AgaMatrix, a Boston-based development stage venture, offers proprietary Digital Signal Processing technology (DSP), which dramatically improves the functionality of biosensor devices. AgaMatrix’s core DSP algorithms significantly increase the performance and functionality of biosensors without expensive specialized hardware nor additional 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 plans to have positive cash flow for the third consecutive year. Future targets in healthcare include the large immunoassay sector and implantable sensor sectors.
Problem: Glucose Monitors Can Be Too Heavy, And Painful To Use
Many diabetic patients fail to use home blood glucose devices as prescribed because the regimen is too burdensome or too physically painful. A patient must poke his or her finger four to seven times per day to draw blood onto a strip that will be used to insert the glucose biosensor. The average glucose biosensor test rate is less that 1.5 times per day. This results in an acceleration of complications like blindness, stroke, heart disease, kidney failure, and heart attack. Diabetes is the leading cause and type of blindness in people between 20 and 74 years old. Better glucose monitoring compliance can be the best way to prevent it. The root cause of non-compliance has been identified by device makers as the physical pain caused by using current devices. They are currently looking for ways to reduce the required sample size. AgaMatrix technology will enable less invasive drawing mechanisms to meet the overwhelming demand for less 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.
The Software Solution to a Hardware Challenge
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.
AgaMatrixâ€™#8217â€™s solution, made up of a number of software modules allows for new functionality. It dramatically improves biosensor device performance. Performance improvements include the ability leverage higher signal-to noise ratios to reduce blood sample requirement. AgaMatrix, a professional healthcare platform, can increase the accuracy as well as sensitivity of hospital pointâ€“of-care analyzers. This eliminates the major obstacle to widespread adoption of portable blood analyzers instead of traditional laboratory equipment.
Software DSP solutions have helped many industries succeed where they would not have otherwise. In the 1980s, CD players used error-correction and oversampling algorithms to correct for poor quality hardware filters. AgaMatrix’s algorithms provide analogous solutions in the biosensor space.
Model of Business – Software Licensing & Royalty from Device Makers
AgaMatrix initially will be a technology licensing firm, generating royalty revenue streams based upon device makers’ consumables sales (i.e. disposable test strips or cartridges used in devices). The technology will be sold to manufacturers of home glucose devices, hospital point-of care blood analyzers, and developers of minimally invasive and implantable glucose biosensors.
Therasense- An Illustration of How Disruptive The Glucose Market is
Only a few years back, the blood glucose market was dominated primarily by four players (numbers denote annual revenues from test strips).
27B), J & J (1.09B), Bayer (650M), and Abbot (450M). These companies have existed since the 1980’s. They have grown their market capitalization to over $800million in less than 2 years after their product rollout. This is a market open to new technology, especially when it reduces pain.
Competitive advantages We have no direct competition for our innovative and proprietary approach. It has been developed over seven years in collaboration with a world-class scientific group. AgaMatrix will complement any indirect competition that may be created by the major medical device manufacturer’s in-house laboratories. AgaMatrix offers the following sustainable competitive advantages:
- Superior software paradigm, complementing chemical (hardware), advancements in biosensors.
- Biosensor research over seven years has given rise to a lot of knowledge.
- Monopolization in the scientific team that was responsible for the original paradigm invention.
- Development lead time of at least two years over potential competition.
- Intellectual property strategy involving two core utility patents (filed) and three defensive utility patents.
We have reached out to two manufacturers of glucose monitors and a manufacturer of hospital point-ofâ€“care devices as potential customers. We have yet to approach more than 20 potential target companies. The following summarizes the status of the companies that we have reached.
- Two companies with blood glucose monitors expressed strong interest in being partners (discussions between Presidents); however, details are not confidential but we think we can close a partnership by 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 â€“ discussions with Vice President and Director level staff).
A current team made up of:
- The three top scientists in the field of digital signal processing have over 40 years combined experience in biosensor research and DSP.
- Entrepreneurs who started, built, and ran a enterprise software company.
- An expanding group of veteran advisors consisting of doctors with healthcare business experience.
- After seed financing, an additional technical team of three engineers committed to joining company. It is comprised of engineers from MIT/Tufts, who collectively have more than 25+ years of experience in technical management.
Since its inception, AgaMatrix was self-funded entirely by its principals. The company has recently closed a seed round in the amount of $500K with a number healthcare angel investors as well IncTANK, an early-stage venture capital fund. A Series A round is expected in four to five months of approximately $1 million.
These rounds of funding have two objectives: to complete version 1.0 of products and to acquire at least one paying client over a period 13 months. These milestones, considering the current state of product development and customer traffic, seem reasonable. The company anticipates raising an institutional round or another private round in the amount of $4 million before year one. This will allow it to become cash flow positive. Current valuation drivers include:
- A world-class scientific group consisting of Dr. Sridhar Singh (CTO), Dr. Justin Gooding and Doctor. Ian Harding. This team also includes an engineering team and an aggressive business team that has start-up management and startup experience.
- Technology that is applicable to many other vertical markets, and protected by an aggressive IP strategy.
- External validation through existing customer relationships and advancement in the final rounds of several national business planning competitions.
AgaMatrix creates solutions to power next generation biological and chemical sensor system. AgaMatrix is able to significantly increase the accuracy, sensitivity, robustness, and effectiveness of a wide range of sensors in order to make medical diagnostic devices more efficient.
AgaMatrixâ€™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.
- Develop technology solutions that will increase the adoption and compliance rates of diagnostic medical devices by improving the functionality and performance of biosensors, specifically for home blood glucose monitors and hospital point-of-care blood analyzers.
- Achieve positive cash flow by year three.
- By year four, reach $50 million in annual revenue
- Expand into industries that heavily rely in biosensors like industrial processing and military sectors.
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