J & J Solutions has developed a closed system transfer device for safer handling of chemotherapy drugs. Their device eliminates risks of contamination, standardizes compounding to reduce errors, improves workflow efficiency, and reduces costs. They are seeking funding to complete product development including alpha and beta testing, obtain FDA approval, and launch the product to address a $1 billion market that is growing due to increasing cancer rates.

1. J & J SOLUTIONS, INC.
EXECUTIVE SUMMARY
J & J Solutions has developed a fully-vetted, patent pending prototype enabling the more effective, efficient, and affordable
handling of chemotherapy and other hazardous drugs in a clinic, hospital, pharmacy, and research setting. This type of
device, known as a closed system transfer device (CTSD), is advocated by groups such as the Occupational Safety and
Health Administration (OSHA), the American Society of Health System Pharmacists (ASHP), and the Oncology Nursing
Society (ONS). The technology presents a strong value proposition and offers the following features and benefits:
Self-contained device that effectively eliminates the risk of contamination, ensuring worker safety
Standardized compounding methodology that mitigates errors and increases accuracy, enhancing patient care
Improved workflow efficiencies that boosts capacity with equal or fewer staff, providing greater throughput
Increased personnel utilization, decreased personnel needs, minimized drug wastage, reducing operational costs
Scaled product offering that is affordable to purchase, easy to implement, simple to use, generating strong ROI
The company is proceeding rapidly, focusing on product development and recruiting the full management team to lead the
product through FDA Class II clearance, beta testing, full production, and sales and distribution. The opportunity for this
particular product arises from the severe health risks to patients and workers along with industry recommendations,
corroborating regulation, and the proven ineffectiveness, critical inefficiencies, and high costs of existing devices.
Recently, the National Institute of Occupational Safety and Health (NIOSH) issued an alert regarding the extreme dangers
of working with hazardous pharmaceuticals and acknowledged that over 5.5 million workers are exposed to hazardous
drugs in the U.S. NIOSH also confirmed that the known side effects include: miscarriages, infertility, liver and/or kidney
damage, and the development of cancers. United States Pharmacopeia (USP) has since implemented regulation <797>,
which supports the use of a closed system transfer device or substantive equivalent when compounding hazardous drugs. A
closed system, as defined by NIOSH, “mechanically prohibits the transfer of contaminants into the system, and the escape of
vapors out of the system.” No product meets this definition as all existing products allow “the escape of vapors out of the
system;” several studies corroborate this fact. Current devices are also inefficient and costly as they increase the time
required to prepare medications, and they add between $100,000 and $300,000 in non-reimbursable annual costs.
The annual U.S. market potential for hazardous drug handling devices is in excess of $1 Billion. Due to the extended
lifespan of Baby Boomers, cancer and chemotherapy rates are increasing at about 18% per year, which will increase the
market potential to over $2.5 billion within five years. The company’s target market is comprised of “outpatient
community settings,” defined as private physician’s practices and other outpatient cancer treatment centers. According to
U.S. Oncology, “more than 80 percent of cancer treatment is provided in outpatient community settings.”
J & J Solutions is leveraging the expertise of various outsourcing partners to expedite the time to market. Leading R&D
is LTB Engineering, a fast-paced R&D firm specializing in the creation and deployment of disruptive technology. The
company is also working with two regulatory approval agencies, NAMSA, an independent testing firm, and EMERGO, an
FDA consulting company, to ensure regulatory compliance and to accelerate FDA clearance. The company has also
recruited beta sites who are interested in publishing white papers to validate the effective of the product to the industry.
Finally, the company also has strong ties with personnel employed with prospective licensing partners who will lead the
marketing, sales, and distribution of its products, accelerating market penetration on a global scale.
J & J Solutions has enlisted several clinical, engineering, and business professionals with 250 years of collective experience.
Clinical advisors include Dr. Timothy Tyler, PharmD and Director of Pharmacy at Desert Regional Medical Center, who has
expressed written interest in purchasing the product. Lucille Power, M.S., has 35 years of drug compounding experience
and was a writer of the NIOSH Alert, and James Wagner has 28 years of free air flow expertise and is a member of the
USP regulatory committee—both are consulting us on the product requirements. Dr. Dean Gesme, MD, is a practicing
oncologist with 30 years managing community clinics; he has written a letter recommending the product for purchase by
his clinic. Greg Lyon, founder of LTB Engineering, is personally leading R&D; he has spawned seven start-ups and has
introduced hundreds of new products. Curt Nelson is a seasoned entrepreneur with 25 years of successful business creation.
The company has raised $100,000 and used it to secure patent protection, to obtain proof of concept, to construct a
model prototype, and to substantiate market viability. The company has assembled a world-class legal IP, product
development, and market research team to attain these objectives. J & J Solutions is currently seeking $500,000 to achieve
a series of value-adding milestones, including: alpha prototype, product testing, market research, CEO recruitment,
consulting costs, legal fees, and working capital. These milestones will be critical in raising $3 million in Q2, 2009 to be
used for a commercial beta product (December, 2009), independent testing (Q1, 2010), and FDA approval (Q2, 2010).
The company will seek $5 million in Q2, 2010 to invest in: production tooling, marketing plan, beta testing, and product
upgrades. Initial revenues will be realized in beta testing (Q2, 2010) and break-even (Q4, 2012) is projected at $9.8
million in sales. The firm’s exit strategy is via acquisition, and historical precedents along with financial forecasts have been
utilized to project a 2013 liquidation event, generating an attractive ROI for early-stage investors.