any form solely on a need to know basis for the purpose/s intended herein, for potential mutual benefit; and may NOT use any and/or all part/s of this Plan, concept, or its contents solely for its (recipient/s’) own benefit, in any form. 2009 BPCMSB: Concept Paper: GlucoCenter™ © 2009 IMM USA LLC Page# 1 of 4 CONFIDENTIAL DOCUMENT
  2. 2. “The lives of far too many people in the world are being blighted and cut short by chronic diseases such as heart disease, stroke, cancer, chronic respiratory diseases and diabetes. This is no longer only happening in high income countries. Four out of five chronic disease deaths today are in low and middle income countries.“ - LEE Jong-wook Director-General, World Health Organization I. CONCEPT & VALUE PROPOSITION: Every 21 seconds, a new diabetic is diagnosed in the US. Globally, every 10 seconds, a person dies from diabetes related causes, which is predicted to rise 25% in the next 10 years. Diabetes is the most pervasive of all diseases, in that it causes 2-4 times more heart diseases and stroke, 60% of amputations, 44% of new cases of kidney diseases, and is the leading cause of new cases of blindness. Worldwide, diabetics are projected by the International Diabetes Federation to grow by over 54% from 246M in 2007 to about 380M by 2025. 80% of all diabetes cases will come from low-mid income countries by 2025, with highest numbers and annual growth increases coming from emerging countries like India, China, Brazil, Mexico, and Russia. 7.6% of the 30-69 year old Brazilians are diabetic. It is also estimated that 40% of Brazil’s population – over 75 million people - are overweight with 1 in 10 being obese – a leading cause of Type 2 diabetes (90% of all diabetics). However, issues surrounding the appropriate prevention, treatment and monitoring of diabetics - awareness, education, motivation, diet, nutrition, exercise, stress, social stigma, compliance, reinforcement, availability and convenience of related services – remain problematic for most of the population of Brazil regardless of economic status. Currently education, distribution, and costs are the leading causes for the lack of quality, effective, and comprehensive treatment in Brazil. IMM USA LLC will introduce the revolutionary GlucoCenter™ concept in Sao Paulo, Brazil – an emerging market with a relatively high adoption rate, low hurdles, and optimal return potential amongst developing countries, and one in which our team has extensive inroads with prior successes. GlucoCenter™ will provide a total solution “one-stop-shop” narrowly focused holistic chronic disease management based products, services, and support for diabetics and those at risk of becoming diabetics such as obese patients. Patients can get everything they need to manage their diabetes including: • Education, awareness, training, support, and reinforcement programs to increase motivation and compliance • Products and services for diet, exercise, diabetics: insulin, pumps, glucose tablets, meters, strips, and related items • Lifestyle management tools integrated with recommended therapeutic regimen and doctors’ oversight The first GlucoCenter™ will be conveniently located near high density offices and mid-high income residential areas in the Jardims neighborhood of Avenida Paulista in Sao Paulo. Subsequent GlucoCenters will be located in the affluent Pinheiros and Itaim Bibi districts of Sao Paulo as well as in other major population areas of Brazil including Rio De Janiero, Salvador, Porto Alegre, Brasilia, Fortaleza, Belo Horizonte and Recife. These GlucoCenters will service over 85% of the target market within 7 years. The first GlucoCenter™ is expected to break-even in 2 years with 3-5 x ROI and 20% market share in 5 years. II. WHY DIABETES CENTERS IN BRAZIL? Brazil offers the highest future business potential in the diabetes market with the least relative hurdles of entry: • Untapped Market - Brazil has one of the highest number of untapped diabetics and obese patients with increasing 4 7 disposable incomes among improving economies. Over Korea Diabetes Prevalence in 77 45% of diabetics and 80% of obese patients have yet to be Japan Emerging Countries will 4 diagnosed, with 23% not treating themselves at all. Egypt 8 increase significantly compared Less than 5% of diagnosed diabetics actually test their Mexico 4 9 to developed countries blood glucose, barely complying with recommended Brazil 6 11 therapeutic regimen because of limited access to 10 Russia 11 comprehensive awareness, education, and training 6 Pakistan 12 programs, and a lack of availability of cost effective quality 16 US 23 products & services. China 24 • Favorable Demographic Trends – Brazil has an aging, 46 36 urban population that is living longer, is more obese and India 74 has more disposable income. Over 50% of the 190 million 0 10 20 30 40 50 60 70 80 population in Brazil are now considered “middle-income” (with jobs, vehicles, credit), with disposable income. 2009 BPCMSB: Concept Paper: GlucoCenter™ © 2009 IMM USA LLC Page# 2 of 4 CONFIDENTIAL DOCUMENT
  3. 3. • Brazil Knowhow & Process Expertise – High costs, long time to market, know-how for product registration processes, local distribution and difficult market environments make it challenging for small-medium companies to enter emerging countries such as Brazil. The GlucoCenter team brings a wealth of Brazil specific knowledge, expertise, relationships, and successful past experience in a similar JV & Co-marketing project between Roche & Eli Lilly that leveraged a Harvard Medical – Joslin Clinic – Brazilian Diabetes Society education, awareness, and training program for Endocrinologists, General Practitioners, and Nurses, resulting in #1 market positions for both companies and a nationwide acceptance and practice of globally recognized standards of care for diabetics. • Profits from Day One, with Mostly Out-of-Pocket Business - While most insurance, government, or reimbursement agencies in emerging countries do not cover expenses outside of hospitals, there are no restrictions on types of treatments or limits on payments, for related out of pocket products or services as they exist in developed countries, giving us the opportunity to target those with disposable incomes in a virtually all cash-pay environment with limited insurance receivables. In addition, we plan to capitalize on partnerships with established diabetes specialized pharmacies and/or clinics, leveraging their existing sales, profits, brands, and diabetes patient customer bases. • Industry Feedback – Initial surveys and discussions with key opinion leaders (KOLs) including health care professionals, manufacturers, distributors, and patients suggest strong support for a comprehensive service like GlucoCenter™. III. PRODUCTS, SERVICES, & SUPPORT: Products: Distribution of diabetic products is a significant problem in Brazil. Quality control, reliability, and pricing are all concerns for the target market. By establishing strategically located centers, the GlucoCenter™ brand can become synonymous with reliable diabetic supplies and services. Patients can rest assured that all products and services will meet global competitive features, performance, and approval standards and encompass everything needed for diabetes. Below are some key product categories with respective estimated gross margins: Product Category Estimated Gross Margins Consumables: Insulins, Urine & Blood Glucose Strips, Lancets, Needles, Tubing 60% Devices: Glucose Meters, Insulin Pens & Pumps, Syringes, BP, Temp, Exercise m/c 30% Oral Medicines: Anti-diabetics, Glucose, ED Tablets, Diet OTCs, Supplements 75% Complementary Test products: HbA1c, Cholesterol, Ketone, Triglycerides, etc 40% Personal Products: Shoes, socks, creams, other wearable products for diabetics 40% Food & Nutrition Products: Diet foods, sugar-less, no/low-salt, fiber, etc 30% Services & Support: GlucoCenter™ will coordinate the following services and support using highly trained personnel: • Diabetic Self-Management Tools through a comprehensive PC, Internet, and Mobile computing platforms and web portals for patient profile and lifestyle management tools, doctor and patient forums and communications, articles and blogs, online commerce, advertisements, etc, in collaboration with partners in these fields. • Education, Awareness, Training, Support, and Reinforcement Programs, Seminars, and Sessions led by appropriate professionals, for associated therapeutic regimen, e.g. for insulin administration, glucose monitoring, managing stress, cooking for diabetics, exercise, foot and eye care. • Patient Support Groups to share, learn, reinforce, and improve health, morale, motivation, compliance. • Membership Club with promotions, discounts, awards, and programs for Frequent Buyers, monthly service check of devices, product upgrades, newsletters, supply reminders, sessions, etc. IV. COMPETITIVE ADVANTAGE: GlucoCenter™ will have unique competitive advantages through a shrewd combination of strategic partnerships; leveraging existing contacts, relationships, and relevant experiences of its team members in this sector; and being the first movers in a new business model that will be hard for current individual major players to duplicate due to their corporate focus: • Unparalleled experience and strategic connections within the industry will provide a significant barrier of entry to competitors. The management team of GlucoCenter™ has extensive inroads in this marketplace through years of hands-on similar experiences working in Brazil, India, China, and other emerging markets in the diabetes field. • Strategic partnership with Diabetes America in Texas: A reimbursement / insurance based comprehensive chain of diabetes health centers in United States, which will provide additional operational insights and credibility, and assist GlucoCenter™ by providing world class guidance for diabetic medical services. • Strategic partnerships and leveraging existing relationships with global manufacturers of diabetic supplies will provide a broad portfolio of quality products with cost advantages for national distribution. 2009 BPCMSB: Concept Paper: GlucoCenter™ © 2009 IMM USA LLC Page# 3 of 4 CONFIDENTIAL DOCUMENT
  4. 4. • Strategic partnerships with medical centers, clinics, and specialized diabetes stores in Brazil, and co-opting with potential rivals in the retail market, will provide valuable access to databases of affluent patients, marketing, sales, distribution, promotions, and medical marketing focused outcomes studies. • Comprehensive service offerings will be a key differentiator of GlucoCenter™. A few non-profit, semi government supported “Diabetes Associations” with similar concepts cater to low income populations. Specialized diabetes pharmacies do not/cannot provide the depth and breadth of services to match a GlucoCenter™. • Convenience through strategic placement of GlucoCenters™, backed by home/office delivery services specifically designed for the target market. • Regulatory restrictions prevent major manufacturers such as Eli Lilly and Roche from selling or promoting directly to patients, or entering in related areas that are not directly related to their business. Any efforts they do take to promote are limited to their product portfolio and are vulnerable to patients and physicians seeking options. • Medical centers are too generalized or too focused and therefore do not offer the wide variety of specialized solutions that diabetic patients require. Further, most medical centers or specialized pharmacy stores are not equipped and managed in a manner conducive to the education, diagnosis, and treatment of chronic diseases. V. GLUCOCENTER’S BUSINESS POTENTIAL: The International Diabetes Federation estimates that the number of Significant market potential exists in diagnosed patients in Brazil will grow from 4 million in 2005 to 7.5 unreimbursed target countries due to: million by 2025. The estimated number of glucose monitor owners, if • growth in the number of diabetics with grown proportionally, should jump to 490,000 from 256,000 over disposable income the same time period. However, with expanded market education • undiagnosed vs. diagnosed diabetics and joint efforts with manufacturers, GlucoCenter™ estimates that • gaps in those who should vs. actually the number of diagnosed and glucose monitor owners will more managing their condition likely be 9.5 million and 970,000 respectively. • low test frequencies Estimates Brazil Most sales in the diabetes market are dominated by BGM Insulin Orals Other TOTAL insulin and blood glucose monitors and strips (BGM), 2007 $ $83M $165M $45M $15M $308M followed by oral tablets and other products. ‘07Growth 10% 7% 10% 10% 10% Preliminary total market size estimates for Brazil are 2012 $ $130M $250M $90M $45M $515M shown to the right but DO NOT INCLUDE value-added ‘12Growth 12% 10% 12% 10% 12% services that compliment the products listed. VI. MANAGEMENT AND ADVISORY TEAM: • Manas Kanungo, IMM’s Founder, has over 15 years of diabetes related experience (25 total), having successfully conceptualized, developed, and managed similar initiatives in several emerging countries including in Brazil. • Romilla Batra is from India, an emerging country, with clinical and education experience from US, and manages a similar pilot Medicare sponsored “Advanced Medical Home for Diabetics” program at UC Irvine. She will develop and implement medically sound patient focused chronic disease diabetes management and lifestyle programs. • Nachi Das, with 18 years international background from the financial and business development sectors, will help develop and oversee global financial, strategy, modeling and risk management. • David Ochi has 20 years of experience as an entrepreneur and has successfully started and exited several companies. He brings international marketing and strategic planning experience that includes the introduction of Disney Consumer Products into the Indochina marketplace. • Brian Dao offers nearly a decade of technology and operational expertise. His efforts focus on efficient operations that utilize technology and applied operations techniques to achieve business objectives in a start-up environment, both domestically and internationally. • Frank Basile, President & CEO of Diabetes America Inc, will bring immense insight, and significant organizational, operational, and disease management experience to guide the formation and growth of GlucoCenter. VII. PROGRESS / PROJECT STATUS: The GlucoCenter™ project was initiated in December 2006. The team has performed name searches and registered the company, trademarks, and domain names. It has also selected and obtained NDAs from key in-country managers; lined up product manufacturers for potential distributions; and completed drafts of key business plans and strategies. Members of the team will be visiting Brazil in early 2009 to meet with potential in-country investors, partners, and key opinion leaders, to obtain first hand local feedback and agreement in principle for this concept, in order to finalize a detailed business execution plan. The team is currently looking for, and in discussions with, investors. 2009 BPCMSB: Concept Paper: GlucoCenter™ © 2009 IMM USA LLC Page# 4 of 4 CONFIDENTIAL DOCUMENT