Hi Fi * Surat ℂall Girls Surat Dumas Road 8527049040 WhatsApp AnyTime Best Su...
Presentation TES Mobile
1. Development, creation
and international
launch of a line
of medical devices
to treat sensorineural
hearing loss
and tinnitus
Skolkovo
Инвестиционный меморандум
Investment memorandum
Saint Petersburg, January 2013
2. Skolkovo
1. Резюме меморандума
1. Memorandum summary
2. Project descriptionпроекта
2. Характеристика
3. Market descriptionрынка
3. Характеристика
4. Характеристика Заявителя
4. Applicant description
5. Financial plan план
5. Финансовый
6. Риски
6. Risks
7. Skolkovo Fund participation
7. Участие Фонда «Сколково»
8. Appendices
8. Приложения
January 2013
3. Glossary
Development, creation and international launch of the line of medical
Innovation project
devices to treat sensorineural hearing loss and tinnitus
Applicant ООО TES Mobile
Abbreviation 1 TES – Transcranial Electric Stimulation
Abbreviation 2 SNHL – Sensorineural Hearing Loss
Abbreviation 3 ATES – Audioselective Transcranial Electric Stimulation
Abbreviation 4 SEN – Subjective Ear Noise (tinnitus)
Abbreviation 5 RUB – Russian Rubles
Abbreviation 6 SW – Software
Abbreviation 7 DD – Design Documents
Abbreviation 8 PS – Performance Specification
Abbreviation 9 IP – Intellectual Property
Abbreviation 10 MoH – Ministry of Healthcare of the Russian Federation
Abbreviation 11 Q – one quarter of a year (3 months)
Abbreviation 12 R&D – Research and Development
Investment Memorandum
22.02.2013 CONFIDENTIAL
3
4. Skolkovo
Brief description of the innovation 1. Резюме меморандума
1. Memorandum summary
1. Memorandum summary
project, the market and risks
Brief description of the financial plan
2. Project descriptionпроекта
2. Характеристика
3. Market descriptionрынка
3. Характеристика
4. Характеристика Заявителя
4. Applicant description
5. Financial plan план
5. Финансовый
6. Риски
6. Risks
7. Skolkovo Fund participation
7. Участие Фонда «Сколково»
8. Appendices
8. Приложения
January 2013
5. Investment memorandum summary
ООО TES Mobile
Project aim: Development, certification and international market launch of a line
of medical devices and a procedure to treat sensorineural hearing loss and tinnitus.
Essence of the innovation: Implementing unique patented technology for selective
transcranial electric stimulation of the brain’s protective mechanisms with an impulse
current combined with acoustic influence by tonal signals.
To be created during project realization: Professional and individual device
versions; the latter will be in the form of a mobile application (for download
and periodic update) and a special headset connected to user’s mobile platform
(smartphone or tablet PC).
Project budget (1Q 2013 - 2Q 2015): RUB 40,000,099
Funding requested from Skolkovo Fund: RUB 30,000,000
Co-investors: Parent company OOO Tsentr TES: RUB 10,000,099
The product stands at its stage 1: The first R&D results are obtained, and a clear
investigation plan, business plan and intellectual property management strategy
have been written. A project team has been formed, combining the appropriate level
of qualification and experience. Activities at this stage will result in the creation
of test models of medical devices for development.
Investment Memorandum
22.02.2013 CONFIDENTIAL
5
6. Skolkovo
Innovation product/technology 1. Резюме меморандума
1. Memorandum summary
description
2. Project description проекта
2. Характеристика
Commercialization method
3. Market descriptionрынка
3. Характеристика
Competitive advantages
4. Applicant description
4. Характеристика Заявителя
Description of reasons for consumer
interest 5. Financial plan план
5. Финансовый
Technical description 6. Risks
6. Риски
Project roadmap 7. Skolkovo Fund participation
7. Участие Фонда «Сколково»
8. Appendices
8. Приложения
January 2013
7. MEDICAL PROBLEM
• About 10% of the world’s population suffer from hearing disorders
• In 2015 the number of patients will reach 700 million and there will be 900 million
patients in 2020
• 85-90% of patients have sensorineural hearing loss and 50% have tinnitus
• This equals 30 million patients in the US, 80 million in Europe and 13 million
in Russia
• Hearing loss and tinnitus have no specific treatment at present!
8. HOW ATES WORKS
Audioselective Transcranial Electric Stimulation
Audio stimuli of variable Transcranial Electric
frequency and intensity Stimulation
The biophysical basis is the proven positive impact of re-education
in the treatment of acoustic neuronal disorders
9. ATES model sample
• Prototype device – TRANSAIR-07
• Course – 10-15 procedures, every other day
• Duration of procedure – 30 minutes
• Average current – 2 mA
• Average supra-threshold intensity – 15 dB
• Time of presentation of each tone in the cycle – 5 sec
10. TESTING RESULTS
of professional model sample device
• Hearing improved in 89% of patients with acute/sudden hearing loss and in 67%
of those with chronic hearing loss (regardless of etiology)
• Tinnitus stops or becomes milder in 91% of patients
• Tonal hearing thresholds are stably decreased by 10-35 dB
Percentage of patients with improved hearing ATES effects on subjective tinnitus
in acute and chronic SNHL
9%
36% 55%
– Tinnitus stopped
– Tinnitus decreased in intensity
– Tinnitus remained unchanged
11. INTELLECTUAL PROPERTY
Protection in the Russian
Worldwide protection
Federation
1. Application for US patent
2012/0109251/A1
Patent 2159639 for TES method 2. Application for patent
Basic and device EP1997527
technology 3. Eurasian patent 012158
(TES) License for audio applications 4. Ukraine patent 92792
Transfer of patent rights
Patent 2214842 for ATES International applications
method and device for ATES
Conversion of TES into national
Transfer of exclusive patent phases in the US and European
license countries
ATES 2014
technology
At least 3 patent applications
for method and device to treat Conversion of international
sensorineural hearing loss applications for ATES into national
and tinnitus phases in the US and European
countries
Will be submitted in 2013 2015
13. COMPETITIVE TECHNOLOGIES
Traditional drug and Tinnitus Retaining Therapy
Cochlear implants
physical therapy (TRT)
These implants consist
Histamine-like medicines, Use of special hearing devices of wearable (external) and
retroauricular procaine blocks, combined with white noise implanted (inner) parts. The costs
laser therapy, stimulation with generator. Widely used in the of an operation start from USD
fluctuating current, quantum West, with a sales volume 30,000. The market has topped
hemotherapy, plasmapheresis, (therapy courses) in 2011 USD 960 million and will reach
homeopathic medicines, etc. exceeding USD 87 million. USD 2.3 billion in 2017. The USA
accounts for 40% of the market.
Does not treat the disease, Invasive hearing
Aimed to inhibit disease
but teaches the patient restoration applicable
progression, not to treat it
to ignore it in severe hearing loss only
14. BUSINESS MODEL
Individual ATES
purchase
recommendation
4P
Insurance
coverage
Purchase of SW
updates fee
15. BUSINESS MODEL
Professional ATES
Equipment
and
service consumables
at wholesale
price
sale
Equipment and
consumables at market
price
16. SALES VOLUME IN YEAR 6 – RUB 648 MILLION
1.4% 0.1% Продажа индивидуальных АТЭС (без coverage)
Sales of individual ATES (without insurance
страхового покрытия)
Продажа индивидуальных insurance coverage)
Sales of individual ATES (with АТЭС (со
страховым покрытием)
23.1%
Реализация профессиональных АТЭС
Sales of professional ATES
34.4%
Комиссия с услуги SNHL and tinnitus treatment
Fees per services in по лечению СНТ и
тиннитуса
Продажа обновлений ПО для
Sales of software updates for individual ATES
37.0% индивидуального АТЭС
3.9% Продажа расходныхfor professionalдля
Sales of consumables материалов ATES
профессионального АТЭС
Name Price, RUB Sales volume, pcs. Revenue, RUB
Individual ATES 15,000 10,000 150,000,000
Insurance coverage 12,000/year 20,000 240,000,000
Professional ATES 250,000 100 25,000,000
Fees per service 7,000/10 sessions 31,875 223,125,000
SW update 1,500 6,000 9,000,000
Consumables 1,000 824 824,000
17. ROADMAP
Step 1: RUB 19,899,082.60
1Q 2013 2Q 2013 3Q 2013 4Q 2013
Device R&D, PS Device DD, SW beta Industrial and
version interface design Device test
models,
Marketing studies Phase 1 to obtain FDA Participation in SW R-
and CE IFFES Intl conference version, IP
protection,
Exclusive IP license Patent studies 2 applications for
patents and inventions
513G
Step 2: RUB 20,101,016.4
1Q 2014 2Q 2014 3Q 2014 4Q 2014
Sample technical Operating Medical instruction MoH
testing documents
certificate,
Certificate
SW is integrated Clinical trials Phase 1 to obtain FDA
with interfaces and CE ISO 13485
510K
Certification as Launch of sales and Start
Applications for PCT per ISO 13485 services of sales
18. Skolkovo
Demand 1. Резюме меморандума
1. Memorandum summary
Supply 2. Project descriptionпроекта
2. Характеристика
Factors of success 3. Market description рынка
3. Характеристика
4. Applicant description
4. Характеристика Заявителя
5. Financial plan план
5. Финансовый
6. Risks
6. Риски
7. Skolkovo Fund participation
7. Участие Фонда «Сколково»
8. Appendices
8. Приложения
January 2013
19. MARKET
• The market for hearing aids grows by 10-15% a year, to reach USD 26.2
billion in 2017*
• USA, Europe, Canada, and Japan account for 80% of sales
• Within the last 5 years, the mobile device market in the US tripled
(from USD 2.7 billion to 9.6 billion); 15 million devices were sold**
Hearing devices
40%
50%
Cochlear implants
10% Diagnostic equipment
* – Audiological Devices – Global Strategic Business Report
** – HIMSS Analytics
20. Skolkovo
Basic information 1. Резюме меморандума
1. Memorandum summary
Applicant members and persons 2. Project descriptionпроекта
2. Характеристика
helping the Applicant in project
3. Market descriptionрынка
3. Характеристика
implementation
Description of current activity
4. Applicant description
4. Applicant description
Характеристика Заявителя
Team qualification and experience
5. Financial plan план
5. Финансовый
Applicant assets required to reach 6. Risks
6. Риски
the goals 7. Skolkovo Fund participation
7. Участие Фонда «Сколково»
Current financial position 8. Appendices
8. Приложения
January 2013
21. THE TEAM
Alexander Malygin – CEO, co-founder, Candidate of Technical Science, MBA,
20 years of business experience. He headed the organization of serial production,
certification and technical testing of TRANSAIR and DOKTOR TES devices,
participated in creating a sales and service network for the device. During his job,
more than 5,000 and over 40,000 TRANSAIR and DOKTOR TES devices
respectively have been sold and 10 regional agencies have been founded.
Prof. Valeriy Lebedev – Research Director, MD, co-founder, member of the
Russian Academy of Natural Sciences. He discovered TES effects on protective
systems in the brain of animals and humans. The author of 98 articles and 115
theses on TES therapy. An Honored Science Worker of the Russian Federation
and Head of Applied Neurophysiology at the I.M. Sechenov Saint Petersburg
Society of Physiologists, Biochemists and Pharmacologists.
Anna Belimova – physical therapist and audiologist, Candidate of Medicine,
10 years of experience in SNHL treatment. She has personally performed all clinical
trials, arranged and partly performed instrumental testing, carried out ATES
procedures in SNHL patients, and studied changes in hearing after ATES.
Dmitry Tseitlin – Business Development Director, MD, Candidate of Medicine,
20 years of experience in international marketing and technology commercialization
in Russia, Israel and Germany. Business Coach at the Skolkovo Industrial Park.
22. TES TECHNOLOGY DEVELOPMENT
TES technology TES center starts TRANSAIR-02 device New-generation devices -
is developed the manufacture for home use TRANSAIR-03, 04, 05
and registered of TRANSAIR released developed
as a discovery devices
1986-1995 1996 2001 2005
8 patents, 2 international applications, 4 certificates of authorship, 2 trade marks
TRANSAIR devices are used in over 3,000 medical institutions.
24 doctorates and 102 candidate theses have been defended.
Development of ATES
TRANSAIR-07 Clinical data on SNHL A separate company
begins, use of acoustic
prototype device and tinnitus therapy is created for ATES,
load istested
developed by ATES obtained and status of Sk resident
technology obtained.
2006 2007 2008-2011 2012
23. CURRENT PROJECT STATUS
The following project activities are now completed
The technology of TES-therapy was developed and patented.
A product line has been arranged on the basis of fundamental technology to treat
diseases of various etiology (Marketing Authorization and Roszdravnadzor license
for medical device manufacture No. 99-03-001095 have been obtained). Prototype
devices are serially made and sold in the Russian Federation and CIS countries.
A method to treat sensorineural hearing loss on the basis of TES
therapy, combined with audio stimuli, has now commenced development.
A Russian Federation patent has been obtained.
A prototype sample of a new-generation device has been made.
Preliminary tests were carried out that prove the chosen stimulation method was
effective in SNHL and tinnitus treatment.
The project team has been formed, with the target competencies.
Investment Memorandum
22.02.2013 CONFIDENTIAL
23
24. Skolkovo
Information on investors 1. Резюме меморандума
1. Memorandum summary
Investment timetable 2. Project descriptionпроекта
2. Характеристика
Cost sheet 3. Market descriptionрынка
3. Характеристика
Applicant’s prediction of sales
4. Характеристика Заявителя
4. Applicant description
5. Financial plan план
5. Финансовый
6. Risks
6. Риски
7. Skolkovo Fund participation
7. Участие Фонда «Сколково»
8. Appendices
8. Приложения
January 2013
25. INVESTMENT
Project budget (1Q 2013 - 2Q 2015): RUB 40,000,099
Parent company – ООО Tsentr TES http://www.tes.spb.ru – acts as a co-investor
Timetable of planned investments
Stage 1 Stage 2 Total
(Feb 1, 2013 – Feb 1, 2014) (Feb 2, 2014 – Feb 2, 2015)
Fund 14,924,312.00 15,075,688.00 30,000,000.00
Co-investor 4,974,770.70 5,025,328.30 10,000,099.00
Overall 19,899,082.60 20,101,016.40 40,000,099.00
Costs structure
Outsourcing works Equipment Materials and
14.3% 9.3% components
2.7%
Managerial costs
7.1%
General expenses
1.6%
Marketing expenses
8.0%
Salary fund + taxes
Costs of intellectual 54.4%
property protection
2.7%
Investment Memorandum
22.02.2013 CONFIDENTIAL
25
26. Skolkovo
Research, technological 1. Резюме меморандума
1. Memorandum summary
and production risks
2. Project descriptionпроекта
2. Характеристика
Market risks
3. Market descriptionрынка
3. Характеристика
Management risks
4. Applicant description
4. Характеристика Заявителя
Financial risks
5. Financial plan план
5. Финансовый
Legal risks
6. Risks
6. Риски
7. Skolkovo Fund participation
7. Участие Фонда «Сколково»
8. Appendices
8. Приложения
January 2013
27. RISKS
Research, technological and manufacturing risks
Related to the risk of not achieving the planned R&D results, potential lagging in technology development from
competitors, potential leaking of the intellectual property, and possible delays in manufacture of the necessary device batches
Risk level: moderate
Justification
• The project team includes highly qualified specialists with the target competencies and experience in medical device
development based on TES platform technology. Research Director V.P. Lebedev is the author of the discovery that transcranial
electric stimuli selectively affect the defense system of humans/animals and the founder of the TES therapy scientific school. V.P.
Lebedev and A.V. Malygin have experience of collaboration in research and development of the TES-based medical device line
to treat diseases of various etiology; they are therefore aware of any hidden obstacles in this area.
• The presence of first positive R&D results, well-tested basic elements of technology and procedure, positive results
of preliminary studies and a positive project team image in the medical community in conjunction with a clear research program
guarantee the attainment of the planned research and development results.
• Possible leak of intellectual property is prevented by signing non-disclosure agreements will all company employees and through
the timely protection of patentable R&D results including patent protection in the international market the company is targeting.
• The project will use the manufacturing site of the parent company, which enjoys controllable terms of product manufacture
and shipping. Delivery channels for components and materials are streamlined, and delay periods do not exceed scheduled
levels.
Management risk
Related to the lack of the managers’ qualification required for rapid development of the project
Risk level: moderate
Justification: Key project team members have over 20 years of experience in development and commercialization of medicines
including in international markets (EU and Israel). In addition, it is planned to form a network of loyal doctors of target specialty
interested in the new, breakthrough method of hearing disorder therapy and willing to act as advisors.
Moreover, it is planned to take part in StartupAccess (http://startup-access.com/index.php/ru) on-site business incubator
to establish contacts in the US market, participation in on-site business incubator and annual conference held by IFESS
(International Functional Electrical Stimulation Society) is also planned.
22.02.2013 27
28. RISKS
Commercial risk
Related to: difficulties arising in device registration and certification, lack of customers for products and services, and the launch
of products by competitors
Risk chances: average
Justification
• The project team has experience of medical device registration at the Ministry of Healthcare of the Russian Federation
and obtaining the medical device manufacturing license from the Federal Service on Surveillance in Healthcare and Social
Development. When registering new products in the Russian market, the current marketing authorization for TRANSAIR
devices, based on similar medical technology, will help to simplify the procedure. When registering devices as per the FDA
procedure, it is planned to use the services from qualified companies assisting in medical device authorization. For this
purpose, we have already spoken with A. Faibushevich, a clinical trial specialist with 10 years of experience in medical device
registration by FDA. Another positive fact is the launch of precedent devices in the US market registered by FDA: AlphaStim
(technology is low-impulse electric therapy and transcranial electric stimulation) by Electromedical Products International, Inc.
(Texas, USA) and Kalaco Transcranial Electrotherapy Stimulator-A (transcranial electric therapy) by KALACO SCIENTIFIC, INC.
(California, USA).
• At the development stage, it is planned to arrange collaboration with potential customers. Clinics that are Company partners
have already expressed their interest in the professional version of the device. An individual version was requested by E.
Caplan, MD, the head of a pain clinic in New Jersey (http://nscenter.org). E. Caplan is a practicing neurosurgeon using the entire
spectrum of technologies for pain relief and managing a group of patients with chronic sensorineural hearing loss; he is prepared
to test
a batch of individual devices.
• The competition from similar technologies is blocked by well-written patents protecting the technology in selected regions
and by active marketing measures aimed at rapid capture of a significant market share.
Financial risk
Related to the lack of sufficient financial resources to provide co-investments into the project.
Risk chances: moderate
Justification: Parent company production volume amounted to RUB 45 million in 2011, thus enabling allocation
of co-investments provided in the financial plan on product development.
Investment Memorandum
22.02.2013 CONFIDENTIAL
28
29. Skolkovo
Amount of financing requested 1. Резюме меморандума
1. Memorandum summary
from the Fund, funding terms 2. Project descriptionпроекта
2. Характеристика
and conditions
3. Market descriptionрынка
3. Характеристика
Non-financial support
of commercialization 4. Applicant description
4. Характеристика Заявителя
Management support 5. Financial plan план
5. Финансовый
Equipment necessary for project 6. Risks
6. Риски
implementation 7. Skolkovo Fund participation
7. Участие Фонда «Сколково»
Other resources required 8. Appendices
8. Приложения
January 2013
30. Skolkovo Fund Participation
Funding
Amount of financing requested from the Skolkovo Fund is RUB 30,000,000.
Planned date of financing – February 2013.
Funding requirements – duly prepared document package, project presentation before the grant
committee, co-funding of at least 25% of project total budget by a private co-investor.
Funding – in tranches by the pre-specified schedule.
Nonfinancial support of commercialization: An opportunity to establish contacts and arrange mutually
beneficial cooperation with other Skolkovo residents – innovators, managers, and research workers
(including foreign specialists); assistance in device authorization as per FDA/CE procedure; support
in implementation of the chosen strategy of intellectual property protection.
Management support: Tax concessions (exemption on income tax, VAT and property tax; lower social tax
on wages fund), reimbursement of tax duties on imported goods to be used in the research.
Other necessary resources: Renting rooms at the Skolkovo industrial park, access to sharing center, PR
of this Project in the media, and an option of taking part in conferences and exhibitions.
Equipment necessary for research: Parent company owns part of the equipment required for research
and development; this equipment will be granted for free use. It is planned to buy an additional set
of the necessary equipment and accessories during project implementation.
Other resources required: Starting from the second stage, it is planned to open a Moscow office
at the Skolkovo industrial park (50 m2), to accommodate the personnel responsible for device registration
in MoH and FDA/CE.
22.02.2013 30