Exclusive interview for SPINOFF.COM with Stefano Valenzi, PhD., Chief Scientist of Dynamic Brain Labs LLC, about GlucoScanner, which is a non-invasive sensor for indirect measurement of blood glucose levels. GlucoScanner, the new non-invasive biosensor for blood glucose levels, working through optical technology and signal processing methods. The device was conceived to revolutionize the world of thousands of diabetics. GlucoScanner, in fact, does not require any invasive procedure such as continuous finger pricking, avoiding arm patches and additional costs for disposable products. Currently, the innovative device goes straight to phase two. GlucoScanner moves on to produce a manufactured and miniaturized device that will allow a final testing stage aimed to assess the product quality.
SOC: Dear Dr. Valenzi, thank you for your generosity in spending time with us and sharing your insights about Glucoscanner.
Dr. Valenzi: GlucoScanner is a painless and more affordable way of blood (lat.Sanguis) glucose monitoring. Our product is about to revolutionize the world of millions of people who are currently forced to daily check the glucose levels in their blood. This pioneering device has been invented by the Dynamic Brain Labs LLC in Tokyo, Japan.
An integrated system of sensors, mobile apps, and data services has been designed to enable global scale research of diabetes aiming to further understanding and prevent health-related crises. Besides measuring the glucose level, GlucoScanner can monitor other body parameters such as heartbeat and blood oxygen concentration, in order to have a continuous, clear frame of the patient physical status.
Thanks to the Cloud Software and the mobile app, GlucoScanner is able to alert caretakers and selected relatives or friends in case of emergency. All the necessary data for monitoring general health status can be collected. This system can be used to improve data access and ultimately to facilitate communication for the scientific community and health professionals.
GlucoScanner employs non-standard light frequencies in the infrared spectrum. Dynamic Brain Labs has developed a new way to assess tissue light absorption data. The device combines light absorption information with other physiological data and individual physical features; thus allowing the research team to solve some of the well-known problems linked to optical technology, such as differences in skin pigmentations. A simple automated calibration procedure performed on individuals ’ fingers will guide the user through the GlucoScanner setup in order to optimize the device performance.
SOC: Our investors would like to learn more about your academic endeavors and your professional/scientific background.
Dr. Valenzi: Our core R&D team has combined more than 25 years of experience in Psychophysics, Brain-Computer-Interface, Cognitive Neuroscience, Experimental psychology, Signal Processing and Data Science. I am a creative problem solver with expertise in healthcare and technological solutions. I am a neuroscientist, with training from the Sapienza University of Rome, expertise in EEG, emotions, biosignals and cognitive science. I have developed numerous innovative methods, from a number of international collaborative studies mostly aimed at the study of emotion, aging, cognitive skill development and general health care. In 2008 I moved to Japan and started to work at RIKEN Brain Science Institute. I started his transition from academia to industry in 2014 as R&D specialist. Peter Jurica is a scientific programmer, software and hardware prototypist. He grew up with computers and never stays far from them, he was trained as a telecom engineer. He has large-scale software engineering experience at Siemens. After obtaining degrees in computer science, signal processing and neural networks he switched to brain science in one of Japan's and world's top neuroscience research institutes. He has been working with scientists since 2001 taking the responsibility for solving all technical aspects of research in multidisciplinary international teams, developed scientific software, developed and published novel scientific methods. Peter and I have met at RIKEN in 2008 and since then we have been working together. In 2016 we co-founded the Dynamic Brain Lab LLC aiming to create innovative, non-invasive, healthcare and medical monitoring devices.
SOC: Considering your experience, we would like to know whether you had other projects? Could you please share the story of their creation and success?
Dr. Valenzi: Besides our scientific publications, right now our other projects are classified, but soon we will disclose our next project.
SOC: It is so interesting to know more about the process of your technology/product creation. Currently, at what stage of commercialization is your technology/product? Was your project funded by any state financing or grants? Has it already received any honors or awards?
Dr. Valenzi: In the first phase, GlucoScanner has been tested through experiments with the general public in the Tokyo area. Now, the second phase is ready. We have miniaturized our device and soon we will manufacture our first prototypes. Then we will be able to evaluate our product performance (we are organizing a clinical trial) and test if it complies with consumer product quality and safety standards. At the same time, we will start also the necessary procedures to evaluate if our product complies with different medical standards.
SOC: In the formation of every scientific spinoff, one of the most important keys to success is the team. For many potential investors, the management team is the most important element in deciding whether to invest or not. Could you please share some information about the team members who supported you and the project? What key additions do you need for the team in the short term?
Dr. Valenzi: Our business side is led by the other 2 co-founders, Nicola Grieco and Roberto Forlani. Nicola is our CEO and Roberto our business concept developer. Nicola has extensive experience in the Asia Pacific rim, having worked in Hong Kong and Mainland China for fifteen years. Since moving to Japan in 1997 Nicola has worked for a Recruitment Firms 'InterSearch Japan Inc.', as a Human Resources Specialists placing higher-skilled professionals in a wide variety of industries. In 2014 Nicola joined Power Clouds Japan a subsidiary of Power Clouds Inc as a Country Manager and Resource Manager. No task can be completed without appropriate resources and Nicola is responsible for ensuring that the organization has the right people with the right skills available at the right time to accomplish the work that needs to be done. Nicola holds an Electrical Science Diploma from Technical Institute ITIS, Italy. Roberto is a veteran of the Solar power industry with over 15 years experience operating at various levels across many international solar projects. Completed design & construction of the first solar plant in 2002. Commissioned, supported and serviced over 500MW of solar plants in Italy, Europe, and Asia, across hundreds of individual plants between 2004 and 2014. These include - the world's pioneering (and largest at the time -3.5MW) Persano Solar Plant, Italy; 26MW in Fuente Alamo, Spain; 70 MW in Ravenna, Italy, and 120MW in Thailand. Founded Power Clouds in 2013 to move into plant ownership. A graduate in Electronic Engineering with specialization in power electronics and automation from University of Salerno in Italy.
SOC: What problem did you intend to solve by creating your technology/product? What results did you plan to achieve?
Dr. Valenzi: As stated above our product is painless and cut the cost of disposable products. Lowering the expenses of this procedure will mean that people, who could not until now afford the test strip method, could become able to monitor their blood glucose, and potentially live a healthier life. Healthier life for everybody, not just for people with diabetes. Monitoring blood glucose is necessary to control the body weight, to optimize working out activities, and finally to help people to age in a healthier body and with a healthier mind.
SOC: Has someone already tried to solve this problem? What is the USP of your technology/product and fundamental differences from other technologies/products that tried to solve this problem before you?
Dr. Valenzi: Many people have tried to solve the same problems with similar technology. We have studied most of the previous attempts and then, after reviewing and improving the hardware, we have also developed our personal approach to the problem and created an innovative method to collect and evaluate data.
SOC: In order to understand the peculiarities of this particular spinoff, our investors always ask what is the investment structure of the company? Do you still own the controlling stake in your spinoff?
Dr. Valenzi: Dynamic Brain Lab consists of 4 co-founders, 2 former researchers, and 2 businessmen, and together we control our company.
SOC: What is the actual addressable market currently for your invention and who are the current competitors? Could you please share with us the results of the market studies, if there are any? What are the barriers to entry?
Dr. Valenzi: People with diabetes, but also athletes, pregnant women, hospitalized people and everybody either sick or healthy that can be interested in living a healthier life. There is no current competitor on the market for similar products. According to World Health Organization, the number of people with diabetes has risen from 108 million in 1980 to 422 million in 2014. The global prevalence of diabetes among adults over 18 years of age has risen from 4.7% in 1980 to 8.5% in 2014. Diabetes prevalence has been rising more rapidly in middle- and low-income countries. Diabetes is a major cause of blindness, kidney failure, heart attacks, stroke and lower limb amputation. In 2015, an estimated 1.6 million deaths were directly caused by diabetes. Another 2.2 million deaths were attributable to high blood glucose in 2012.
SOC: We always need to paint a clear picture to the potential investors of a large and growing market opportunity of this spinoff. Why in your opinion should your company have a high growth potential? Could you tell us all current industries and fields of your technology/product application and where do you think it could be successfully applied in the future?
Dr. Valenzi: I have already partially answered to this question, I can add that in the future we are planning to create a wearable device for continuous monitoring.
SOC: The potential investors will be curious whether you already have your first clients and signed contracts? What was the feedback from these clients, partners, and customers?
Dr. Valenzi: So far we have sold a non-exclusive license to use our technology in a limited fashion. In other words, the US company who bought our license will be able to evaluate just generic glucose categories (e.g. low, medium, and high glucose levels).
SOC: Dear Mr. Valenzi, we both know that for you and the investor it is crucial to reach positive cash flow as soon as possible. Certainly, the market scaling cannot be achieved without proper distributor networks and clients. Please tell us about your criteria of selecting partners and which markets are open for spinoff activity.
Dr. Valenzi: GlucoScanner is absolutely an innovative and unique product that has no competitor on the market. For this reason and thanks to the pre-marketing work, we have done to date we are receiving various proposals for distribution. We have requests from all over the world and we will make a final decision as soon as the GlucoScanner project is complete and ready for the market.
SOC: It is very important to understand your particular vision and unique features of your company. Why do you think major market players might be interested in investing in your technology/product?
Dr. Valenzi: GlucoScanner will be the first non-invasive, reliable device with no competitor on the market. The worldwide annual sales of glucose meters are around 10 billion dollars per year. There are more than fifty products on the market. Today all the glucose meters are invasive devices. (GlucoScanner is NOT). For this reason, we are sure that our products can be over the years a very interesting alternative to replace all the others products on the market.
SOC: Now we would like to refer to the next very crucial, even essential aspect, for spinoff companies ‘as to their strategy of R&D, production, distribution, and marketing processes. Do you have your own unique strategy? Which of these processes do you consider to be your strength?
Dr. Valenzi: If you believe as we think that we have a unique product on the market that can help more than 400 million people around the world to monitor their health problem, then is also easy to understand how the marketing strategies and finding partners for distribution are easy to pursue.
Thanks to our innovative technologies and experience with modern data analysis methods, preliminary GlucoScanner evaluation of blood glucose levels already show accuracy better than any other non-invasive optical devices. Our prototypes were so far tested in the range of ~80mg up to 530mg/dL.
Dynamic Brain Labs has already performed two experiments with the general public, inviting over 100 subjects in the Tokyo area. The first experiment took place in June 2017 with our 3rd generation prototype. The 3rd generation is the last prototype assembled manually in our labs, each with custom 3d printed finger cuff.
SOC: As a rule, the majority of spinoffs outgrow into exits. How do you determine the market for your product/technology and estimate its volume and dynamics? What is your potential share of the market? What is the market cap that your company can reach at its peak development and why? How long might this process take?
Dr. Valenzi: The market for the Glucose Meters are huge (ten annual billions USD) and ours is a product that has no competitors and could easily replace a good part of the device on the market.
We have estimated that in the first three years we could occupy a slice of 5% of the market and then over the years have a coverage that could reach 50% of the market.
As well, I want to note that according to the Diabetes Daily - Consumer Report 2015 the Worldwide annual sales of glucose meters and test-strip supplies tally up to well over 10 billion dollars each year. Following few of the Glucometer on the market today.
FreeStyle Lite: $20 for the meter with an annual cost of $2410 at 4 strips per day; FreeStyle Freedom Lite: $20 for the meter with an annual cost of $2410 at 4 strips per day; Bayer Contour Next: $20 for the meter with an annual cost of $1460 at 4 strips per day; Well: $22 for the meter with an annual cost of $1225 at 4 strips; Bayer Breeze 2: $25 for the meter with an annual cost of $1900 at 4 strips per day; Up & Up: $15 for the meter with an annual cost of $525 at 4 strips per day; Accu-Chek Aviva Plus: $30 for the meter with an annual cost of $2115 at 4 strips per day; ReliOn Micro: $15 for the meter with an annual cost of $525 at 4 strips per day; Accu-Chek Compact Plus: $75 for the meter with an annual cost of $2030 at 4 strips per day; ReliOn Ultima: $15 for the meter with an annual cost of $525 at 4 strips per day.
SOC: For spinoff companies, their intellectual property is a key to success. The investors pay particular attention to this. What key intellectual property does your company have (patents, patents pending, copyrights, trade secrets, trademarks, domain names)?
Dr. Valenzi: We have few patents pending, Trademarks approved in few countries, Domain name/social network under our control.
SOC: For both of us, as well as for thousands of successful spinoffs, it's not a secret that a new technological breakthrough may become obsolete very fast, especially as the patent validity period becomes shorter. What is the perspective protection plan of your technological advancement and leadership in a medium-term and long-term?
Dr. Valenzi: We are going to collect data in the future, so we only foresee improvements for GlucoScanner quality and precision; therefore until a definitive cure for diabetes is found, we do not have to worry about that our technology will become anyhow obsolete.
Further, GlucoScanner improves over the years and considering that relies on numerous scientific and technological innovations it will be nearly impossible for other companies to develop anything similar or even better anytime soon.
Until January 2018, GlucoScanner has been tested through experiments with the general public in the Tokyo area. Now, the second phase, the miniaturization process started in February 2018, has been completed. Next step will be the launch on the market, following further study in a Japanese hospital, aimed at to evaluating the performance of the new GlucoScanner and obtaining medical certifications.
SOC: The investors will want to get a clear picture of how many rounds of investments that you have completed? Are you seeking investments at this moment? What is the volume and time limits? What milestones will the financing get you to? What did you plan to use the investments funds for?
Dr. Valenzi: Indiegogo was the first step in Glucoscanner funding campaign. Indiegogo community did not provide the funds we needed. Nevertheless, we have been able to reach the right people, and so we have found the funds to manufacture the product and possibly even make that process faster and more efficient. Currently, we are not looking for investors to finance the prototype or the miniaturization of the GlucoScanner. We have sufficient funds for these steps.
GlucoScanner is in the phase of preparation for the final products and eventually we will be very interested to find shareholder partners that have a strong capacity to help us on the worldwide sales.
SOC: Could you please describe your ideal investor? What aspects are important for you? For instance, is it experience, country, the amount of private capital or maybe some personal qualities? Will existing investors participate in this round?
Dr. Valenzi: The partner could be a global pharmaceutical company e/o healthcare company that can help us to develop, market and/or distribute our GlucoScanner in the context of healthcare.
SOC: Our last question is: could you specify the most convenient way you would like to receive inquiries from potential investors? Should it be by e-mail or a personal phone call?
Dr. Valenzi: I would prefer to get an email first.
We would like to express gratitude for the time you have dedicated to this interview. SPINOFF.COM will be pleased to support Dynamic Brain Lab and to share the interview on your Glucoscanner technology with all potential partners and investors!
