Highlights

In 2016, tuberculosis was the ninth leading cause of death in the world. Yet, most people who develop tuberculosis can be cured if they receive an early-stage diagnosis and correct treatment. One major challenge is that many of today’s diagnostics methods are either slow, costly or require a high level of infrastructure compared to the reality in many affected areas.

 

EMPE develops rapid diagnostic solutions for infectious diseases with an initial focus on tuberculosis. EMPE’s disposable test kits can correctly identify tuberculosis bacteria and its antibiotic drug resistance at an affordable cost and without access to special instruments. EMPE wants to help clinicians in over 200 countries to start immediate treatment with appropriate antibiotics, even at primary health care centers and medical camps.

 

“The test developed by EMPE is easy to use, offer prompt results, do not demand sophisticated safety laboratories and clearly has the potential to play an important role in controlling drug resistant tuberculosis in many high tuberculosis burden areas around the globe."

- Dr. Sven Hoffner, responsible for the WHO Supranational Reference Laboratory for drug resistant TB at the Public Health Agency of Sweden.

 

 

 

 

Highlights

Patented technology developed by researchers at the Karolinska Institute Science for Life Laboratory, enables time and cost-efficient point-of-care diagnosis at remote locations.

Strong network for commercialization. Collaborations with Q-linea and WHO National Reference Laboratories as well as commercial and governmental connections in India are in place for market launch and expansion.

Serial entrepreneurs and proven researchers in the team. EMPE was founded by Mats Nilsson who has successfully co-founded seven biomedical companies and Pavan Asalampuram who was the project manager for Indo-Swedish bilateral project for novel tuberculosis diagnostics and established a clinical consortium across 14 countries in Europe and Asia.

Clinically validated in collaboration with WHO labs. The test kit has been validated on clinical samples in collaboration with Dr. Jose Dominguez at the Institute for Health Science Research IGTP with promising results. “Overall, I recommend that the technology is revolutionary and it would provide a very good solution for the tuberculosis management worldwide”, says Dr. Jose Domínguez.

Big market with strong demand for better diagnostics. The global tuberculosis diagnostics market is estimated to 19.3 Bn SEK per year and the medical device sector in India, which is EMPE’s first target market, was valued at USD 4.9 billion in 2015.  The World Health Organization has identified accurate diagnostics as essential in their strategy to fight tuberculosis.

High estimated gross margin. EMPE estimates an average gross margin of 52% based on current production costs in Sweden and price indication from intended purchasers of EMPE’s products.

 

EMPE is now in the process of final product validation and initial commercialisation in Europe.

 

Full information including legal documents are available in the Deal Room. Below follows brief information about the company.

 

 

Opportunity

The need

In 2016, 10,4 million people fell ill with tuberculosis and for the past five years, it has been the leading cause of death from a single infectious agent, ranking above HIV/AIDS. Yet, with a timely diagnosis and correct treatment, most people who develop tuberculosis can be cured. In 2015, more than 4 million people with tuberculosis went undiagnosed.

 

Source: WHO, Global Tuberculosis Report 2017.

 

Accurate diagnosis including drug-resistance testing is essential in the WHO strategy to fight tuberculosis. One major challenge is that many of today’s diagnostics methods are either slow, costly or require a high level of infrastructure compared to the reality in many affected areas. As a consequence of inadequate diagnostics, clinicians are forced to prescribe empirical or cocktail antibiotics, causing additional spread of resistance in tuberculosis bacteria.

EMPE develops test kits adapted to the circumstances and needs at primary health centers and medical camps.

  • The test does not require any special instruments, electricity, refrigeration or skilled personnel, making it suitable for resource-limited clinical laboratories. Since the test has a visual readout format, no computers, microscopes or similar are needed to view the results.
  • The experimental turn-around time (sample to result) is 60 minutes and EMPE can detect 25 targets and their resistance genes in one test, meaning that correct antibiotic treatment can start at the first medical visit.
  • The test is cheaper than many of the tests available today.

 

“The test developed by EMPE is easy to use, offer prompt results, do not demand sophisticated safety laboratories and clearly has the potential to play an important role in controlling drug resistant tuberculosis in many high tuberculosis burden areas around the globe.”


– Dr. Sven Hoffner, responsible for the WHO Supranational Reference Laboratory for drug resistant TB at the Public Health Agency of Sweden.

 

 

EMPE's diagnostic solutions

EMPE’s products combine a stringent molecular test with sensitive biosensors to provide visual results in 70 minutes. EMPE’s product lines include:

 

 

 

 

mfloDx® MDR-TB can identify 86% of all drug resistance tuberculosis variants. The test does not require any special instruments except for a simple PCR machine. The mfloDx® MDR-TB has been validated at the Institute for Health Science Research IGTP. Further clinical validation is ongoing.

mfloDx® XDR-TB can identify drug-susceptibility and/or drug resistance to all antibiotics used to treat tuberculosis. The product is under preparation for clinical validations in 2019.

mfloDx® Direct-TB is an automated platform for performing the XDR-TB test in large-scales. The instrument is designed to be operated by semi-skilled personnel and powered by battery. As dry reagents will be used, cold-storage will not be necessary. Product development will start in 2019 in collaboration with Q-linea.

mfloDx® DoMI can detect up to 25 targets corresponding to 25 infections caused by virus, bacteria, fungus, etc. in one test. EMPE plans to include sexually transmitted infections. The development of mfloDx® DoMI will start in parallel with the development of the Direct-TB instrument.

 

 

The technology

The products are based on technology developed by EMPE and the Swedish biotech company Q-linea. EMPE has developed and patented the technology for the readout format (visual detection of targets) and licensed Q-linea’s patented technology for DNA amplification.

 

 

Time plan

During 2018, EMPE will launch mfloDX® MDR-TB test kits as a research product in Europe and India.

  • Complete mfloDX® MDR-TB clinical validation in Europe (Q2).
  • Start selling mfloDX® MDR-TB test kits as non-categorized IVD research only use product to WHO national reference tuberculosis clinics in Europe and to clinics in India (Q3, Q4).

 

In 2019, EMPE will launch the mfloDX® MDR-TB for clinical use and develop the mfloDX® XDR-TB test kit.

  • Launch of mfloDX® MDR-TB as an IVD diagnostic test (Q1).
  • Clinical validation of mfloDX® XDR-TB in Europe (Q3).
  • Sales start of mfloDX® XDR-TB as a research product in Europe (Q3).
  • Receive certifications/recommendations from WHO and FIND Diagnostics (Q4).
  • Clinical validation of mfloDX® XDR-TB in India (Q4).

 

In 2020, EMPE will launch the mfloDX® XDR-TB as a CE certified IVD test in Europe and India. EMPE will also establish a large-scale production facility in India. During 2021 and 2022, EMPE will focus on global market penetration and final product development and sales of the mfloDX® Direct -TB product.

 

 

 

 

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Market

In 2016, an estimated 10.4 million people fell ill with tuberculosis and more than one-quarter of the world’s population had latent tuberculosis which means that they have been infected by the bacteria but not become ill. People infected with tuberculosis bacteria have a 5–15% lifetime risk of falling ill with tuberculosis. 

Currently, more than 200 million tuberculosis tests are performed every year globally, but the number will most likely increase. The total tuberculosis diagnostics market is estimated at 19.3 Bn SEK with an annual growth rate of 4.2% to 2024.

 

 

Target market 

Source: WHO, Global Tuberculosis Report 2017.

 

EMPE targets the global market for tuberculosis diagnostics and resistance detection with initial focus on Europe and India.

Tuberculosis is one of India's major public health problems and India bears the highest burden of both active tuberculosis (drug-sensitive) and multi-resistant tuberculosis (first-line drug resistance) in the world. The medical device sector in India was valued at USD 4.9 billion in 2015, with an estimated average annual growth rate of 15% in the next decade. The Indian market is among the top twenty markets for rapid molecular tests of tuberculosis, such as EMPE’s test, in the world by market size.

 

 

 

Commercialisation

In the molecular diagnostic industry, government policies have a decision-making role in funds sanctioning, laboratory administration, laboratory operations and provision of services type. EMPE has already established connections in the Indian healthcare system and with WHO.

In India, EMPE will adopt a top-down approach, starting out with central and state governments, and then reach out to individual hospitals, laboratories and healthcare centres for marketing and sales.  

 

 

 

In September 2017, EMPE visited India together with Swecare (Sweden Medtech) and met with directors of Indian authorities such as ICMR, NCDC and CDSCO as well as major private hospitals. They were positive to EMPE’s diagnostic solutions and will consider them for their national tuberculosis eradication programs. These programs would require at least 40 million mfloDX® test kits, every year.

 

 

 

In addition to government policies, WHO has an influential role in the global tuberculosis community. EMPE has already established a clinical consortium in 14 countries, including 7 WHO National Reference Laboratories enabling EMPE to develop efficient product lines based on validated clinical requirements and guidelines.

 

 

Business model

EMPE’s products will first be launched for research use only and then for diagnostic use. Since EMPE’s technology allows the use of low-cost paper-based materials in the production process, the tests can be sold at a competitive price with high gross margin.

EMPE has two business models, one for research institutes and one for commercial entities.

  • The first product, mfloDx® MDR-TB is a disposable test that will be sold directly to central and state government bodies, including research and development labs, intermediate reference labs, academic researchers, pharmaceutical companies (for antibiotic screening). The test kits will be manufactured in-house by EMPE.
  • The flagship, mfloDx® XDR-TB is a disposable test targeting the in vitro diagnostics market. EMPE will sell the tests via local manufacturers (OEM) and distributors targeting public and private hospitals, diagnostic laboratories, district-level health care centers, sputum microscopy centers, etc. The test kits will be manufactured and distributed by local partners.      

     

 

 

Competition strategy 

EMPE’s main competitive advantages is the ability to detect as many as 25 targets in one single test and operate with minimal infrastructure. Major diagnostic providers such as Cepheid, Hain Lifescience and Nipro Corporation, mainly target laboratories with high infrastructure.

The main competing test, Cepheid’s Xpert test, is fully automated but it can only identify resistance to one antibiotic. Hains’ line probe assay, on the other hand, can detect up to 15 targets in one test but it takes 3-8 hours and requires 4-5 different instruments.

 

 

Risks 

The two main risks according to EMPE’s team along with risk mitigations are summarised below.

Risk 1: One risk is that the ongoing larger scale validation would not reach satisfactory results which could call for re-evaluations, causing delays in the launch of the product.

Risk mitigation. Initial product validations of mfloDX® MDR-TB have been successfully accomplished at a hospital. EMPE’s team and technical/commercial partner Q-linea has long experience in research and product development within the field, which would help overcome production problems.

 

Risk 2: Bureaucratic processes at governmental agencies and long sales cycles could slow down market adoption.

Risk mitigation: EMPE’s products have clear competitive advantages compared to existing products and tuberculosis is a high priority for policy makers such as WHO. EMPE already has ongoing collaborations with clinicians, policy makers and resellers as well as previous experience in working with these stakeholders.

 

 

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Team

EMPE’s team has long experience in clinical research, business development, entrepreneurship in biomedicine and clinical work in the tuberculosis field. The team also has an extensive network of clinical researchers, clinicians, policy makers and market leaders in the tuberculosis field.

 

 

Operational team

Pavan Asalapuram (Co-founder & CEO) holds a PhD in Biotechnology, specialized in molecular diagnostics. His education in Hospital and Healthcare Management triggered his interest to develop cost-effective and reliable diagnostics for developing countries. 

He has published approximately 25 peer-reviewed scientific articles and holds three international patents within biomedical and molecular diagnostics. As the project manager for a project to develop diagnostic tests for MDR-TB, Pavan established a network of clinical researchers, clinicians, policy makers and market leaders to help turning ideas into meaningful products in collaboration with 14 European and Asian countries.

Tomasz Krzywkowski, CTO, full-time from June 2018. Thomas holds a PhD in Biochemistry and Biophysics as well as an Engineering degree in biotechnology. He has long academic experience in development of competitive methods for RNA and DNA detection. 

Jeanpierre Salas, Applications Manager, part-time. Jeanpierre holds M.Sc. degree in Industrial and Environmental Biotechnology, from the Royal Institute of Technology. 

 

Recruitments

EMPE plans to hire five new employees in 2019 to speed up product development, marketing and sales, and customer application support.

 

 

Advisors

Prof. Sven Hoffner is the former director of the WHO Supranational TB Reference Laboratory at the Swedish Institute for Communicable Disease Control (SMI). He is currently a researcher at the Department of Public Health Science at Karolinska Institute and at San Diego State University where he evaluates diagnostics and treatment methods to improve tuberculosis management strategies. Sven is an advisor to WHO Europe.

Ass. Prof. Jose Domínguez (Advisor) is a senior researcher in clinical microbiology at the research institute IGTP in Spain. He has published more than 100 scientific articles and is a member of the steering committee of TBnet Academy which is an international organization in the tuberculosis management field.      

Mats Gullberg (Advisor) is the Vice President and Director Research at Q-linea. He holds a PhD in molecular medicine and is a named inventor of 10 patents and patent applications, including the circle-to-circle amplification method of padlock probes that is used in EMPE’s product. Mats co-founded the life science company Olink and was the CTO of the company until 2014.

Jenny Göransson (Advisor) is the CSO at Q-linea and holds a PhD in Molecular Medicine from Uppsala University.

 

 

Board of directors

Mats Nilsson (Co-founder & Chairman of the board) is a Professor at Dept. of Biochemistry and Biophysics at Stockholm University and Site director at the Science for Life Laboratory in Stockholm. He is a globally renowned researcher who has published more than 250 scientific articles and he has previously co-founded four companies in the biomedicine field, including Olink, Q-linea, ParAllele Bioscience and ApiRays.

Pavan Asalapuram (board member).

New board members. EMPE is open for additional board members with relevant experience in international marketing and business.


 

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Financials

Financial information is available in the Deal Room for members at Sciety.

 

 

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Contact

EMPE Diagnostics

Website: www.EMPEdiagnostics.com

E-mail: info@EMPEdiagnostics.com

LinkedIn: www.linkedin.com/company/16214180/

Address: Karolinska Science Park, Nobels väg 3, Solna

 

 

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