1 market feasibility study real-time brain monitoring system

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Market Feasibility StudyReal-Time Brain Monitoring System

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Introduction

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Brief Summary

• Market feasibility study• Office of Technology Licensing

offerings• Benefits based on available market• Weighed philanthropic benefits • Based final decision on financial

merits

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Assumptions

• Assumptions:– Add-on Versus Stand-alone Solution – U.S. Market Only– Initial Market Demand Based Only on

Neonatal Intensive Care Units• Follow-On Markets Exist (e.g., PICU,

Operating Room, Recovery Rooms)

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The Problem

• Current monitoring devices and methods are limited– Providing qualitative assessments– Predicting seizure events is difficult– Analyzing events results is lengthy

• Video

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From the Inventor…

Care of University of Florida Hospital Systems: mms://wm8.video.ufl.edu/onc/051705Carney386.wmv

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The Solution

Real-Time Brain Monitoring System• Algorithms based on multivariate data

input• Uses all available patient data• Alerts when activity varies from the

expected norm• Intervention/fidelity of analysis

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Patient

Signal Acquisition Equipment

Wireless MonitoringIllness Index and Detection Alarm

Technical Depiction

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Market Analysis

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Market Analysis

• Medical Devices– $125.9B in 2004 sales– Future demand at 4.1% compounded

annual rate to $167.4B by 2010

• Electromedical Equipment– $19.7B in 2004 sales, 8.7% growth rate– Growth rate of 7.7% annually until 2009

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Market Analysis

• Neonatal Intensive Care Units– 4.1M births annually– 1 in 8 births classified as premature– Premature infants at 30% greater risk of

major medical issues– Impact $26.2B annually, $51K per infant– >20,000 NICU beds

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Entry Barriers

• Food and Drug Administration– Class II Device– Pre-market Notification required (510K)– Needs to be Substantially Equivalent

• Market Acceptance

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Competition

• Other patented devices• Brain Z• Infra-Red Perfusion and Brain

Imaging Technology

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Demand Analysis

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Demand

• Product demand is dependent on service demand

• Service demand is based occupancy of NICU beds by preterm infant seizure patients

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Demand

• Historical data suggest;– > 20,000 NICU beds in the U.S.– ≈ 78.5% occupancy rate– 11.1% preterm infants have seizures– Demand ≈ 1,750 units– Significant uncertainty in data

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Demand Estimate

• Population• Birth rate (14.14/1,000)• Preterm births (12.5%)• Preterm infants with seizures (11.1%)• Average NICU stay (17.5 days)

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Demand Analysis

2007 2008 2009 2010

U.S. Population 291,263,000 293,672,000 296,081,000 298,490,000

Total Number of Births

4,118,459 4,152,522 4,186,585 4,220,649

Preterm Births 514,807 519,065 523,323 527,581

Preterm Births with Seizures

5,7144 57,616 58,089 58,561

Number of NICU Beds Requiring

RTBMS2,740 2,762 2,785 2,808

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Demand Summary

• Initial demand ≈ 2,740 units• Demand increases ≈ 0.8% per year

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Financial Analysis

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Assumptions

• The Financial Analysis includes the following assumptions:– US market only– One scenario – one company to take product

from development phase to market– Market share over ten years 41%– Government funding– Price per unit $12,500– Units sold– Revenue growth is 8.7% per year

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Research & Development

• R&D costs total $11.6M and are incurred mainly during the period 2006 to 2008

• Costs include:– Software development costs of $2.0M– Research costs involving the validation and

integration of the EEG measures of $1.9M– Marketing and Planning during the

development phase of $1.3M– Clinical testing of $1.7M– Other costs of $4.7M

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Profit & Loss Statement

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Break-Even Analysis

Break-Even Analysis

(15,000,000)

(10,000,000)

(5,000,000)

0

5,000,000

10,000,000

15,000,000

20,000,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Year

Am

ount

($)

Sales Revenue COGS and Operating Exps. Net Income/(Loss) Cumulative profit/(loss)

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Financial Indicators

Return on Investment (ROI) – 5th Year -$921%– 10th Year -$1,286%

Internal Rate of Return (IRR)– 10th Year -121%

Net Present Value (NPV)– 5th Year -$73M– 10th Year -$89M

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Conclusions and Recommendations

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Conclusions

• The RTBMS offers a tangible solution– Doctors and medical staff are not able to

predict the onset of neonatal seizures.• The technology can reduce seizure

associated financial burdens– Parents of patients (costs of care)– Hospital community (lawsuits)

• The philanthropic nature of the RTBMS is not enough to warrant the technology’s being taken to market. – Limited market demand for the technology – Protracted payback (break-even) period

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Recommendations

• We recommend no investment in the University of Florida’s Real-Time Brain Monitoring System– Large financial risks based solely on the

investment in the technology– Cumulative losses of $4.9 million over a

14 year period

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Questions and Answers

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Thank You!