Business

Introduction

Our aim is to improve the design of our device by determining the societal impact of our circulating tumour cell (CTC) detection device. Our device is able to detect CTCs of various cancer types from blood samples, which we foresee as being an integral part of cancer diagnosis in the future worth investing in.

To get his views on this issue and to determine if our test can be scaled up to allow it to be deployed at hospitals, we interviewed Dr. Ralph Schiess, whose answers were greatly beneficial in helping us improve the design of MicroBeacon and setting our outlook and business plan. Ralph is the co-founder of ProteoMediX, a company developing a tool for detection of prostate cancer. We also asked him about his company's history and the procedure he went through to found it.

Summary

In summary, we retained the following from Ralph Schiess' answers:

• Bringing our device to marked would probably cost around $20 Million.
• In general you can divide the process of founding a company into three steps: demonstrate the proof of principle an a concept, specify and test the product, get an approval of FDA or CE to sell the product.
• An FDA approval (US) is harder to get than a CE certificate (Europe), but if you get the FDA approval the product is really good.
• There are two ways to get access to the market: partnering with a big company or sell your own product.
• To make a test attractive for doctors, it has to adress a clear medical question.
• Never loose the business view of a project for making it successful.
• Keep in mind the "elevator pitch": You shoud be able to explain an idea in 90 seconds to somebody who does not understand anything about the subject.

Talk with Dr. Ralph Schiess from ProteoMediX

What are the first steps that you have to consider when founding a company?

The first phase in commercializing a product is research, demonstrating a proof of principle and the concept, which takes about 3 years. Then, you specify your product precisely and test it extensively, which can take about 5 years and is expensive. I estimate the amount of money you would possibly need to bring your test to the market to be 15 to 25 million Swiss francs, equivalent to $16 to $26 million.

A proof of concept device does not necessarily have to be simple or elegant, it only has to work. Once the validation phase is reached, the product has to be developed to the point that it can be demonstrated on a much larger sample of patients. In the last phase of development, the product takes its final form and applications for a CE certificate and FDA approval are submitted.

How does the procedure to go to the market look like? Is it difficult to get the approval of the Food and Drug Administration (FDA),Swissmedic and other authorities?

Two differing procedures exist, one for Europe and one for the USA.

To commercialize a product in Switzerland you need a CE mark, which is easy to obtain for low risk tests such as yours. A test is defined as being “low risk” if a false negative result carries a low risk for the patient/user. Cancer diagnosis is still low risk, whereas tests for HIV and other infectious diseases pose a high risk. The requirements and workflow to get CE approval are roughly as follows: you have to first present a reliable, reproducible test, then go to a notified body and fill out several forms. When CE approval has been granted, you are allowed to market your product. For the test to be marketable, however, it must undergo clinical testing in addition to the tests required to get CE approval.

In contrast to the CE, the FDA has tighter regulations for diagnostics and showing clinical validation is required. Once FDA approval is granted, however, the test is marketable. In order to get FDA approval and market a test in the USA, in most cases, it is beneficial to incorporate a daughter company in the USA before starting the process. The procedure is also more costly than getting a CE. However, having FDA approval greatly expands your market, so it pays off eventually. Different labels exist for a given diagnostic test according to the stage of development, which includes RUO (research use only), IUO (investigational use only, that means it can only be uses for clinical studies), and IVD (in vitro diagnostic test).

If we would like to scale up our project and to produce our device industrially, how would that work?

When you want to get access to the market you could either do it by partnering with one of the big companies to get on their machines. Or you go directly with your own tests. The procedures for the two paths are slightly different.

To make our test attractive for doctors, what else do we have to consider?

You should think about a clear medical question to answer with your test. For example, the test from ProteoMediX gives a clear answer for prostate cancer and has a defined goal: avoiding unnecessary biopsies. At the moment, with your test, you just check if the patient has CTCs. However, the doctors will ask, "what type of cancer?” For medical doctors, a test is useful only if it has medical consequences (actionable results) such as a more personalized treatment, a better survival rate for the patient, etc. For cancer treatment, there are now markers needed to differentiate which type of chemotherapy, what kind of treatment, which drug to use.

What do you think is worse as a result of our test: false positives (a cancer signal for a healty patient) or false negatives (No cancer signal for a patient who has cancer)?

As you plan to later on sequence all the positive results to find out where the cancer comes from, false positive are acceptable, because then you find out [if detected positives are true positives] at a later stage”. However, you should try to limit the number of false positives in your design. So your idea of including two sequential filtering steps to increase your specificity seems to be good idea.

At the moment, what do you think is missing in our project to develop a good businessplan?

When trying to develop a business plan, when explaining an idea to someone, it is important to never lose the business view of a project; it helps a lot to explain things in an easy understandable way, focus on the really important matters, and shape an idea. For marketing it is important they can associate a clear idea with your business case, so they remember you. Its good for marketing, but it also helps you to shape your idea. You can get easily lost in writing all the technical aspects.

There is this concept of the “elevator pitch”: you should be able to explain an idea in 90 seconds in an elevator...so you take out really the essentials. It can be like shells: you can always further explain it. The title and first two sentences should be really good!

If you were to found another company, what would you different?

Nothing. But I would try to make it faster, always faster. If you do it the first time, you try to avoid stuff, to think twice. In the very beginning, it is hard to take the full risk, because you still think about opportunities/your academic career, it all takes time. One could do things quicker. Nevertheless, we avoided a lot of mistakes by doing things properly.