More than 10 million people worldwide fall ill with tuberculosis each year, and even though most people can be cured if they receive correct treatment, tuberculosis is one of the top ten causes of death globally. One reason for the high mortality is limitations in today’s diagnostics – about 40% of the affected persons are undiagnosed or unreported according to WHO.
EMPE develops rapid diagnostic solutions for tuberculosis. EMPE’s disposable test kits can correctly identify tuberculosis bacteria and its antibiotic drug resistance at an affordable cost and without any advanced instruments. EMPE wants to help clinicians globally to start immediate treatment with necessary antibiotics from the first clinical visit, even at primary health care centers and medical camps.
- The Company’s first product is validated. EMPE’s rapid diagnostic test is based on patented technology that has been develop by researchers from SciLifeLab and Uppsala University. The first product has been validated on patient samples in collaboration with a reference laboratory to the World Health Organization (WHO) and sales is planned to start in India in Q4 2019 through a wholly owned Indian subsidiary.
- Noticed by the Indian government and WHO. EMPE presented at the 2nd World Conference on Access to Medical Products that was arranged by the Indian government together with WHO.
- WHO calls for more effective methods for diagnostics. Access to rapid test has an important role in WHO’s program to stop the tuberculosis epidemic. Many of today’s diagnostic tests are either unreliable, slow or require relatively advanced infrastructure.
- Big market for tuberculosis diagnostics. The market for tuberculosis diagnostics is estimated to 19.3 billion dollars per year and each year an estimated 6.9 billion dollars is spent on diagnosing, preventing and treating tuberculosis. EMPE focuses on India which is the world’s largest market for tuberculosis diagnostics.
- Founded by serial entrepreneur and researcher with a network in India. EMPE was founded by Mats Nilsson who has founded several biotechnology companies and Pavan Asalapuram who has a large network on the Indian diagnostics market.
- Advisors with long experience in tuberculosis diagnostics. Sven Hoffner (advisor to WHO Europe and a tuberculosis expert), Raghavendra Goud (General Manager - Sales & Strategy South Asia at GE Healthcare Lifesciences) and Joy Sarojini (has performed clinical validations on established test for tuberculosis) are advisors to EMPE.
Tuberculosis (TB) is a serious health problem that affects people of all ages. 1.7 billion people are infected, and 10 million fall ill (show symptoms) every year. Even though TB is curable, it is estimated that TB bacteria kills one person in every 24 seconds. Over 95% of TB deaths occur in Low-/Middle Income Countries (LMICs) where the access to appropriate diagnostics is limited.
Business Idea and Vision
EMPE’s vision is to enable a quick point-of-care diagnosis of tuberculosis (and potential mutations thereof) at the first clinical contact points in the world. This will help clinics to start treatment with the correct antibiotics, significantly increasing the possibility of a speedy recovery of the patient and a reduction in the transmission of drug resistant TB.
The business idea is to develop, produce and sell diagnostic test kits, reagents and instruments for tuberculosis and potential drug resistance related mutations thereof.
In the 90’s, a new molecular method (padlock probes and rolling circle amplification) for the correct detection of nucleic acids was developed by Mats Nilsson and colleagues at Uppsala University. This unique and sensitive technology can detect DNA or RNA or proteins enabling its applications in molecular diagnostics. In 2013, Pavan Asalapuram joined Mats Nilsson’s team and soon became the project manager for an Indo-Swedish bilateral project for the detection of antibiotic resistant TB bacteria. Since the technology required a powerful microscope to read the results and most clinics did not have access to such equipment, Pavan realised that the technology needed to be adapted.
Pavan integrated the molecular method with lateral flow chemistry (similar to pregnancy test strip) and developed a paper-based readout (cassette). This cassette provides visual signals (red lines) for the presence of bacteria and its antibiotic resistance genotypes that can be easily read by laboratory personnel or doctors. After performing scientific validations and filing patents, Mats and Pavan established EMPE Diagnostics AB in October 2015.
EMPE’s most recent achievements are summarised below. EMPE has:
• validated EMPE’s first product, mfloDx® miniMDR-TB, on clinical isolates at the IGTP institute at a hospital in Spain. The miniMDR-TB showed high coherence with standard diagnostics methods.
• agreed with three medical centres to perform validation of mfloDx® miniMDR-TB, planned in July-October 2019. An Indian delegation representing a few of EMPE’s partners visited EMPE in April 2020.
• announced EMPE’s first product at a celebration at the Swedish Embassy in India. The Swedish Minister of Health and Social Affairs handed over the test kit to the Director General of the Indian Council of Medical Research and the Secretary of Indian Ministry of Health.
• recruited two experienced advisors that will support commercialization and sales on the Indian market: Raghavendra Goud (General Manager - Sales & Strategy South Asia at GE Healthcare Lifesciences) and Joy Sarojini (has performed clinical validations on established test for tuberculosis).
The need for better tuberculosis diagnostics
The Disease and Incidences
Tuberculosis (TB) is a contagious disease caused by a type of bacteria called Mycobacterium tuberculosis. TB is curable, if it is detected in early stages and treated with correct antibiotics. However, the duration of treatment is very long, and it can take months to realize if the correct antibiotic drug has been prescribed. If the patient has received the wrong antibiotics, the patient deteriorates and continues to spread the disease.
About 1.7 billion people are infected with TB worldwide, 10 million fall ill (show symptoms) every year and 1.6 million people die every year. The World Health Organization estimates that 3.5% of the new TB cases and 18% of the relapse TB cases are drug resistant (DR-TB).
Estimated incidence of MDR/RR-TB in 2017, for countries with at least 1000 incident cases
Source: The Global Tuberculosis report 2018 from the World Health Organization.
Due to lack of resources for diagnosis, especially at primary care levels, many of the TB infected cases are not diagnosed. It has been estimated that more than 40% of people with TB infections are undiagnosed and almost 80% with drug resistant TB are undiagnosed.
EMPE targets this issue by developing a method that can be used at microbiology labs and primary healthcare centres to diagnose the disease at the patient’s first clinical visit. An early and correct diagnosis is a prerequisite for effective treatment and disease control.
The EMPE product
EMPE’s tests combine molecular tools called padlock probes with lateral flow biosensors to identify antibiotic resistance in a fast and accurate manner. This novel combination enables:
• highly specific identification of multiple segments and/or positions in TB DNA.
• results in around 2 hours, in an easy to interpret PRESENCE/ABSENCE format with visual signals.
A detailed description of the principles of EMPE’s technology is available at EMPE’s website.
Diagnostic result, the EMPE way
The technology will enable clinicians to select correct antibiotics based on red lines that will appear on a disposable test kit. Each line corresponds (represents) to a gene. As this technology will not require sophisticated equipment or stable electricity, it can be implemented in very decentralized clinics, ensuring availability of high-quality TB diagnostics also in remote and rural areas.
Product Line and Positioning
EMPE’s current and future product line is summarized below.
EMPE’s first product can correctly detect resistance to the two key first line antibiotics (RIF and INH). Approximately 80% of the multi-resistant TB patients are resistant to RIF or INH. The current version of the test is not suitable for testing sputum samples directly, and hence EMPE will release miniMDR-TB for Research Use Only (RUO) to clinics with the ability to culture the bacteria.
Expected release for RUO: Q4 2018 or Q1 2019.
EMPE is currently working to improve the sensitivity of the first product to be able to test sputum samples directly without the need to culture the bacteria. Only PCR processing will be needed. EMPE has tested a prototype of this product on three clinical samples and achieved satisfactory/expected results. This product is expected to (i) test sputum samples directly after PCR processing, (ii) diagnose active TB, and (iii) detect resistance to the two key first line antibiotics (RIF and INH). This product will help clinicians to start correct antibiotic treatment at the first clinical visit since it can be used at microscopy centres (first contact point for TB suspects/patients). EMPE aims to get an IVD certificate in India for this product by the end of 2020. This is required in order to be able to sell it for clinical use.
Expected release with Indian IVD certificate: Q2 2021.
EMPE also aims to develop a product for the correct detection of resistance against RIF, INH and another major class of anti-TB drugs called, fluroquinolones (FQ). The FQs are normally used to treat patients that are resistant to RIF and INH. This product is developed for detection of severely drug resistant bacteria or to give an indication to the clinician whether the patient has developed extensively drug-resistant TB. EMPE expects that the financial resources of the clinic and the incidence of severely drug resistant TB will determine if the clinic uses MDR-TB or MDR-TBplus.
Expected release with Indian IVD certificate: 2022.
EMPE’s product line, market positioning and customers
*MGIT +ve refers to the process of culturing the bacteria.
Patents and Protection
EMPE’s products are based on a patented test cassette and a patented technology for DNA amplification. EMPE has a patent for the design of the test cassette and for the combination of the test cassette and a technology for DNA amplification. The patent for the DNA amplification technology (padlock probe-based molecular technology) is held by Olink AB/Q-linea AB. EMPE has a licensing agreement with Q-linea AB that gives EMPE the right to use the DNA amplification technology.
Patents and protection of EMPE Diagnostics’ know-how
According to the TB diagnostics market report 2015, more than 88 million diagnostic tests were performed during 2012-2013 for TB detection, treatment monitoring, antibiotic resistance detection. The total tuberculosis diagnostics market was estimated to USD 2.24 billion in 2016 and is expected to reach USD 3.3 billion by 2023 with an annual growth rate of 5.7%. The global spending on services for prevention, diagnosis and treatment of TB exceeded 6.9 billion dollars in 2018 and has almost doubled since 2006.
EMPE’s target market
EMPE’s target market is India where TB is a major public health problem. The country has the largest number of TB cases in the world — over a quarter of the global TB and multidrug-resistant TB burden. In 2016, 2.79 million people became ill from TB, and 435,000 died from it. India also has the greatest number of new cases of multi-drug resistant TB (including rifampicin resistance), with an estimated 147,000 cases in 2016.
Target customers in India
In India, the public healthcare system offers free TB diagnosis and treatment. As can be seen in the figure below, thorough genotyping of multi-resistant TB (complete detection of resistance genes) would take up to 12 months or longer in the public sector. As a consequence, people also approach private diagnostic labs or multispecialty hospitals, where culturing and advanced molecular test can be performed to speed up the process.
Molecular rapid tests are available at intermediate Reference Centres, National Reference Centres and Multispeciality/University hospitals, but at a limited scale. One reason for this is that the tests are costly and require expensive instruments.
TB diagnostic health care system in India
EMPE’s first product, mfloDx® miniMDR-TB, targets diagnostic labs, multispecialty hospitals and university hospitals in the private sector, and reference centres in the public sector. EMPE’s next products (culturing not required) target sputum centres which are most patient’s first contact points.
Competitors and Competitive Advantage of the EMPE Products
There are three main competitors that provide molecular tests: GeneXpert MTB/RIF test (Cepheid, USA), Molbio (India) and Hain Life Sciences (Bruker Group).
The main competitive advantages of EMPE’s MDR-TB and MDR-TBplus are summarized below:
• The tests require less additional instruments than competing tests.
• No software is needed to read the results.
• The tests cover resistance to most first and second line TB drugs.
• Lower installation costs.
Most rapid molecular tests can only be performed with additional instruments that need to be purchased from the manufacturer of the test. EMPE’s tests will not require any additional instruments except for a standard PCR machine that is common commodity at molecular diagnostics laboratories. The fact that hospitals and clinical laboratories can use machines that are already in place is a major competitive advantage for EMPE.
Commercialisation and sales
As a first step to enter Indian market, EMPE Diagnostics AB (EMPE Sweden) is setting up a subsidiary in India, EMPE diagnostics Private Limited (EMPE India), which will be established in Q3 2019. EMPE Sweden will be the R&D unit, while EMPE India will become the global production and supply centre. EMPE has already started to build a team in India that will establish agreements with local OEM partners, appoint local distributors or dealers and participate in the tenders. EMPE India will also take the lead in obtaining regulatory permissions from the Indian government and setting up clinical collaborations.
The subsidiary will be owned 99% by EMPE Diagnostics AB (Sweden). The remaining 1% will be owned by the Board of Directors of EMPE India because of Indian company laws and regulations.
EMPE will work with Dr. Joy Sarojini (Prof. and Head, Cristian Medical College Hospital, Vellore) who will coordinate the clinical validations and Mr. Raghavendra Goud (General Manager of GE India & South Asia) who will contribute in the development of sales strategies and negotiation with OEM partners.
EMPE plan to use resellers with established distribution networks for marketing, sales and the physical distribution of products in India. EMPE has identified a few suitable partners and plan to close agreements with at least two partners in Q4 2019.
The resellers will charge EMPE a certain percentage of the sales price as fee for the service. EMPE will only be involved in overseeing the resellers work and in marketing to strategic clients. This strategy will considerably reduce the financial as well as logistical burden of EMPE.
One main aim for EMPE is to be recommended by WHO since it would have a significant impact on EMPE’s sales. In order to receive a recommendation, the performance of EMPE’s test need to be proven in additional clinical validations and by scientific publications from various clinics and research groups.
EMPE has established a new facility at Karolinska Institute Science Park in Solna (in April 2019) where test kits are produced at small scales for R&D and performance validation purposes. EMPE plans to outsource most of the commercial production to India.
EMPE’s two main risks according to EMPE’s team are related to the product development and clinical validations for the mfloDX® MDR-TB for diagnosis and resistance testing directly on sputum samples. EMPE has established collaborations with experienced clinical and commercial partners that will help to overcome potential issues.
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.
Board of Directors
Pavan Asalapuram (Co-founder, board member and Managing Director). Pavan holds a PhD in Biotechnology, specialized in molecular diagnostics. Pavan has played important roles in the development of five diagnostic platforms. He has published 25 peer-reviewed scientific articles. As the project manager for an Indo-Swedish bilateral project for developing diagnostic tests for multi drug resistant TB, Pavan established a network of clinical researchers, clinicians, policy makers and market leaders.
Mats Gullberg (Board member) is the Vice President and Director of Research at Q-linea AB (publ.). He holds a PhD in molecular medicine and is the inventor of the circle-to-circle amplification method of padlock probes that is used in EMPE’s product. Mats co-founded the life science company Olink, with its spin-out companies Halo Genomics, Q-linea and Olink Proteomics.
Sven Hoffner (Alternate board member), Professor, is 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 also an advisor to WHO Europe.
Catharina Lagerstam (Chairman of the board) is a member of the board and independent advisor at several Swedish companies. She holds a PhD in financial risk management from the Stockholm School of Economics. Catharina has worked for an extended period in Luxembourg and Belgium with risk management, investor relations and finance.
Mats Nilsson (Co-founder and board member) is a Professor at the department of Biochemistry and Biophysics at Stockholm University and Scientific director at the Science for Life Laboratory in Stockholm. He is a globally renowned researcher who has published articles in leading journals such as Science and Nature Genetics. Mats has co-founded six companies in the biomedicine field, including Olink, Halo Genomics, Q-linea, ParAllele Bioscience and Cartana.
Pär Nordström (Board member) works as an investment manager for Almi Invest with focus on life science investments. He is on the board of 10 portfolio companies. He holds a MSc in engineering physics from KTH.
Pavan Asalapuram (Co-founder & CEO). Please refer to the description above.
Tomasz Krzywkowski (Chief Technical Officer). Thomas holds a PhD in Biochemistry and Biophysics and an Engineering degree in biotechnology. He has long academic experience in development of competitive methods for RNA and DNA detection.
Jeanpierre Salas (Chief Applications Officer). Jeanpierre has previously worked with development of a molecular assay for detection of viral-like particles using PLA (Proximity Ligation Assay), and QCM (Quartz Crystal Microbalance) at Stockholm University - Science for Life laboratory.
Magdalena Mazurkiewicz (Principal Scientist, Part-time). Magdalena holds a PhD in Biomedicine from Karolinska Institute in Sweden as well as an Engineering degree in Biotechnology. She has a broad background in cancer research, molecular biology, cell based-assay development and data analysis. At EMPRE, Magdalena is responsible for the clinical validations.
EMPE’s operations team also include Aizada Khodzhanepesova (Research & Production Assistant, part-time), Venkata Ramanarao Parasa (Scientific Project Manager), Spyridon Gkotzis (Senior Scientist) and Kjartan Gudmundsson (Researcher).
Advisors and Collaboration partners
Jose Domínguez, PhD. Jose has long experience in developing and evaluating new methods for diagnosing tuberculosis. He is a member of the steering committee of TBnet Academy which is an international organization in the tuberculosis management field.
Anna Engström hold a PhD in infection biology/medical science from the Karolinska Institute. Her academic work has focused on drug-resistant tuberculosis (TB), mainly on developing molecular methods for rapid detection of drug-resistant TB. She now works as a team leader for the laboratory at Clinical Genomics, Science for Life Laboratory, Stockholm, Sweden.
Joy Sarojini. She is the Prof. and Head at the Christian Medical College, which is a premier medical college and hospital in India. Joy has several years of experience working with international organizations to validate diagnostic test kits for TB, including Gen Xpert, Hains LPA, Molobio’s TrueNat, etc. Dr. Joy will coordinate the clinical validations of EMPE’s products in India.
Raghavendra Goud is the General Manager for sales & strategy South Asia at GE Healthcare Lifesciences. He will help EMPE to setup the business and scale-up sales in Asia.
Please refer to the Deal Room for financials.
This company will only be funded if at least SEK 5,000,040 is invested. Please see the issue resolution in the deal room for all legal details.