Exclusive interview for SPINOFF.COM with Liron Hadar, CEO of RapiDx on painless blood testing technology for easy and accurate self-testing at home and away at click of a button
Human life became more dynamic now than ever. They are busy, things move quickly, and time becomes an ever-more essential resource. We are all aware of the importance of early detection of symptoms and diseases. With the RapiDx innovative self-testing device, it is possible to test people's health wherever and whenever they needed it. Compact RapTest device, doesn't require any special medical skills as it is simple, safe and as accurate as laboratory testing. Whether on the go, at home or in the office, the series of automated RapTest devices put the power of professional testing into person's own hands and at his convenience. The company's main product is HIV-based home testing, and the second product, that RapiDx is planning to launch next year, will help to diagnose Myocardial Infarction by identifying a protein released into the blood. The company is also planning to conduct tests for the level of vitamin D, infectious diseases detection, such as malaria and much more.
SOC: Dear Mrs. Hadar, we are so grateful for your generosity this day in spending time speaking with us and sharing your insights about RapiDx blood self-testing innovative technology.
Mrs. Hadar: With pleasure.
SOC: Our investors and we would like to learn more about a vast experience of your academic endeavours and your professional and scientific background.
Mrs. Hadar: In my background, I have a PhD in Chemical Engineering and postdoc in Biomedical Engineering. All my studying was conducted at the Technion - Israel Institute of Technology. Since graduating all these academic stages I am involved in the medical devices industry. It's now about 12 years in various positions, various companies, and not only medical devices but also drug-device combination products, delivery systems.
SOC: Considering your tremendous experience, we would like to know whether you had or have other then RapiDx projects? Could you please share the story of their creation and success.
Mrs. Hadar: RapiDx Ltd. has been founded eight years ago with the vision to allow accessibility to blood self-testing, recognizing the growing demand in the market. RapiDx Ltd. was the first company that identified this trend in the market. The founder is Mrs. Nili Tamir, an Israeli entrepreneur, together with the initial investors the company was founded. Specifically discussing my background, I'm involved in other companies as well and medical devices not only RapiDx. At the moment we are looking for additional investment to bring it into full-blown activity.
SOC: Please tell at which stage of commercialization your blood self-testing technology currently is? Was your project funded by any state financing or grants? Has it already received any honours or awards?
Mrs. Hadar: We are at this stage of having an Alfa prototype and we successfully completed a clinical trial in which we demonstrated that our passive blood extraction and pain reduction using our solution is working very well. We have a part of the system which we call RapidRing which has been FDA cleared for marketing and as I mentioned we have the Alpha prototype which we would like to take further to the next step which is miniaturization and integration with specific diagnostic test strips.
SOC: It is so interesting to know more about the process of RapiDx blood self-testing technology creation.
Mrs. Hadar: First, our vision does not include developing a new generation of lateral flow strips, we are integrating existing tests. These strips are well known in the market as pregnancy tests, Streprocoke A tests and others, to measure other body fluids. We identify that we can integrate existing lateral flow strips for blood measurement and with our unique platform we can allow this test to be done at home since most of them are currently done only at the point of care (POC) or hospitals. Once identifying the needs and we faced the question how to bring it to home use and how to deal with the blood collection which is a tremendous dealbreaker for people of make self-testing of blood at home.
You can take, for example, type 1 diabetic people which are supposed to be used to pricking themselves and squeezing their fingers. If you ask most of them who has to do self-testing several times a day, they are frustrated with this process which involves a needle, lancing device, blood collection and transfers it to the test strip. It's a very messy and painful process with a huge psychological barrier even for those people that are used to this process.
What about other tests over for example cardiac patients that they can do this at home. They'll have the device and how they will deal with their blood collection. By identifying the need and that it is possible to make test without people seeing the needle, without collecting their own blood, without transferring the blood into the test strip, they just put the finger in the device and they have a result. So once we identify the need and the ideal a solution we developed the process. Once we identify the need and the ideal solution, we developed our platform.
We've got funding from Israel OCS (Office of Chief Scientist) at the beginning of the process. In September 2016 we were selected as one of the top companies during InnoVmed Startup Competition in Tel-Aviv conducted within the INNONATION-2nd China-Israel Investment Summit. The same year RapiDx has also received BroadHaven Diagnostics Grant. We are published in local newspapers and we have some publications mentioned on the website.
SOC: As we know 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 in it or not. Could you please share some information about the team members who supported you and the project? What are the key additions to the team needed in the short term?
Mrs. Hadar: The team member that initiated the all process was the Founder Mrs. Nili Tamir, a well-recognized entrepreneur that is greatly experienced in diagnostic testing and not only for blood testing but also for urinary and salivary tests. She brought the vision and the direction to the RapiDx being a key player in the company until now.
The other co-investor Mr. David Akunis enters the Board of Directors at RapiDx and he is also the Managing Partner of VC MedVest UK. He is significantly involved in the process and is passionate about the self-testing technology. Mr. Akunis has extensive experience in strategic planning, investment banking and over twelve years of managerial experience in high-growth ventures. He holds a BA in Psychology and an LL.M. in Corporate Law.
Mr. Chen Katz is another venture capital investor in the RapiDx from its early days which is also the CEO of TechnoPlus Ventures Ltd., a diversified investment company publicly traded on the Tel-Aviv Stock Exchange. Mr. Katz has a great deal of experience in the venture capital arena and legal aspects of investing in high-tech companies of all maturity levels.
Once we complete the next investment round, we will hire the additional team members of course. We are interested in having in-house people who will move the company forward.
SOC: It is not a secret that the development of a new technology and its subsequent commercialization presupposes some problem and addresses unmet needs. Respectively, what problem did you intend to solve by creating your RapiDx blood self-testing technology? What results did you plan to achieve?
Mrs. Hadar: The main challenge now is to bring an existing blood test to home use, that is currently allowed for use only the point of care or at hospitals. This is one problem which we want to solve. We are aiming to show that our solution is safe, user-friendly and allows the better accuracy of same tests (as reducing human errors). For example, HIV tests for using at home, which were a taboo about 10 years ago. The regulatory authorities understand now the benefits of allowing such tests for home use. Now they understand that it's better that people will know their condition, will have an option to test themselves and know their condition even without reporting it to the healthcare authorities in the country. This is one of the challenges and we see this trend is changing, that is very important for us and we are welcoming of this change. Imagine you go to the pharmacy and select a blood test which you would like to have at home, accessible, without going to the point of care, for example, without asking the doctor to give you a prescription or go to the lab at any stage. That will be possible only if the end price will be low. This is another challenge – to have this sophisticated and easy to use the system at a low-end price. The challenge is to create and to design the system with low BOM (bill of materials) and easy assembly process. Our aim is to make the RapiDx system robust, reliable and cheap, with no electronics and minimum components.
SOC: As far as we understand from the video on RapTest and its USP, the problem which you targeted to solve was actual before. Probably someone has already tried to solve it. Is it right? Understanding the USP from the investor's side could make the technology/product #1 for them. What are the USP of your self-testing technology and fundamental difference from other technologies and products that tried to solve this problem before you?
Mrs. Hadar: The unique selling point is the integration of all the system components into one device, which is very easy to operate- just pressing one button. If you look at the conventional rapid diagnostic tests (RDT) existing today, they have many components such as lancing device and lancet, a strip, some of them need additional reagents to be mixed with the blood in the proper ratio. It's rather complex for a user- the user has to follow a long list of activation steps in order to complete the testing. Such activation steps include prick his finger, squeeze it in order to extract the needed amount of blood, etc. at the end of the test you have to discard the components that came in contact with the blood. In comparison, our RapiDx solution has an integrated system which is intuitive and includes all components together. The user has a minimal number of steps from activation until getting the test result. Once you don't see the lancing device and you don't mess with lacing itself it becomes a less painful process. our clinical trials proved that we can reduce the pain by 30%, which is an amazing result. Moreover, with our system of passive blood extraction, we could extract 10 times more blood compared to the common squeezing process. Taking into consideration also that in our system there is not exposed strip, the blood is maintained in the device and the needle is hidden in the device-no risk of contamination!
SOC: In order to understand the peculiarities of this particular spinoff our investors always ask what is the investment structure of the company? Who owns the controlling stake in RapiDx?
Mrs. Hadar: RapiDx is controlled by private investors and VCs as mention earlier such as MedVest UK and TechnoPlus Ventures Ltd. together with the inventor. They hold the majority of the company shares.
SOC: We wonder what is the actual addressable market currently for your invention and what are the current competitors there? Could you please share with us the results of the market studies, if there are any? What might be the barriers to entry?
Mrs. Hadar: During phase one of the 'Go-to-Market Plan' we are planning to go to the point of care and to approve two initial HIV and Cardiac tests. The next step would be to approve these tests for home use. Our technology has a great interest in European and the US markets, but not only. Countries like China also are very interested in our suggested solutions for home blood testing. For countries like China, this might be a solution for cases where you don't have specific healthcare facilities every, mainly at distant places. Imagine healthcare provider in developing countries going to the specific village with a box of kits, testing people for HIV, diagnosing them without exposing and personal risk, measuring and testing with no need in any special equipment or even electricity.
SOC: I think this is also a perfect solution for Africa. I think if you put the low price so it's a huge benefit.
Mrs. Hadar: The barrier in developing countries would be the end price of the miniaturized device, but we believe we are there. Keep in mind that our solution has the different need when comparing cardiac patients and people who would like to have HIV test. We would like those people with a risk of cardiac failure to know that they have the option of self-monitoring at home before calling the emergency service. The person who has Cardiac RapTest will be able to use the device before calling the ambulance, identifying if what he feels is really a heart attack or just a pain in a chest from going to the gym. Diagnosing a person which is at the risk of having a heart attack at home or even at the ambulance before going into the emergency room is a huge benefit.
SOC: We always need to paint a clear picture to the potential investors of the market opportunity of the spinoff that is meaningfully large and growing. Why in your opinion might RapiDx have a high growth potential? Could you tell us all current industries and fields of your product application and where do you think it could be successfully applied in the future?
Mrs. Hadar: We've identified several meaningful segments of the market that we highlighted for our RapiDx test.
For example, there are many infectious diseases such as HIV, Malaria, sexually transmitted diseases, Zika Virus etc. This is one huge segment. Speaking of specific markets inside this section of infectious diseases we can understand the potential. HIV market sizes about $2 billion and is growing about 10 percent annually. Another segment that we identified is the cardiac market. This is a huge market as well for about $5 billion and is growing 12 percent per year. The potential is huge. We also have such potential markets as drug abuse testing, for example, measuring cannabinoids, cocaine or other opiates in the blood. We have markets related to cancer, for example, measuring PSA. The other part of the chronic diseases market section like clotting factors and their treatments. I think one more very interesting segment is the lifestyle segment with measuring markers like vitamin D, troponin for athletes, food allergies and many more.
SOC: It is curious whether you already have the first clients and signed contracts? What was the feedback from your partner's markers and customers?
Mrs. Hadar: We haven’t yet initiated selling, though we are considering several collaborations with companies that are close to market with new rapid diagnostic testing. Those partners do not have the solution for the blood extraction.
SOC: Dear Mrs Hadar, 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 distributors network and clients. Please tell us about your criteria for partners selection and which markets are open for spinoff activity.
Mrs. Hadar: We would like to collaborate with strategic partners both for production and distribution. We look for strategic partners that have distribution channels, that are quite familiar with the distribution and the process of bringing devices to the market. The strategic partners for production are always linked to the distribution channels and can that can speed up the time of penetrating the market.
SOC: As a rule, the majority of spinoffs outgrow into exits. How do you estimate the market volume and dynamics? What is your potential share of the market? How do you think what market cap your company might reach and when?
Mrs. Hadar: There are some specific markets as the first steps which are the HIV and Cardiac biomarkers markets. These markets are several billion US dollars each and are rapidly growing. I think even if we go with a very moderate penetration percentage into the markets even starting with 0.5 percent penetration per year the market share is huge and the potential for exit there is huge.
The process once we complete the investment round which we expect to finalize in four to six months will take us about a year and a half to bring the first device to market. 18 months after completing this round and immediately afterwards having the second generation products in place. We have a pipeline not only for specific biomarkers but also for the device itself. We expect it will allow us to have a growing market share.
SOC: Now we would like to refer to the next very crucial and we would even say essential aspect for spinoff companies’ as the strategy of R&D, production, distribution and marketing processes. Do you have your own unique strategy? Which of these processes do you consider your spinoff is strong at?
Mrs. Hadar: We think that our R&D strategy is unique. We do not go into the development of the strip, the sensing element. We focus only on the integration of existing tests. This strategy allows us to keep going with our vision of short time to market and the short development cycle. We will have to demonstrate and approve laboratory in terms of regulation each indication separately, but not going into development the sensing element from the beginning. Dealing with this integration we can have a very short development time, short clinical trials when we need them and to show better performance even with the existing devices. We can improve accuracy because we reduce human errors.
SOC: It is very important to understand your particular vision about unique features of your RapiDx company. Why do you consider the major market players might be interested in investing in a promotion of your RapTest and RapidRing products on the addressable market?
Mrs. Hadar: We identified the markets on time and started acting on time. We all know that there is a growing demand for personal care solutions around the world. Wearable devices trend is growing as well as the need for personal care solutions. People want to have options to do tests at home and to monitor themselves. As I mentioned, there are some usability barriers like the finger picking, blood extraction and transfer of the accurate volume of the analysis. These are the significant barriers for self-testing, even if you need only one or two drops of blood. The pain and psychological impact are considered the most significant deterrent factors, which prevent today the widespread of blood self-testing. In our vision, these are the crucial things.
I think this makes us unique with identifying this in time and having IP which we believe is a strong asset to the company and we invest in it all the time.
SOC: We understand that for all spinoff companies their intellectual property is a key to success. What key intellectual property does your company have (patents, patents pending, copyrights, trade secrets, trademarks, domain names)?
Mrs. Hadar: Currently, we have two patent families granted in separate territories. Others are in a process of examination and approval in additional authorities. We believe in having IP asset of the company and we invest in.
The companies contact us for collaboration because they have the sensing technology and they identified us as having the solution for the integration with the blood collection. It shows that our IP is strong. We also believe that patents are not on only IP asset and we will undergo keep on collecting our trade secrets which we believe is an important asset for the company as well.
SOC: Respectively, it is interesting to know the perspectives and protection plan for your technological advancement and its leadership.
Mrs. Hadar: We think not only patents are the crucial assets of the company, but also having trade secrets and growing IP portfolio as we proceed with the development and the commercialization stages.
SOC: The investors will want to get a clear picture of how many rounds of investments have you completed? Are you seeking for the investments at the moment? What is the volume and time limits? What milestones will the financing get you to? What did you plan to use the invested funds for?
Mrs. Hadar: We have already completed round С investment. We are now heading for the next investment which we expect to finalize in 4-6 months. We are looking for 3 million USD. The company roadmap is to finalize the product development with the miniaturization and the integration with specific lateral flow strips and then going to the production phase. We are also going to gain CE Mark and FDA clearance for the integrated devices, and that will be followed by initiating the marketing and sales with strategic partners.
SOC: Could you please describe your ideal investor? What aspects are important for you, for instance, is it experience, country, the amount of own private capital or maybe some personal qualities? Will existing investors participate in the round?
Mrs. Hadar: I think the investors should be involved and patient and they should believe in our vision as we believe in it. In the terms of medical devices contrary the applications the development process is not so fast. Going into investment in the healthcare industry requires some patience because of all the regulation that has to be part of the process. It's important for us to have reliable and robust devices in the market and that requires patience and involvement in understanding and affecting the process of the company's growth.
SOC: Could you specify the most convenient way you would like to receive inquiries from potential investors, partners and distributors?
Mrs. Hadar: All channels of communication are possible. Personally, I would prefer having an intro email as a start.
Dear Mrs. Hadar, we would like to express gratitude for the time you have dedicated to this interview. We will observe the development of RapiDx with great pleasure and interest. We are pleased to show all potential partners and investors the brilliant spinoff and to add it to the portfolio of the best science spinoffs from all the world gathered in one place at SPINOFF.COM