LiquiLume Diagnostics develops molecular diagnostic devices that can detect individual molecules rapidly and inexpensively. Their initial focus is on nucleic acid testing (NAT) and protein biomarkers. They plan to first sell to research laboratories for research use only, then pursue FDA clearance to sell to clinical labs and hospitals. Their technology allows highly automated sample processing and analysis at low concentrations and low cost compared to standard methods.

1. Molecular diagnostic devices
that make every molecule count
Number of
Customers
97
LIQUILUME DIAGNOSTICS
Total target opportunity: $5.1 Billion

2. Holger Schmidt (PI)
Prof. Electrical Engineering
UC Santa Cruz
Philip Measor (EL)
PhD, Electrical Engineering, UC Santa Cruz
CEO, LiquiLume Diagnostics, Inc.
Bob Dunkle (IM)
MBA, Entrepreneur-in-Residence QB3
ABES Partners
Aaron Hawkins (Co-founder)
Prof. Electrical and Computer Engineering
Brigham Young University (BYU)
Team members

3. - Build viable MVP
- Identify and win
first customers
- Develop partnerships
and advisors
- Set up production
- Assess regulation
needs
The Business Model Canvas LiquiLume Diagnostics HS / PM / BD
1
20 03 2012
Key Partners Key Activities Value Propositions Customer
Relationships
Customer Segments
Channels
Revenue StreamsCost Structure
Key Resources
1. Cancer researchers
2. Hospital labs
3. Test labs
4. Physicians
5. Pharmaceutical comps
- Early diagnosis, better
treatment (docs)
- Unprecedented perfor-
mance [proteins]
(docs, researchers)
- Lower test cost, faster
[NAT] (test labs, hospital
labs, payors)
- Companion Dx
(pharmaceuticals)
- Quality of life
(patients)
- R&D (scientists)
- IP licensing + filing
- Chip manufacturing
- Assembly/design
- Chip foundry
- acad/industr. research
labs to validate
- distributors
- Potential parent comp.
- Regulators
- Proteins: Value-driven (unmatched performance)
- NATs: Cost-driven (cheaper, faster, simpler)
- Economies of scale: increasing # of biomarkers
- Economies of scope: both NATs and proteins on one platform
- Fixed costs: ongoing R&D; chip fabrication fairly simple
- Instrument: feature-dependent; negotiable; possibly low
- Consumables: fixed; mass/volume discounts
- Service contracts
- Service sales: test per marker per sample
- Direct purchase
- Distributors
- Website sales
- Trade shows / conf.s
- On-site setup
- Service contracts
- On-site support
- Co-develop (research)
- Web forum
Designed for: Designed by: On:
Iteration:

4. Original value propositions
Detect individual molecules rapidly and inexpensively
Nucleic acid testing (NAT) Protein biomarkers
• save cost • unprecedented sensitivity

5. Standard Nucleic Acid Testing Workflow
Take sample
Mix sample and
probes
Extract
DNA/RNA
Thermal cycles Analysis
Labor intensive, subject to inaccuracies at low concentrations, high cost

6. LiquiLume Workflow
Low volume sample
On-chip sample prep
Add to disposable chip
Run Assay Read out result
Add reagents
Highly automated processing, highly accurate at low concentrations, low cost

7. LDI develops
Prototype & test
kits
Initial company roadmap
Sell to:
- Clinical labs
- Research labsTrials;
510(k);
Cost: ??
2 years
Research labs
partner to
validate product
Sell to:
- Point of care
- Physician officesCLIA
waiver
1 year

8. Market size: In-vitro Diagnostics
Worldwide:
$44.3B
US: $19B
ID: $4.6B
Source: Kalorama Information (2009)
Oncology:
$1.85B
TM: $440M
TM: $2.4B

9. Out of the building: Customer interviews
RUO labs
• Oncologists
• Pathologists
• Virologists
• Sequencing center
• Biomolecular eng.
• Anal.chemist
• MS facility
Regulators
Clinical labs
Partners Water safety
Industry
• Stanford MDx
• Quest
• LabCorp
• Idexx
• Test labs
• Drug company
• Vets
• Cancer immuno-
therapy
• Private oncologist
• Pharmaceuticals
• CMS
• CAP
• CLIA
• FDA
• Semiconductor
foundry
• Assay developers
• OEMs
• Distributors
• Semiconductor
industry
• Pool users

10. Out of the building: Options!
water
chemicals
Service test
Research labs
Clinical labs

11. Test service (S) vs. Instrument (I) model
Customer Type Preference
UCSF oncologists Academic I
Genentech Industry I
Lab Corp Clinical lab I
Quest Clinical lab I
Idexx Clinical lab I
Stanford oncologists Academic I
Stanford MDx lab Academic I
TBRI (ID) Academic I
UCSF microbiology (ID) Academic I
UCSF virologists (ID) Academic I
• VCs will not fund a hybrid instrument/test company

12. Clinical Trial Road
Feasibility
ProposalTrial Bid
Trials
Training?
$50k-$1M$3k
Pass?
$2k-50k
IRB
FDA
Submission
X
First MDx cost to approval: $100M, 7 yearsExample:
FDA approval

13. Aha Moment: Micro-RNA testing
Oncologist: “Micro-RNAs are emerging cancer biomarkers”
Scientist: “Micro-RNAs are not well suited for standard detection.”
Works!
Doesn’t
Work
20-30 bases
Successful short-strand
detection within 2 weeks!
Impact:
• New market segment
• New competitive weapon
• New value proposition
Validation

14. Target Market
water
chemicals
Service test
Research labs
Clinical labs

15. Refined company roadmap
510(k); PMA; $3-100M
5-7 years
RUO:
- Researchers
- Core labs
Sell to:
- Clinical labs
- Hospitals
RUO = Research use only
$$$

16. Source: Web of Science
Market size: Research-use only (RUO)
Worldwide:
$27.0B
US: $7.7B Target: $2.3B
0%
2%
4%
6%
8%
10%
12%
14%
Biochemistry
Microbiology
Biotechnology
Oncology
VeterinarySciences
Genetics
Immunology
InfectiousDiseases
CellBiology
PlantSciences

17. RUO Customer Archetypes
Academic research labs Core Diagnostic labs
• principal investigators
• large research effort involving
nucleic acids/proteins
• make purchase decision
• heavy instrument users
• joint publications
• academic core labs
• multi-user-facilities
• director or committee decides
• multiple instruments
• relatively high sample volume
• results go back to researchers

18. Revenue Model: “Razor / razor blade”
Academic research labs
Core Diagnostic labs
Razor - Instrument Blade - Chips and test kits
• loan or lease (~$500/month)
• option for discounted purchase
• ~3 options for chip types (~$50/chip)
• customized test kits (~$200/kit)
• direct sale (~80k for NATs;
~200k for proteins)
• ~3 options for chip types (~$500/chip)
• customized test kits (~$100/kit)
Additional revenue
• IP licensing of non-core applications
• protein tests for chem/bio researchers (~$200/test)

19. Chip
Manufacturers
RUO Ecosystem
LiquiLume
OEMs
Packaging
Reagents
Shippers
Clinical Labs
$$$
Research Labs
$$$
Distributors
$$
$$
Licensing
$$
Doctors

20. SBIRs
Seed Funding
MVP Production
Customer Validation
Next Steps

21. Iteration:
On:
The Business Model Canvas LiquiLume Diagnostics HS / PM / BD
9
23 05 2012
Key Partners Key Activities Value Propositions Customer Relations Customer Segments
Channels
Revenue StreamsCost Structure
Key Resources
1. Research
labs
(“RUO”)
2a. Test labs
2b. Hospital labs
- Unprecedented
performance
- New biomarker
detection (Micro-
RNA)
-Perform NAT and
protein detection on
one platform
- R&D (scientists)
- IP licensing / filing
- Assembly/design
- R&D
- Customer Acquisition
- Distributor cut
- Instrument manufacturing
- Chip fabrication
- IP
- Instrument
- Accessories
- Consumables
- Service contracts
- Licensing
- Direct purchase
(RUO)
- Trade shows /
conferences
- Publications
- Service contracts
- Direct
- On-site support
- Co-develop
(research)
- Web forum
Designed for: Designed by:
- MVP
- Customers
- Partners/advisors
- Production
- Regulation
- SBIRs
- Seed investment
Market
- Research labs
- Clinical labs
- Dx co-developers
Product/Operation
- Chip foundry
- Packaging
- OEMs
- Reagent suppliers
- Sample prep.
- Shippers
- Distributors

22. Canvas Slideshow

23. - Build viable MVP
- Identify and win
first customers
- Develop partnerships
and advisors
- Set up production
- Assess regulation
needs
The Business Model Canvas LiquiLume Diagnostics HS / PM / BD
1
20 03 2012
Key Partners Key Activities Value Propositions Customer
Relationships
Customer Segments
Channels
Revenue StreamsCost Structure
Key Resources
1. Cancer researchers
2. Hospital labs
3. Test labs
4. Physicians
5. Pharmaceutical comps
- Early diagnosis, better
treatment (docs)
- Unprecedented perfor-
mance [proteins]
(docs, researchers)
- Lower test cost, faster
[NAT] (test labs, hospital
labs, payors)
- Companion Dx
(pharmaceuticals)
- Quality of life
(patients)
- R&D (scientists)
- IP licensing + filing
- Chip manufacturing
- Assembly/design
- Chip foundry
- acad/industr. research
labs to validate
- distributors
- Potential parent comp.
- Regulators
- Proteins: Value-driven (unmatched performance)
- NATs: Cost-driven (cheaper, faster, simpler)
- Economies of scale: increasing # of biomarkers
- Economies of scope: both NATs and proteins on one platform
- Fixed costs: ongoing R&D; chip fabrication fairly simple
- Instrument: feature-dependent; negotiable; possibly low
- Consumables: fixed; mass/volume discounts
- Service contracts
- Service sales: test per marker per sample
- Direct purchase
- Distributors
- Website sales
- Trade shows / conf.s
- On-site setup
- Service contracts
- On-site support
- Co-develop (research)
- Web forum
Designed for: Designed by: On:
Iteration:

24. Iteration:
- MVP
- Customers
- Partnerships/advisors
- Production
- Regulation
The Business Model Canvas LiquiLume Diagnostics HS / PM / BD
2
21 03 2012
Key Partners Key Activities Value Propositions Customer Relations Customer Segments
Channels
Revenue StreamsCost Structure
Key Resources
1. Research labs
2. Hospital labs
3. Test labs
4. Pharmaceuticals
5. Defense clients
6. Physicians
- Unprecedented perfor-
mance [proteins]
(docs, researchers)
- Lower test cost, faster
[NAT] (test labs, hospi
tal labs, payors)
- Drug validation
(pharmaceuticals)
- PoC on-site diagnosis
(military)
- Early diagnosis, better
treatment (docs)
- Quality of life
(patients)
- R&D (scientists)
- IP licensing / filing
- Manufacturing
- Assembly/design
- Chip foundry
- Research labs
- Distributors
- Potential parent comp.
- Regulators
- Both cost (NAT) and value (proteins) driven
- Economies of scale: biomarker #
- Economies of scope: NATs + proteins
- Fixed costs: ongoing R&D; chip fabrication
- IP
- Instrument
- Consumables
- Service contracts
- Service sales
- Direct purchase
- Distributors
- Website sales
- Trade shows / conf.s
- On-site setup
- Service contracts
- Direct
- On-site support
- Co-develop (research)
- Web forum
Designed for: Designed by: On:
Bait and Hook

25. Iteration:
On:
- MVP
- Customers
- Partnerships/advisors
- Production
- Regulation
The Business Model Canvas LiquiLume Diagnostics HS / PM / BD
3
22 03 2012
Key Partners Key Activities Value Propositions Customer Relations Customer Segments
Channels
Revenue StreamsCost Structure
Key Resources
1. Research labs
2a. Hospital labs
2b. Test labs
4. Pharmaceuticals
5. Defense clients
6. Physicians
- Unprecedented perfor-
mance [proteins]
(docs, researchers)
- Lower test cost, faster
[NAT] (test labs, hospi
tal labs, payors)
- Drug validation
(pharmaceuticals)
- PoC on-site diagnosis
(military)
- Early diagnosis, better
treatment (docs)
- Quality of life
(patients)
- R&D (scientists)
- IP licensing / filing
- Manufacturing
- Assembly/design
- Chip foundry
- Research labs
- Distributors
- Potential parent comp.
- Both cost (NAT) and value (proteins) driven
- Economies of scale: biomarker #
- Economies of scope: NATs + proteins
- Fixed costs: ongoing R&D; chip fabrication
- IP
- Service tests
- Instrument
- Consumables
- Service contracts
- Service sales
- Direct purchase
- Distributors
- Website sales
- Trade shows / conf.s
- On-site setup
- Service contracts
- Direct
- On-site support
- Co-develop (research)
- Web forum
Designed for: Designed by:
Bait and Hook

26. Iteration:
On:
- MVP
- Customers
- Partnerships/advisors
- Production
- Regulation
The Business Model Canvas LiquiLume Diagnostics HS / PM / BD
4
28 03 2012
Key Partners Key Activities Value Propositions Customer Relations Customer Segments
Channels
Revenue StreamsCost Structure
Key Resources
1. Research labs
2a. Hospital labs
2b. Test labs
3. Ultrapure water
user (power
plant, semi.)
- Unprecedented
performance
[proteins]
(docs, researchers)
- Lower test cost, faster
[NAT] (test labs,
hospital labs,
payors)
- Cleaner water for
ultrapure
operations
- R&D (scientists)
- IP licensing / filing
- Manufacturing
- Assembly/design
- Chip foundry
- Research labs
- Distributors
- Potential parent
comp.
- Both cost (NAT) and value (proteins) driven
- Economies of scale: biomarker #
- Economies of scope: NATs + proteins
- Fixed costs: ongoing R&D; chip fabrication
- IP
- Service tests
- Instrument
- Consumables
- Service contracts
- Service sales
- Direct purchase
- Distributors
- Website sales
- Trade shows / conf.s
- On-site setup
- Service contracts
- Direct
- On-site support
- Co-develop (research)
- Web forum
Designed for: Designed by:
Bait and Hook

27. Iteration:
On:
- MVP
- Customers
- Partnerships/advisors
- Production
- Regulation
The Business Model Canvas LiquiLume Diagnostics HS / PM / BD
5
04 04 2012
Key Partners Key Activities Value Propositions Customer Relations Customer Segments
Channels
Revenue StreamsCost Structure
Key Resources
1. Research labs
2a. Hospital labs
2b. Test labs
3. Ultrapure water
user (power
plant, semi.)
- Unprecedented
performance
[proteins]
(docs, researchers)
- Lower test cost, faster
[NAT] (test labs,
hospital labs,
payors)
- Cleaner water for
ultrapure
operations
- R&D (scientists)
- IP licensing / filing
- Manufacturing
- Assembly/design
- Chip foundry
- Research labs
- Distributors
- Potential parent
comp.
- Both cost (NAT) and value (proteins) driven
- Economies of scale: biomarker #
- Economies of scope: NATs + proteins
- Fixed costs: ongoing R&D; chip fabrication
- IP
- Service tests
- Instrument
- Consumables
- Service contracts
- Service sales
- Direct purchase
- Distributors
- Website sales
- Trade shows / conf.s
- FDA clearance
- Publications
- Service contracts
- Direct
- On-site support
- Co-develop (research)
- Web forum
Designed for: Designed by:
Bait and Hook

28. Iteration:
On:
- MVP
- Customers
- Partnerships/advisors
- Production
- Regulation
The Business Model Canvas LiquiLume Diagnostics HS / PM / BD
6
11 04 2012
Key Partners Key Activities Value Propositions Customer Relations Customer Segments
Channels
Revenue StreamsCost Structure
Key Resources
1. Research labs
2a. Hospital labs
2b. Test labs
3. Ultrapure water
user (power
plant, semi.)
- Unprecedented
performance
[proteins]
(docs, researchers)
- Lower test cost, faster
[NAT] (test labs,
hospital labs,
payors)
- Cleaner water for
ultrapure
operations
- R&D (scientists)
- IP licensing / filing
- Manufacturing
- Assembly/design
- Chip foundry
- Research labs
- Distributors
- Potential parent
comp.
- Both cost (NAT) and value (proteins) driven
- Economies of scale: biomarker #
- Economies of scope: NATs + proteins
- Fixed costs: ongoing R&D; chip fabrication
- IP
- Service tests
- Instrument
- Consumables
- Service contracts
- Service sales
- Direct purchase
- Trade shows / conf.s
- FDA clearance
- Publications
- Service contracts
- Direct
- On-site support
- Co-develop (research)
- Web forum
Designed for: Designed by:
Bait and Hook

29. Iteration:
On:
- MVP
- Customers
- Partnerships/advisors
- Production
- Regulation
The Business Model Canvas LiquiLume Diagnostics HS / PM / BD
7
18 04 2012
Key Partners Key Activities Value Propositions Customer Relations Customer Segments
Channels
Revenue StreamsCost Structure
Key Resources
1. Research labs
2a. Test labs
2b. Hospital labs
- Unprecedented
performance
[proteins]
(docs, researchers)
- Lower test cost,
faster
[NAT] (test labs,
hospital labs,
payors)
-New biomarker
detection
-Perform all above on
one platform
- R&D (scientists)
- IP licensing / filing
- Manufacturing
- Assembly/design
- Chip foundry
- Research labs
- Distributors
- Potential parent
comp.
- Both cost (NAT) and value (proteins) driven
- Economies of scale: biomarker #
- Economies of scope: NATs + proteins
- Fixed costs: ongoing R&D; chip fabrication
- IP
- Instrument
- Consumables
- Service contracts
- Service sales
- Direct purchase
- Trade shows / conf.s
- FDA clearance
- Publications
- Service contracts
- Direct
- On-site support
- Co-develop (research)
- Web forum
Designed for: Designed by:
Bait and Hook

30. Iteration:
On:
- MVP
- Customers
- Partnerships/advisors
- Production
- Regulation
- SBIRs
- Seed investment
The Business Model Canvas LiquiLume Diagnostics HS / PM / BD
8
25 04 2012
Key Partners Key Activities Value Propositions Customer Relations Customer Segments
Channels
Revenue StreamsCost Structure
Key Resources
1. Research labs
(“RUO”)
2a. Test labs
2b. Hospital labs
- Unprecedented
performance
[proteins]
- New biomarker
detection [NAT]
-Perform all above on
one platform
- R&D (scientists)
- IP licensing / filing
- Manufacturing
- Assembly/design
- Chip foundry
- Packaging
- OEMs
- Reagent suppliers
- Sample prep.
- Shippers
- Distributors
- Dx co-developers
- Research labs
- Clinical labs
- Both cost (NAT) and value driven
- Economies of scale: biomarker #
- Economies of scope: NATs + proteins
- Fixed costs: ongoing R&D; chip fabrication
- IP
- Instrument
- Accessories
- Consumables
- Service contracts
- Direct purchase
- Trade shows / conf.s
- Publications
- Service contracts
- Direct
- On-site support
- Co-develop (research)
- Web forum
Designed for: Designed by:

31. Iteration:
On:
The Business Model Canvas LiquiLume Diagnostics HS / PM / BD
9
23 05 2012
Key Partners Key Activities Value Propositions Customer Relations Customer Segments
Channels
Revenue StreamsCost Structure
Key Resources
1. Research labs
(“RUO”)
2a. Test labs
2b. Hospital labs
- Unprecedented
performance
- New biomarker
detection (Micro-
RNA)
-Perform NAT and
protein detection on
one platform
- R&D (scientists)
- IP licensing / filing
- Assembly/design
- R&D
- Customer Acquisition
- Distributor cut
- Instrument manufacturing
- Chip fabrication
- IP
- Instrument
- Accessories
- Consumables
- Service contracts
- Licensing
- Direct purchase
(RUO)
- Trade shows /
conferences
- Publications
- Service contracts
- Direct
- On-site support
- Co-develop (research)
- Web forum
Designed for: Designed by:
- MVP
- Customers
- Partners/advisors
- Production
- Regulation
- SBIRs
- Seed investment
Market
- Research labs
- Clinical labs
- Dx co-developers
Product/Operation
- Chip foundry
- Packaging
- OEMs
- Reagent suppliers
- Sample prep.
- Shippers
- Distributors

32. Backup Slides

33. Competitors
Nucleic acid tests Protein detection