Tomo Wavelabs I-Corps@NIH 121014

OAT guided cryoablation of prostate cancer – new

standard for minimal rectal damage, impotence and

cancer recurrence

Original Opportunity Estimates

$140,000 – estimated price/unit of the technology

Total Available Market:

Total number of urological hospitals in U.S – 2,000

(1,570 ranked by U.S. News)

$280 million

Served Available Market:

1,200 clinics served by cryoablation providers

$168 million

Target Market:

Focused cryoablation, est. half – 600 clinics

$84 million

Team #16, I-Corps @ NIH, Chevy Chase, MD

NIH I-Corps™ Team #16

Sergey Ermilov (C-level Exec) VP Research and Development

Peter Brecht (Industry Exp) Director, Business Development

Elena Petrova (PI) Scientist

Customer interviews: 126 Instructor engagements: 43

Week 1 Week 10

Team 16


Fast

Faster

Original idea

$140,000 x 600 = $84,000,000

600 units: High-resolution T-maps Enhanced contrast of ice ball

urologist TomoWave, Inc.

37oC

Physiological

temperature

-7oC

Freezing

-6oC

Flipped OA signal

-1oC

T0 – zero OA signal

Temperature


DIRECT SALE TO PHYSICIANS

Week 1: Business Model Canvas


Tech

Fe

atu

res

Co

llage

of

“Cu

sto

me

rs”

And next we … GooB

Urologic surgeons

Hospital specialists

Thermal therapy scientists

Patient support groups

Got out

of the

Building!


GooB ― first experience


GooB ― solution

Well … just walk in to the hospital!


Reality 1: We are doctors! And we need better

treatment control and … better money!

1 C accuracy 1 mm spatial resolution 1 frame per second


Doctor’s Pains Doctor’s Gain

Reality 2: … and, by the way, we do not buy your

equipment!. Mobile service instead!

Selling

Leasing


Bu

yer

Customer archetypes

o 50-75 years old man diagnosed with a localized prostate cancer o Pays in full or splits costs with medical insurance o Values excellent cancer control, fast recovery & min complications

o 30-60 years old o Practices cryoablation or just from residency o Mostly rents equipment and buys consumables o Values patient’s satisfaction, fast learning & payment comparable to office dollars

TomoWave Cryoablation

business Patient Urologist

Decision Maker User, Influencer Buyer

o Stressed by competition and defiant surgeons o CEO, Director of Marketing, CTO o Buys/licenses monitoring technology or OEM o Values larger servable market & competitive advantage

Proposer: academic urologist experimenting with novel prostate cancer treatment techniques Saboteur: prostatectomy guru and radiologist Team #16, I-Corps @ NIH, Chevy Chase, MD

Reality 3: Customers need market growth!

Partnership is unavoidable!


Texas

Cryoablation of prostate cancer: Cash

flow


Clinical Technology

Ultrasound OEM

Patient

Cryoablation manufacturer-

provider

OAT OEM (TWL)

Private Insurance

Urologist Product/Service Payment

Medicare

Outpatient facility

Cancer treatment & post-treatment activities

$1

k, a

nn

ua

l pa

ymen

ts

Self-payment per procedure


$786 per procedure

$800-1k per procedure

Federal tax

$5.5k per procedure

Lease equipment, sell consumables

Market Size


$5,500 – price of a single cryoablation procedure Based on HealthTronics pricing

12,000 – current number of annual prostate cryoablation treatments in US Based on HealthTronics estimates

230,000 – number of new prostate cancer cases in US in 2014 http://seer.cancer.gov/statfacts/html/prost.html


100% market dominance. Fixed price. 50-50 split of the

revenue growth

$600 million


Double current prostate cryoablation market. Fixed price. 50-50

split of the revenue growth

$66 million

Target Market:

Double prostate cryoablation market for a single major player.

Fixed price. 50-50 split of the revenue growth

$33 million

Week 1

Week 2

Week 3

Week 4

Week 5

Week 6

Week 7

Week 8

Week 9

Week 10

NIH I-Corps™ lessons learned

Cryo-provider

• Better Control

• Easy Learning

Urologist

• Better Control

• Easy Learning

Cryo-provider

• OEM

• License

• Tech sale

Cryo-provider

• Partners

• Market Growth

Urologist

• Technical Specs

Urologist

• Better Control

• Easy Learning

• Reimbursement


Our Journey

LaunchPad Business Model Canvas: Week 1


Our Journey



$ 60M = double of annual revenue

Urologist

2 Leasing

No complications No cancer

2 Happy patient w/o cancer

Technology License

OEM

Cryoequipment provider

Next? … To be continued!

TomoWave Laboratories, Inc.


Final Notes


With respect to submitting an SBIR/STTR Phase II application, we are making the following decision (PICK ONE):

• Go with a significant pivot: The feasibility data generated in the Phase I grant provide the appropriate technical foundation for a Phase II application, BUT we are targeting very different customer segments than we had originally anticipated

Start

Current Investment Readiness Level (IRL)

Prior to NIH I-Corps™ – 1

Current – 5

APPENDIX


Slide A1: Story Telling

The World: market/Opportunity – how it operates Characters: Customers/Value Proposition/Product-Market-Fit, pick few examples to illustrate Narrative arc – lessons learned how? Enthusiasm, despair, learning, then insight! Show images and demo to illustrate learning Editing – does each slide advance the characters and plot?


Slide A2: Theater

Point audience at what they need to see! Self-explanatory Use analogies Tell a story that others can repeat Use common audience appropriate language



OAT guided cryoablation of prostate cancer – new

standard for minimal rectal damage, impotence and

cancer recurrence

Interviews: 123

Sergey Ermilov (C-level Exec)

Peter Brecht (Industry Exp)

Elena Petrova (PI)

Team # 16

OA-US

module

to visualize

ice ball with

high contrast

and monitor

temperature

near rectal

wall

Joseph F. Harryhill, “Cryoablation for Salvage Treatment of Prostate Cancer,” Web: Univ. of Pennsylvania Health System, March 23, 2011

Original Market

Estimates


$140,000 – estimated price/unit of the technology Source: Estimate is based on known price for some of the components(laser, ultrasound probe,

DAQ) and company’s price policy for similar system for small animal imaging


Total number of urological hospitals in U.S – 2,000

(1,570 ranked by U.S. News) Source: http://health.usnews.com/best-hospitals/rankings/urology

$280 million


Healthtronics, Inc. - major provider of prostate

cryoablation – 600 clinics http://www.healthtronics.com/

GalilMedical, Inc. – another, est. about the same 600

clinics http://www.galilmedical.com/

$168 million

Target Market:

Focused cryoablation, est. half – 600 clinics

$84 million

http://www.galilmedical.com/

Customer archetypes


o 50-75 years old man diagnosed with a localized prostate cancer o Pays in full or splits costs with medical insurance o Values excellent cancer control, fast recovery & min complications

o 30-60 years old o Practices cryoablation or just from residency o Mostly rents equipment and buys consumables o Values patient’s satisfaction, fast learning & payment comparable to office dollars

TomoWave Cryoablation

business Patient Urologist

Decision Maker Influencer Buyer

o Stressed by competition and defiant surgeons o CEO, Director of Marketing, CTO o Buys/licenses monitoring technology or OEM o Values larger servable market & competitive advantage

Proposer: academic urologist experimenting with novel prostate cancer treatment techniques Saboteur: prostatectomy guru and radiologist

Customer relationships funnel


New monitoring algorithms New US co-registration

($100k) Journal publications In person communication Co-development

Joint journal articles Software updates Hardware & probe

upgrades

Awareness Interest

Consideration Purchase

TV & media promotion Free trials of new technology Up-Selling features Cross-Selling new technology

with consumables Referral deal on consumables

($1M) Joint clinical studies Presentations & Demo at conferences & med schools

Focus groups Existing social media groups Free educational trainings Free trial lease

Joint journal articles Low cost lease Free software updates Free on-site trainings Free tech support Dedicated social media

group (active recruiting)

Relay success stories to general public through TV & social media

($10k) Clinical brochures Paid links from cancer educational websites

Clinical brochures Referral by physicians Paid links from cancer

educational websites

Get Grow Keep

Unbundle Up-Sell Cross-Sell Referrals

The channel economics

(approximate numbers)


Cost of Goods $60K

Direct sales to physicians

R&D, Selling Cost, Gen & Admin $80K

-5% Profit $78K

List Price $230K

Our revenue $218K

Cost of Goods $60K

Indirect sales to cryoproviders

R&D, Selling Cost, Gen & Admin $70K

-5% Pro-fit

$55K

List Price $230K

Our revenue $185K

Reseller 15%

COGS

OEM to cryomanufacturer

SGA -5% Pro-fit

List Price $380K

Our revenue $220K

Reseller

License? Sell technology?

Direct leasing to physicians

-5% Profit $1.5K

List Price $9K

Our revenue $8.5K

COGS/20 $3K

SGA/20 $4K

Indirect leasing to cryoproviders

-5%

List Price $9K

Our revenue $7.2K

Pro-fit

$0.7K

Resell

15%

COGS/20 $3K

SGA/20 $3.5K

Key Activities and Resources


Freedom to operate

Quality data

Regulatory approval

Final product

Sales

• Internal financing

• Patent lawyer

• SBIR/SBA • Internal

financing • R&D facility,

equipment • R&D

personnel

• SBIR/SBA • Investment • R&D facility

and equipment

• R&D personnel

• Mentors, advisors

•Investment •Assembly facility •Laser, optical, US, electronic parts

•Trade secrets, patents, licenses

• Engineers, tech-nicians, quality control

•Mentor, advisors

Finance Physical Intellectual Human

Purpose Activity Resource

• Investment • Internal

financing • Marketing

personnel • Sales

personnel • Customer

service • Mentors,

advisors

5 steps to our success

• Clinical trials • Negotiation

of reimburse-ment

• Manufacturing • Licensing

• Marketing • Sales/Leasing • Education • TechSupport

•Blocking patents on OA imaging

•Ultrasound license

• R&D • Clinical

studies

Key Resources: IP


Field IP solution

Ice ball

IP

OA technology

Thermal monitoring

Ultrasound imaging

Cryoablation

Block-ing

patent

Trade secrets

Blocking patent / licensing

Blocking patent / licensing

Partners

Partners Service

directly to urologists

Licensing Open

platform Develop

ment Electro

nics Soft-ware

Probes

Original Revenue Models


CMP

TWL

Urologist Sale Cash

Leasing

Cash

Reimbursement

Licensing

TWL – TomoWave Labs CMP – Cryoablation Manufacturer & Provider

Sales

Leasing

CMP

TWL

Urologist Licensing

License Fee

Leasing

Cash

Reimbursement

Leasing

Cash

CMP

TWL Urologist

Leasing

Cash

Reimbursement

Cryoablation of prostate cancer: Cash

flow


Clinical Technology

Ultrasound OEM

Patient

Cryoablation manufacturer-

provider

OAT OEM (TWL)

Private Insurance

Urologist Product/Service Payment

Medicare

Outpatient facility

Cancer treatment & post-treatment activities

$1

k, a

nn

ua

l pa

ymen

ts



$786 per procedure

$800-1k per procedure

Federal tax

$5.5k per procedure

Lease equipment, sell consumables

Market Size


$60,000 – estimated price/unit of the technology Source: Estimate is based on direct costs + 100% margin. $17k – 805 nm Q-switched OEM

laser, $7k proprietary modified OEM ultrasound, $6k – proprietary OAUS probe, $0k –

proprietary software.


Total number of urological hospitals in U.S – 2,000 (1,570

ranked by U.S. News) Source: http://health.usnews.com/best-hospitals/rankings/urology

1 unit per hospital – 2,000 units

$120 million


Current share of cryoablation in prostate cancer ~ 1%

Dominating revenue model (>90%) – mobile service

Need 50% less units – 1,000 units

$60 million

Target Market:

Bipolar U.S. market of cryoablation providers:

HealthTronics www.healthtronics.com

50% market – 200 units

GalilMedical www.galilmedical.com

50% market – 200 units

Total number of in-field units – 400, Market growth – 600 units

$36 million

http://health.usnews.com/best-hospitals/rankings/urology



http://www.healthtronics.com/

http://www.galilmedical.com/

Finance and operation timeline


OEM to CMP 2 (300 units)

R&D, Preclin. studies

R&D, Clinical studies (30 patients, 3 units),

GMP

Exclusive OEM to CMP 1 (20 units)

Spending

Profit

Time

OEM to CMP 1 (300

units)

6 months 24 months 42 months

Co-development with CMP 1

18 months

$200k $1M

20 x $30k = $600k

600 x $30k = $18M

Evolution of Business Model Canvas


R$: Now only direct sales revenue stream remains CS: Direct sales to one of two major cryoablation manufacturers and providers C: Direct sales via OEM or acquisition KA: Quality control will be required for in-house assembly of OAT units and probes. KA: Requirements for clinical studies were updated to reflect time frame, available funds, and planned business development

Key Activities and Resources/Partners


Partner Activity Resource

• Clinical trials • Negotiation of

reimbursement

• Manufacturing • Licensing

• Marketing • Sales/Leasing • Education • TechSupport

•Patents on OA imaging

•Ultrasound license

• R&D • Clinical

studies

Cryoablation provider

Clinicians

Ultrasound machine producer

•R&D personnel •R&D facility, equipment •Consultants

•Marketing personnel

•Sales personnel

• Investment • SBIR/SBA

•Assembly facility

•Laser, electronics and parts

Trade secrets, patents, licenses

•Engineers, technicians •Quality control

Customer service

Tomo Wavelabs I-Corps@NIH 121014

Education

Transcript of Tomo Wavelabs I-Corps@NIH 121014