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EM-CATH by SremCath

Innovative construction of next-generation urinary catheter

Serbia
Market: Medicine
Stage of the project: Idea or something is already done

Date of last change: 17.03.2021
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Idea

Catheter-associated urinary tract infections are killing more people than all traffic accidents worldwide!
We have solution to this problem – EM CATH – innovative urinary catheter, which prevents introducing bacteria into the urinary tract, most of which are multi-resistant. EM-CATH will reduce complications related to use of urinary catheters by 50%, save lives and significantly improve quality of life of millions of patients worldwide, will substantially increase the quality of medical treatment, and will reduce costs of treatment of all medical conditions requiring urinary catheterization.

Current Status

The EM-CATH was filled with World Intellectual Property Organization (WIPO), and favorable Patent Cooperation Treaty (PCT) international search report was received with the Written Opinion of the International Searching Authority (WO/ISA) confirming the novelty, inventive steps and industrial applicability for all 12 claims. SremCath d.o.o. company was established in June 2019 and a contract with the University of Belgrade granting exclusive patent license was signed. The first step was to make a 3-D printed prototype. The next step will be small-scale production of a sterile finished product ready for pre-clinical and clinical trials (ex-vivo and in-vivo testing). Upon finalizing the collection of the clinical data required for CE marking, the next step will be EU, US and worldwide marketing authorization, in parallel with reimbursement-related negotiations with local health authorities.

Market

EM-CATH operates at medical devices market, segment of catheters, sub-segment urological catheters, specific urinary catheters segment, with domination of male segment. According to Joshi and Sumant study, February 2019, the global catheters market was valued at USD 10.7 billion in 2017 and is estimated to reach USD 20.0 billion by 2025, registering CAGR of 8.0 % from 2018 to 2025. The segment of urological catheters counts about 20-25% of global catheter market, and is projected as one of the most lucrative.
According to the Market Study Report from March 2018, global market for urinary catheters was estimated at USD 2.5 billion in 2017, expecting to reach USD 4.8 billion in 2022, growing at 8.6% CAGR.
North America dominates the global market (36%), followed by Europe and Asia-Pacific, counting together for more than 80% of the global market, growing annually by 5% in Europe, 8.5% in US and 10% in China.
Urinary catheter market is dominated by intermittent segment (60-65%), followed by indwelling segment (30-35%) and external catheter segment (3-5%), with highest growth of the indwelling segment due to increasing demand for those catheters in hospitals and elderly care centers.
EM-CATH will be primarily focused on human use, for adults and children, but also for animal use in mature phase of commercialization.
EM-CATH is designed for patients as end users but will be sold on B2B market including healthcare institutions and home and community care. Entrance on the B2C market is planned at later stages.
EM-CATH innovative solution will also be applicable to all tubular medical devices (catheters, intubation tubes, airways, drains etc.), opening space for new markets.
Foreseen market entry barriers are medical practice patterns, complexity of R&D, regulatory limitations, approval process, reimbursement issues, and startup costs, all of which addressed in risk management plan.

EM-CATH will operate predominantly on B2B market:
Healthcare institutions, both public and private, on primary, secondary, tertiary & quaternary level, including general care, hospitals, clinics, health centers, etc.
Home and community care subjects, both public and private, including elderly care, self care, home care, long-term care, assisted living, rehabilitation centers, etc.
EM-CATH end users are persons with medical conditions requiring urinary catheterization, dominantly male persons: patients under general anesthesia, patients hospitalized in intensive care units, patients with spinal cord injuries, men with enlarged prostate, women during childbirth, as well as people with bladder weakness or nerve damage. Most frequent users are elderly people due to their body physiological status; whose proportion of world’s population is rapidly growing.
EM-CATH value proposal is very simple – resolving medical issues and improving quality of life. EM-CATH provides urinary catheterization without infection, with less complications, discomfort, pain and suffering, lowered stress, social anxiety and inconvenience, resulting in restoring overall functionality in daily activities and lowering catheterization-related costs. EM-CATH will provide high value added to the customers.
EM-CATH ideal end user is elderly person, immuno-compromised, not life threatened, with permanent and repeating urinary problems requiring frequent replacement, with adequate medical care and good access to treatment; solvent and with good medical insurance plan. These ideal users are among 3% of world population living in the community and 13% of care home residents who use urinary catheters.
EM-CATH ideal client is well established referent hospital for urinary disease treatment, with large capacity, strong home care support, high quality service, adequate facilities, highly skilled stuff, well managed and organized, solvent and stabile, well connected, and ready to accept innovative treatment solutions.

Problem or Opportunity

According to Journal of Medical Engineering & Technology, urinary catheters have been used for more than 3,500 years. Foley catheter, which is invariably used since 1930s, is directly responsible for tremendous morbidity and significant mortality. Consequently, there is an urgent need for the development of an alternative urinary catheter system.
EM-CATH urinary catheter is the solution of the challenge addressed above.
The problems that EM-CATH solve include: urinary tract infections, complications related to use of urinary catheters, decreased quality of life due to discomfort, pain and suffering, socialpsychological and economic issues and related huge costs.
The biggest problem is bacterial infection. Unfortunately, 70% all hospital-acquired infections are catheter-associated urinary tract infections in most cases caused by multi-resistant bacterialstrains.
These infections are extremely difficult to eliminate and in immunologically compromised individuals often cause severe compilations and may have fatal outcome. Every year more than 2,000 people in UK and 13,000 people in US will lose their life due to infection caused by urinary catheterization! This statistic counts worldwide.
Complications related to use of existing urinary catheters include bacterial colonization, antibiotic resistance, chronic infection, kidney and bladder damage, bladder stones, pseudopolyps, septicaemia, urethral trauma, balloon fragments, allergic reaction, etc. Treatment of these complications are very costly. Costs of complications in US are estimated at approximately USD 36 billion, and in UK at approximately GBP 2 billion. EM-CATH will significantly reduce those costs.
EM-CATH will also increase quality of life for about 3% of population living in the community and 13% of care home residents use urinary catheter, as well as for 12-16% of hospitalized patients who require urinary catheterization.
These numbers clearly indicate the dimension of the problems.

Solution (product or service)

EM-CATH is a novel urinary catheter.
EM-CATH is a novel medical device for urinary tract catheterization which does not ins ert bacteria in to the sterile parts of urinary tract, intended both for intermittent and indwelling use.
EM-CATH preserves the lives of immunologically compromised individuals and prevents severe medical conditions, i.e. immunodeficiency disorders.
EM-CATH significantly decreases the rate of complications of urinary catheterization and improves quality of life offering less discomfort, pain, and suffering for the patients.
EM-CATH novel urinary catheter system provides a safe and comfortable solution for the users lowering stress, social anxiety and inconvenience as well as restoring overall functionality in daily activities.
EM-CATH prevents contamination from the external environment before placement; prevents transport of bacteria from the meatus surrounding skin and from the distal parts of urethra; prevents damage of the epithelium caused by sliding friction of catheter and uric acid crystals; prevents creeping phenomenon caused by impossibility of total balloon exhalation; and prevents side flow of urine leakage between urethra walls and catheter. EM-CATH has soft surface for good comfort and glide surface to prevent attachment of bacteria.
The existing urinary catheters introduce bacteria from the urethra and exterior in the sterile space of the bladder, causing infection. Also, contact and friction while placing catheter leads to damage of the epithelial barrier – thus facilitating further bacteria getting into the body, and causes pain. EMCATH can reduce and prevent entering and retention of bacteria in the sterile parts of the urinary tract and thus reduce these complications. The urethra in healthy people is not sterile, and any contact of the catheter with the urethra causes contamination of the catheter, thus infecting the sterile urinary bladder. EM-CATH can pass through the urethra in which there are bacteria, making sure that these bacteria do not enter the bladder. Standard catheters that are used in medical practice now days do not meet this requirement because during the catheter placement, the catheter causes bacteria to enter the bladder from urethra. Since the urethra is not sterile, one should avoid any contact of catheter with the exterior environment, including the hands of the person inserting the catheter - therefore, EM-CATH provides a solution to the problem: The part of EM-CATH (the rolling membrane) which is in contact with the urethra and bladder, has been isolated from the external environment. This part of the catheter (rolling membrane) is located inside outer tube of catheter and isolated. Damage of the epithelium makes catheter placement difficult, painful and leads to narrowing of the urethra, urethral injury, blood infection and sepsis. EM-CATH solution prevents tearing and conforms to the natural curvature of the urinary canal avoiding damage to the epithelium of the urethra. Standard catheters often lead to damage of the epithelium which opens an entry site for infections, which can be very dangerous. The rolling membrane of EM-CATH functions in such a way that tearing friction is reduced so that the curvature of the urethra and damage by tearing of the epithelium can be easily overcome. EM-CATH can be used as an intermittent or indwelling catheter, whether short- or long-term.
There are other innovative catheter solutions. Flume and Riocath stand out among them, however both of them fail to cover all aspects of the urinary catheterization problems. Although it reduces infection, Flume fails to protect insertion of bacteria into the urinary tract. Riocath does not allow insertion of bacteria, however, it is only intermittent.
EM-CATH significantly improves urinary catheterization, reduces complications related to use of the existing urinary catheters, saves lives and significantly improves quality of life of millions of patients undergoing through urinary catheterization worldwide. EM-CATH will substantially increase the quality of medical treatment, and consequently will reduce costs of treatment of all medical conditions requiring urinary catheterization.
EM-CATH will have strong positive impact on all stakeholders including patients, health care institutions, distributors/wholesalers, health insurance funds, manufacturers, health care system, adding val ue at each stage of its commercialization.
https://www.youtube.com/watch?v=Wr4NuqPfr7I

Competitors

Urinary catheter market comprises of intermittent, indwelling and external catheter segments, and is saturated and consolidated with Foley catheter, invariably used for more than 90 years, which dominates the market (95%), both in intermittent and indwelling segments.
EM-CATH will disrupt this stagnant situation on the market. Key players on Foley catheter market are BD, Coloplast, Teleflex, Medtronic, Boston Scientific, B. Braun Melsungen, ConvaTec, Hollister, Cook, and Amsino International, counting more than 90% of the market, with domination of Bard (part of BD), Teleflex, Coloplast and Boston Scientific.
There are also innovative catheter solutions entering the market attempting to reconfigure the market, for the benefit of EM-CATH innovative solution to enter and capture a leading position in the new innovative urinary catheter market (“blue ocean”). Flume and Riocath stand out among them, both of them fail to cover all aspects of the urinary catheterization problems. Although it reduces infection, Flume fails to protect insertion of bacteria into the urinary tract. Riocath does not allow insertion of bacteria, however it is only intermittent. Also, Riocath is aiming to enter the market of tubular medical devices that can roll-in blood vessels, respiratory system and other body cavities, opening space for EM-CATH innovative solution to enter this market with its superior technical solution that can both roll-in and ROLL-OUT safely. EM-CATH will take strategic advantage of “second mover”.

Advantages or differentiators

EM-CATH will utilize existing trends and offer a better solution: both intermittent and indwelling urinary catheters, without any insertion of bacteria, but also a tubular medical device that can safely and easily roll-in and roll-out from blood vessels, respiratory system, and other body cavities, opening further possibilities for other innovations.
There is no innovative solution that can be compared to EM-CATH, therefore market entrance of any similar solution before EM-CATH commercialization is not foreseen.

Finance

Medical device industry has specific limitations for fast profit generation, including long and demanding research & development process due to strict regulatory requirements (mandatory ISO, GxP and regulatory compliance, timelines, process complexity, etc.), IP protection (documentation, timelines, etc.), marketing authorization (CE marking, complex documentation, timelines, etc.), and significant costs (development of functional prototype, small-scale contract manufacturing, finished product testing, pre-clinical and clinical trials, regulatory, registration, consultancy, advisory, IP costs, etc.).
Therefore, time to market for typical medical is estimated at approximately 3 years. However, upon Marketing Authorization, fast scaling is ensured with prerogative pre-marketing activities as well as growing market demand on international scale.
The largest buyers for EM-CATH will be national Health Insurance Funds with its negotiable prices and reimbursed medical devices (“positive lists”). Critical success factor is commencing negotiations in very early phases of research & development, supported by reimbursement consultancy experts. Well performed negotiations with HIFs result in very fast revenue growing. In order to start negotiations, clinical data from compassionate use has to be acquired, which is possible only upon pre-clinical trials finished. This project will enable small scale production of a sterile finished product ready for pre-clinical and clinical trials.
Due to its’ technical refinement, EM-CATH could not have competitive price compared to Foley catheter. However, EM-CATH effectiveness will have incomparable superiority and will significantly reduce other concomitant costs (treatment of infections, complications, etc.). Price/quality ratio will be unparallel with any other solution on the market. Estimated price will range from USD 30 to 50.
Economy of scale will be achieved based on growing demand which will significantly reduce fixed costs, opening space for better profitability.
It is estimated that customer lifetime value of EM-CATH will be seriously higher in comparison to Foley catheters due to life extension, elimination of multi-resistant bacteria, and significant reducing of complication costs.
Due to regulatory requirements, marketing authorization and significant development costs, EM-CATH will start revenue-gathering beginning of 2024, upon registration in Europe and US in first phase and China in second phase. It is estimated that revenues will grow progressively due to extensive pre-marketing activities and market readiness for the innovative urology catheters. In parallel with the growth of the learning curve of the KOLs, decision makers and other administrators of device, the revenue will grow. The growth of the learning curve is assured with smart training activities.
Break-even point is estimated for the final quarter of 2024, due to planned phased acquisition of customers on the target markets, however with manufacturing readiness for larger scale of production.
The revenue growth will be in phases consequent to securing contracts with national HIFs (public and private). Accordingly, revenues will growth in portions, progressively. Financial analysis was based on projected number of end-users and average price, with conservative estimation of revenue gatherings in range of 0.1%-0.4% of the global urinary catheter market. The average price (USD 30-50) was estimated to be competitive for the specific market segment.
EM-CATH costs will follow the typical route of medical devices development (IP protection, pilot production, pre-clinical and clinical trials, ISO, GxP, CE marking, marketing authorization, mass production setting, etc.) as well as typical route of commercialization (marketing, sales, overhead, etc.) – high pre-marketing R&D costs and fast revenue growth upon registration.
Costs will growth in parallel with income growth, considering that income growth will exceed significantly cost growth due to economy of scale. Consequently, return on investment (ROI) is estimated for 2025.
It is estimated that long-term sustainable operation of business, with profitability that assure further growth and development, is feasible with at least 150,000 end-users annually. EM-CATH will reach this number in the second year of sales (2025).
Entering the European and North-American markets will ensure stabile and sustainable profitability, while entering the Asia-Pacific markets, with the dominant number of end-users, will boost the revenues and secure strong growth upon 2026.

Business model

Key partners:
Key partners and channels are academic institutions (research and IP), health institutions and health care professionals (consultancy, pre-clinical and clinical research, and sales), manufacturers (contract manufacturing and mass production), reimbursement consultants and Health Insurance Funds (private and public reimbursement), media and marketing agencies (promotion and publicity), distributors and wholesalers (sales and distribution), patient advocacy groups and customers (advocacy and sales).

Key activities:
Product development, safety, trainings, QA, pre-clinical and clinical trials, regulatory and certification, data analytics, business consultancy, marketing authorization, reimbursement and pricing, legal, IP protection, production, marketing and sales, customer relationship management, company development

Key resources:
Tangible (financials, facilities, raw materials, packaging, fixed assets etc.)
Intangible (social capital, technological knowledge, know-how, networks etc.)
Human (highly specialized experts, highly effective teams, strong corporate culture etc.)

Value proposal:
Urinary catheterization without infection and with less complications, and better quality of life due to usage with less discomfort
EM-CATH value proposal is very simple – resolving medical issues and improving quality of life. EM-CATH provides urinary catheterization without infection, with less complications, discomfort, pain and suffering, lowered stress, social anxiety and inconvenience, resulting in restoring overall functionality in daily activities and lowering catheterization-related costs. EM-CATH will provide high value added to the customers

Customer relationships:
Development of demand, i.e. pre-marketing activities, starting with introduction and consultation with key opinion leaders, decision makers, financiers, administrators of the device, and end users (urologists, nurses, hospitals, HIFs, patients etc.), followed by endorsement through compassionate use of EM-CATH upon pre-clinical trials by eminent world-class urologists and medical device experts.

Upon granting Marketing Authorization post-marketing activities include promotion and sales value-centric legally accepted actions such as intensive personal selling, PR and publicity, sponsorships, sales promotion, branding, continuing education and word-of-mouth (advertising is strictly forbidden), through selected available offline and online media (publications, presentations, promo materials, websites, databases, social media, search engines, mail, TV, radio, conferences, exhibitions and fairs, sales representatives, advocacy groups, etc.).

Distribution channels:
Distributors and wholesalers, National Health Insurance funds (HIFs), reimbursement companies, online platforms, direct sales, patient advocacy groups

Customer segments:
EM-CATH will operate predominantly on B2B market, including:
Healthcare institutions, both public and private, on primary, secondary, tertiary & quaternary level, including general care, hospitals, clinics, health centers, etc.
Home and community care subjects, both public and private, including elderly care, self-care, home care, long-term care, assisted living, rehabilitation centers, etc.

Entrance on the B2C market is planned at later stages.

Cost structure:
The waste majority of costs (over 80%) will include product development costs, regulatory costs, manufacturing costs and marketing and sales. Other costs include transport, logistics, indirect and overhead costs (about 20%)
Revenue streams:
Revenues from healthcare institutions, both public and private, on primary, secondary, tertiary & quaternary level, including general care, hospitals, clinics, health centers, etc.
Revenues from home and community care subjects, both public and private, including elderly care, self-care, home care, long-term care, assisted living, rehabilitation centers, etc.
Revenues from B2C sales – pharmacies, point-of-care etc.

Money will be spent on

Funding of EUR 200 000 (~USD 238 000) will be spent for the first step in development of EM-CATH.

In order to reach EM-CATH end-users worldwide, production of finished sterile product ready for pre-clinical and clinical trials is prerogative.

Production of finished sterile product include: production steps planning, project management planning and documenting, material specification, design and production tools specification, production of the finished product, including tooling and product components manufacturing, product components assembly, sterilization and mandatory testing of the product parts and the finished product.

Further steps include:
- Pre-clinical studies - EUR 120 000 (~USD 143 000)
- Clinical studies - EUR 2 000 000 (~USD 2 380 000)
- Certification and registration - EUR 600 000 (~USD 714 000)
- Marketing and sales - EUR 2 000 000 (~USD 2 380 000)

Offer for investor

SremCath is ready for ownerhip sharing with investor.

EM-CATH is in the stage of pre-seed funding.

Negotiation on the share of the company depends on the stage the investor is ready to cover: if the investor is willing to invest only in pre-seed phase would be significantly less then if the investor is ready to invest in pre-clinial and clinical development as well.

Team or Management

Risks

Technology risks:
Omitted details in product planning, shortage of any material on the market, prolonged design freeze, unsatisfactory production of tools, insufficient quality, non-compliance, testing errors and fails.
Actions to be taken: thorough analysis and planning of each and every step of the development process, including risk analysis, risk assessment, risk management, compliance to all requirements, etc. Precise delegation of authority to each and every participant of the development process. Selection of appropriate partners with firm contractual obligations
Risk level: low

Market risks:
Market failure, strong reaction of Foley catheter manufacturers, insidious reaction of competitors, technology theft or imitation, low acceptance rate, price dumping, bad user experience, delay of payments, unsatisfactory response of key decision makers.
Actions to be taken: strong IP protection worldwide, selected market entrance in phases, secured HIF financing in selected markets, setting high entry barriers based on superior offer, ensuring good market supply and fast delivery, development of stabile primary market demand through strong marketing and sales, benefiting from introduced new innovative urinary catheter solutions by existing innovative companies which also develop the market for EM-CATH (“pave the way”), proactive approach to key decision makers, advanced payment policy, payment insurance, factoring, managed entry agreements, risk sharing agreements, etc.
Risk level: medium

Timing and milestones risks:
Prolonged time in any part of the development process
Actions to be taken: good project management, well planned and feasible milestones of the development process, preventive measures in place, good monitoring and reporting, well defined contractual obligations and feasible sanctions, and overall good planning.
Risk level: medium

Budgetary risks:
Delays in investment installments, change of budget, budget reallocation, partners-related switching costs, input prices increase, out of scope costs, inadequate reporting.
Actions to be taken: strong business and financial strategy, good financial planning and reporting, good financial and operative controlling, good risk management planning, assessment and management, cost reduction, good financial discipline, provision of back-up funding, liability insurance.
Risk level: medium

Stakeholders’ risks:
Choice of inadequate partners or team members, absence of fit among partners or team members, change of partners or team members, underperforming partners or team members, terminated cooperation by partners or team members, disclosure of sensitive information.
Actions to be taken: careful and smart choice of partners, employees, consultants, advisors, with smart incentives (not focused only on financial aspects), good planning and execution of delegated activities, firm contractual obligations (e.g. 3-year contract obligation with employees, strict non-disclosure contracts, non-compete and non-solicitation provisions, feasible penalties, etc.), strong leadership and supervision, satisfying stimulus for advancement of the science.
Risk level: medium

Procurement risks:
Delivery of inadequate materials, delay in materials and services delivery, input prices increase, change of suppliers
Actions to be taken: well defined procurement policy, well planned procurement, cost reduction, choice of adequate suppliers, firm contractual obligations, transferring risks to contractual manufacturing and other partners, good monitoring and reporting, and feasible penalties
Risk level: low

Environmental and social risks:
Inadequate waste management, non-compliance to Product Stewardship principle, violation of environmental standards by contract manufacturing partners, social unawareness of introduce of novel urinary catheter.
Actions to be taken: strong environmental management strategy, strict adherence to environmental regulations and to Product Stewardship principle, maintenance of environmental standards, raising awareness of introduce of novel urinary catheters and necessity of fight against multi-resistant bacteria.
Risk level: low

Incubation/Acceleration programs accomplishment

EM-CATH participated at ImagineIF accelerator programme.

SremCath also participated in ImpactHub Serbia accelerator general training programme.

Won the competition and other awards

EM-CATH won national contest and second place on the global ImagineIF contest in Cambridge, June 2019.

Invention/Patent

The EM-CATH was filled with World Intellectual Property Organization (WIPO), and favorable Patent Cooperation Treaty (PCT) international search report was received with the Written Opinion of the International Searching Authority (WO/ISA) confirming the novelty, inventive steps and industrial applicability for all 12 claims.

Photos

Photo 1 - Innovative construction of next-generation urinary catheter
Photo 2 - Innovative construction of next-generation urinary catheter
Photo 3 - Innovative construction of next-generation urinary catheter

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Idea
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Solution (product or service)
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Finance
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Business model
Money will be spent on
Offer for investor
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