MECHANICAL COCHLEA

Project Objective

• To create a mechanical device that closely mimics the function of the human Cochlea, with the capability to scale down for future applications.

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Goals/Objectives

Engineers

• Develop Concept

• Design

• Construct Model

Business & Technology

• Business Plan

• Industry Analysis

• Competitor Profile

• Marketing Strategy

• Cost Analysis

Scott DiStefano, Kenneth Meerendok,

Kahri Olsen, Alex Orbach

Matthew Koellner

Project Advisor: Professor Prasad Marehalli.Prasad@stevens.edu

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Industry Facts

• Cochlear implants have strongest market potential and growth of all hearing implants

210,000 implants sold

worldwide

200,000 potential new implant patients EACH YEAR

FAST GROWING MARKET

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Industry Facts • 34 million Americans experience hearing loss.

– Only 24% of these people use hearing aids.

• Cochlear implant surgeries alone are growing at a rate of 20% per year.

0

100000

200000

300000

400000

500000

600000

CI USERS POTENTIAL

25,000

Potential Growth of

1900%

500,000

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Purpose/Process of Cochlea

Vibrations

• The cochlea is filled with a watery liquid.

• Liquid moves in response to the vibrations from middle ear.

Electrical Signals

• As the fluid moves, thousands of "hair cells" are set in motion, and convert that motion to electrical signals.

• Signals communicated via neurotransmitters to many thousands of nerve cells.

Electrical Impulses

• primary auditory neurons transform the signals into electrical impulses known as action potential.

• travel along the auditory nerve to structures in the brainstem for further processing.

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Cochlea

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Mechanical Human

• Damping Fluid

• One Straight Duct

• Resonating Bars

• Input: Sound waves

• Output: Electrical Impulse

• Damping Fluid

• 2 Spiraled Ducts

• Resonating Hair Cells

• Input: Sound Waves

• Output: Electrical Impulse

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Hearing Aid vs. Cochlear Implant

• A cochlear implant is completely different from a hearing aid. • Hearing aids amplify sounds to a level audible for people

with hearing impairment • cochlear implants bypass damaged portions of the ear,

directly stimulating the auditory nerve.

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Problems/Opportunities Hearing Loss Solutions

Opportunities

• All include EXTERNAL devices. Currently no Exclusively Internal device. • Open market for new products. No commoditized product for more severe hearing loss. • Increasing number of patients willing to get implant because of advancements and

increasing confidence in surgical procedures.

Standard Hearing Aid

Mild/Moderate Hearing Loss

Bone Anchored Hearing Aid

Conductive/Unilateral Hearing Loss

Cochlear Implant

Profoundly Deaf/ Severely hard-of-hearing

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Implant Example

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Dimensions

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How long will the implant surgery last?

• A typical implant surgery can last from 1-3 hours or longer.

• Length of stay in the hospital can vary from one to several days depending upon local practice.

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1 vs. 2 implants

many parents report that bilaterally implanted children are better able to concentrate in school and that they are less tired from social interaction when using two implants.

The majority of implanted individuals worldwide use one implant.

studies show that there are benefits to bilateral implantation

• localize sounds, • hear better in difficult

listening situations

In general, it can be said that “stereo” hearing (with two ears) is less strenuous than “mono” hearing (with one ear).

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Patient Breakdown

Adults

• Hearing loss from aging, accidents, illness, or ototoxicity

Children

• Newborns born deaf

• Hearing loss developed between ages 1 and 6

50% 50%

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Benefits for children

• Regain a normal quality of life

– Given opportunity to acquire normal speech

• Enables child to enter a standard kindergarten

The most targeted patient for the project would be children due to the more openness about the operation and early detection possibilities.

• An increase in early hearing detection and intervention (EHDI) programs as a result of legislation and advocacy efforts by organizations such as the American Speech-Language-Hearing Association (ASHA) has allowed for the identification of more children who may benefit from cochlear implants during recent years.

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Global Market Volume

40%

35%

15%

10%

Global Market Volume

North America

Europe

Asia/Pacific

Latin America

25,000 through 30,000 units sold annually

Tests such as newborn screenings conducted more often and at increasing rate

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Restrictions

• Number of cochlea centers are limited

• In emerging markets…

– Reimbursement of cochlear implants not yet established

– Large amount of potential patients not identified

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Costs for Patient • The costs of cochlear implants vary widely depending

on a number of factors, including the duration and extent of a patient's hearing loss prior to surgery.

Global Average

• $100,000 - $125,000

• Evaluation, Surgery, Device, Hospitalization, Rehabilitation

UK, Australia, and Israel

• National Health System covers

According to the US National Institute on Deafness and Other Communication Disorders, the estimated total cost is $60,000 per

person implanted (some covered by health care).

FREE

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Cost of Device

Patient

$20,000 to $25,000 per unit

Manufacturer

About $500 per unit

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Competitors

• Currently the three cochlear implant devices approved for use in the U.S. are manufactured by:

Cochlear Limited

Australia

MED-EL Austria

Advanced Bionics

United States

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Cochlear TM

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Cochlear

• Company’s profit in Americas grew 18%

TM

198.2

249.8

232.2

300.4

307.6

06

07

08

09

10

Almost Half of company’s Revenue

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Conclusion/Recommendation

• Market has very high profit potential

• High Growth Potential

• Best place to start is US and expand from there

– US showing highest growth in sales

• Very expensive to penetrate market with new product from unfamiliar company

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40%

35%

15%

10%

Global Market Volume

North America

Europe

Asia/Pacific

Latin America

0

100000

200000

300000

400000

500000

600000

CI USERS POTENTIAL

25,000

Potential Growth of 1900%

500,000

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Goal for Next Semester

Typical structure for a business plan for a start up venture

cover page and table of contents executive summary business description business environment analysis industry background competitor analysis market analysis marketing plan operations plan management summary financial plan attachments and milestones

BUSINESS PLAN

First Semester

Second Semester

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