Development and Productization of Orthopedic Trauma 3D Implants

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• Development and Productization of Orthopedic
  Trauma 3D Implants

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• 1. Company

• Skolkovo Foundation Resident No. 414
• Skolkovo Industrial Park Resident No. 14
• Sarov Industrial Park Resident
• Ph 7 (495) 28-0000-1 p5070
• Ph 7 (495) 7-43-43-45
• Company information on the Internet
• www.3d-medicina.ru
• www.sk.ru to search for company information,
  enter "ABC" in the search field
• www.community.sk.ru/net/1120077/
• www.community.sk.ru/technopark
• www.community.sk.ru/technopark/p/residents.aspx
• www.???-?????????.??/sobytija/news/229/
• www.facebook.com/!/groups/MICtp/
• www.itechnopark.ru/residents/
• www.nptechnopark.ru/store_of_innovations/

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• 2. Innovative Project Summary (hereinafter -
  Project)

• Product
• All-purpose, anatomic, three-plane 3D implants
  made of titanium alloy for surgical treatment of
  human bone fractures, which have no analogues in
  the world
• Project Objectives
• Improving health, quality and the duration of
  human life
• Active introduction of the innovative development
  of Russian scientists and health professionals
  high-tech 3D implants on the market of medical
  trauma and orthopedic implants
• Creating a range of competitive fixators
• Making a profit and educating financial reserves
  in order to promote active business development
• Expansion into international markets.

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• 2. Innovative Project Summary (hereinafter -
  Project)

• Current Project Status
• So far, one of the products planned for
  production and sale "3D Crab" plate has been
  introduced.
• "3D Crab" plate has been developed based on the
  model of comminuted intraarticular fractures of
  the distal humeral metaepiphysis.
• Fixator was centrally purchased in Arkhangelsk
  Region, by the N.V. Sklifosovsky Research
  Institute of Emergency Medicine (Moscow), and
  N.I. Pirogov City Clinical Hospital No. 1.
  (Moscow). It is also being used at the clinic of
  the Traumatology, Orthopedics and Field Surgery
  Department at the Moscow State University of
  Medicine and Dentistry (City Clinical Hospital
  No. 59, Moscow), and at the Russian Railways, LLC
  Hospital at the Lyublino Station (Moscow).
• Project commercialization is planned to begin 12
  months after obtaining financing.

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• 3. Target Market and Competition

• Competitive Advantages
• Product uniqueness lies in the possibility of
  reducing the disability times for patients with
  fractures (3-5 times shorter) and the risk of
  disability by 30-70.
• Comparison with competitive products (SYNTHES
  KONIGSEE STRYKER ChM OSTEOSYNTHESIS)
  competitive retail price strength (kN) is 2
  times higher the number of screws needed for
  fixation is 2 times smaller surgeries are 30-90
  minutes shorter minimum need for modeling
  recovery period is 3-5 times shorter patient
  disability period is 3-5 times shorter the risk
  of disability in patients is 30-70 lower.

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• 3. Target Market and Competition

Comparison with competitors' products on the key
parameters
Product name Manufacturer RF market share country Price (RUB) Strength (kN) No. of screws Surgery time (min) Recovery period (weeks) Modeling
Plates with angular stability Osteosynthesis 62 of the market Russia 48 35 16 120 - 180 10-14
Plates with angular stability SYNTHES21 of the RF market Switzerland 59 29 16 120 - 180 8-14
Plates with angular stability KONIGSEE7 of the RF market Germany 53 25 12 120 - 180 10-14
3D implants ABC Technologies Russia 50-98 65 8 60 - 90 2-4 -
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• 3. Target Market and Competition

• Similar product development
• Currently, there are no analogues in the world
• Existing products on the market are not 3D
  implants
• Virtually 100 of the market is occupied by
  regular linear and pre-modeled plates.

• Potential consumers of 3D implants are
• Patients and their relatives
• Orthopedic trauma hospitals
• Private clinics and surgical centers
• Departmental agencies
• Army.

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• 3. Target Market and Competition

• Commercialization scheme
• Centralized implant sales (within p. 94 of the
  Federal Act) to orthopedic trauma institutions.
  Innovative 3D implants are automatically placed
  in the HTMC (High-Tech Medical Care) Program as
  they are used for reconstructive artroplastic
  surgeries. Due to the fact that ABC Technologies
  is a resident of the Skolkovo Foundation, all the
  company's innovative products will be recommended
  for purchase in all regions of the Russian
  Federation by the Foundation
• Maintaining a competitive market value of the
  product
• Creating Sales Offices with a complete set of the
  necessary equipment to ensure individual design
  and development of implants in all major cities
  of the Russian Federation
• Creating an Internet Sales Center to possibly
  provide free on-line consultations with the
  leading traumatologists using scanned images or
  3D CT scans
• Company's product range allows us to satisfy more
  than 60 of the consumer needs.
• Sale of technology (license) of the leaders of
  the market (SYNTHES KONIGSEE STRYKER)

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• 4. Project Geography

China1,349,718,000
EU502,000,000
India1,222,172,000
Russia143,000,000
USA313,328,000
Japan127,000,000
Indonesia245,612,000
Mexico112,000,000
Brazil195,962,000
Philippines102,000,000
Annual market volume7,000,000,000
The project has a broad geographical application
as trauma care is provided in all major cities of
the World. According to statistics, every year
one out of 1,000 people receives bone implant.
Average implant price 1,000
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• 5. SWOT Analysis Strengths Russia

GR and PR resource Skolkovo Foundation YIC
Sarov Russian Association
of Industrial Parks
NO TAXES Benefits for Skolkovo participants
Preferences in national sales under the brand
name Made in Skolkovo
Authority of the developers and positive image of
the product
HIGH SOCIAL IMPORTANCE
Reducing surgery duration and traumatic effect by
half
Development strategy
Implants ups and downs
75 RD
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• 5. SWOT Analysis Possibilities Russia

Competitive price Dealers network (bulk sale)
MEDICAL EDUCATION
Sales to RF Government3D
implants included in HTMC Program
Internet Sales Center in all major languages of
the World
LICENSE TO MANUFACTURE MEDICAL PRODUCTS
OUTSOURCING implant blank production to
NGO "AVANGARD"
PRODUCT RANGE 3D, 2D and 1D implants and screws
MATERIAL Bioinert titanium
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• 5. SWOT Analysis Weaknesses and Threats Russia

Presence of foreign competitors in the market
Lack of material and technical base
Dependence on third-party production capacity
NGO "Avangard"
Competitors with unfair marketing policy
(kickbacks)
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• 6. Technology and Intellectual Property

• Innovation Description
• 3D implants are anatomic and solid in structure
  and can provide even distribution of appendicular
  bone joints weight bearing thanks to multiplane
  fixation (screws are inserted in all 3 planes -
  x, y and z - of the three-dimensional coordinate
  system)
• Angular stability in 3 planes ensures absolute
  stability of fracture fixation. Plates are
  symmetrical for left and right skeleton regions,
  have six standard sizes, are differentiated by
  gender and race depending on the width of
  metaepiphyseal regions, and combine all the
  positive features of the traditionally used
  fixators (diaphyseal, metaphyseal, reconstruction
  plates, etc.).

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• 6. Technology and Intellectual Property

• Patents obtained
• ?RF Patent PM No. 66183 "Fixator for
  osteosynthesis of distal humeral fractures,"
• RF Patent PM No. 104445 "Fixator for tibia
  osteosynthesis."
• ?RF Patent PM 116335 "Fixator for treatment of
  fractures of the distal radial metaepiphysis."
• RF ?Patent PM 116340 "Fixator for osteosynthesis
  of proximal tibia fractures"
• ?Patent applications
• ?Application for RF patent PM No. 2011145082
  dated 11/8/2011 "Fixator for osteosynthesis of
  distal humeral lateral fractures (outer
  epicondyle and trochlea of humerus)"
• Application for RF patent PM No. 2011145083 dated
  11/8/2011 "Fixator for osteosynthesis of proximal
  femoral fractures (basilar, pertrochanteric and
  subtrochanteric fractures)"
• Application for RF patent PM No. 2011146436 dated
  11/17/2011 "Fixator for osteosynthesis of
  fractures of the proximal humeral metaepiphysis"

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• 7. Project Team

• ?Aleksej Valeryevich Babovnikov
• Director General
• ?M.D.,Professor - Traumatology, Orthopedics and
  Field Surgery Department at the Moscow State
  University of Medicine and Dentistry
• ?Author of 99 studies, 10 RF patents and 1
  monograph winner of the contest of young
  scientists PhD (MK-2006) for the Grant from the
  President of the Russian Federation
• Dmitry Nikolaevich Rubekin
• ?Director of Development
• Business angel
• Serial entrepreneur

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• 8. Project Financial Indicators (5-year horizon)

Investment amount 3,715,000
Project NPV at start47 897 354
Project PI15,89
Project payback period
27 months
Project IRR 202.5
It is planned that the project will generate 3.97
for each invested Euro in 5 years
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• 8. Project Financial Indicators (5-year horizon)

Project NPV and undiscounted cash flow
?????? ?????? 15 ?????
????? (RD)
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• 9. Calendar Plan prior to Sales

No. Work Description Turnaround Time Turnaround Time Turnaround Time Turnaround Time Turnaround Time Turnaround Time Turnaround Time Turnaround Time Turnaround Time Turnaround Time Turnaround Time Turnaround Time
No. Work Description Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
  Month Number 1 2 3 4 5 6 7 8 9 10 11 12
1 Developing 3D models in "Stl" format of the entire product range                  
2 Developing promotional materials (branding)                      
3 Preparing technical documentation (TS)                    
4 Preparing documentation for obtaining a registration certificate from the Federal Service on Surveillance in Healthcare and Social Development of Russian Federation, including            
4.1- Clinical trials (on paper)                    
4.2- Bench tests                    
4.3- Clinical trials (actual)          
5 Obtaining TS Certificate of Conformity                    
6 Obtaining voluntary GOST R ISO 9001-2008 (ISO 90012008) Certificate of Conformity                    
7 Obtaining license to manufacture medical products                
8 Trademark registration                  
9 Office organization                    
10 Creating Internet Sales Center with online consultations from leading traumatologists and information on all governmental programs to receive free High-Tech Health Care
11 International patenting    
12 Filing priority RF patent applications for unpatented products                
13 Organizing and supplying equipment for medical products manufacturing (renting premises, purchasing marking, packaging and technical equipment)                    
14 Sale start                    
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• 10. Commercial Offer

• Requested investment amount 3,715,000 EUR
• 1.05 mln EUR - authorized capital contribution
  for 25.01 company shares, venture capital
  investments (non-return investments).
• 2.71 mln EUR - current assets (return on
  investment). After the completion of R D (13
  months) interest-free credit line for 2 years.
  
• Investor project withdrawal options
• IPO
• Company share buyback
• Strategic sale of investor's share to a large
  biopharmaceutical company
• The project team plans to attract non-returnable
  grant of the SKOLKOVO Foundation in the amount of
  1 million euros on RD stage of the project.