Oppotunities
Problem statement
Background of Autism
Autism spectrum disorder (ASD) is a developmental disorder characterized by persistently impaired social interactions, restricted and repetitive patterns of behavior, interests ,or activities which can lead to a variety of difficulties in social interaction, communication,participation in everyday activities.
The prevalence of ASD has been increasing over the past few years. The Autism and Developmental Disabilities Monitoring (ADDM) Network of the US Centers for Disease Control and Prevention estimates that by 2020, approximately 1 in 36 children will be diagnosed with an autism spectrum disorder (ASD).
Immune dysfunction is a viable risk factor for the neurodevelopmental deficits observed in autism spectrum disorders (ASD). For example, serum anti-nucleoside-specific antibody levels were significantly higher in children with autism than in healthy controls (p < 0.001), being elevated in 46.7% of patients. It is suggested that they may cross the blood-brain barrier and bind to brain tissue antigens to form immune complexes, thereby damaging the neural tissue of autistic patients. Gangliosides are expressed in the outer leaflet of the plasma membrane of all vertebrate cells and play an important role in memory formation, neural axonogenesis, synaptic transmission ,other neural functions. Exogenous administration improves nerve regeneration. Ganglioside M1 is the most abundant ganglioside in nerve membranes. It may become an autoantigen through the galactosaminogalactan portion of its sugar fraction. It triggers a T-cell-independent IgM response.
The identification of current problems
Currently, the main problem with most treatments for children with autism is that they are effective but carry a heavy burden. In China, 61.15 percent of the families participating in the survey suffered occupational losses due to the care needs of children with ASD, 43.90 percent moved to a different place of residence due to the need for rehabilitation and treatment, and 67.04 percent suffered family conflicts due to their child's illness. Conclusion ASD children's illness caused serious economic and psychological burdens to their families - the median cost of Chinese families with ASD children for consultation and rehabilitation treatment was 60,000RMB/year.
The problems described led to the opportunity identified by NJMU-China. The field of autism should move toward treatments that reduce the burden on patients. One potential option is targeted therapy. Targeted therapy can be more efficient because it is a time-saving and cost-effective therapy.With 52Hz+, NJMU-China is designing a time- and effort-saving autoimmune autism therapy that specifically blocks ASD auto-antibodies as a customized treatment for ASD symptoms through a small molecule metabolite. It treats ASD by administering medication that is more convenient for the patient and reduces the workload on the patient's family.
Product Description
NJMU-China is designed for autoimmune ASD with the antibody-based therapy 52Hz+. As explained in the problem statement, we are concerned with a sub-type of ASD called autoimmune autism, but for the purposes of this report we will refer to the disease collectively as ASD.This section will describe the characteristics of 52Hz+ in detail. Many autoimmune diseases are characterized by the presence of what are known as auto-antibodies. These auto-antibodies are usually specific to each disease. For ASD, we focus on brain auto-antibodies, which include anti-phospholipid antibodies, antiganglioside antibodies, antinucleosomal antibodies, and Fc receptor antibodies
These antibodies have been shown to be associated with disease in children with ASD. We ended up focusing on three antibodies, anti-GM1, anti-MBP & anti-MBP. Since this antibody is blocked by specific small molecule metabolites, the system aborts the autoimmune response and is therefore considered a targeted approach to treating the disease. In this way, 52Hz+ can be taken exactly as the patient needs it, stopping the progression of the disease and reducing the symptoms associated with ASD. Additionally, in the event of a relapse of the disease, the memory cells will be reactivated so there is no need to undergo treatment again.
The process of developing our product is also shown in the picture above, where four groups of our team, each with their own role but working closely together, have come together to create 52Hz+ - a time-saving autoimmune autism treatment!
Primary Products and Services
Our principal product will be a patented proof-of-concept for 52Hz+, supported by pre-clinical and clinical Phase I and Phase IIa data, which we will licence to our customers who will further test, manufacture, market, distribute and sell the product.
Value Proposition Canvas
The value of 52Hz+ can be viewed from four different perspectives. Since our goal is to design an immunotherapy, most of the value is created for healthcare. At this moment in time, 3 million children in the world is living with autism, and we are improving the health of individuals by reducing the symptoms associated with the disease.
Preventing relapse and improving quality of life There will be less stress, more independence, more energy and a happier life for the individual as well as their family, friends and carers.
Social well-being and enhancement of socioeconomic This in turn has a secondary impact on society, as the general well-being of society tends to be boosted by a more sustainable and healthier workforce.
Burden of care and reduction of additional expenses Also relevant to healthcare is the reduction in workload for the accompanying family. Our therapy reduces the necessary number of custodial and therapeutic visits per child with ASD significantly. In addition, because our therapy has fewer side effects and does not require additional hospital visits, care is less intense and less demanding for healthcare professionals. As a result, the amount of work involved in caring for people with ASD is reduced. Healthcare professionals range from doctors performing the treatment to nurses who are able to perform less demanding care.
Biomedical, Synthetic Biology Solutions Finally, the ethical implications of 52Hz+ have social implications. The often polarized discussion about the consequences of artificially created organisms has been steadily rising over the past few decades. While the discussion itself will not cease, the introduction of effective immunotherapy may take some of the heat off and demonstrate that engineered organisms can provide a safe and therefore compelling solution to many of the world's current problems. Responsible innovation in synthetic biology in response to COVID-19 is one such example.
Customer Segmentation
This section describes the primary and secondary customers of NJMU-China. In addition, the interests of other key stakeholders and product users are included.
Primary Customers
NJMU-China's primary customers are large pharmaceutical companies. The pharmaceutical industry is rapidly evolving and pharmaceutical companies must stay ahead of these developments. Therefore, the mission of pharmaceutical companies is to discover new ways to improve and extend people's lives (according to Mark van Hattum, Health Care Relations, Novartis Pharmaceuticals). 52Hz+ is a time-saving and cost-effective therapy for autoimmune autism. This means that our innovative therapies can help pharmaceutical companies stay ahead of their competitors and grow in the market. The pharmaceutical companies we target are large organizations with at least 5,000 employees or an annual turnover of more than €1.5 billion and a balance sheet of more than €2 billion. (In addition, these pharmaceutical companies should have manufacturing facilities and expertise to produce Advanced Therapeutic Medicinal Products (ATMPs) or be willing to invest in such facilities. In addition, the NJMU-China-focused industries should be actively involved in the field of neurodevelopmental disease therapeutics. In addition, they should have all required licence and their facilities should comply with all WHO laws and regulations. Finally, our customers should hold the same standards of safety and ethics for genetically engineered machines as NJMU-China does.
Secondary Customers
Triangulation of stakeholders is required to make 52Hz+ a successful product. These stakeholders are important members of the Chinese healthcare system. This section describes the Chinese healthcare system and its most important players. The pathway to market for 52Hz+ may be different in each country but usually involves similar stakeholders in the healthcare system. The values and interests of these stakeholders are important to the success of 52Hz+.
When 52Hz+ is approved by legal authorities to begin clinical trials or the manufacturing process thereafter, our primary customers will sell 52Hz+ to health insurance companies. Therefore, health insurance companies are considered a secondary customer target for NJMU-China. Health insurance companies have two priorities and interests. Firstly, they focus on medication, which means that the healthcare included in the basic care of social security in China should be necessary and proven to be effective. In addition, there is an economic interest in medicines, which ensures that the health insurance provided to society is affordable. These two interests align with those of NJMU-China, and the effectiveness of 52Hz+ relative to current treatments is one of our strengths. In addition, NJMU-China's mission is to "save time and effort for new healthcare solutions", which is not possible without affordable healthcare. The health insurance companies will decide which treatments they will (partially) reimburse, based on the recommendations of a committee of experts. This reimbursement is an important determinant of the success of 52Hz+, and treatments that are not reimbursed are too expensive for patients.
Product Customers
The MIC will provide treatment to healthcare providers in the healthcare purchasing market. These clinicians are considered product customers and are closely involved in the development and production phases of 52Hz+. In addition, they provide advice to health insurers. This means that these specialists also decide which new drugs and therapies are to be used for their patients. It is vital to identify and fulfill the needs of these clinicians and to design reliable products. This means that the effectiveness and side effects of treatments are extremely important to these professionals. Therefore, NJMU-China has been working with clinicians from various hospitals, institutes and companies to advise us on their possible needs for 52Hz+.
Roadmap
This year, NJMU-China focused on the design and development of the 52Hz+ ’s proof-of-concept. We tested mechanisms to simplify the proof of concept in vitro. Over the next year, we aim to optimize the 52Hz+ proof-of-concept and product design to make it safer and more effective. In addition, we aim to transform the proof-of-concept into an actual therapy. in 2025, this therapy will be tested in vitro and on computer models to gain essential information about its safety and biological efficacy. The next step will be to test 52Hz+ not only by cell lines but also in vivo in various animal models. The goal of the preclinical tests will be to characterize the pharmaceutical profile, general safety, and toxicity. In addition, the mean residence time of the drug will depend on the metabolism, absorption, excretion, and distribution of the treatment. We aim to commence Phase I clinical trials in 2026 and conduct Clinical Trial IIa last year before licensing 52Hz+ to our target customers.
Entrepreneurs and Winning Teams
The Team
The NJMU-China 2023 team was established in March 2023 to develop 52Hz+. The team consists of ambitious undergraduates with diverse backgrounds, ranging from expertise in basic medicine (cell biology, organic chemistry, pathology, and statistics) to experience in entrepreneurship, stakeholder co-creation, and graphic design. This enabled interdisciplinary, creative thinking and critical evaluation of deliverables from different perspectives. These qualities are necessary for high-quality scientific research and the creation of new businesses in the development of 52Hz+.
Clinical Medicine，Organic Chemistry，Foundational Medicine，Pathology and Physiology，Computer Science，Pharmaceutical Science，Cell Biology，Statistics, Preventive Medicine, Graphic Design.
In addition, NJMU-China has general engineering hard skills such as problem-solving, analytical, and academic writing skills. In addition to hard skills, the team possesses a variety of soft skills including stakeholder communication, public speaking, networking, leadership, and time management skills. Soft skills, in particular, are very useful when signing up new partners. More importantly, NJMU-China has a strong team as the team contains a 4 professional subgroups that are critical to effective decision-making and business processes within the team. These professional subgroups are combined with a clear delineation of tasks and responsibilities for each team member. The wide diversity of knowledge, experience, skills, personality traits, and responsibilities makes business processes such as project management, human resource management, and business development very efficient. All in all, the team has the competencies and skills needed to launch new ventures, conduct research and development to optimize 52Hz+, manage long-term projects, and contract new partners.
Technical Support
NJMU-China has a large network of knowledge-based technical support and works with many different partners and stakeholders.
Nanjing Medical University (NJMU): NJMU-China has a close relationship with Nanjing Medical University (NJMU). NJMU is a "double first-class" university with a strong faculty.
NJMU Affiliated Hospitals: The team relies on a number of tertiary care hospitals with vast resources for epidemiological and evidence-based medical research. These hospitals offer many different clinical programs to improve skills and knowledge within the team. For example, they offer research opportunities and networking and knowledge exchange with other student teams.
School of Basic Medical Sciences of NJMU: In addition, our team has a close relationship with the School of Basic Medical Sciences at Nanjing Medical University, which provides resources applicable to wet-lab experiments and knowledge on how to translate the work of 52Hz+ to other stakeholders. In addition, they have incorporated NJMU-China into their public website, which has increased reputation and brand awareness.
Commercialization
Protect-ability
An important factor in the success of 52Hz+ is the protect-ability of its technology. This protection can be divided into three different categories, namely intellectual property, confidentiality, and speed to market.
Intellectual Property Rights
Prior art:52Hz+ has no patents granted anywhere at the moment, and our business will be based in China, where there is of course freedom to operate. For protect-ability reasons, our team plans to file a patent application for the 52Hz+ technology in China. In the description of the application, the binding of antibodies to synthetic receptors and the efficient blocking of autoantibodies in the human cellular system is described in detail. More details on the 52Hz+ technology can be found in subsection 1.2 of the product description. Through the China Patent and Trademark Office, 52Hz+ will be the subject of a utility model patent application, which typically expires 10 years after the date of filing. This will mean that we have 10 years of protection to develop and market the 52Hz+ licences in China. At the same time, we will apply for a European patent. This is an easier and cheaper alternative to obtaining individual patents in the member states of the European Patent Convention (EPC). 6 months later the European patent application will be published. This patent is valid for 20 years.
Confidentiality
Confidentiality of the 52Hz+ technology is essential to ensure that patents are approved. This is why every founder, partner, and investor in NJMU-China should sign a confidentiality agreement. This process is necessary to ensure that no knowledge is leaked to competitors.
Speed to Market
The patent for 52Hz+ in the Chinese market is valid for 10 years. Due to this limited time frame, NJMU-China should focus on appropriate speed to market. This can be achieved by prioritizing research and development and participating heavily in clinical trials. The team should also invest early in relationships with pharmaceutical companies so that they will be interested in 52Hz+. It is in the interest of both parties to sell a licence for 52Hz+ to potential companies as soon as possible. Our team generates profits as quickly as possible, while the pharmaceutical company obtains the licences as quickly as possible and holds the patent for as long as possible.
Disclaimer of Liability
Although we have sought legal protection for the 52Hz+ technology from experts, we were unsuccessful in obtaining a patent for 52Hz+ before the Big Gathering. We have decided to disclose the 52Hz+ technology with relevant stakeholders during the Big Gathering so that we can present our project in the best possible light. In addition, we wanted to get the most relevant feedback on how to improve our design to make it more feasible, desirable, and responsible. Instead, as discussed in the proposal implementation, we aim to further extend and optimize the 52Hz+ mechanism after the big party. Through a non-disclosure agreement, we will discuss the technical details of these optimizations with relevant stakeholders and apply for a utility model patent for the improved design through the process described in the previous section on intellectual property. Our experience has taught us the value of intellectual property and we recommend that future iGEM teams consider legal protection as early as possible in their projects.
Commercialization Strategy
NJMU-China owns or has easy access to the assets required for the drug discovery phase. However, in all other phases, not all assets are available in-house or free of charge, meaning that significant investment or collaboration with third parties would be required to access them.Therefore, it was decided that NJMU-China would focus only on the drug discovery portion of drug development up to Phase IIa clinical trials, as successful Phase IIa clinical trials are the gold standard for proof of concept in clinical research. This strategy is closely related to recent trends in the pharmaceutical industry. Since 2004, the pharmaceutical industry has outsourced a large number of R&D activities due to the high risks and costs involved in the R&D phase. In the new business model, traditional large pharmaceutical companies started to focus on specific (late) stages of the drug development process in order to reduce overall costs. As a result, strategic partnerships, including service outsourcing, are encouraged.
Therefore, we analyzed the positioning of the team in the market and identified five dimensions of stakeholders relevant to the team's commercialization process, referred to as the "Five Forces". These forces are the bargaining power of the supplier, the bargaining power of the buyer, the ability of potential competitors to enter, the ability of substitutes to replace them, and the ability of competitors in the industry to compete now. Changes in different combinations of the five forces ultimately affect changes in the industry's profit potential.
Strategic environment for commercialization
For this technology to be commercialized, it will be legally protected so that it can be licensed in the technology market, including large pharmaceutical companies. As explained in the Protect-ability section of subsection 3.1, proof of concept can be well protected. On the other hand, the complementary assets to bring cellular therapies to market are not freely available and are largely in the hands of Big Pharma, which means that we are in an "idea factory" situation. In this case, it is not possible to obtain a license from Big Pharma. In this case, you have to work with external parties because the complementary assets are in their hands. However, contractual agreements are possible because of the high bargaining power of well-protected technologies. 10 Established companies have a lot of power. The complementary assets owned by the established companies give them high bargaining power, and the strong protection technology owned by NJMU-China gives them high bargaining power. Therefore, the goal is to find the incumbents that need the technology the most, as this optimizes the bargaining power of NJMU-China, thus offering attractive proof-of-concept licensing deals to these external parties.
Partners and Resources
Not all assets are available or inherent in large investment barriers. Therefore, partnerships are inevitable for a successful commercialization strategy.
Proof of Concept Development
The partners required for the first phase of designing, developing, testing, and optimizing MPACT's proof-of-concept need to have additional resources to conduct high-quality research, strong relationships with clinics, and access to patients. They benefit because they are involved in state-of-the-art research in their field, and they will get a share of our new venture. Resources are shared in the partnership, including expertise, clinical data, laboratories, laboratory equipment, laboratory consumables, biologics, and human tissue. Most of the resources required at this stage, such as laboratories, low-end laboratory equipment, laboratory consumables,and biologics, are freely available in the marketplace at a relatively low cost and are therefore available within NJMU-China. Other resources, such as high-end laboratory equipment that we do not own ourselves, are advantageous within the Technical University campus. Therefore, the partnership focused on sharing information (e.g. patient data and expertise) and providing access to human tissue and some high-end laboratory facilities.
Therefore, our team contacted the universities and exchanged ideas, giving each other input and inspiration in the conceptual design phase. See the Collaborations section for more details!
Preclinical Trials
Only a portion of the resources for preclinical trials are in-house, but they are relatively easy to obtain. Because not all resources are in-house, and due to the significant investment costs involved in obtaining these resources (e.g. advanced laboratory equipment, animal care, appropriate laboratory environment, in silico models), we will outsource the majority of these activities to companies that specialize in preclinical research services, who specialize in immunotherapy, provide in vivo studies, offer support services, and have all of the required resources. They have in vitro laboratory space including tissue/cell culture laboratories. In addition, they offer tissue hematology services and bio-analytical services. They have the required imaging technology and licence to perform animal studies in a wide range of species from monkeys to pigs to rats.
Clinical trials
Clinical trials require a great deal of expertise, license, large facilities, lots of equipment, trained staff, analytical tools, and so on. As a result, the required resources are difficult to obtain on one's own and the barriers to entry are large, making partnerships crucial. Nanjing Medical University (NMU), on the other hand, has a wealth of clinical research resources, and as a student at NMU, our team has easier access to resources for clinical trials compared to other teams.
Clinical Trial Phase IIb - Market Access
The large pharmaceutical companies that we authorize 52Hz+ to conduct proof of concept have the resources needed to conduct large clinical studies (Phase IIb and III), they have large business units, and they have well-known brands to promote new therapies. They have manufacturing facilities or sufficient financial resources to invest, and they have the required distribution channels and infrastructure. They have regulatory units to apply for market authorizations and they are aware of the laws and regulations for market entry in different countries as they have multiple branches (geographical coverage). They have close relationships with hospitals and doctors. In addition, they have experience in bargaining with governments on the price of new therapies to ensure successful market entry (reimbursement). For NJMU-China, accessing all these resources for a limited period of time (patent term) is not possible. Therefore, we cannot execute this part of the value chain ourselves, but rather license our products to large pharmaceutical companies that execute the drug development process from the clinical stage to market entry.
Greg W iederdrecht believes that Big Pharma prefers innovative, best-in-class assets in areas of unmet medical need, which fits perfectly with 52Hz+ as an ASD treatment. In addition, Big Pharma needs some clinical evidence, which is why we decided to develop MPACT to phase ii. In addition, Big Pharma needs backup designs, which means that we will develop multiple (~10) potential 52Hz+ series for reference. Finally, large pharmaceutical companies insist on global licensing, which means that we will only be licensed to one target customer!
Steps
The second important question is, what are the steps required to reach a successful licensing collaboration? What does the process look like? After the initial meeting between a large pharmaceutical company and a biotechnology company, the pharmaceutical company receives a non-confidential written dossier. This dossier is first pre-screened by the pharmaceutical company's evaluation team. If it is deemed credible, it is passed on to scientists or clinicians within the company with expertise in the subject matter, who look at it in more detail. They usually need a confidential dossier, for which they first sign a confidentiality agreement. After they have successfully reviewed the confidential dossier, a face-to-face meeting is arranged for the subject matter experts to discuss their findings. If the proposal is still of interest to the pharmaceutical company, they first request that the therapy be tested. This means that we must sign a material transfer agreement so that the pharmaceutical company can test MPACT in internal analyses. The pharmaceutical company will hold an internal meeting with key executives to make a final decision on the strategic partnership. 13 After this stage, negotiations on the collaboration contract begin. Depending on the quality of the IP, the clinical results obtained, and the market interest in 52Hz+, NJMU-China will have some bargaining power to reach the best possible agreement.
Marketing Strategy
Market Analysis
NJMU-China is targeting the 3 million patients in the world suffering from autoimmune ASD, with a potential market of approximately 1 billion euros, assuming an annual contract value of 100 euros per patient. As the laws and regulations for market entry of immunotherapies vary from country to country, and as it is crucial to accept such therapies in health insurance, the main niche market, China, is targeted first. The number of ASD patients in China totals 10 million with a total potential market of 2,000,000 euros. In addition, only about 95% of Chinese citizens have health insurance. Considering these additional factors, and taking into account that all health insurance organizations in China cover treatments for ASD, it is expected that the potential serviceable market will consist of approximately 9.5 million patients, valued at 1 billion euros. NJMU-China expects that the size of the market gained by cell therapies within 8 years (due to the time to return on investment for the expiry of the IP) will ultimately reach a potential serviceable market of 35%.
Competition
When bench-marking 52Hz+ against competitors, it has been determined that this therapy achieves ASD remission. No direct competitors have been identified as there are currently no other cellular therapies or customized treatments for patients with ASD. Current treatments for ASD still have a number of drawbacks. Firstly, they do not cure the disease and therefore require long-term treatment, and the disease often recurs. Multiple treatments significantly reduce the quality of life of patients. Medical costs are perceived as high and hospital workloads are high due to intensive treatment procedures and additional hospitalization. Thirdly, current treatments are associated with many side effects and adverse events, which also pose a risk to patients' health and reduce their quality of life. We can identify several selling points of 52Hz+ compared to competing therapies. 52Hz+ is more specific for ASD (as 52Hz+ is only activated by disease-specific biomarkers) and is expected to have fewer side effects. Our cell therapy is responsive to disease relapse and therefore prevents the reappearance of clinical manifestations of ASD. As a result, the disease does not recur, thus avoiding multiple hospitalizations, lowering healthcare costs and reducing the workload of hospital staff. Thus, 52Hz+ is expected to improve the quality of life of children with ASD.
Marketing
NJMU-China has limited marketing resources and lacks a strong brand for effective 52Hz+ marketing. Therefore, NJMU-China endeavors to enter into marketing licensing agreements with large pharmaceutical companies that have a strong brand name, as they have the right to use, market, sell and distribute MPACT. As described in subsection 3.1, we license our utility patents to pharmaceutical companies based on royalties. However, this paper makes some recommendations to ensure effective marketing by the licensee.
Marketing Objectives
Pharmaceutical marketing objectives are first and foremost to create brand awareness for 52Hz+, Licensees, and NJMU-China so that we are a trusted entity in the community. Second, the goal is to educate healthcare professionals (HCPs) about 52Hz+ and the related disease ASD.In addition to HCPs, our goal is to educate patient groups, such as the Vasculitis Association, about innovative cellular therapies. Fourthly, it is important to disseminate key information on 52Hz+, side effects and effectiveness post-launch. The goal is to increase the visibility of the website, to clarify the key actions needed to market the return on investment and finally the main goal is to increase the sales of 52Hz+ by the pharmaceutical company to maximize the return on investment.
Marketing Strategies
Effective 52Hz+ drug marketing strategies include a mix of direct and indirect marketing strategies. Direct marketing strategies include detailed presentations, sampling, educational and promotional meetings, promotional mailings, journal and web advertisements, and direct-to-customer advertising. Detailed marketing includes face-to-face promotional activities, especially for physicians, internists and hospital directors. This includes activities such as doctor visits to promote 52Hz+. Providing free samples of 52Hz+ to doctors can also significantly increase sales of a new drug. Educational and promotional meetings are meetings where leaders in the field, usually physicians, discuss the use of 52Hz+. Promotional mailings are usually unsolicited and consist of brochures describing positive results from recent clinical trials. Journal advertisements and publications increase the trust of experts in the field and promote the new drug. Direct-to-customer advertising is aimed at the general public and patients, and has proven effective in motivating patients to request branded products and in getting patients to talk to their doctors about the products. This type of advertising is only permitted in the United States. This type of advertising can be done through social media campaigns, PCC adverts, print adverts, TV adverts, and conferences. Indirect marketing consists of two main activities: continuing medical education, such as medical education courses, and funding health advocacy organizations. 17Indirect marketing can be used for a variety of purposes.
In summary, the team utilized the BCG Matrix model to analyse the market and evaluate the effectiveness of the company's marketing strategy based on the existing strategy as well as the market situation.
The BCG Matrix is a methodology pioneered by the Boston Consulting Group for product planning. It is designed to assist companies in analyzing and evaluating their existing product lines, and in allocating and developing products efficiently using the available capital of the company.
Risks and Uncertainties
Risk Identification Assessment
In order to identify the key risks, the business model is assessed with a focus on potential risks. Specifically, each risk is assessed on a five-point Likert scale of impact, probability，and uncontrollably, ranging from 1 (low) to 5 (high). Based on these 3 factors, a risk index is calculated by multiplying these 3 factors. A high index value means that it is a critical risk that needs to be monitored and managed well, while a low-risk index means that it only needs to be monitored.
Based on this, our team carefully evaluated the potential risks, risk indexed the risks that we might run into during our commercialization process, and generated a visual table.
| Operational Risk(possible side effects for patients) | Financial risk | Competitive risk | Publicity risk (availability of publicity) | Management risk(Co-ordination of staff across departments) | |
| impact | 5 | 4 | 3 | 3 | 4 |
| probability | 2 | 4 | 5 | 3 | 2 |
| Uncontrollablity | 5 | 3 | 4 | 1 | 1 |
| Composite risk index | 12 | 11 | 12 | 7 | 7 |
Based on the above table, it can be seen that among the above five dimensions of risk, business risk and competition risk are the most important, followed by the capital risk index. As for the business risk, it is directly related to the main stakeholder - patient children. Risks in this area are mainly high-impact and uncontrollable. What our team can do is reduce the probability of its occurrence, thus reducing the overall risk index. Competitive risk is a part of the marketing process that cannot be ignored, it has a high probability of occurrence, but is controllable, and can be avoided by designing appropriate marketing strategies and establishing cooperative care, i.e., by reducing the two dimensions of uncontrollably and impact to achieve the goal of ultimately reducing the overall risk index.
In the following, we will analyze these winds and propose feasible solutions.
Managing Risk
In order to manage risks, there are four strategies that can be considered to reduce or prevent them: cooperation, networking, strategic choices, and compartmentalization of risks.
Operational risks
As far as operational risks are concerned, collaboration would be the most effective strategy to reduce them. In particular, collaborations with pharmaceutical companies or research organizations can reduce risks associated with treatments, as they can add expertise to the development, clinical trials, and production of 52Hz+. Collaboration with legislative bodies, such as law firms specializing in life sciences and healthcare, as well as with patent offices, can reduce legislative and policy risks. In this way, legislative activities can be outsourced to experts. As a result, they may be able to provide our organizations with relevant insights and tools to mitigate these legislative risks.
Networking seems to be the most effective strategy when it comes to security risks. Having IT specialists or links to the company's IT that can provide relevant security information (e.g. consultancy reports) on our (medical) data may be very helpful in reducing security risks such as data theft or privacy violations. Particularly because none of the members of our joint venture have extensive IT experience/knowledge, having someone who has hands-on experience with common IT threats and knows how to best address/control them is very valuable.
Competitive risks
Strategic choices can be effective when it comes to competitive risks. Particularly in the context of competition, it may be useful to analyze multiple scenarios in which competition could be a threat and how our business could respond to those threats. Based on the multiple scenarios, we can develop a variety of business models to address each particular scenario. With these different business models, we can react faster to specific changes within the market, such as pricing. For example, if a competitor has a cheaper drug with more or less the same effect, we should prepare a Plan B (e.g. a pricing-based business model) so that we can quickly modify our business model and become competitive immediately. In this way, we can minimize economic risks (e.g. loss of financial gain).
Financial risks
In terms of funding, it would be wise to consider various scenarios as to how we would like to be funded and by whom. In particular, analyzing the impact of being funded by a specific company/partner and how this will affect our future reputation and entrepreneurship building are cases that should be looked at from a broader perspective. This also applies to the selection of partners (pharmaceutical companies). By using this broader perspective, we can better understand who we should be working with/funded by and thus reduce financial and cyber risks.
Management risks
Finally, for management risks, it may be useful to consider a risk segmentation strategy. Since specialists, managers, and lab personnel are three different departments in our organization, it may be useful to assign specific responsibilities to each department that may entail certain risks. For example, specialists may be assigned tasks involving products and legislation, while managers may be assigned tasks involving the economy they have to manage. For laboratory staff, two departments can be created: one for the actual laboratory work and another for calculating results and setting up new experiments. In this way, one department can be relieved of its workload, thus reducing managerial risk.
Financial Planning
Based on the risk analyses in the previous subsection, we understand that financial risk is also a relatively important aspect, and therefore the team will focus on the planning of the team's funds.
Benefit-Cost Analysis
In order to execute the company's business plan, a financial plan is required. Therefore, assumptions have to be made about the expected cost structure and revenue streams. Fixed costs include human resource expenditures, training costs, services provided by third parties, infrastructure operating costs, and marketing costs. In addition, as NJMU-China is not a manufacturing company, the cost of the legal protection of 52Hz+, the cost of developing a license for the IP of 52Hz+ , and the R&D costs of developing 52Hz+ are also considered fixed costs. We have therefore excluded direct variable costs. Revenue assumptions are based on expected license fees that pharmaceutical companies will have to pay to further develop and market 52Hz+.
NJMU-China 2023 currently consists of 30+ team members. Over the next five years, each team member will be assigned a position based on their current team role. Positions that are critical for med-tech startups include CEO, CSO, CFO, CDO, CMO, paralegal and office administrator, the medical laboratory technician (MLT), and clinical research manage．
During the first five years, salaries will remain the same for all job functions. [ QPS Missouri. How Long Do Clinical Trials Take, 7 2020.] The employer's wage costs are actually higher than the employee's gross wages due to holiday allowances, employee insurance and medical contributions. The statutory holiday allowance is 300 per cent of gross wages. Employee insurance, and medical contributions, including holiday allowances, together represent about 20 percent of gross wages. The index and the cumulative wage growth percentage are based on the nominal wage growth target (2 percent).
A distribution chart is put below.
fund flow
Training costs
As iGEM -NJMU industry knowledge and many training facilities are provided free of charge. Therefore, expected training costs are minimized. Services provided by third parties The services that NJMU-China aims to outsource include five main costs: legal and regulatory costs, clinical research costs, preclinical trial costs (e.g., animal testing), consulting fees, and accounting. For the development, clinical trials, and marketing of medical products, especially for ATMP, there are many regulations and several licenses are required. Legal and regulatory services will be outsourced to a third party as our team lacks expertise in legal and regulatory compliance. Based on conversations with several MedTech startups, the cost of outsourcing these services is expected to be around 50$ per hour. Total legal and regulatory costs are estimated to be 2,000$ per month (40 hours per month).
A team of undergraduates
Since we are a team of students at NJMU, we do not have the facilities and expertise to conduct high-quality (pre)clinical trials. As explained in Chapter 3, we aim to license our proof-of-concept 52Hz+ to a major pharmaceutical company. (Pre-)clinical evidence is necessary to convince our major customer to license our product. The gold standard of clinical evidence is Phase IIa data. NJMU-China aims to outsource clinical trials Phase I, Phase IIa, and preclinical trials as the team does not have the resources in-house and huge investments are required. Preclinical trials include in vitro experiments as well as in vivo animal experiments. The total cost of the preclinical trials is estimated at 5,000 Euros and is expected to take 2 years. Clinical Phase I and IIa studies are relatively small compared to Phases IIb and III and therefore require significantly less expenditure than that required for Phases IIb and III.
Because ASD is a relatively rare disease, it is difficult to find enough participants for clinical studies. As a result, we expect that clinical trials will be more costly than average. Because our goal is to design a novel cell therapy based on complex technology and incorporate interdisciplinary research areas, different types of expertise are required. Our team does not have expertise in all of these areas and we do not have experience in creating new businesses. Therefore, we aim to compensate for this lack of expertise and experience by hiring consultants. We would like to hire two consultants (technical and commercial) for about 20 hours a week.
Other necessary costs
Finally, accounting is a service that we would like to partially outsource. On the other hand, if we grow into a startup, most of the accounting will have to be outsourced. Infrastructure and operating costs Infrastructure, and operating costs include IT costs, office rent, travel, equipment maintenance, insurance, and office supplies. Other infrastructure and operating costs include the cost of acquiring and maintaining 52Hz+ intellectual property, the cost of entering into licensing agreements with key customers, and research and development costs to develop and test the 52Hz+ concept. These costs include equipment, software services, internet, website and data storage. License for the use of GMOs in the laboratory, licence for the use of GMOs outside the laboratory, license for conducting animal and human studies, etc.
