Entrepreneurship

Market Analysis

Marketing Plan

Financial Analysis

Future of SenSkill

Acknowledgements

Entrepreneurship Award


Overview

Colorectal cancer (CRC) is one of the most prevalent diseases globally. 5% of people will die with Colon Cancer. 5,287 people are diagnosed with CRC daily. Rates of CRC are expected to grow, primarily due to increased awareness, increased screening, and an aging population. The WHO projects a 70% increase by 2030. Currently the global market stands at 17 billion USD, and due to government and private sector support, the market for diagnostic and treatment options are expected to grow rapidly over the next 5 years and onwards. The costs related to CRC can be divided between direct costs (surgery, hospital bills, etc.) and indirect (economic loss of a worker, disrupting productive ability of friends and family, etc.). Indirect costs accounts for nearly 50%. It can be justified that part of the costs of CRC can be channeled into new treatment and diagnostic tools that reduce the overall societal cost of the disease. Currently, the primary treatment method are surgery and radiation/chemotherapy, all of which are either invasive or non-specific, reducing quality of life. Our product builds the foundation of a cheap, non-invasive, easy, specific, and localized treatment option with built-in biosafety mechanisms. Once developed, it can cheaply be mass produced and enter the global market.

Market Analysis


Current Treatment of CRC

For localized instances, surgery is the primary curative modality. For locally advanced primary legions, in which the affected regions have spread within the colon and rectum, multi-visceral resection is an appropriate option as well as chemotherapy and immune therapy. When CRC has metastasized to other parts of the body the prognosis severely decreases. Major advances in chemotherapy have increased median survival from one year to more than 30 months. However, fewer than 20% of those treated with chemotherapy alone are alive at 5 years, even rarer are those free of the disease, unless resection or ablation has been performed, both of which are highly invasive procedures. Most patients who have a metastatic disease are not surgical candidates, and chemotherapy is generally advised. In limited metastatic instances, surgery can be a curative option for select patients.

Future Treatment of CRC

As it relates to our project, with the rapid market growth for colorectal cancer (CRC) diagnostic and treatment options, as well as the expected increase in CRC rates, we expect that new treatment and diagnostic methods will be developed using emerging technologies to combat this disease. Current methods, though still effective, have been in place for many decades. With the advent of genetic engineering as well as new understandings in the nature of CRC and possible therapeutics, GMO based options will likely become a part of the standard portfolio of diagnostic and treatment options for CRC and many other diseases. Currently, the greatest improvement that can be made when battling this disease on a cost basis would be to increase screening. Additionally, a new treatment method that can deal with localized stage 1 and stage 2 CRC without the need for invasive surgery would be a welcome and synergistic addition. If possible, options that can deal with stage 3 CRC non-invasively and with minimal effect on the rest of the body would increase the prognosis for those who acquire a late diagnosis.

Market Environment

We employ a PESTLE analysis to assess the Market Environment:

The numbers in this figure refer to the following references (1) The Costs of Colorectal Cancer, 2020, (2) BBC Publishing, 2019, (3) Ltd, n.d. and (4) Colorectal Cancer Market, n.d.

In addition to a PESTLE analysis, we have also identified a few of the key players within the industry of CRC. Aside from being competitors, these also can constitute sources of investment as well as potential buyers of our project.

Stakeholder Analysis

We should be concerned with those who may be interested or have power over the success of our project. Here we perform a stakeholder analysis and outline a few possible stakeholders of our project. We classify them based on their interest and power regarding our project and determine how we should treat them. We also speculate on what their desires may be with regards to our project. As time moves forward, and the project progresses, new stakeholders may emerge, and current ones may change their attitudes towards us. In this section we address the nature of stakeholders at the early stages of our project.

Government Agencies: We must meet regulatory standards since we are developing a product for medical use. Therefore, government agencies would have the ability to halt our project from reaching the market if we do not satisfy their requirements. Their desire would be to ensure proper due diligence is performed and for a safe product that meets regulations.

Politicians: There is a small possibility that politicians may be interested in our product to serve society. On the other hand, political motives may cause powerful individuals to step in the way of GMO based medical products. Their desires would be to appease their voting base.

Public: Since we are seeking to become a new entry into the market, we are rather unknown and therefore the public would probably not pay much attention to us, at least until our project nears completion. Their power is dampened, however, by the nature of our product. Those who are candidates for our product will likely be open to its use. Their desires would be a balance of wanted a new and effective, non-invasive treatment option versus a hesitance towards GMOs and a new drug.

Anti-GMO Groups: Because our product is a GMO, they may have an interest in preventing its use, especially that which enters the human body. The passionate fraction of them may have enough willpower and organization to inflict negative sentiment towards us. Their desire may be to prevent the production and success of the project.

Doctors: As our project progresses, doctors may develop stronger interest since they would be the ones administering the product to patients. Initially however, until we have a product that seems promising, their interest will likely be low. Their ability to decide whether a product is used or not does give them some power over our market success. Their desire would be to have a new, safe, and effective product that offers a different approach to treating CRC.

Competitors: Depending on the progress and success of our project, they may develop a growing interest in our product. On their own, however, their main power would come in the form of patent protection, which may prevent our product from entering the market. Their desire may be to prevent a competitive product to their own portfolio as well as utilize our research and knowledge.

Buyers of the Project: If we choose to sell the work to other groups, they may have high power and high interest in the success of our project. If we attain satisfactory results in our development cycle, there may be several potential companies who would be interested in carrying out the rest of the development. With more companies interested, the overall power of each reduces. Their desire may be to acquire our project should it appear promising.

Suppliers: As outlined in our Porter’s Five Forces analysis, there are several suppliers for the materials/services that development would require, reducing their power. It is unlikely that they would protest our project’s success nor be particularly interested in our development. In terms of suppliers for production of our product, once it is developed, they will need to meet regulatory standards, such as Good Manufacturing Practices. However, the technical requirements for cultivating our strain of bacteria would be low. The desires of suppliers would be to work with us, either in supplying our needs in developing our project, or secure a future contract to produce our product.

Investors Discussed in our funding section, we will require additional assets to continue development of our project. Investors who we can work with will likely have high interest and power over the success of our project. Their desires would be the success of our project and bringing it to market, as well as finding a low risk and high reward investment.

Media: Initially, the media will likely have little interest in our project, but this may change as we near success. They would have the ability to sway other stakeholders, such as the public, politicians, and doctors. Their desire would likely to have an interesting story to cover as well as possibly influencing opinions based on their bias.

Academics: We have already spoken to several professors and scientists about our project. They would be interested in seeing our results for their own knowledge and applications. They could also be able to help or influence our project based on their input and involvement. Their desire would be to see how our project turns out, particularly on the technical level.

We map our identified stakeholders on a standard stakeholder map to better visualize whether we should manage, satisfy, inform, or monitor them.

Porter's Five Forces

By using the Porter’s Five Forces Model, we can better understand the market environment and the competitive market forces that exist within the CRC industry.

Marketing Plan


SWOT Analysis

To assess the nature of our project, we performed a SWOT analysis.

Segmentation

Initially our target segment will be regarding the Belgian market. Here we will focus on doctors, specifically oncologists and gastroenterologists as they are the professionals who will deal with CRC in patients. Because Belgian employs a national healthcare system, once the product makes it to market, insurance companies will pay for the product, doctors will administer it, and the end user will be patients undergoing CRC treatment. It is illegal and unethical to advertise prescription-only products to the public in Belgium (Global Legal Group, n.d.). Doctors are the ultimate target audience for marketing purposes. Marketing to physicians is heavily regulated and must be ratified by qualified personnel.

Our target customers are well-educated, trained professionals. They would likely be able to interpret our product on a technical level and would likely appreciate a thorough understanding of what our product is, how it is used, and how it works. They will also likely have strong desires for positive outcomes when administering our product. Being medical professionals, they will likely be scientifically oriented and will be swayed with logic, understanding, and data. In communicating our product, we would want to be objectively clear on the effectiveness, applicability, ease-of-use, mechanism, and safety of our product.


TAM, SAM, and Target

Total Available Market (TAM), Served Available Market (SAM), and Target method allows us to estimate our market size. Our TAM at first would be the regional market of Belgium which currently has a population of 11.58M (Wikipedia contributors, 2022). The SAM would be the proportion of the number of patients who have CRC. In 2020, Belgium saw 9,585 new cases of CRC, which constitutes our SAM (The International Agency for Research on Cancer (IARC), n.d.). Approximately 39% of all CRC cases are discovered at stage 1 or 2 (Survival Rates of Colorectal Cancer | Fight CRC, 2021). Therefore we can estimate that within Belgium, approximately 3,738 new cases of stage 1 or stage 2 CRC are diagnosed yearly. As stated, the standard treatment procedure is surgical resection. However, this is an invasive procedure that carries risk. Our product would be able to offer a non-invasive treatment option that would not preclude the option of surgical resection in the future. Numbers for those that would be interested in first trying our non-invasive approach are unknown and hard to gather. We can conservatively speculate that of yearly stage 1 and 2 Belgian cases, approximately 75% may be candidates for our treatment method. We assume that the other 25% are those who require surgical resection immediately, those whose cancer is at the tail end of stage 2. Therefore, our Target can be estimated to be 2,803 cases/year.

4P's Marketing Mix

Since we are offering a product, we employ the 4P’s to create a marketing mix appropriate for our product. By developing a marketing mix, we can better plan how our product will interact with the market once it enters.

Product:

  • Easily identifiable pill. Consumers should be able to easily differentiate our product from others they may be taking to facilitate correct use.
  • Proper information that not only meets regulations but also effectively informs both doctor and consumer on the use of the product on packaging and in pamphlets. It would be best if the information is easily digestible by both professionals and the layman.
  • Depending on in-vivo testing results, should make packages contain varying amounts of pills in accordance with ideal treatment durations.
  • We want minimal packaging to be more sustainable and keep costs down.

Promotion:

  • We should seek to present at conventions, conferences, and exhibitions which target doctors of interest. Must adhere to legal standards.
  • Sending sales representatives to doctors to discuss the viability of prescribing our product.
  • Well-trained and informed sales representatives will be pivotal in effectively promoting our product.
  • Meeting with regulatory bodies to correctly gain approval for marketing authorization (MA).
  • Maintaining open and direct communication with hospitals and doctors should they have any concerns or questions regarding product.
  • Update with news regarding QA/QC, case studies, experimental results, etc., to keep target audience informed.

Place:

  • Working with pharmacies, both in and outside hospitals, to stock and facilitate patients’ ability to acquire prescriptions, therefore allowing doctors to effectively administer product.
  • • Due to regulations and ethics, we cannot seek to place our product anywhere else.

Price:

  • Pricing of prescription drugs is regulated by government bodies.
  • Otherwise, our product is differentiated, therefore we cannot effectively apply competitive pricing, price skimming, penetration pricing, and economy pricing strategies.
  • Rather we will likely employ a combination of dynamic pricing, value-pricing, and cost-plus pricing, in accordance with government regulations.
  • Payment method would be in-line with Belgian standard of insurance reimbursement.

Financial Analysis


Funding

By the nature of our project, much of our costs that would go into pursuing a project like this have been covered or subsidized in some way by our host institution. To date, the current lab costs we have had to cover for disposable consumables, reagents, primers, sequencing, kits, etc., amounts to 3163.35 Euros. Additionally, we have been working in the lab on this project for four months. We do not pay ourselves a salary while developing this project. This results in 3163.35 Euros / 4 Months = 790.83 Euros/month average cost. Currently, if we were to continue this project, we would need to combine our constructs into a single plasmid and transform them into our target strain of E. coli, this would likely take an additional 4 months. Afterwards, our goal would be to then implant the gene into a Lactobacillus strain that is safe to use in the human gut. Following the same procedures, this would take 4 months. Afterwards we would likely perform various in-vitro tests to characterize and optimize the GMO for use. This would likely go on for an additional year, assuming it would take three iterations of 4 months each to optimize our product for begin in-vivo testing. This results in a total additional time of 20 months. Rarely do projects go unhindered, and it would be prudent to assume some inefficiency in developing our product. Therefore, we shall add a 50% increase to the timeline to account for errors, extra iterations, and any other unforeseen obstacles. Thus bring our final projected timeline to 30 additional months, thus totaling 34 months of in-vitro development. At an average cost of 790.83 Euros/month, we would then require an additional 23,725.13 Euros to complete the development portion of our product.

As our project were to progress, at a certain point we will need to find funding for pre-clinical and clinical trials. Research and development (R&D) spending has increased in the EU. In 2008, the average R&D costs of clinical trials were 27.2M Euros in the EU (Recent Developments on Clinical Trials in Belgium, 2011). However, the global market threatens EU as rates of clinical trials decrease in both. Emerging countries such as Eastern Europe and Asia offer a larger patient pool as well as lower costs. Due to market forces, it is recommended that companies within the EU and US try to offload some of the costs of clinical and pre-clinical trials onto to more robust and refined fundamental research, thus lowering trial error and costs. On average it takes around 6 years to go through pre-clinical and clinical trials (McDowell, 2022).

Although we our long-term goal is to serve the global market for CRC treatment, we will initially focus ourselves on Belgium. As a team with minimal funding, achieving Marketing Authorization (MA) via the national procedure can save us money. The national procedure would only allow us to serve the Belgian market. Should our product succeed in this region, we would be able to use the profits to apply for MA throughout the EU via the decentralized procedure later. The national procedure for acquiring a Full MA currently costs 31,855.39 Euros (PharmaBoardroom, 2020).

Finding funding for pre-clinical trials, clinical trials, and MA will be a goal in the future, likely once we approach completion of the initial development process. At that point we will need to find either a large investment, such as via venture capitalists, sell our project to another group to continue with, or partner with existing pharmaceutical firms that can afford to bring this product to market. For now, however, we would need to secure approximately 23,725.13 Euros to complete our initial development, assuming we retain access to pre-provided resources our host institution offers. Should we lose access to these resources, our costs would rise dramatically.

Pricing and Payback Period

Within Belgium, pricing of prescription drugs is regulated by authorities, and we would ultimately be compliant with their requirements. Until our product is developed, we would not be able to definitively set a price.

Despite this, we can look at our costs and determine what treatment price would be necessary to reach a certain payback period. Without further research and clinical trials, it will be unknown how much of our product would need to be used in each pill and in total per treatment, which can itself vary. However, cultivation of probiotic pills follows a similar process to what we would need to perform. The specifics can vary widely, but production costs can vary between 5 USD/1000L of culture to 120 USD/ Liter for probiotic bacterial production (Berisvil et al., 2020). Based on these numbers, we take liberty to assume that production costs would be negligible and that the primary cost comes from development, trials, and market authorization.

Our target customers are well-educated, trained professionals. They would likely be able to interpret our product on a technical level and would likely appreciate a thorough understanding of what our product is, how it is used, and how it works. They will also likely have strong desires for positive outcomes when administering our product. Being medical professionals, they will likely be scientifically oriented and will be swayed with logic, understanding, and data. In communicating our product, we would want to be objectively clear on the effectiveness, applicability, ease-of-use, mechanism, and safety of our product.

To determine a price, we would want to consider the payback period. Since a Belgian Market Authorization license is valid for 5 years before requiring renewal, we set a target payback period of 5 years. Based on our Target Market, over the course of 5 years we can expect 14,015 new cases in which our product can be applicable. Our total additional cost would be 27,255,580.52 as listed in our funding section. From this we calculate that our treatment therapy should have a lower price threshold of 1,945 Euros.

The average cost of CRC surgery, the main competitor treatment option to our product, is between 1,149 – 34606 USD depending on the country. We were unable to determine the cost in Belgium, however, a valuable reference point is the cost in Spain where stage 1 and stage 2 costs of CRC treatment is 8644 Euros and 12675 Euros respectively (Mar et al., 2017). We can guess that as another country within the EU, that surgical treatment costs of CRC in Belgium would be similar.

If we set the price of treatment to be half the cost of stage 1 CRC in Spain, then the price would be 4322, a yearly cashflow of 12,114,566 Euros, and a payback period of 2.25 years. At this price point, and the avoidance of hospitalization costs and invasive surgery, our product could be a favorable option for patients.

NPV and IRR - Net Present Value and Internal Rate of Return

We performed a basic NPV calculation by making assumptions. Our project would take 102 months, or 8.5 years, to bring to market. At a price of 4322 Euros/Treatment, we would have a yearly cashflow of 12,114,556 Euros. We assume a risk-free rate of %5 and an initial investment of 27,255,580.52 Euros.

With these numbers, our NPV = 7,399,222.76 Euros. The approximate Internal Rate of Return = 7.24%

Future of SenSkill


There are several avenues for improvement once our project is complete. At first it may be wise to improve biosafety and biocontainment by developing a more robust kill-switch. Aside from developing a more binary activation of our kill-switch, a genetic circuit could be designed such that we create an upper threshold for temperatures above human body temperatures. This would therefore create a narrow band in which the organism can survive, helping to prevent spread into the environment as well as unlocking the applicability in hotter climates and seasons.

Our project as can act as a platform to assist in other ailments. Adapting our SHOOT genes to target other ailments within the gastrointestinal system can widen the scope of our product line. Stomach cancer, for example, can possibly treated in an analogous way to CRC, with the correct adjustments to our GMO. Another example could be that is may be possible to facilitate healing of ulcers within the stomach with adjustments to our platform.  

The genetic circuit can also be applied to other industries as well. On a basic level, our plasmid detects a signal, activates gene expression, detects an environmental temperature change, then kills itself. Any one of these nodes can be altered and adapted to fit various needs. If the plasmid is adjusted placed in an appropriate Gram-negative bacterium, our plasmid may be useful in water treatment. Such a fundamental platform allows for a wide variety of applications.

Beyond product improvements and diversification, we can begin to look at expanding the market for our product. Initially, in order to focus our market and keep our costs down, we suggest pursuing the MA by the Belgian national procedure. This would give us access to only the Belgian market and only for 5 years. We chose our payback period because after those 5 years, we would need to renew our MA. At this point it could be wise to consider market expansion by applying for EU market authorization. This is done by apply via a decentralized procedure in which a Belgium MA would then be subject to inspection by other countries. Should it pass inspection, we would be able to market to the EU as a whole. From this, we can set the stage for the possibility of expanding globally.

Acknowledgements


Here we would like to thank key individuals who we consulted regarding various aspects of our project to date.

Luc Colemont: Physician and head of Stop Darmkanker, who we met with and spoke about CRC within the Belgian market and how our project can fit into the current treatment portfolio.   

Massimiliano Simons: A philosopher at KU Leuven whom with we discussed bioethics of our project.

Markus Schmidt: Biosafety and biocontainment expert who we consulted regarding the framework by which we approach meeting biosafety and biocontainment standards.

Iryna Nykytiuk: International marketing consultant from THoM, who advised us on how to setup a market plan.

Capricorn Ventures: Venture capitalist firm in which we gave a presentation to in our project and learned about what investors may look for regarding our project.