Photo - PatchAi®
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PatchAi®

#Patientcentricity #ConversationalPRO #AiVirtualAssistant

Italy
Market: Medicine, Artificial Intelligence
Stage of the project: Operating business

Date of last change: 08.06.2020
Min investment
$  109.000
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Total required
$ 2.030.855
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Idea

PatchAi® is the first cognitive platform for clinical research that champions
patient engagement to revolutionize data collection through the adoption of
Co-PRO™ (Conversational Patient Reported Outcomes).

Current Status

- Released PatchAi® (mobile app to app stores globally (Android and Apple)
- 2 clients served (Big Pharma Companies) and first revenues 12 ahead of forecasts
- 2 investment rounds closed (€860K)
- Raised 100K equity-free cash and over 300K in-kind services in 12 international competitions won
- IP protection PatchAi® brand and Co-PRO
- Accelerated by Plug and Play Silicon Valley, EIT Health and Unicredit Startup Lab.

Market

The Clinical Research market on average accounts for over 21K new Phase II-IV studies per year, with around 7K new trials in Europe and 1K new trials in Italy every year. Currently, there are around 2300 ongoing trials in Italy out of which 928 are collecting Patient Reported Outcomes (PROs).
There are around 862 trials planned for 2020 already, out of which 375 will collect PROs. In terms of potential clients, there are 582 companies involved in pharma R&D solely in Italy with 121 companies headquartered exclusively in the country. It grows at an annual rate of 5.7% and is dominated by the oncology, chronic pain/anaesthesia and respiratory segments (these segments cover 50% of trials per target and also represent the areas with the highest economic burden for clinical research).
Our target Market segment constitutes more than 7K new studies (Phase II-IV) per year that collect Patient Reported Outcomes (PROs) and is representative of the global ePRO and eCOA digital solutions market. Furthermore, there has been a 500%+ increase in the adoption of PRO measures in clinical trials over the past five years, so this number is expected to keep growing. Our Total Addressable Market is worth € 1.15 billion (CAGR 15,3%) and is expected to be worth 2.3 billion € by 2023.
There has been a 500%+ increase in the adoption of PRO measures in clinical trials over the past five years, so this number is expected to keep growing.
Outside of clinical research, the telehealth market is valued at 8.3 Billion USD and the adoption of Patient Support Programs has been increasing by 11% every year.

This market covers the following customers:
-Pharmaceutical & Biotech companies: They engage heavily in Research & Development for the new therapies in their pipelines to ensure they have sufficient clinical evidence to get them to the market
-Contract Research Organizations: They act as subcontractors for pharmaceutical companies to oversee clinical trial management (budgeting, planning and data management)
- Research Institutions & Hospitals: They carry out clinical studies and patient support programs that focus on testing out new clinical hypotheses for new therapy or indication (disease) for use as well as improving delivery of clinical care.

Problem or Opportunity

In this crucial juncture in healthcare where R&D amendments are becoming more significant, real world patient reported data and virtual trials are two concepts that are expected to come to the fore in the coming years. With the advent of the Covid pandemic, there has been an advance in incorporating these elements in the field of clinical research as well as routine clinical practice.
There is a clear demand to move towards patient centric and cost-effective strategies through the adoption of virtual clinical trials. This can be achieved through the implementation of innovative digital solutions that simultaneously engage patients and collect extremely valuable health data.
The value proposition of PatchAi® lies clearly in line with these upcoming trends and as such is poised to make a huge impact in the field of clinical trials and Real World Studies.

Solution (product or service)

PatchAi® is a cognitive platform for collection and predictive analysis of patient- reported data in late phase clinical trials and Real World Studies that champions patient engagement to improve patients’ quality of life and support the pharma industry in offering better, affordable and personalized medical products. PatchAi® uses technologies such as Artificial Intelligence and Machine Learning, and integrates an empathic virtual assistant that interprets patient needs, implements customized strategies to promote and maintain patient engagement, and collects data on symptoms, adverse events, adherence to therapy and quality of life.
We are the pioneers in introducing conversational and empathetic manner (Co-PRO™) of data collection for clinical investigators and sponsors to derive actionable insights (through a web platform). Also, we provide workflow optimization that overcomes the hindrances of paper methods and optimizes trial performance.
Thanks to new standards of Conversational User eXperience, the constant monitoring of one’s behavioral profile and emotions and the incorporation of health gamification allows the virtual assistant integrated in the PatchAi® platform to improve the overall patient experience, leading to better health outcomes and reducing the cost and time of trials.

Competitors

Our main competitors are:

CRF Health, Medidata, Kayentis (Market leaders)
Medable, Trialbee (Medium sized)
Medaptive health, data cubed (similar value proposition for patients, but are both very early stage, have no provision for data analytics and exclusively based in the USA)

A commonality of the pricing model is a customised SaaS licence (costs are evaluated on a whole per patient-month) depending on the needs of the trial in terms of number of patients, data points collected, etc.


Advantages or differentiators

Our competitors offer standard solutions that hold the cons of pen and paper (no real-time data, recall bias, poor patient experience).
Most of eCOA/ePROs actual solutions do not prioritize patient engagement as a value proposition, rather choosing to focus on clinical trial management as a whole whilst making the collection of patient reported outcomes a secondary focus.

We overcame these gaps and offer a fully customized solution that aligns with the client's needs. Thanks to AI we personalize the app functionalities to every single patient, providing an added value in terms of patient experience, branding for pharma, increased quantity and quality of the collected data.  Additionally, our system is developed by and for patients: we partner with patients associations and continuously improve the UX/UI in order to align with patients needs, whereas our competitors offer standard solutions identical to paper forms.

The value proposition of PatchAi® lies clearly in line with those upcoming trends and as such is poised to make a huge impact in the world of clinical trials.
PatchAi® has the potential to scale-up the market through Adoption of ML/AI technologies and can help to reach heights in the digital era of healthcare whilst keeping the spotlight on the patient through our all-purpose conversation based Virtual Assistant.

PatchAi®'s competitive advantage over the international scene is represented by the following factors:
- First mover in the implementation and offering of Co-PRO™.
- Concrete focus on patient engagement VS focus on data collection
- VS platform customization software standardization
- Strategic positioning as a Medical Device to support patient experience and engagement VS data collection software.
- Use of ML to customize the behavior of the app on an individual level.

Finance

The tariff stands at an all-inclusive fee averaging out to 50€ per patient per month over the course of the study (covering setup, licensing and maintenance services). Setup fees are equal to approximately 40% of the project value, the accrued monthly fees are equal to 50% of the project value and the decommissioning fees are equal to 10% of the project value. These are the market average prices, we tailor the price based on the phase, duration and number of a patient of a trial. The average study (in five cumulative years) will have the following characteristics: 650 Patients, 20 months active treatment, 30 months overall duration. The pricing is adopted in a similar manner for patient support programs but the tariff per patient per month will be much lower than the clinical trial rate (given the patient sample size will be at least 5-10 times higher than average).

Business model

Our business model is a B2B custom SaaS, flexible and tailored to customer needs. The sales cycle corresponds to the duration of the clinical study or patient support program. Pharmaceutical & Biotech companies pay for the software license through which the doctors/researchers and patients use the platform for free.
The pricing is adopted in a similar manner for patient support programs but the tariff per patient per month will be much lower than the clinical trial rate (given the patient sample size will be at least 5-10 times higher than average).

Since we have a primarily B2B model, we do not have a lot of costs concerning maintenance of user/customer base. Customer acquisition is more targeted in our case and not volume driven (the value of contract is upwards of 100K minimum), so the costs per customer acquisition are very minimal (in the range of 3000-5000 euros maximum benchmarking against our BD targets for the year).
The financial projections conducted on the business model show that in 5 years from the go-to-market (2019), we will be able to generate cumulative revenues of € 28 million. Losses of € 2,7M are foreseen in the first 3 years, during which we will mainly focus on research and development and improvement of the product.
The channels were identified after an extensive analysis of the competitive landscape. We performed a SWOT analysis from which emerged the strengths and weaknesses of our competitors' marketing and client acquisition strategy and developed, based on the results, a strategy that overcomes market gaps.

The customer acquisition strategy consists of classic online and offline channels and more importantly, strategic & commercial partnerships.
Online channels: Extensive market research to create a database with the right customer fit and creation of marketing material (webinars, case studies, brochures, open source demos, SEO, Pay per click, targeted email, Linkedin and social media ads)
Offline channels: participation in symposiums and sponsorship of eCOA/ePRO events, Patient Engagement, Clinical trials outsourcing, Digital Health.
Leverage personal and investor network for introduction to key stakeholders to cover ½ of the top 20 pharmaceutical companies globally
Leveraging client network for complementary introductions and commercial partnership with adjacent collaborators (pharma to CROs and vice versa): client matching, brand promotion.
Strategic partnerships (branding): innovative technology providers, patient associations, academic and research institutes.

Money will be spent on

● R&D: it includes cost for the further development and scalability of the PatchAi platform and to manage new clients requests.

● Corporate: It includes costs for current management

● Business Development: It Consider cost for the BD staff, the medical staff, Marketing & Communication activities.

● Legal, IP & Regulatory: It considers costs for Patents filing, trademarks, application for medical device, compliance with the industry requirements.

● SG&A: It considers costs for office, bills, softwares & hardware, accounting, recruiting.

For more info investor deck attached.

Offer for investor

● Strong Team, Reputed advisors and Investors
Our Team is international and complementary, with specific industry expertise. With an advisory board with the best minds guiding us in every area of the business and a pool of investors boasting a consortium of esteemed professionals who trust in us.

● First mover advantage and game changing product
PatchAi is the only Virtual Assistant for patient-data collection in Clinical studies implementing Machine
Learning & Artificial Intelligence technologies to engage patients and help scaling newer heights in the digital era of healthcare whilst keeping the spotlight on the patients.

● BIG MARKET with exponential Annual Growth
PatchAi has already attracted attention from major Pharma companies & consultancies and looks set to penetrate the ever growing Clinical Trials market at a global level.

● Potential Tex benefit for investors
PatchAi Srl is a Med Tech Company registered in the special section of the Italian Business, Register for Innovative Startups and SMEs, offering up to 40% tax incentive under Italian law to eligible investors (L. 145/2018).

Team or Management

Risks

Legal/Regulatory
Medium to big EDC vendors are primarily based in the USA (owing to the relatively lax regulations surrounding patient data management from the FDA) and the UK (despite the tight regulations from the NHS UK, there have been concerted efforts from the regulators to create pathways for digital health solutions to obtain reimbursement in various facets of the healthcare industry). The abundance in caution from the European authorities could create a lot of apprehension in the uptake of novel digital solutions within pharmaceutical companies for clinical research. This could create roadblocks in meeting our client acquisition strategies if the regulatory landscape shifts at a very slow pace. However, we have kept ourselves market ready for data regulations in collaboration with our legal consultants well in advance.
For our first 2 projects, we are not required to have a CE-mark since we do not offer features for device integrability/adverse event reporting. We are preemptively applied for the CE mark as a Class one SaMD (Software as a medical Device). For the future we could be the upgrade of our CE-mark as a higher risk category.

Language (User adoption and acceptance)
A roadblock in the short-term with respect to product scalability. For every multinational trial conducted by the big pharmaceutical companies, it would be easy for them to have one vendor cater to all the trial locations rather than just one country. Our value proposition hinges on delivering ‘Conversational Patient reported outcomes’ and to cover the scope of conversations in several languages could serve as a hindrance in acquiring large scale contracts for multinational trials. This would be contingent on taking necessary steps to have the product being market ready for coverage in at least the major European countries in line with our market outreach strategy, through the hiring of language experts contingent on the needs of the project.

Market/Competitors
Within the Italian market, our value proposition remains largely unrivalled and for the most part in Europe, there is a minimal presence of the market leaders such as Signant Health & Parexel but they have transitioned into Contract Research Organizations (CRO) rather than Electronic Data Capture (EDC) vendors. Our direct competitors are based in North America and are small to medium sized, so there is no palpable threat of EU market entry.

The major possible point of weaknesses could be the apparent and upfront costs of the technology implementation and deployment compared to the use of paper, which might cause apprehension amongst the payers in the pharmaceutical company (even though in the long run, the opportunity costs are much higher in case of paper methods).

Incubation/Acceleration programs accomplishment

Plug and Play (Silicon Valley Health Batch X Program 2020)
Unicredit Bank (Unicredit Start Lab 2019-2020)
Eit Health Innostars 2019

Won the competition and other awards

2020
IBM Global Beacon Award (May 2020)
“Excellence in Life Science” Award with Novartis Italia (April 2020)
2019
InnoStars Awards Competition 2019 Finalists, access to the program (EIT Health)
“Life Science Innovator” (BioUpper third edition)
Best Italian startup on Crunchbase (April 2019)
Best medtech Italian start-up on Valuer.ai (May 2019)
Best startup international competition organized by RGAX
Best AI Startup “Pitch Your Startup” (Deloitte AI)
Best startup ReHealth (GeoSmartCampus)
Health Builders Competition Finalist (Roche Italy)
Web Marketing Festival
Best startup “Startup Avalanche” - June 2019 (Techsylvania-Risky Business) -
Best startup “DigithON” - September 2019 - € 10K
Best startup “Heroes meet in Maratea” – September 2019
Patients’ Digital Health Awards (Digital Health Academy) – November 2019
Best startup at AboutPharmaDigital Awards (HPS)

Invention/Patent

To date PatchAi is a registered Mark ® in EU Territory since November the 7th 2019 (Classes 9,10,44) and, by the end of the year, we will extend the protection to the U.S.A.
Ongoing:
Co-Pro trademark registration (Classes 9,10, 42, 44) in EU Territory plus U.S.A. Canada and Swiss (June 2020)
Patent filing algorithms of Machine Learning algorithms and technology roadmaps (Q1 2021)

Photos

Photo 1 - #Patientcentricity #ConversationalPRO #AiVirtualAssistant

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Idea
Current Status
Market
Problem or Opportunity
Solution (product or service)
Competitors
Advantages or differentiators
Finance
Invested in previous rounds, $
Business model
Money will be spent on
Offer for investor
Team or Management
Mentors & Advisors
Lead investor
Risks
Incubation/Acceleration programs accomplishment
Won the competition and other awards
Invention/Patent
Photos
Product Video