ChipCare

Lab-On-The-Go

Founded: 2009

Founders: James Dou, Stewart Aitchison and Rakesh Nayyar

Subsidiaries and consortia:

Estimated Total Funding:

2013: $3.25 million from Grand Challenges Canada, Maple Leaf Angels, MaRS Innovation, the University of Toronto’s Connaught Seed Fund, the National Research Council of Canada Industrial Research Assistance Program (NRC-IRAP), the Scientific Research and Experimental Development Tax Incentive Program (SR&ED), Ontario Centres of Excellence, MaRS Discovery District and ventureLAB/Genesis.

2015: $5.045 million from Puffin Partners, MaRS Innovation, Maple Leaf Angels, Winfield Venture Group, Epic Capital, and additional Canadian and U.S. Angel investors.

2016: targets $18.8 million funding being lead by Biotech Alliances International, $2.8million has already been secured

Valuations:

Cap Table:

Employees: 30

Patents:

Growth History:

Products

ChipCare’s main product is a handheld cell analyzer system named PAx (Polyvalent Analyzer). PAx consists of an analyzer and uses disposable microfluidic cartridges. The analyzer uses a patented optical detection method to test for multiple classes of analytes including cells, proteins, and nucleic acids. PAx is a lab-on-a-chip device which is composed of multiple micro and nano-devices that perform chemical, biochemical, analytical, separation and diagnostic operations. Through a single finger prick, the analyzer provides the user with a result in 10–15 minutes. The device has been ruggedized and weighs under 2 kilograms.

The analyzer is less expensive than other similar devices, allows for faster and more accurate results, and has the ability to potentially run multiple diagnostics simultaneously. It forgoes the need for central diagnostic lab facilities that employ flow cytometers. A flow cytometer can cost $150,000 for the equipment alone and requires annual operating costs such as maintenance and staffing.

ChipCares first priority is to develop an HIV test, which is expected to hit the market by 2017. The cost of each test is approximated to be $1–$10.

Patents

ChipCare looks to have one worldwide patents (US20140170679). This patent describes a device composed of an optical source, a fluidic chip, and a detection module.

Team

James Fraser is the CEO of the company. He was brought in by the founders to provide them with leadership guidance . Prior to joining ChipCare, James was the co-founder and CEO of Dignitas.

James Dou is one of the co-founders and has 10 years experience in developing micro-/nano-fabrication and microfluidics devices.

Stewart Aitchison is one of the co-founders and is a professor or Electrical Engineering at University of Toronto, with over 250 publications and 30 years of experience in designing optical devices.

Rakesh Nayyar is one of the co-founders and brings over 17 years in flow cytometry.

Lu Chen is the director of research and has over 10 years of experience in research and development of microfluidics design and testing.

Lynn McNeil is the COO and brings over 20 years of experiences in the high-tech sector.

Market Opportunity

In vitro diagnostics are tests that can detect diseases, conditions, or infections. These tests can be performed in a laboratory, by a health professional or directly by consumers at home. The global in vitro diagnostics market is expected to reach $64–$75 billion by 2020, showing a compounded annual growth rate of 5%.

https://www.pinterest.com/source/medicalbuyer.co.in/
http://visual.ly/global-vitro-diagnostics-ivd-market

The Point of Care Diagnostics (POCD) is testing that is performed outside of the clinical laboratory and in close proximity to where the patient is receiving care. Point of Care Diagnostics represents around 12% of the in vitro diagnostics market.

https://www.linkedin.com/pulse/point-care-diagnostics-new-trend-industry-cassie-liu

The POCD market is expected to grow to $34 billion by 2021. ChipCare’s products are currently focused on infectious disease testing which is expected to be around $700 million market in 2016 and represent around 20% of the total point of care testing market in the U.S.

https://bccresearch.wordpress.com/2012/04/04/global-point-of-care-diagnostics-market-to-grow-to-16-5-billion-in-2016/
http://www.genengnews.com/gen-articles/point-of-care-testing-impacts-outcomes/3349

Lab-on-a-chip devices such as those produced by ChipCare, are mobile and do not require a central laboratory and high upfront investments. Such devices would enable this technology to capture a higher market share of the diagnostics market and lead to the expansion of the market through cheaper and more accessible tests.

ChipCare’s initial focus is on developing an HIV test. There are around 37 million people living with HIV all over the world, with 2.1 million new infections expected in a year and 1.1 million of deaths. Most of the HIV infections are in Africa.

http://kff.org/global-health-policy/fact-sheet/the-global-hivaids-epidemic/
http://www.who.int/hiv/data/en/

HIV testing is composed of 4 different tests. An RTD or rapid testing device is an antibody screening test to determine if a patient is HIV positive. In 2010 around 43 million RTD tests were performed with the test costing $0.5–$1.6. These tests are widely accessible and there is a robust market of suppliers that manufacture these tests. Once a patient is diagnosed as being HIV positive through an RTD test, more accurate tests such as CD4 and Viral Loading (VL) are prescribed to determine the severity of the infection. A CD4 test counts the number of CD4 T lymphocytes, this provides an indication of the state of the immune system and if antiretroviral therapy (ART) should be started. These tests are performed every 3 to 6 months on an HIV patient. In 2010 BD and Beckman Coulter were the two main suppliers of such test, with ~14million tests performed. This test requires a laboratory facility and costs around $2-$10, and was accessible only to about 28% of patients. A VL test measures the amount of HIV virus in the blood. It is used in combination with the CD4 test to determine if ART should be started. In 2010 the main suppliers of this test were Roche, Siemens, Abbott, bioMerieux, with ~1.2 million tests procured. The test requires a laboratory facility and costs $10–$60, and was accessible only to about 9% of patients. The final test is EID (early infant diagnosis), these tests were supplied by Roche and Abbot. In 2010 around 0.6 million of EID tests were procured, costing $10–$20 and being accessible to 40% of patients.

https://www.gminsights.com/industry-analysis/hiv-diagnostics-market
http://www.slideshare.net/unitaid/murtagh-ias-final2011
http://www.slideshare.net/unitaid/murtagh-ias-final2011

ChipCare’s first HIV test will be a CD4 test, following this their plan is to roll-out viral load and EID tests.

ChipCare’s strategy is focused on providing a cheap and easily accessible test to African patients,thus increasing the market through focusing on the under-served patients.

By allowing all of the tests to be performed on a single mobile machine, ChipCare aims to provide a significant saving against current methods. The products currently in use can only perform one test on a given machine and a lot of the products require a laboratory facility.

The main focus of the strategy is to be the price leader and thus capturing market share from competitors and incumbents. It does not look like ChipCare is focused on patenting and sharing the consumables, but rather looks at it as an equipment solution.

Competitors

Alere Inc. is a global diagnostic device and service provider. It has over 30 diagnostic tests for infectious diseases. It has a full spectrum of RTD and CD4 tests for HIV. The CD4 HIV monitoring test is performed through a mobile point of care device.

Daktari is a healthcare solutions company that manufactures portable diagnostic products for screening and monitoring of patients. It is currently developing an HIV tests.

BD is a 70-year-old medical technology company focused on improving medical discovery, diagnostics and the delivery of care. Its main diagnostic product is a range of flow cytometers that can test over 5,000 different antibodies. It is one of the leaders in HIV CD4 testing.

Beckman Coulter is an 80-year-old laboratory equipment supplier. It provides flow cytometers for HIV CD4 tests.

Abbott Molecular, Roche, and Siemens all provide laboratory facility solutions to perform HIV virus load tests.

Luminex develops a molecular diagnostic system that provides rapid diagnostic information for health care providers. Focuses on bacterial tests of blood, gastrointestinal, respiratory systems and herpes virus.

MBio develops clinical diagnostics and sample testing products for medical, veterinary, environmental, food, agricultural and military segments. It is focused on research use and it not approved for human diagnostics.

Biodesix is a molecular diagnostic company that discovers, develops and commercializes cancer tests.

Exagen Diagnostics researches, discovers, develops and commercializes diagnostic tests with a focus on rheumatology and autoimmune diseases.

Sandstone is a biotechnology firm that designs and develops healthcare equipment and technology solutions for fertility management.

Cepheid Inc is molecular diagnostics company that develops, manufactures and markets fully-integrated systems for testing in the clinical and non-clinical markets. It provides different tests for different bacterial and virus infections but does not have an HIV test.

Fio, is a data capture and management company focused on capturing diagnostic results and treatments.

OPKO Health is a medical test and medication company. It is in the process of developing tests for prostate cancer, testosterone levels and Alzheimer's.

Trinity Biotech specializes in the development, manufacture, and
 marketing of clinical diagnostic products. It has developed an RTD HIV test.

Veredus Laboratories develops, manufactures, and markets innovative multiplexed molecular solutions in the clinical, specialty, and custom testing markets based on STMicroelectronics’ Lab-on-Chip platform. Its tests are focused on bacterial infections and different influenza viruses.

Conclusion

ChipCare aims to take on the HIV diagnostic market which is currently served by big incumbents. It aims to compete on price as well as on the mobility of its device. The price will be kept low through the reuse of the device for multiple tests. Currently one device is needed for each separate test. Through introducing a cheaper diagnostic method ChipCare aims to capture market share and grow the market by making diagnostic tests more accessible.

ChipCare is competing against big and long established medical diagnostic companies as well as new startups with similar strategies. I think ChipCare is more of an acquisition exit where once the product is finalized and proven it might be bought up by one of the big incumbents. This is a lower risk strategy investment as the technology has been proven, the company is entering a well defined market and there is a clear path exit . The investment should provide a reasonable exit and return.