Deutsche Version 

Executive Summary

Increasing Quality of Life for Diabetics - Vision and Business Model

The GlucoMetrix AG was founded with the vision to improve the quality of life for diabetics. The realization of our vision is based on the 

·        non-invasive Blood Glucose Meter (NIB).

Till now several blood lettings per day and analyses are required for diabetics to determine the correct amount of insulin they need. The NIB can expect  highest acceptance and enormous distribution because

·        it is free of pain for the patients because of its optical operation,

·        it has an accuracy of nearly 99 % compared to a professional blood analysis lab and

·        it is reducing the costs for health insurances because there is no consumable material.

The 1^st phase in the business concept of the GlucoMetrix AG is based on the miniaturization and commercialization of the NIB.

Millions need blood glucose meters  - The Market

Estimations from different reports (AOK and Institutes) show the high broadening of this metabolic disease:

• ca. 6 Mio. diagnosed patients in Germany
• ca. 30 Mio. in Europe
• ca. 200 Mio. worldwide

The estimated number of not diagnoses diabetics is about twice the numbers above. The same reports expect

• 30 % growth rate in the next 10 years

caused by better diagnoses as well as by improper nutrition and daily life habits in the industrial part of the world. In general every diabetic worldwide is a potential addressable customer of the GlucoMetrix AG for the non-invasive blood glucose meter. 

Assuming a selling price of ca 700 Euro per device one get a

• theoretical market volume in Europe of 10 Bio. Euro
• and currently 0 % saturation of the market

Small, reliable, secure and pain less - the product

Diabetics are supposed to measure their blood glucose level several times a day to determine exactly the required amount of insulin. The current common methods requires the withdrawal of some blood, which is then analyzed using test straps. The planed product of the GlucoMetrix AG

• will use an optical method (so called Near Infrared Spectroscopy - NIS) for the determination of the blood glucose

A diode is emitting near infrared light directly to the skin. This light will is reflected by the glucose molecules in the blood. Based on the intensity of the reflected light the glucose level can be calculated. First results reports that the accuracy is as exact as from devices already in the market. The measurement procedure and the corresponding patents can be licensed. The negotiations are far in advance. The placing of the contract is expected soon. The GlucoMetrix AG is planning

• the development and production of the and reliable measurement device
• to spend no time and money in expensive research projects by

-          licensing innovative biometric-technologies

-          and implementing security features

The main task is definitely the miniaturization of the device and the development of an application specific circuit (ASIC), which makes the measurements reliable. The product shall be small, portable and easy to use. For the protection of the personal data a biometric fingerprint device is used. Only after successful fingerprint verification people are allowed to use the device and to read out the personal data. All necessary technology is in product status and licensed. The final product 

• will be attractive through the combination and miniaturization of existing technologies.
• will have an perfect timing because of the stage of maturation of the technologies and the high exposure to the market demands

The product will be produced by partners to avoid bound capital.

Knowledge is power – The management team and know how

To make the best use out of the 18 month time frame until the market entry the team leader Peter Paul Schikora composed a management team that combines the required know how and all core competences for the product development and commercialization:

Peter Paul Schikora will be the CEO of the GlucoMetrix AG. He is working since 1985 in the IT market and founded companies like FAST Electronic GmbH, FAST ComTec GmbH or the CMC Handels GmbH and M.Sales GmbH. He was responsible for the development and distribution of computer components, security systems and measures. He will be responsible for marketing, sales, human resources and finance.

Dr. Markus Ludwig:

Ph.D. Tesis in Biotechnology and Nanotechnology (“New Operation Modes in Atomic Force Microscopy for the Analysis of single Molecule Properties”) at the institute for Applied Physics of Prof. H. E. Gaub of the Ludwig-Maximilians-Universität. Physics Department, Institute for Biophysics ( Prof. Dr. E. Sackmann). Hw was working for years in the field of Biotechnology and Nonoscience.

Team NIB Miniaturization: will be headed by an electrical engineer with an PhD in Nanoscience, who is currently responsible for projects at McKinsey in London.

Siegfried Link: he is an electrical engineer with 30 years of working experience in the semiconductor business. He was working for Motorola and Siemens in the field of microelectronics. He will be responsible for the development of the ASIC.

Medical supervision: the chief physician of a Bavarian hospital and chief of the department of diabetic will supervise the measurements with the NIB and will be responsible for the medical parts of the project.

Dr. Christian Erhard: he will set up the product marketing and the international partner communication. He has 20 years of experience in this field and was working for 3 world wide leading computer and telecommunication companies.

To cover all tasks in an adequate way the following personnel development is addressed:

• 12 Employees in 2005
• 60 Employees in 2010

In the beginning the company will be based in Ruhpolding and Munich, which leads to attractive costs and which has an reasonable traffic connection.

Being on the fast line – Entry of the market

Parallel to the product development the sales channels and sales strategies will be prepared. Two main targets will be addressed:

• Health insurances can reduce costs
• Patients can use pain less methods for glucose determination

Roughly a Bio. Euro is used for consumables for blood glucose measurements. This costs will be totally eliminated by NIB. Assuming that people will use pain less measurements much more often as the current used methods, so diabetics will be much better adjusted what means decreased indirect costs for health insurances. This arguments will cause a high engagement of the insurances for the distribution of NIB. As soon as the patents learn about the existence of pain less methods they will create a very high demand if NIBs. Hospitals, pharmacies and doctors will have to be prepared with information to handle this demand in a reasonable way. Therefore they will be involved in the communication strategy using the specific congresses, journals, newsletter etc..

This results in the following matrix:

After successfully entering the German market  

• the expansion  to other European markets follows

in the same ways. The cooperation with adequate partners for licensing and franchising the technology is preferred. With the ASIC implementation the number of sold devices can exactly be controlled.

Stumbling Blocks – Risks

There are three categories of risks:

• Pharmaceutical industry
• Competitors
• Problems during development

The pharmaceutical industry is earning a lot of money with the current model. There is the possibility that they try to buy the patents and/or the products to protect the existing market. This can result in a offer for the products of the GlucoMetrix AG. Or an competitive product is entering the market with much investment and marketing power. Worldwide about a dozen groups are working on non-invasive methods, so there is a risk from this side in the time frame of the 24 months. But for similar featured products the market huge enough for several companies.

On the other side problems during development can occur. This can result in delaying or even cancel the market entry.  For example other groups can claim parts of the patent contents. This danger exist in spite of the careful investigation of the technology.

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Where the money goes – the financing

For the 24-month time frame for the development of the product, and additional 12 months for entering the market a capital of ca 6 Mio. Euro is required. They will be spent as following:

• 5 Mio. Euro capital
• 0,6  Mio. buying licenses, patents, know how, etc.
• 2,6  Mio. development costs, ASICs
• 2,6  Mio. SG&A, selling, general, & administrative expense

How to earn money – the margins

During the first 24 month no revenue will be achieved.

• After mid of 2008 we expect to sell about 10.000 per month,

After improvement of this first line the mass production can be started. This results in  a

·        Break even at the end of 2009/2010.

After the show – the Exit-Strategy

The most interesting question for an investor is the return of his investment. After 3-5 years of the business it could be interesting to go public with the GlucoMetrix AG. Another option would be to merge with a bigger company. Even a long term business in this pharmaceutical field would be possible.