BIOCARE LTD

SlickStick
B Plan for BioCare Ltd

Pritish Jain, Pritesh Sankhe, Tarkeshwar Singh

4/21/2013

This document serves as the business plan for the product SlickStick being developed by BioCare
Ltd. The document contains details of the product, detailed market research and financial
projections along with the required startup capital
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Table of Contents

1. Executive Summary ....................................................................................................................... 2

2. Company Description .................................................................................................................... 3

3. Products and Services.................................................................................................................... 4

4. SWOT Analysis ................................................................................................................................ 6

5. Marketing Plan ............................................................................................................................... 7

5.1. Market Size and Statistics ..................................................................................................... 7

5.2. Existing Market Players ......................................................................................................... 9

5.3. Target Market Regulations.................................................................................................. 10

5.4. Barriers to Entry .................................................................................................................... 11

5.5. Target Customers.................................................................................................................. 12

5.6. Prospective Partners ............................................................................................................ 12

5.7. Pricing Model ........................................................................................................................13

5.8. Distribution Channels............................................................................................................13

5.9. Target Industry Attractiveness............................................................................................ 14

5.10. Go To Market Plan.................................................................................................................15

6. Opportunity Estimation ............................................................................................................... 16

7. IP Protection Strategy .................................................................................................................. 17

8. Risk Analysis and Mitigation ........................................................................................................ 18

9. Operational Plan .......................................................................................................................... 20

10. Exit Strategy .................................................................................................................................. 21

11. Management and Organization Structure ................................................................................. 22

12. Start Up Expenses........................................................................................................................ 23

13. Financial Projections and Analysis .............................................................................................. 24

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1. Executive Summary

More than 200 million people get diagnosed with Malaria every year and a significant number of
them die. Most the victims who die are young children below the age of 5 or pregnant women.
All these victims die inspite of the presence of highly subsidized malarial drugs. This example
presents a very important problem that the world is facing where victims die of diseases for
which drugs are already developed and being distributed. Lack of efficient and cost affective
diagnosis is the principal contributing factor to this problem. Most of the current R&D funding
and effort is directed towards drug development which has resulted in increasing costs and
ineffectiveness of diagnostic tools.

BioCare is a startup founded by three students of IIT Gandhinagar with the motto of ‘Building
biotechnology for the underprivileged’. The company has a vision to create effective diagnostic
tools that can be used by the poor and the illiterate effectively at the point of care. The first
disease that the company wants to fight in its endeavor to become a leader in the field of point
of care diagnostic tools is Malaria. The company is currently working on the R&D to create better
Rapid Diagnostic Tool kits which are cheaper and can be used without any human intervention.

The company’s first product ‘SlickStick’ is a unique combination of RDT (Rapid Diagnostic Test)
dipstick and smartphone to ensure accurate analysis of Malaria. The product is aimed at solving
three important problems related to malaria diagnosis. These are: a) Rapid diagnosis of malaria
without human intervention, b) Predicting risks of epidemic prediction based on the test results
of multiple patients and c) Maintaining patient history to suggest better drugs. While adhering to
these aims the company aims to keep the cost of the product 50% lower than any other RDT kit
available in the market. The company plans to handle both R&D and manufacturing itself to
ensure maximum cost reduction.

The current management structure of the firm has three founder members with multiple areas of
expertise. The CEO and CMO of the company shall be Mr. Tarkeshwar Singh while the
responsibilities of CTO and COO shall be taken up by Mr. Pritish Jain and Mr. Pritesh Sankhe
respectively. The company’s current financial projections boast a healthy net profit margin of 10%
in the first year which is expected to increase 15-16% in the long run. The Internal rate of return for
the firm over the period of first four years is found to be 23% on an expected initial investment of
around $2.2 million. The company shall have a debt equity ratio of 2:1 in the initial years.

BioCare expects to serve the most underserved and underprivileged segment of the world
effectively with its innovative and cost efficient products.

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2. Company Description

Biocare is a medical technology startup founded by three undergraduate students of IIT

Gandhinagar in 2013. The company is still in the early stages of idea development and is looking
for funding for its research and development. BioCare has a vision of making healthcare products
accessible to the underprivileged people in the world. The vision of the firm sets it apart from
most other companies and startups in this domain that primarily focus on the developed world as
a market.

The company’s mission is to improve the health of people around the globe by focusing on
developing diagnostic devices especially for the poor. Early, accurate detection is very important
for administering suitable treatment as well as the prevention and control of the disease
spreading through a population. Biocare is formed with an emphasis on inhouse R&D to develop
a pipeline of products keeping the customer in focus. The first product ‘SlickStick’ developed by
Biocare provides point-of-care rapid diagnosis of malaria using smartphones. The company’s
mission statement further involves partnering with organizations dedicated towards
improvement of healthcare conditions in African, Middle East and South East Asian countries.

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3. Products and Services

Malaria is a curable disease. A major obstacle to effective malaria control is the lack of
affordable and accurate malaria diagnostics, which has also led to misuse and abuse of
anti-malarial drugs. Our product aims at providing affordable rapid diagnosis at point-of-
care level while also providing the disease outbreaks surveillance by use of the test data.
The product comprises of a ‘SlickStick’ which is analogous to a dipstick used in Rapid
Diagnostic Tests (RDT) and a smartphone based application.

‘SlickStick’:

Rapid diagnostic tests (RDTs) or “dipsticks” are currently being used to detect antigens
of Plasmodium species in blood or plasma. The older “dipstick” tests (Parasight-F, ICT
Malaria P.f and PATH Falciparum Malaria IC Strip) detect only Plasmodium
falciparum infection. All three assays detect histidine-rich protein 2, an antigen expressed
only by P. falciparum trophozoites. However, the two newer tests (the OptiMAL assay,
and the ICT Malaria P.f/P.v assay) have the advantage of detecting infection with P.
falciparum or Plasmodium vivax.

Our ‘SlickStick’ is developed to detect almost all the species of the malaria parasite
namely Plamodium falciparum, P. vivax, P.malarie and P.ovale. The ‘SlickStick’ requires a
blood sample obtained from a finger-prick. The ‘SlickStick’ works on the same principle of
‘immuno-chromatography’ which essentially relies on the capture of dye-labeled
antibodies to produce a visible band on the strip of nitro-cellulose. The dye-labeled
antibody (which is found on the strip) binds to a parasite antigen (from the blood
sample) and the resultant complex is captured on the strip, forming a visible line (test
line). These antibodies on the ‘SlickStick’ are targeted to detect the histidine-rich protein
2 of P.falciparum, a pan-malarial Plasmodium aldolase and the parasite specific lactate
dehydrogenase. There are different lines on the strips and change of color of different
combination of lines indicates different malarial infections.

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Point-of-care smartphone Application:

The strip is then placed on a color mat – supplied with the smartphone app and intended
to normalize colors on the stick regardless of lightning conditions where the photo is
taken. The app then quickly analyzes the strip and produces accurate and easy to
understand results.

Once the application identifies the blood sample, the data is made anonymous and is
relayed to our web portal. This data includes the geo-location of the user which could
allow scientists and even people to see trends as well as check out for malaria outbreaks
on the web portal.

No special training or expertise is required for the operation of the device. Also, this
application eliminates user intervention and consequently any human errors in
understanding the tests and the results. The app also allows user to maintain the
patient/user diagnosis history for future use and this data may find useful for doctors for
easy diagnosis of the patient. This application is scalable and can be extended for other
health issues and even diseases. And eventually could take a form of a general health app
for a user with monitoring and screening health tests and all the medical history at one
place.

The concept of ‘‘SlickStick’’ is also scalable as it could also be used to diagnose other
diseases which could be identified using urine, blood or saliva samples. Based on which
disease is to be diagnosed, relevant instructions can be followed on the smartphone app
to get the results. The concept of having a centralized database and suggesting
medications can be applied in the exact same way to other diseases as well.

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4. SWOT Analysis

Strengths Weaknesses

 Innovative and unique Combination of  Smartphone penetration in the target

Rapid Diagnostic Test and Smartphone. market.
 Lower costs – ‘SlickSticks’ would be  Accuracy of ‘SlickStick’ in comparison
cheaper. to microscopy tests is lower.
 Integration with Smartphone provides  Inability of the product to determine
a mechanism for epidemic prediction. the parasitic count.
 Scalable – Potential of similar model for  Lack of existing distribution channels in
urine, blood or saliva tests. the target market.
 Data analysis will help in handling  Product is still invasive so there is a risk
inventory better. In case of increased of needle injuries and blood collection.
number of registered malarial cases,
manufacturing of ‘SlickSticks’ would be
increased.
 Digitalization of medical data/history –
a step towards telemedicine.
 Drug recommendation which would be
region specific
 Abundant R&D funding – Easy funding
available from NGO’s and government
schemes.
 Lack of vaccines – This has led to more
demand for diagnostic tests.

Opportunities Threats

 Current focus on malaria diagnosis to  Weak Patent protection may lead to

bring down the incidences of malaria
gives rise to the adoption of RDTs
 Testing rate is around 77% currently
implying that the rest of the market
goes undiagnosed at the preliminary
level.
 Increasing general focus on RDTs for
monitoring and screening health issues.
 Weak Government regulations/FDA
approvals implying faster product
development and clinical trials.
duplicate diagnostic test kits.
 Low/negligible barrier to entry.
 Presence of existing established
players.
 Behavioral issues: Technology adoption
barrier to users in context of
smartphone based diagnostic tests.

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5. Marketing Plan

5.1. Market Size and Statistics

The target market for the product ‘SlickStick’ is horizontal and hence has a wide number of
opportunities available. However during the launch the company shall be focused upon malaria
diagnostic using non microscopic Rapid Diagnostic Tests. Some of the most important facts and
statistics about that make Malaria an attractive initial target market are:

i. 219 million cases of malaria were reported worldwide in 2010 and roughly around 660,000
deaths can be attributed to this endemic disease1.
ii. More than 3.3 billion people in the world lead Malaria risk zones which primarily includes
South Asia, Middle East, Africa and Latin America.2
iii. More than 80% of the Malaria cases are found to occur in 14 countries according to WHO
report on Malaria.1
iv. Of all the Malaria prone countries, Congo, India and Nigeria contribute more than 40% of
all the cases.1 A majority of the malaria affected individuals are children under 5 and
pregnant women. Further a very high majority of these individuals fall come from the
underprivileged sector making it more difficult for them to get access unsubsidized
drugs.
v. The WHO expects an overall reduction of Malaria incidence cases by 75% by 2015. India
pledges to bring down the cases by more than 50% in the same time period.1
vi. The testing rate for Malaria in South Asia with the exception of India has been found to
be 55% and in the African region it is found to be 47%. Globally the testing rate for Malaria
is found to be 77% currently. This implies that a major amount of funding is directed
towards providing treatment to those who may not even need them.1
vii. The current forms of diagnostic are majorly divided into two categories viz. Rapid
Diagnostic Tests and Microscopic Examination of blood. The number of RDTs sold in the
2011 was estimated to be around 155 million and majority of it was distributed in Africa
and South East Asia. The number of patients undergoing microscopic examination was
found to 171 million and the major share of 108 million of this comes from India.1
viii. The estimates of total number of suspected malaria cases that requires diagnosis is
pegged at 1 billion by the WHO.1

1
Source: World malaria Report 2012, World Health Organization
2
Source: http://www.cdc.gov/malaria/malaria_worldwide/impact.html

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ix. It has also been found that only 21% of the individuals who take heavily subsidized
medicines for malaria actually have malaria3
x. The current cost of diagnosis using a RDT that uses immune-chromatography as the
underlying principle is found to vary from $1.20 to $13.50 depending upon the country of
diagnosis.4
xi. External international support to Malaria endemic countries to fight Malaria was pegged
at $1.71 billion in 2010. Domestic funding at around the same time was found to be $625
million.1

The facts mentioned here clearly lay the importance of diagnostic testing for malaria. Most of the
drug that is used for malaria is heavily subsidized and as can be seen a major chunk of it is used by
those who do not have malaria. Hence the importance of having a cheap and effective diagnostic
tool becomes imminent.

The near term focus of BioCare shall be around creating products focused on making rapid
diagnostic cheaper and more effective. Based on these the company shall fall under two different
markets viz. In Vitro Diagnostics (IVD) market and Point of Care (POC) diagnostic markets. Both
of these markets form a fairly developed and highly growing market segments. Some of the most
important facts and statistics about these market segments are:

 The world market for IVD products was pegged at $44 billion and is expected to grow at a
CAGR of 7.8%. The U.S contributes roughly around 47% of the total IVD market.5
 Asia is the fastest growing region of the global market and accounts to be 22.88% of the
global market and is estimated to reach the market of $17.20 billion with a CAGR 11.3%
from 2011 to 2016.5
 The immunochemistry market is expected to grow at a CAGR of 6.8% during 2011-2018. It
will be the largest revenue generator in the IVD market with an expected value of $25.5
billion by 2018. There are a total of 1,726 pipeline products in this category, which
accounts for 59% of the total pipeline products in the IVD market.6
 The Point of Care (POC) test market that is often considered as a subset of the global IVD
market, was pegged at $13.6 billion in 2011. 7

3
Source: ‘Price Subsidies, Diagnostic Tests, and Targeting of Malaria Treatment: Evidence from a Randomized
Controlled Trial’; J.Cohen, P. Dupas, S.Scahner; National Bureau of Economic Research, 2013
4
Source: http://www.malariasite.com/malaria/rdts.htm
5
Source: http://www.marketsandmarkets.com/Market-Reports/in-vitro-diagnostics-ivd-market-547.html
6
Source: https://www.asdreports.com/news.asp?pr_id=373
7
Source: http://www.bccresearch.com/report/point-of-care-diagnostics-market-hlc043c.html

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 The POC market is expected to hit a size of $16.5 billion to $25 billion by 2016 by different
market research firms.8
 Blood glucose monitoring market contributed more than 70% of the total POC market.8
 The sector shall see a rapid growth in self-testing segment of the POC market.

5.2. Existing Market Players

Extensive trials on three commercial dipstick formats for HRP-2 namely ParaSight F, ICT Pf or
Pf/Pv and PATH Falciparium Malria IC test have been performed, although there are now several
other manufacturers of tests for HRP-2. The major players are Becton Dickinson, Amrad ICT and
PATH.

Becton, Dickinson and Company (BD) is an American medical technology company that
manufactures and sells medical devices, instrument and reagents. BD is working towards fighting
malaria by investing in a rapid diagnostic test to detect the most deadly strain, Malaria
falciparum. BD is committed to improving the state of malaria diagnostics9.

Amrad ICT is another company which has directed efforts towards improving the RTD diagnosis
particularly for Plasmodium falciparum.

PATH is an international nonprofit organization that transforms global health through

innovation. PATH takes a dual approach to fighting malaria. They work with national and global
partners to develop strategies to eliminate malaria, and they bring together public- and private-
sector partners to accelerate the development of malaria vaccines.

Rapid “Dipstick” Blood Tests for Detection of Malaria

Plasmodium
species Parasite antigen Sensitivity Specificity
Assay (company; contact address) identified detected (%) (%)
OptiMAL P. falciparum Parasite lactate 88-91 (P.f) 92-99 (P.f)
P. vivax dehydrogenase 94 (P.v) 100 (P.v)
Flow Inc., Portland, ORWeb
ICT Malaria P.f/P.v P. falciparum HRP-2 95 (P.f) 89 (P.f)

8
Source: http://www.marketresearch.com/Renub-Research-v3619/Point-Care-Testing-Forecast-Global-
7320510/
9
Source: GBCHealth http://gbchealth.org/member_profiles/1356

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Plasmodium
species Parasite antigen Sensitivity Specificity
Assay (company; contact address) identified detected (%) (%)
AMRAD ICT, Sydney, NSW, Australia P. vivax 75 (P.v) 95 (P.v)
PATH Falciparum Malaria IC Strip P. falciparum HRP-2 96 99

Quorum Diagnostics, Vancouver,

Canada
Parasight-F P. falciparum HRP-2 94 95

Becton Dickinson Tropical

Diagnostics, Sparks, MD
ICT Malaria P.f P. falciparum HRP-2 90 97

AMRAD ICT, Sydney, NSW, Australia

Lifelens Project: An innovative point-of-care smartphone application10 which uses a tiny lens
giving 350 times magnification to analyze the blood cells at the cellular level. The smartphone
application runs algorithms for identifying artifacts the malaria parasite within the red blood
cells.

5.3. Target Market Regulations

BioCare Ltd expects to establish itself as a biotech company dedicated to serve the
underprivileged market in the world. The regulatory requirements in all of these countries are
relatively less stringent and approval for the diagnostic tools is easier to get. Further the category
of diagnostic tests has less stringent requirements in comparison to other biotech products like
drugs, surgical tools, etc.

It is important to note that the government regulations in many of the developing countries have
been becoming stringent in unison with the global/international regulations and standards. This
shall make it easier for the company to stay ahead of the curve in terms of regulatory
requirements. For the current target market of Malaria RDTs, the company will have to meet the
international regulations set up by the World Health Organization. These regulations are followed

10
Lifelens Project: http://lifelensproject.com/

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by almost all the developing countries and are less stringent than the FDA requirements of the
United States or the European countries.

5.4. Barriers to Entry

One of the most important checks that need to be made by any company before making the
decision on entering a market is to look at the barriers of the entry. BioCare aims to focus on a
different market segment in comparison to other biotech companies which means that the
barriers to entry will be very different for BioCare in comparison to others. Some of the major
barriers of the target market are:

 Low Affordability of Target Market: This shall form one of the greatest barriers to entry. It
implies that the companies targeting this section of the market will have to focus on
keeping the costs of the products low enough.
 Weak Patent Protection: In most of the countries that form the target market, the patent
protections is weak which shall make it difficult form for companies to protect their
intellectual properties from copying by other local companies.
 Distribution and retail environment: In most parts of the target market, there is a lack of
established distribution channels to reach the final consumer. Further, in many cases the
target user may not be the one paying for the product; instead an NGO or the domestic
government might be the procurers of the product. This implies that any company that
wants to establish itself in this target market shall have to focus on forming partnerships
with the NGOs and the local governments.
 Absence of stringent Government Regulations: All of the target markets have fairly lenient
government regulations; this shall make it easier for any company to enter the market
reducing the barriers to entry.
 Funding for R&D: As was mentioned in the section 4.1, a huge sum of money is diverted
from the international community towards the underprivileged nations to fight the
required diseases. A lot of this funding is diverted towards funding R&D for the diseases
which acts as a potential capital resource for innovative startups in need for initial R&D
funding.

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5.5. Target Customers

The product ‘SlickStick’ is being designed to serve as a horizontal product. The supporting mobile
app can be adapted to handle multiple disease diagnostics with minor modifications. Hence the
target customers for the product shall be extremely varied and wide:

 NGOs and Governments: In most parts of the world where people may not have access to
smartphones, the customer for ‘SlickStick’ shall be the NGOs and Government
organizations operating in those zones. They shall be the ones who will distribute test
dipsticks to individual and then run the diagnostic on them using the smartphone.
 Affluent Individuals: A growing trend in large parts of developed and developing world is
self-diagnosis for several diseases like Diabetes. These target consumers can be directly
reached to sell the dipsticks. As they are generally educated, hence the risks of any
diagnostic fault due to human errors shall be minimized drastically.
 Doctors and Private Clinics: Apart from the above two class of customers, doctors and
private clinics shall also act as potential customers as the Rapid Diagnostic Tests make it
easier for them to perform immediate diagnostic and suggest medication instead of
waiting for the reports to come.

5.6. Prospective Partners

Forming partnerships and alliances helps in risk mitigation for startups in the initial stages. The
target market for BioCare provides a plethora of opportunities to partner with different kinds of
organizations ranging from the NGOs to private companies. The partnerships shall be developed
with the three basic aims: a) Reduction of risk due to absence of well-established marketing
channel, b) Funding requirements for R&D, c) High initial capital requirements for manufacturing.
The following shall be the major partner categories for the firm:

 NGOs and Government Organizations: They shall help in achieving the first two aims
mentioned above.
 Private Companies: The partnership with private companies can be formed to meet any of
the following aims: a) Outsourcing manufacturing, b) Marketing and distribution
partnerships and c) Sharing R&D expenditure.
 Private Clinics and Medical Associations of doctors: They shall form a very important
partner to market and distribute the product to final consumers.

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 Malaria Drug Manufacturers: Partnership with Malaria drug manufacturers can be used to
mitigate marketing risk and reach the precise target crowd.

5.7. Pricing Model

BioCare in the short term of 2-5 years aims at being in the industry of Rapid Diagnostic Tests. The
pricing models for different products will vary depending upon the socio economic status of the
target market. The company shall own all rights on the data being kept on its servers via usage
the app in every case. The company shall have three pricing models for different kinds of
products:

i. Individual Consumer for diseases prevalent in underprivileged countries: The pricing for this
kind of products will be based only upon the usage of the dipsticks. The app shall be
available to download for free. The pricing model for ‘SlickStick’ shall be similar to this
model.
ii. Individual Consumer for diseases prevalent in developed countries: For this product and
customer category, the app and the dipstick shall be sold in the form of a bundle on the
first instant after which the users can buy extra dipsticks to continue regular diagnostics.
Further the app in such a case shall have limitations on the number of profiles that can be
made per smartphone.
iii. Enterprise Customers: For big enterprise customers, the app shall be distributed for free in
all cases and the revenue shall be generated only from the dipsticks.

5.8. Distribution Channels

Distribution channels form a major contributing factor for the success of any product or
company. The following is an exhaustive list of distribution channel for BioCare Ltd:

i. Doctors and Medical Associations: Doctors and Medical associations shall form the most
important and trusted distribution channel as they shall help in creating acceptance for
the product among final user.
ii. Private Clinics and Hospitals: Private Clinics and hospitals shall act as a major intermediary
as well as customer for the product.
iii. Local Malaria Drug Manufacturers: Partnerships with local malaria drug manufacturers can
help in getting access to their well established distribution network. The partnership can
also be used as a significant marketing tool.

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iv. NGOs and Government Organizations: NGOs and government organizations shall form the
largest distribution network in sub Saharan and other underdeveloped countries.
Importantly they shall also be a major customer of the product or may help in subsidizing
it to the normal users.
v. Pharmaceutical store chains: Pharmaceutical store chains can be tapped in countries like
India where they form a developed network.
vi. Travel Kit Manufacturers: Travel kit manufacturers can be used as the distribution channel
to reach the travelers from the developed world who plan to travel in Africa or South
Asia. Most of these travelers prefer to have self-diagnostic test kits with them.

5.9. Target Industry Attractiveness

The following is an analysis to judge the attractiveness of the industry in which BioCare wants to
establish itself using the Potter’s Five Forces analysis:

 Competition: The dipstick model in RDTs is already prevalent but as of now, no single
product as ‘SlickStick’ (dipsticks working in combination of smartphones) exists in the
market. The products of BioCare will be cheaper and will eliminate any user intervention
or technical know-how that is currently required to some extent for diagnostic tests.
Moreover, the product also helps to predict epidemic trends that would enable to take
precautionary measures and prevent the spread. This product differentiation would help
to minimize the competition threat.
 Buyers Power: The buyer power in the target market is limited. Malarial epidemics are
predominant is most areas of rural sub-Saharan Africa, endemic areas of Asia and isolated
areas in Africa. The targeted buyers for our product are either individuals majorly from
these areas or NGOs which do not function the same way as corporates. Hence the low
buyer power makes the industry more attractive.
 Suppliers Power: The supplier power for the firm shall vary depending on the amount of
finished products need as raw materials for the final product. However the current plans
for the firm are to manufacture all the products itself by using the basic raw materials
which shall primarily be chemicals. The abundance or absence of these chemicals cannot
be determined at this stage hence the supplier power cannot be fully gauged at this
moment. However, the firm expects its supplier power to be quite low.
 Potential Entrants: The barrier to market entry is negligible and the government
regulations are not very strict. Also, the patent protection in the target market is weak.
The potential entrants could be a possible threat. Hence in order to keep the competitors

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at bay, the company shall constantly need to improve its partnerships while also looking
out on different ways of scaling the developed model. The lack of distribution channel
shall act as a deterrent to the potential entrants and the firm can create a barrier to entry
by partnering with a lot of organizations and companies.
 New substitutes: The advent of vaccines for malaria could pose a threat to the RDTs
model but there hasn’t been a huge success in this area. Moreover, the mHealth (mobile
health) market is growing rapidly and hence there are high chances of a new application
based on the same ‘SlickStick’ model. For this, the company constantly shall be required
to innovate on the existing product as per customer needs and partners and also develop
a pipeline of products. This way the overall danger of new substitutes would be minimal.

5.10. Go To Market Plan

 Initial Launch: The aim of the initial launch shall be to reach out to partners, distribution
networks as well investors. Hence the initial launch shall be done on a platform like
Medical conference or a Biotechnology products tradeshow.
 Pre-Launch Partnerships: The pre-launch partnerships shall help in reaching out to
customers so that the impact of initial product promotions can be maximized. These pre-
launch partners shall primarily be the NGOs and the government organizations.
 Initial Product Promotions: Initial product promotions shall be important to gain
acceptability among the end users. Some of the most important tools for initial product
promotions are Flyers, Posters, Newspaper Ads and Electronic Media (if budget permits).
 Distributing test kit for free to doctors and public healthcare units: Distributing a test kit for
free shall enable maximum usage in the first few weeks/months of the launch. This shall
also help in creating demand for the future.
 Launch in epidemic prone regions: The distribution channel and partnerships in the initial
months shall be created to get access to malaria epidemic prone regions and the launch
time shall be kept around the rainy season when there are the highest chances of malaria
infections spreading.
 Tie up with Local Malaria Drug Manufacturers: Tie up with local malaria drug manufacturers
shall be helpful in reaching out to final consumer as well as creating awareness about the
product by advertising on existing drugs.

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6. Opportunity Estimation

Estimating a market opportunity with appropriate accuracy is the first step to the success of any
startup or any new product. For BioCare’s first product ‘SlickStick’, the target market shall be the
malaria epidemic prone countries. Based on the data found during the market survey, the
expected number of people who need to be diagnosed every year for malaria is 1 billion. The cost
of each ‘SlickStick’ is expected to be less than $0.60. Hence, the maximum possible potential for
the Rapid Diagnostic Market around malaria can be roughly estimated as $600 million. The
minimum estimate can be made by assuming that the number of Rapid Diagnostic Tests to be
performed shall not exceed the current levels. The current number of Rapid Diagnostic tests
performed every year is around 155 million. This means that the total market size for BioCare
even in the worst possible scenario shall be around $93 million. Hence the opportunity size for
the first product of the firm in terms of revenue can be projected to be from $93 million to $300
million.

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7. IP Protection Strategy

Intellectual Property protection is very important for all technology companies and more so for
the companies in the biotechnology sector. The IP protection strategy of BioCare Ltd consists of
two major components:

 BioCare shall apply for patent protection in countries where there are strict patent laws.
This shall ensure that no expenses made towards patent protection go waste.
 For products aimed at countries that have weaker patent laws, BioCare shall only focus
on getting the patent protection in the country where the manufacturing is done. In the
rest of the countries it would not apply for any patent protection.

The products manufactured by BioCare shall be patented in two parts:

a) The dipstick shall be patented as a product.

b) The mobile app shall be patented as a technology process of capturing and processing
data.

In the initial stages of any product, the patents shall be filed only in the countries of R&D and
manufacturing.

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8. Risk Analysis and Mitigation

Knowledge of risks involved with any business is important for its survival in the face of the
threats it faces. Some of the major risks that BioCare shall face in the initial few years can be
looked into the following subheads.

 Patent Protection Risks: Patent Protection risks are central to any biotech product.
BioCare shall focus on mitigating the risks related to patent violation by having strong
legal support systems. Further the firm shall continuously innovate on its products to stay
ahead of the rivals who create a copy of its products.
 Regulatory Approval Risks: Regulatory approval risks can be best handled by adhering to
the standards set by the WHO for products that need to be launched in developing and
underdeveloped countries. The regulatory requirements and rules shall also be kept as a
major design parameter for the products to ensure all products meet regulatory
requirements.
 Research &Development Risks: Research and Development risks shall be handled by doing
a thorough study of existing technologies before undertaking a research project. The
R&D team shall also be divided in such a way that the focus is on both working on the
existing project as well finding opportunities for future R&D.
 Distribution Risks: The major target market for BioCare shall be the underdeveloped and
developing countries where distribution channels for drugs are in the dormant stage or
still developing. Handling these distribution risks shall be the key to achieve sales targets.
The distribution related risks shall be handled by creating distribution partnerships with
NGOs and private companies before the initiation of production.
 Inventory Management Risk: The products being manufactured by BioCare shall generally
adhere to seasonal and epidemic prone diseases which implies the demand for the
product shall be very uneven. Hence managing the inventory shall be a major risk. The
firm shall manage this risk by using the data analytics collected from the mobile app
extremely efficiently to create demand projections.
 User Adoption Related Risk: User adoption risk can be handled in part by the product
development team which shall work in unison with patients and doctors and take their
feedbacks in designing a product.
 Marketing Research Related Risk: Marketing research is the key to understand the market
and its requirements. However very often companies miscalculate their opportunity due
to poor understanding of the target market. This brings disastrous results in terms of

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failure to sell the product. At BioCare this risk shall be handled in two steps. Step 1 shall
involve using market research firms in doing the market research and analysis. Step 2
shall involve forming R&D and production partnerships before going for R&D and
production respectively. This shall lead to division of risk in between partners.

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9. Operational Plan
The company’s operations comprise of three distinct components viz. Research and
Development, Manufacturing and Marketing and Distribution.

a) Research & Development: The focus of R&D team shall be to create a pipeline of products
that can be launched one after the other. The R&D of the company in the initial few years
shall be completely around Rapid Diagnostic Tests. The aim of the R&D teams shall be to cut
costs of the existing RDT products and create RDT products for diseases where rapid
diagnosis does not exist. The product concept of ‘SlickStick’ is scalable to other diagnostic
tests related to blood, urine or saliva. While developing newer products, the focus would be
on cutting the cost of the existing products and improving them especially the diagnosis
accuracy.
b) Manufacturing: The malarial epidemics are seasonal as well as vary with regions. The data
analytics received from the mobile applications shall be used to predict seasons of high
demand which shall enable the manufacturing department to meet market demands. In case
of extremely high demands during the peak seasons, the manufacturing may be either
outsourced with appropriate terms and conditions or licensed to an established
manufacturing firm.
c) Marketing and Distribution: Biocare would focus on creating partnerships with NGO’s and
public hospitals for distribution. A major part of marketing would also be understanding and
analyzing user behavior by means of analytics and also analyzing the field data. Product
promotions would be achieved by use of posters and flyers in target regions. Newspaper ads
and electronic media would also be employed wherever possible.

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10. Exit Strategy

The exit strategy shall form as a last resort if everything else goes wrong with the current form of
the company and its product vision. The sit strategies have been designed keeping in view the
two core competencies of the firm which are a) Creating innovative dipsticks and b) creating IT
solutions in form of mobile apps. The following are the different forms of exit strategy that may
be used individually or in combination if the situation requires:

a) Sell R&D in form of patents and intellectual property around the dipsticks to rivals and
other probable clients.
b) Migrate into development of hospital management solutions: The firm may be able to
migrate into the domain of hospital management systems by using its second core
competency of creating IT solutions.

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11. Management and Organization Structure

The management structure of the firm has been divided into three major sections viz. a)
Research and Development, b) Operations (Manufacturing and Data Analytics) c) Marketing and
Finance. Each of these has been divided among the three founders to suit their individual
abilities.

Tarkeshwar Singh, CEO & CMO

Tarkeshwar Singh is a senior undergraduate in the department of Electrical Engineering and

holds a minor in Finance. He is passionate about Marketing and Finance and has experience
pertaining to marketing and pricing of products. His further experience with launch and
maintenance of mobile app based products shall play crucial role for the company.

Pritesh Sankhe, COO

Pritesh Sankhe is a senior undergraduate student majoring in Electrical Engineering with

minor in Computer Science. His interests are Mobile and Web Application Development,
Machine Learning and Embedded Systems. He is very passionate about building mobile apps and
has experience of developing several mobile apps. His experience with manufacturing shall
further help in running the manufacturing plants.

Pritish Jain, CTO

Pritish Jain is a senior undergraduate in the department of electrical engineering with significant
interests in biotechnology and biochemistry. He also has internship experience in the domain of
biotechnology products and diagnostic equipment manufacturing and design with Hospira Inc.
This shall help him lead the Research and Development team to create a pipeline of products to
be launched one after the other.

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12. Start Up Expenses

The start expenses sought by the firm are to support the initial fixed assets and to maintain the
minimum level of cash balance while also accounting the minimum inventory level, the payables
and the receivables. The expected investment needed by the firm to perform R&D and create
manufacturing facility with a capacity of producing more than 10 million test kits a year is $2.2
million. The firm’s capital structure shall have a debt to equity ratio of 2:1. However after
receiving the initial funding the firm is expected to be self-sustainable for 3-5 years. The loan will
be taken for 10 years and the repayment of loan shall start happening after the fifth year.

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13. Financial Projections and Analysis

The detailed financial projections along with assumption are given in Annexure A named as
‘Financial Projections_Biocare’. Some of the most important facts and details about the financial
projections are given below:

 Required net initial capital of $2.2 million

 Total fixed costs expected to be $1.5 million
 Sales price of each dipstick is $0.60.
 The expected sales growth is 50% in the second and third year followed by 30% in the
fourth.
 Gross margin on each dipstick is 55%.
 The receivables and payables period for the firm are 45 days and 30 days respectively. The
firm shall maintain an inventory of 60 days.
 10% of the total revenue is diverted towards R&D
 More than 21% of the total revenue is diverted towards sales and administrative expenses.
 The cash flow from operations is negative in the first year and turns positive the next year
onwards.

Financial Analysis Parameters:

 Net Profit Margin: 10%

 NPV: $398,917 at a discount rate of 15% and initial investment of $2,185,500.
 Internal Rate of return found to be 23%
 The payback period for the firm is 3.5 years.

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