Sharklet, Bacteria, and Hospitals

MT5016 – BUSINESS MODELS FOR HI-TECH PRODUCTS;

GROUP: THE APPRENTICE;

MEMBERS: Lo YiYang, Lim Kheng Wee, Lin Rongbin, Chin Mei Yin & Lim Khai Wei.

OVERVIEWIntroduction: Sharklet Technologies and SharkletTM

Business Model

Sharkskin Textured Film

Customer Selection

Value proposition

Sharkskin Patterned Medical Devices

Customer Selection

Value proposition

Value capture

Scope of Activities

Strategic Control

Future of Sharklet Technologies

Conclusion

Sharklet Technologies, Inc. – Company

It is a biotechnology company that develops and markets surface technologies that

manage microorganisms for benefits in health and environment

Altria Ventures, the venture capital investment arm of Altria Group, Inc., invested $2

million in Sharklet Technologies in exchange for a 12.5% stake.

Microscopic view of the surface texture of Sharkskin(left) and the mimic surface of Sharklet (right)

Sharklet Technologies, Inc. – Sharklet™

Sharklet™ is a biomimetic technology inspired by the Galapagos Shark.

The microscopic Sharklet diamonds mimic the shape and pattern of the dermal denticles of

sharkskin which are resistant to fouling organisms including algae (by 85%) and barnacles.

The ribs’ width-to-height ratios would discourage microorganisms from settling.

Sharklet Bacterial Inhibition

Medical Field

Effectiveness of Sharklet

Sharklet™

Sharkskin textured film

Sharkskin Patterned Medical

Devices

Smartphone Cases

Products of Sharklet

Sharklet™

Sharkskin textured film

Sharkskin Patterned Medical

Devices

Smartphone Cases

Products of Sharklet

Health Care Industry

e.g. on high-touch surfaces in hospitals

Sharkskin Textured Film : Customer Selection

Bed Rails

Chair

Intravenous poles

Call Buttons

Light Switches Door handles

Hold rails

Doors around hospital

Other Common Infection Area: Bathrooms

In Hospital: High-Touch Areas

Cost of HAIs

Ref: http://www.healio.com/~/media/Journals/ORTHO/2013/6_June/10_3928_01477447_20130523_27/table1.jpg

1 MSI = 1,000 SQ inches (in²)

1,000 in²= $3.50 + $2.37 = $5.87

1 in² = $0.00587

Sample provided Size : 81 in²Cost : (81 in² x $5.87 )/1000 = $0.48

How much should I sell Sharklet film?

Sharklet Textured Film: The Cost

Cost: Disinfection vs Sharklet Textured FilmDESCRIPTION METRIC

1. Cost Adhesive Sharklet-Film/ in²(Film: $0.00587/in² and Adhesive: $0.08667/in²)

$0.00587

2. 500-Bed Hospital Area (m²/in²) 46,450 m²/21,599,293 in²

Assuming, 80% of Hospital Area considered High-Touch Areas

17,279,435in²

Cost per Annum, Sharkskin Textured Film(Quarterly Replacement Film per year, on average 90 days usage)

$405,721(~$0.4M)

Potential Savings ($4M - $0.4M): $3.6M

Ref: https://www.facilitycare.com/environmental-services/housekeeping/revealing-true-costs-disinfection-and-environmental-cleaning

SHARKLET SURFACE TECHNOLOGY NO HEAT

NO RADIATION NO CHEMICAL

NO ANTISEPTICS NO DISINFECTANTS LOW COST SOLUTION

Sharkskin Textured Film vs Existing Methods of Disinfection

Ability to inhibit

bacteria growth

Green technology – does not

release anything from its surface

Reduced chemical waste (vs existing

disinfection method)

Low cost

Easy to use (adhesive-

backed films)

Sharkskin Textured Film: Summary of its Value Proposition

High touch areas within the research and commercial

laboratory where strict microbial control is critical

Laboratory equipment manufacturer

Sharkskin Textured Film: Laboratory Application

Marine Vessel Manufacturers &

Marine Vessel Coating Service:

E.g. ship hull

Building developer:

E.g. Internal walls of laboratories or external walls

of homes

Sharkskin Textured Film: Other Potential Applications

Sharkskin Patterned Medical Equipment: Customer Selection

To Whom it Benefits?

OEMs of MEDICAL EQUIPMENTS

HOSPITAL PATIENTSat risk of bacterial

infections E.g. UTI, BP Cuff

Sharkskin Patterned Medical Equipment: Statistics of HAIs

Ref: http://www.bactiguard.se/about/the-problem/health-care-related-infections/

Sharklet-Patterned Urinary Catheter

• Catheter manufactured with theSharklet micro-pattern in its surfaceto prevent the survival andmigration of bacteria with the intentto reduce CAUTI

• Reduced the risk of urinary tract

infection which accounts to 32% of

total Hospital Acquired Infections

Sharkskin Patterned Medical Equipment: Urinary Catheters

Targeted approach to address

the most common Hospital

Acquired Infections (HAIs)

Reduced the frequency of

replacing the catheter tube

Low cost solution

Sharkskin Patterned Medical Equipment: Value Proposition

Problem Statement:

Jack had an accident while riding a bike on PIE on a rainy day. Both of his legs were broken and were casted in plaster . Unable to walk and bedridden, doctor needs to implant urinary catheter on him for 3weeks.Doctor needs to decide to implant a normal urinary catheter or Sharklet patterned urinary catheter. What would the costs be?

Normal Catheter needs to be replaced after 7days else high risk of infection:

Week 1 : $0.50 Week 2 : $0.50Week 3 : $0.50

Total cost $1.50

Sharklet patterned urinary catheter:

Week 1 : $0.762Week 2 : $0Week 3 : $0

Total cost : $0.762

Potential gain per catheter = $0.738= 147.6%

* The above gain exclusive 3 times catheter insertion cost

Cost: Normal Catheter vs Sharklet-Patterned Catheter

Assumption:1. Manufacturing cost = 52.4% of Unit Selling Price/ in² based on 3M Annual Report, 2012) 2. $0.50 + 52.4% = $0.762/in²

Ref: http://www.dnrwheels.com/Incontinence/Catheters_Indwell

Manufacture Sharklet film

SharkletIncorporate Sharklet film

to productCompany Use product End User

Manufacture Sharklet film

SharkletIncorporate Sharklet film

to productCompany Use product End User

Production

Commission

Licensing Sharklet

TechnologiesSharklet

Incorporate Sharklet

pattern to product

Company Use product End User

Licensing

Make Money

Make Money

Make Money

Sharklet Technologies: Value Capture

Sharklet Technologies: Value Capture

• So which is the better approach?

Production

Competition from rival (lack of uniqueness, easy to copy - Price war)

Commissioning

Binding contract to be the sole supplied

Licensing

Sales dependent, more ownership

Unique manufacturing method to integrate Sharkskin pattern

Sharklet Technologies: Value Capture

Collaboration with Laboratory Equipment Manufacturer

Sharklet Technologies: Potential Value Capture

Ref: http://www.pacificscience.com/images/manufacturers_2013-06-17.jpg

Continuously searching for partner/ collaboration and draw in

investments.

Sharklet Technologies: Scope of Activities

Continue R & D for better integration with medical equipments and

processes

Collaboration with medical device OEM to apply Sharklet patterned

surface on existing medical devices/implants

Sharklet Technologies: Scope of Activities

Sharklet Technologies: Scope of Activities

Research/sourcing for better adhesive material for the

attachment of film to surfaces

Sharklet Technologies: Scope of Activities

Patent for new medical devices

IP Protection for Sharkskin pattern engineering

Sharklet Technologies: Strategic Control

LOOK INTO FUTURE

• 3D printing?• Economies of Scale?Reduce cost

• Other (shark) skins?• Material sensitive?

Improve performance

• Other applications of shark skin • Invade into normal films?New market

LOOK INTO FUTURE - 3D PRINTING

Ref: http://wyss.harvard.edu/viewpage/537/

LOOK INTO FUTURE – CONTINUOUS R&D

• Why is Galapagos Shark but not other shark?

• Is there any other types of skin has better performance?

• Does the testing result vary with the different materials?

• Color dependency?

• Applicable to other bacterial?

LOOK INTO FUTURE – OTHER APPLICATIONS

Drag reduction

• Marine vessel/Shipping

• Aerospace Application

• Swimsuit

Anti-fouling

• Marine vessel/ Shipping

• Fishery

Anti-biotic surfaces

• Hospitals• Laboratory• Health care

centers

LOOK INTO FUTURE – OTHER APPLICATIONS (AEROSPACE)

'Shark skin' paint to be tested on Lufthansa Airbus jetsScientists estimate that if 40 to 70 percent of the aircraft is coated with the new shark-skin mimicking paint, surface resistance may be reduced

by one percent.Ref: http://www.youtube.com/watch?v=NYZsTFhTT8Q

LOOK INTO FUTURE – OTHER APPLICATIONS (AEROSPACE)

0

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Consumption(million gallons)

Cost (million dollars)

Cost per Gallon(dollars)

US Airline Fuel Cost and Consumption (All Majors - All)

48 billion X 1 % = 480 millionRef: http://www.transtats.bts.gov/fuel.asp?pn=0&display=data1

LOOK INTO FUTURE – OTHER APPLICATIONS (SWIMSUIT)

Researchers found that staticdenticled-skin reduced drag by 8.7percent. When the team flapped thefoil to mimic swimming movement,they found that the swimming speedwas up by 6.6 percent and energyexpenditure was reduced by 5.9percent.

LOOK INTO FUTURE – OTHER APPLICATIONS (ANTI-FOULING)

Early marine antifoulingstrategies by Europeans involvedthe use of copper cladding onships, which was toxic to manyorganisms and either deterredattachment or was lethal tothose that did attach.

Shark scales, or dermal denticlesare covered in enamel that isanalogous to human teeth andcan repel more than 85% ofalgae that comes in contact withthe scales.

Ref: http://www.ny-big.org/learning/non-toxic-anti-fouling-solutions-sharklet/

LOOK INTO FUTURE – OTHER APPLICATIONS (OTHER POTENTIAL MARKETS)

CONCLUSION

Extensive usage of Sharkskin in medical applications

- Medical Devices, Laboratory

Should continue to explore other potential

applications to maximise profit, especially customers

with higher willingness to pay