Overview
AgaMatrix (a Boston-based venture in development) offers digital signal processing (DSP), technology that significantly improves the performance and functionality of biosensors. AgaMatrix core DSP algorithms are able to solve many immediate problems in medical devices by dramatically increasing the performance biosensors with minimal specialized hardware and other chemicals. AgaMatrix’s initial sales will be to medical device companies, specifically home glucose monitors as well as hospital point-of care blood analyzers. AgaMatrix anticipates achieving positive cash flow by year three with future target healthcare segments to include the large immunoassay and implantable biosensor sectors; as well as other vertical industries that heavily rely on biosensors, such as the military chemical agent detection, environmental air/water quality monitoring, and industrial processing sectors.
Problem. Glucose Monitoring Systems Are Heavy and Painful To Use
Because the home glucose monitoring is too painful or burdensome, many diabetic patients don’t use it as prescribed. Patient must insert the glucose biosensor into the glucose test strip four to seven time per day. The average testing compliance rate for diabetes is less than 1.5 per day. This causes complications like blindness or stroke and can accelerate the progression of these conditions, including heart and kidney disease. Diabetes is the most common cause of blindness for people aged 20 to 74. Therefore, better glucose monitoring compliance could be the biggest step towards prevention. Device manufacturers have identified that non-compliance stems from the physical pain experienced when using their devices. Therefore, they are looking for ways to decrease the size of the samples required by their devices. AgaMatrix technology provides less-invasive drawing tools to meet the growing demand for painful alternatives.
Problems in the hospital blood analyzer market are more related to the lack of the comprehensiveness and accuracy of the devices, which results in reduced adoption levels. AgaMatrix’s value proposition for this market is very clear. Devices that are more sensitive and accurate will have a greater chance of being adopted more quickly.
A Software Solutions for a Hardware Issue
The biosensor device industry has tried to overcome issues such as accuracy, robustness, and sensitivity by improving the hardware (or chemical) aspects of its devices. For example, their chemical and biological design. By contrast, AgaMatrix is pioneering a software approach based on digital signal processing (DSP) algorithms that has a number of distinct practical advantages, including lower cost, easier/faster upgrade capability, and complementarity with respect to a wide variety of chemistry/hardware-based biosensor technologies.
AgaMatrix’#8217;s solution consists of a series of software modules. This allows for new functionality, and dramatically improves performance of biosensors. You can leverage increased signal-to-noise ratios to lower blood sample requirements. For the professional healthcare market, AgaMatrix offers the ability to improve the overall accuracy and sensitivity of hospital point-of-care analyzers. This improves accuracy and is a key factor in the widespread adoption of portable lab equipment as a replacement for conventional laboratory equipment.
Software DSP solutions have been vital to the success of many other industries where physical limitations would have impaired their growth. CD players, for example, relied on error-correction algorithms and oversampling in the 1980s to compensate low quality hardware filters. AgaMatrix’s algorithms provide analogous solutions in the biosensor space.
Business Model: Software Licensing from Device Makers and Royalty Fees
AgaMatrix, initially, will operate as technology licensing company. It will derive royalty revenue streams from device makers’′ consumables sales. The technology will be sold to makers of home and hospital blood glucose analyzers as well as implantable and minimally invasive blood glucose biosensor developers.
Therasense — An Illustration Of How Disruptive TheGlucose Marketplace Is
Four major players dominated the blood sugar market a few decades ago (numbers are annual test strips revenue). Roche ($1.
27B), J & J (1.09B), Bayer (650M), Abbot (545M) These companies have existed since the 1980’s. In the span of less than two years since their product roll-out, they have achieved $200 million in annual revenues, gone public, and now have a market capitalization of over $800 million. This is a market open to new technology, especially when it reduces pain.
Competitive advantageThere is no direct competitor to our proprietary and highly innovative approach, which has been refined over the past seven year by our top-notch scientific team. AgaMatrix will complement any indirect competition that may be created by the major medical device manufacturer’s in-house laboratories. AgaMatrix holds the following competitive advantages.
- Superior software paradigm complements the chemical (hardware), and technological advances in biosensors.
- Over seven years of biosensor research, we have accumulated expertise.
- Monopolization by the scientific team that invented the original paradigm.
- Development lead time at least 2 years longer than the potential competition
- Intellectual property strategy that includes two core utility patents (filed), and three defensive utility Patents.
Customer Traction
As potential customer targets, we have already spoken to two manufacturers who make blood glucose monitors as well as one manufacturer of hospital points-of-care devices. We have yet to approach more than 20 potential target companies. Here is a summary listing of all the companies we have reached.
- Two blood glucose monitor companies expressed strong interest in becoming partners (discussions held with Presidents). Details are not disclosed at this time, but we expect to be able close a deal before June 2002.
- A leading manufacturer of blood glucose monitors (J & J –, discussions with Director-level personnel) and a leading manufacturer of hospital point-of care devices (i-STAT – discussions with Vice President and Director level staff).
The Team
A current team composed of:
- The three leading scientists pioneering the use of digital signal processing to improve biosensor technology, with an aggregate of over 40 years of direct DSP/biosensor research experience.
- Entrepreneurs who founded, built, and managed a software company for enterprise use.
- An expanding group of veteran advisors consisting of doctors with healthcare business experience.
- Three additional technical staff members have committed to the company’s success after seed financing. They are engineers from MIT or Tufts with more than 25 years of combined commercial engineering experience.
Financing
Since its inception, AgaMatrix was self-funded entirely by its principals. The company recently closed a seed round of $500K from a number of healthcare angel investors and IncTANK, an early stage venture capital fund. A Series A round in four to six months is expected, with an estimated $1 million.
These funding rounds are designed to help you complete version 1.0 and acquire at least one customer during a period of thirteen months. We believe these milestones are reasonable, given current customer traction and product developments. The company is targeting to raise about $4million in institutional and private rounds by the end year one, which will be cashflow positive. Current valuation drivers include:
- An elite scientific team including Dr. SridharIyengar, Dr. Justin Gooding, Dr. Ian Harding, and Dr. Sridhar Iyengar (CTO), as well as an aggressive business group with start-up or management experience.
- Technology that is useful in a variety other vertical markets. It is protected by an IP strategy.
- External validation through existing customer relationships and advancement in the final rounds of several national business planning competitions.
1.1 Mission
AgaMatrix designs solutions that power next-generation chemical and biological sensor systems. AgaMatrix provides a market-leading solution that dramatically increases the accuracy, sensibility, and robustness a range sensors. This is to help medical diagnostic devices be more effective.
AgaMatrix’s technology is able to create devices that are painless and will satisfy the need for greater accuracy in medical diagnosis. It is committed to developing software solutions for a critical problem in hardware that affects millions upon millions of hospital patients and diabetics worldwide.
1.2 Objectives
- Design technology solutions that will increase adoption and compliance rates of diagnostic medical equipment by improving functionality and performance of biosensors.
- By year three, you can achieve positive cash flow
- In four years, you can reach $50,000,000 in annual revenues
- Expand into other industries that heavily rely on biosensors, including industrial processing, environmental monitoring, and military sectors.