Medical Software Business Plan

Medical Software Business Plan


AgaMatrix is an early stage venture located in Boston that offers its proprietary Digital Signal Processing (DSP), technology which significantly improves functionality and performance of biosensors. AgaMatrix&#8217’s core DSP algorithm solves a number of immediate issues in today’s medical devices market. It significantly increases the performance of biosensors by removing the need to purchase expensive hardware or add chemicals. AgaMatrix is initially going to sell medical device makers home glucose monitors or hospital point-of–care blood analyzers. AgaMatrix is expecting to generate positive cash flow by the third year. Future healthcare segments will include the large immunoassay or implantable biosensor sector; and other vertical industries which heavily rely upon biosensors like the military chemical agent detector, environmental air/water Quality monitoring, and industrial processing.

Problem – Glucose monitors are burdensome and painful to use

Many diabetic patients fail to use home blood glucose devices as prescribed because the regimen is too burdensome or too physically painful. A patient must poke his or her finger four to seven times per day to draw blood onto a strip that will be used to insert the glucose biosensor. The average compliance rate to testing is less then 1.5 times per daily, which can accelerate complications due to diabetes such as blindness. Diabetes is the leading cause behind blindness in those aged 20-74. Having better glucose monitoring compliance is one of the keys to prevention. Device manufacturers have identified that non-compliance stems from the physical pain experienced when using their devices. Therefore, they are looking for ways to decrease the size of the samples required by their devices. AgaMatrix technology allows for less invasive drawing to meet the demand for painless alternatives.

Issues in the market for hospital blood analyzers are more likely to be related to the low accuracy and completeness of the devices. This leads to lower adoption. AgaMatrix’s value proposition to this market is very clear: devices that are more accurate and sensitive will stand a higher chance of being more readily adopted.

A Software Solution for a Hardware Problem

The biosensor devices industry has historically attempted to overcome the problems of accuracy, sensitivity, or robustness by improving the physical (hardware) aspects. By contrast, AgaMatrix is pioneering a software approach based on digital signal processing (DSP) algorithms that has a number of distinct practical advantages, including lower cost, easier/faster upgrade capability, and complementarity with respect to a wide variety of chemistry/hardware-based biosensor technologies.

AgaMatrix’#8217’s solution, made up of a number of software modules allows for new functionality. It dramatically improves biosensor device performance. The ability to increase signal-to–noise ratios can be leveraged to improve performance and reduce blood sample required. AgaMatrix, a professional healthcare platform, can increase the accuracy as well as sensitivity of hospital point–of-care analyzers. Accuracy can be a significant barrier to widespread adoption.

Software DSP solutions were crucial to the success and growth of other industries, where physical limitations might have hindered their growth. CD players made in the 1980s relied on error correction algorithms and oversampling to compensate for low quality filters. AgaMatrix’s algorithms offer analogous solutions within the biosensor space.

Model of Business – Software Licensing & Royalty from Device Makers

AgaMatrix initially will be a technology licensing firm, generating royalty revenue streams based upon device makers’ consumables sales (i.e. disposable test strips or cartridges used in devices). The technology will be sold to manufacturers of home glucose devices, hospital point-of care blood analyzers, and developers of minimally invasive and implantable glucose biosensors.

Therasense — An Illustration Of How Disruptive TheGlucose Marketplace Is

Only a few years back, the blood glucose market was dominated primarily by four players (numbers denote annual revenues from test strips).

27B), J & J ($1.09B), Bayer ($650M), and Abbot ($450M). These companies are well-established since the 1980’s. Their product roll-out has been less than two years. They have made $200 million annually, gone public and now have over $800,000,000 in market capitalization. This market is open to technological innovation, particularly if they can reduce pain.

Competitive advantages We have no direct competition for our innovative and proprietary approach. It has been developed over seven years in collaboration with a world-class scientific group. AgaMatrix technology will be complementary to potential indirect competition from the in-house laboratories of major medical device makers. AgaMatrix has the following competitive advantages:

  • Superior software paradigm that complements chemical (hardware), advances in biosensors.
  • The seven-year period of biosensor research was a time of great expertise.
  • Monopolization in the scientific team that was responsible for the original paradigm invention.
  • A minimum of two years development lead time is better than potential competition
  • Two core utility patents were filed (filed), as well as three defense utility patents. This is an intellectual property strategy.

Customer Traction

Two manufacturers of hospital point-of care devices and a blood glucose monitor manufacturer have been approached as potential customers. There are over 20 other major potential target companies we have not yet approached. Here is a summary listing of all the companies we have reached.

  • We have strong interest from two companies that monitor blood glucose (discussions were held with Presidents); although details are confidential, we believe we can close a deal in June 2002.
  • Strong interest from a leading blood glucose monitor maker (J & J – discussions with Director-level staff) and the leading hospital point-of-care device maker (i-STAT – discussions with Vice President and Director-level staff).

The Team

A current team composed of:

  • The three top scientists in the field of digital signal processing have over 40 years combined experience in biosensor research and DSP.
  • Entrepreneurs who started, built, and ran a enterprise software company.
  • An expanding team of veteran advisors composed of medical doctors with business experience in the healthcare industry.
  • The company will also have a third technical team that is committed to joining it after the seed financing. This team includes engineers from MIT and Tufts who have over 25 years’ combined technical management experience.


Since its foundation, AgaMatrix has been entirely self-funded through the principals. Recently, the company closed a $500K seed round from several healthcare angel investors and IncTANK Venture Capital Fund, an early stage venture capital fund. A Series A round, approximately $1 million, is expected to be completed in the next four to five month.

These rounds of funding have two objectives: to complete version 1.0 of products and to acquire at least one paying client over a period 13 months. Given the current state of customer traction and product development, we believe these milestones are reasonable. To be cash flow positive, the company plans to raise approximately $4 million in an institutional or private round by year end. Current valuation drivers include:

  • A scientific team of world-class scientists, including Dr. SridharIyengar (CTO), Justin Gooding and Dr. Ian Harding. The engineering team is supported by an aggressive business team, with management and start-up experience.
  • Technology that is compatible with a variety of vertical markets.
  • External validation through existing customer relationships and advancement in the final rounds of several national business planning competitions.

1.1 Mission

AgaMatrix develops solutions to power next-generation biological and chemical sensor systems. AgaMatrix offers a significant value to the market by allowing you to dramatically increase the accuracy and sensitivity of a number of sensors to improve your medical diagnostic device’s effectiveness.

AgaMatrix’s technology makes it possible to develop devices that are almost painless for patients. This will also meet the growing demand for medical diagnostics that is more accurate. It will provide software solutions to a critical hardware issue that affects millions of patients with diabetes and hospital patients around the world.

1.2 Objectives

  • Create technology solutions that increase the adoption rate and compliance rates for diagnostic medical devices.
  • Achieve positive cash flow by year three.
  • In four years, you can reach $50,000,000 in annual revenues
  • Expand into other sectors that heavily rely upon biosensors, such as military and industrial processing.

Leave a Reply