iGEM 2021: Mingdao

Mingdao

ENTREPRENEURSHIP

Important Disclaimer: This business plan is written under the assumption that a complete business with a sufficient budget established, which does not represent the real situation of the team.

I.Introduction

deSALMONEtor Studio is a biotechnology company based in Taichung, Taiwan. We aim to target concerns regarding food safety as Taiwan has seen many reported cases of breaches in public food safety within the past decade. To combat a common threat to food safety, Salmonella, we designed a phage-based detector, the deSALMONEtor, to determine the safety of eggs meant for human consumption.

Salmonella is a type of intracellular pathogen that causes infections through animal feces or human feces. Salmonella causes 1.35 million infections, 26,500 hospitalizations, and 420 deaths in the United States every year. According to an estimation of domestic experts, there are more than 300,000 Salmonella infection cases every year in Taiwan. Unsanitary food is usually the main cause of the infection. Symptoms such as diarrhea, fever, and stomach cramps may last from four to seven days. It may also worsen and lead to bacteremia for those with weaker immune responses.

For the sake of improving food safety, we developed a testing kit that can detect the presence of Salmonella. But keeping in mind that the bacteriophage in the product is genetically modified and has the potential to cause ecological problems, our intended marketing audiences are authorized laboratories specializing in research and development.

There are already several methods of testing and detecting Salmonella available in the market. The traditional method is to place specimens into test tubes and wait for approximately 5-7 days. There are some other ways such as Chromogenic Orientation Agar, Real-Time PCR detections, and Immunochromatography testing methods. Real-time PCR is the more accurate method, but higher-level equipment is required as well as three days' time to complete the entire process. On the other hand, Chromogenic Orientation Agar needs 3-4 days to show a complete result. Immunochromatography is sensitive, easy to operate, but still needs a 22-30 hours incubation period.

Although various competitors exist, we believe that deSALMONEtor will be able to provide its own contributions to the current market. To familiarize the public with our product, we have created several accounts to introduce the deSALMONEtor as well as the team behind the product via social media.

II.Product Description

deSALMONEtor is a test kit that uses phage to detect bacteria. Bacteriophage is a virus that is specific to bacteria. After bacteriophages infect bacteria, they replicate themselves and express proteins through the original resources in the bacteria. This test kit was designed based on the natural characteristics of bacteriophages. In order to reduce the cost of the experiment, we use phage samples isolated from the natural environment and adopt a transposon gene modification system. Due to the random insertion of transposons into genes, we can omit the cost of gene sequencing. Our deSALMONEtor transfers the DNA polymerase gene in Bacillus virus phi29 into the Salmonella phage gene through a transposon. The DNA polymerase in Bacillus virus phi29 or phi 29 DNA polymerase gene is an enzyme that can replicate DNA indefinitely. . The process when phi 29 DNA polymerase replicates the plasmid in bacteria is called RCA Rolling Circle Amplification. After performing RCA, a large amount of DNA will be produced. After dyeing the DNA with a fluorescent dye, we read the corresponding fluorescent value through a spectrophotometer to achieve the detection effect.

The deSALMONEtor is designed to detect Salmonella which attaches to eggs and egg-containing foods. Its kit includes (1) a vial of genetically engineered Salmonella phages with Ф29 DNA polymerase gene, (2)a vial of the buffer containing a circular DNA template and a corresponding primer, (3)a 96-well black microplate with a lyophilized fluorescent DNA-binding dye, (4)a wash buffer, and (5) a customized syringe attachment with a filter-like mini Ni-NTA column. The Ni-column helps bind and collect phi29 during a crucial step of Salmonella detection. Due to the nature of this column being highly customized, we found it difficult to attach to syringes using a normal Luer connector and syringe adaptors. To overcome this challenge, we decided to design our own Luer-connector and its 3D model using industrial-grade software such as AutoCAD. Then, we order from professional factories that produce customized plastic parts to produce the Luer-connector for us.

As for how to operate, it is very user-friendly by following the instructions. First of all, draw the samples which should be liquid and collected in a container with a syringe. Secondly, draw the engineered phage liquid into the syringe to mix with the samples. After waiting for 15 minutes at room temperature, the Luer adapter with Ni-NTA column is locked onto the syringe. Let the mixtures pass through the column to capture any His-tagged proteins. Next, the reagent consisting of circular DNA and a primer is drawn onto the column in the Luer adapter using a P200 tip. Perform RCA in the Ni column that captures His-Phi29 DNA polymerase if any. Incubate for 1 hour at room temperature. (RCA is a simple and efficient isothermal amplification method that utilizes Phi29 DNA polymerase to generate long single-stranded DNAs with a primer targeting on a circular DNA template.) Then, push the plunger of the syringe to elute the single-stranded DNA (ssDNA) as RCA products into a well to a 96-well black microplate containing a lyophilized fluorescent DNA-binding dye such as EvaGreen® Dye. Lastly, slightly shake the plate to mix the DNA and dye. Read data by measuring the signal at Ex/Em=500/530 nm. If Salmonella exists, the signal will be observed or vice versa.

III.Market Analysis

Current Market Trends/ Situational Analysis

Salmonella has caused severe food poisoning which can cause severe diarrhea, fever, and stomach cramps(American CDC). To make customers feel safe, the only way is to examine the ingredients before cooking. As our target market is the labs, we analyze other ways to test the bacteria. Most of the other products on the market now need at least two days to finish the testing. The process of examination is too long. Though, we found a way that only cost 2~3 hours. This can definitely save time and become our main attraction.

Another problem for testing Salmonella is that methods on the market now are too complicated and equipment-required. With our product, all the necessary tools are included in our kit: a syringe, a tip, a syringe attachment, and a filtration column. The only thing that you need to collect yourself is your testing specimen. However, other ways to test demand culture medium, incubators, and auxiliary agents, which would cost a considerable fortune.

Competitor Analysis

There are four ways to test now: Traditional Cultivation, Immunochromatography, Chromogenic Orientation Agar, and Real-Time PCR. Traditional Cultivation is the most common way used by observing the bacterial colony and the changes of colors on the specimen; Immunochromatography filters the culture mediums by the reaction of specific antigen and antibody; Chromogenic Orientation Agar is defined as a test that magnifies the target by adding a certain type of nutrient base and antibiotics. And the other type of detection is Real-Time PCR detections.

We performed a SWOT analysis of Traditional Cultivation, immunochromatography, chromogenic orientation agar, and Real-Time PCR detections, as well as our own.

Traditional Cultivation

Strength •suitable for both raw and cooked food •accurate	Weaknesses •takes 5-7 days for the entire operation •requires various, professional equipment and chemical agents
Opportunities •it is “the golden standard” •authorized by the TFDA •used by the majority	Threats •new methods might be faster and easier to use •it costs a lot of time and money

Real-Time PCR detections

Strength •accurate •suitable for both raw and cooked food	Weaknesses •takes 2-3 days for the entire operation •requires various, professional equipment and chemical agents •need the PCR machine
Opportunities •authorized by the TFDA •the standard way	Threats •new methods might faster and easier •it costs a lot of time and money

Immunochromatography

Strength •needless of equipment •high level of sensitivity	Weaknesses •takes 2 days for the entire operation •expensive •after tested positive, still needed further analysis
Opportunities •easy for the public to understand •easy to distinguish •certificated by AOAC	Threats •need to purchase proliferation fluid and amplify the bacteria, make the processes more complicated

Chromogenic Orientation Agar

Strength •Salmonella is shown in a specific color, easier to recognize •relatively affordable	Weaknesses •takes 3-4 days for the entire operation •after tested positive, still needed further analysis
Opportunities •easy to distinguish	Threats •need specific types of nutrient bases and antibiotics

Market segmentation

Due to the safety of the artificially modified genes in phage, our product is suggested to be applied in a laboratory. The deSALMONEtor is designed to be purchased by labs, including the labs of food manufacturers, universities, and the government.

According to the report(2019, CDC), our country has about 1184 laboratories of biosafety level 2 or higher, including 61 for governmental use, 288 for medical use, 482 for teaching and research use. In these labs, up to 335 have the pathogen of Salmonella spp., which means they may do some detecting experiments. In the overall interest and from the most feasible point of view, we decided to focus on selling our products to governmental labs for one main reason. As governmental labs, they may not have enormous money support like private enterprises, so the budgets of machine purchasing and repairing might be shortened. Thus, deSALMONEtor, a much cheaper detecting kit than others on the market, is potentially suitable for them. They are also a source of stable demand and possibly long-term collaboration. Other labs may not have a constant need for our products, testing the existence of Salmonella isn’t an everyday need. The government, on the other hand, constantly needs similar products to check the quality of eggs from different companies. For this reason, we considered governmental labs as our primary customers.

Advantages of our product--The deSALMONEtor

Strength •convenient •simple •efficient	Weaknesses •can’t recognize the serotype •after tested positive, still needed further analysis
Opportunities •can be authorized •new technique	Threats •traditional methods are more accurate in the meantime •phage with artificially modified genes can’t be exposed to the environment •not yet certificated

In short, our product, the deSALMONEtor, compared to other products, is convenient to operate, simple to use, gives results within two to three hours, and sells at relatively lower prices.

We are optimistic that our product can be widely used in laboratories in the future. For a short-term goal, we aim to develop more customers and to balance the expense of research and development. It’s important to build connections with our customers since developing stable cooperation with them is our mid-term goal. We hope to collaborate with our customers with multi-year contracts to meet their long-term Salmonella detection demands. For the long-term goal, we will try to reach the global market, but the law restrictions might be a challenge for us.

IV.Marketing Program

Distribution Strategy

Due to the cost of our product, we believe that mass production will result in higher profits than other methods. Moreover, laboratories inspecting salmonella will potentially use our product continuously rather than just a few times, so we’ll pursue long-term collaboration with our customers. We sell our product through direct marketing, so the process of transportation will be included. Our reagent will be packaged in test kits and stored at a temperature of 4 degrees Celsius while transporting.

Promotional Strategy

Since our target market is labs for inspection or academic purposes rather than the public, public marketing such as youtube commercials won’t be as effective in increasing the popularity of our products. Hence, our strategy for promoting our product is to first visit various labs or related government organizations to determine their demands and to improve the shortcomings of our product. After that, we’ll make a film regarding the concept and the benefits of our product, so that our target audience can learn even more about our product. Eventually, we’ll contact labs and negotiate contracts that are in both our and their best interest.

V.Operation Overview

A.Production Method & Resources--phage production

In the future, for the large-scale production of phage, we hope to purchase large-scale cultivation equipment or commission manufacturers to enter into large-scale cultivation. If we conduct large-scale production by ourselves, we hope to purchase small fermenters and other larger cultivation tools to increase the concentration and yield. For the Luer-Lock Adapter, we found a factory to manufacture PP (polypropylene) and designed the mold ourselves, and mass-produced it. For the Ni Column in the Luer-Lock Adapter, we will seek relevant factories to enter the factory to pour our proportion of Ni Column agarose after the Luer-Lock Adapter is manufactured.

Projected production--production process

stage one

Our productivity will be divided into four stages. The first stage is small-scale production. In the small-scale production stage, our goal is to obtain effective product certification. The products at this stage are for experiments that want to use our products. Laboratories, or laboratories willing to try this new detection method, and gain experience in using it to facilitate future product development.

stage two

In the second stage, we expect that we can obtain certification (ex. AOAC, FDA) and find manufacturers to cooperate in the production of some product materials. At this stage, we want to adopt a contract system to determine the production quantity according to the contract quantity. At the same time, expand the scope of the trial laboratory and strive for a certain amount of exposure.

stage three

At this stage, we will expand our production quantity and sell our products publicly and measure our production quantity according to the demand. At this stage, we expect that the output can reach 50 sets of kits per day, which will be adjusted according to demand. The scale of this stage can also allow us to outsource more parts manufacturers.

stage four

In the final stage, we hope to establish a large-scale company to help us sell our products to the world. At this stage, we expect to produce most of the parts by ourselves. We will have our own production line, including large-scale equipment for cultivating a large number of bacteriophages and the environment and equipment for making Ni Column. We will have the ability to complete the whole process from phage cultivation to packaging.

VI.Financial Overview

This section analyzes and predicts the possible cost and revenue in our future production. As explained in the operation overview, our future plan is divided into 4 phases. The analysis here will analyze for each phase, including their variable cost, fixed cost, predicted revenue, and predicted profit.

Phase 1 – estimated cost

At phase 1, we aimed at producing our product just enough to match the demand of laboratories willing to try this new detection method. Therefore, phase 1 will mainly be smaller-scale production. The estimated cost is shown at the table down below:

Variable Cost (for each produced product):
Production Material Cost (Each product pack contains enough content for 96 detections)	Cost per Each (NT dollars)	Quantity required per reaction	Sum
Φ29 Phages (Vial A)		25ml	50
Ni Column	10	96	960
Luer-Luck Adapter	4	96	384
RCA Reagent (Vial B)		15ml	1,152
Microplate (DNA Dye)	200	1	200
Wash Buffer (Vial C)	0.5	100	50
Total Cost: 2796
Total quantity expected to produce:1000
Human Resources Cost	Numbers of employees	Numbers of employees Individual Salaries (Annual)	Sum
Production Line Engineer	20	720,000	14,400,000
Development Engineer	15	960,000	14,400,000
Total Cost: 28,800,000
Fixed Cost:	Rent price per month	Overhead Charges (One year)
Land Rent	200,000	2,400,000
Factory Fee		10,000,000
Machinery and Equipment			Price Per each (NT dollars)
Laminar Flow Cabinet			300,000
Incubator			100,000
Baffled Shake Flask			2000
Total Cost: 12,802,000

Table 1: budget estimation of phase 1.

The total cost of phase 1 is about 44,398,000 NT dollars.

According to the estimated cost, the sales price of phase 1 will be about 44500 NT dollars per each product due to the small-scale production.

Phase 2

At phase 2, we begin to mass produce our product by molding. The following table shows the total cost of phase 2:

Variable Cost (for each produced product):
Production Material Cost (Each product pack contains enough content for 96 detections)	Cost per Each (NT dollars)	Quantity required	Sum
( Same as phase 1)
Total Cost:2796
Total quantity expected to produce: 2,000
Human Resources Cost	Numbers of employees	Individual Salaries (Annual)	Sum
Production Line Engineer	30	800,000	24,000,000
Development Engineer	20	1,000,000	20,000,000
Total Cost: 44,000,000
Fixed Cost:	Rent price per month	Overhead Charges (One year)
Land Rent	200,000	1,440,000
Factory Fee		10,000,000
Machinery and Equipment
Laminar Flow Cabinet		300,000
Incubator		100,000
Baffled Shake Flask		2000
Total Cost: 11,842,000

Table 2: budget estimation of phase 2.

The total cost is about 61,434,000 NT dollars. Due to increased production and decreased cost, the price can decrease to a more customer-friendly 35000 NTD.

Phase 3

Variable Cost (for each produced product):
Production Material Cost (Each product pack contains enough content for 96 detections)	Cost per Each (NT dollars)	Quantity required per process	Sum
(Same as phase 1&2)
Total Cost:2796
Total quantity expected to produce:5000
Human Resources Cost	Numbers of employees	Individual Salaries (Annual)	Sum
Production Line Engineer	30	850,000	25,500,000
Development Engineer	25	1,500,000	37,500,000
Total Cost: 63,000,000
Fixed Cost:	Rent price per month	Overhead Charges (One year)
Land Rent	200,000	2,400,000
Factory Fee		10,000,000
Machinery and Equipment
Laminar Flow Cabinet		300,000
Incubator		100,000
Baffled Shake Flask		2000
Total Cost: 12,802,000

Table 3 shows the estimated cost of phase 3

The total cost is about 89,782,000 NT dollars.

Like phase 2, as costs continue to drop and production increases, we can decrease the price even lower to further promote our product on the market, but still earn enough profit for the company to grow. The price will be set at 25000 NTD.

Phase 4

Variable Cost (for each produced product):
Production Material Cost (Each product pack contains enough content for 96 detections)	Cost per Each (NT dollars)	Quantity required per process	Sum
( Same as phase 1~3)
Total Cost:2796
Total quantity expected to produce: 10,000
Human Resources Cost	Numbers of employees	Individual Salaries (Annual)	Sum
Production Line Engineer	30	1,000,000	30,000,000
Development Engineer	25	2,000,000	50,000,000
Total Cost: 80,000,000
Total quantity expected to produce:
Fixed Cost:	Rent price per month	Overhead Charges (One year)
Land Rent	200,000	2,400,000
Factory Fee		10,000
Machinery and Equipment
Laminar Flow Cabinet		300,000
Incubator		100,000
Baffled Shake Flask		2,000
Total Cost: 12,802,000

Table 4 shows the estimated cost of phase 4.

The total cost is about 120,762,000 NT dollars.

We will maintain our price as the market should be stable enough during this phase.

However, we are able to increase production for better profit and to expand our reach.

Revenue Prediction:

The following table shows the sales price and revenue of each phase:

	Phase 1	Phase 2	Phase 3	Phase 4
Sales Price ( NT dollars )	44,500	35,000	25,000	25,000
Predicted number of products sold	1,000	2,000	5,000	10,000

The following chart graphs the predicted cost in comparison to the sales revenue.

Graph 1: Predicted Revenue and Cost

The following chart shows the predicted total profit for each phase.

Graph 2: Profit Prediction

VII.Plan for further development

Since the deSALMONEtor is a detector of Salmonella, it would be better if it can be verified and approved by the government. This can make our customers be more confident in our product, and it will be easier to develop longer cooperation with our customers. We will also focus on how to make our product more convenient and efficient, with an even faster way to show the result and simpler process.

For a further target, we plan to expand our target market to all over the world. As Salmonella is a common bacteria appearing around our lives, labs around the world shall be doing research on it. Our goal is to meet the demands around the world, after developing the market in Taiwan.

VIII.Conclusion

As people show high concern about food safety issues, the detecting techniques become better and better. Compared to the other traditional detecting ways, our product is less time-consuming. By utilizing bioengineering, we are able to achieve our goals more easily. What’s more, we found that many companies are interested in our project through the response to our public survey. We also see that phage can bring a great business opportunity and open up new responsibilities to the market.

IX.References

1.Creative LifeScience CO., LTD. “CMP Chromogenic Agar.” Creative LifeScience

2.Creative LifeScience. “Immunoassay tablets RapidChek [RapidChek].” Creative LifeScience

3.Creative LifeScience. “Food immune fast screening of Salmonella, Listeria, E. coli, AOAC international certification [RomerLabs RapidChek® SELECT™ Salmonella].” Creative LifeScience, 13 Apr. 2018

4.Hsiao, Chia-Hao.” The effect of environmental factors on the bacteriophage ϕ103p production of Escherichia coli O103”. master's thesis, Department of Chemicals and Material Engineering, Tunghai University,2013

5.Laboratory biosafety related statistics [National Laboratory Biological Safety Statistics].” Taiwan Center for Disease Control, 20 Nov. 2019,

Team:Mingdao/Entrepreneurship