These 14 Startup Ideas Made The Cut For WashU Olin’s BIG IdeaBounce $50K Top Prize

Team Name: epiSLS

University: University of Michigan

BIG IndeaBounce 2023 finalist

Concept: Rapid, reliable, and accessible point of care allergy testing device.

Challenge: Allergies come in many forms: food, drug, and environmental. Together, allergies represent the 6th leading cause of chronic disease in the U.S. and are estimated to cost the healthcare system hundreds of billions of dollars every year. Allergies can range from mild to life ending and carry a significant disease burden. Nearly 50% of all people have at least one medical allergy on their medical chart and this number has been growing steadily for the last 50 years. Penicillin allergies alone are misdiagnosed in 30 million Americans. The avoidance of penicillin and related antibiotics puts patients at a 60% increased risk of surgical site infection, and a 50% increased risk of developing an anti-microbial resistant “superbug” infection each time they are hospitalized. This one group – those with mislabeled penicillin allergies – costs the US healthcare system $37 billion in excess expenditures, and penicillin allergies are just the tip of the iceberg.

Solution: episLS is a novel medical device which enables, for the first time, point of care allergy testing. epiSLS utilizes an optical sensor to measure markers of mast cell degranulation in the dermis of the patient. Under ideal circumstances, the sensing technology has a sensitivity of 400nm – approximately 100x the resolution of the human eye – allowing it to work faster and with more accuracy than traditional, manual methods. Because it utilizes patterned electromagnetic radiation in the visible spectrum, the technology is compact, safe for any patients who could receive traditional allergy testing, and requires low energy input to operate. This new method of measuring immune cell activity allows the device to collect data which previously required trained human sight and consideration. epiSLS’s unique approach allows for safe, reliable, and inexpensive measurement.

The Market: Allergies come in many forms: food, drug, and environmental. Together, allergies represent the 6th leading cause of chronic disease in the U.S. and are estimated to cost the healthcare system hundreds of billions of dollars every year. Allergies can range from mild to life ending and carry a significant disease burden. The need for more accessible allergy testing is large. Nearly 50% of all people have at least one medical allergy on their medical chart and this number has been growing steadily for the last 50 years. Various studies have found an increased incidence of up to 500% over a 15-year period. Penicillin allergies alone are misdiagnosed in 30 million Americans. The avoidance of penicillin and related antibiotics puts patients at a 60% increased risk of surgical site infection, and a 50% increased risk of developing an anti-microbial resistant “superbug” infection each time they are hospitalized. This one group – those with mislabeled penicillin allergies – costs the US healthcare system $37 billion in excess expenditures, and penicillin allergies are just the tip of the iceberg. In 2018, US Emergency rooms saw 200,000 visits for food allergies alone – that is one every 3 minutes. For market sizing we took a bottom-up approach considering our three first beachhead targets: outpatient pediatricians, outpatient obstetricians, and inpatient medical services in the United States. We sourced data demonstrating the number of patients in each of these settings who are currently being underserved by lack of allergy testing. For the serviceable obtainable market, we then took a conservative view that only one out of every five of these underserved patients will receive testing using our device. This results in a serviceable obtainable early target market of $595 million.

Competition: The current gold standard in allergy testing is skin prick testing conducted by an Allergist. This form of testing is very accurate, but it requires a two-hour appointment with a board-certified Allergist. Allergy is not a large field – the entire country has only ~1 Allergist per 50,000 patients – so it can take months to get an appointment, and allergy specialists are not available in many practice settings. Thermo Fisher Scientific has developed a blood-based test which can be ordered by any physician, but these tests require a blood sample to be sent to a specialized lab and take several days to return a result. Even then, these tests are often considered less accurate than in-vivo skin prick testing. These are the only two options available for allergy testing and neither are options when we need to know a patient’s allergic status right now. There is no point of care allergy solution on the market. Most often, patients simply do not receive allergy testing and resultantly suffer the quality of life, morbidity, and second order impacts of misdiagnosed allergies. EpiSLS combines the best aspects of each approach into a point of care solution that will reimagine the way we test for allergies.

Value Creation: EpiSLS will be sold as two separate units: a reusable technology unit housing the hardware and software necessary for the device to operate, and allergen applicators which are unique to the allergy being tested and must be changed between each test. EpiSLS will target a “razor and blade” model to encourage early adoption and integration into regular medical practice. We anticipate selling the technology units for a marginal profit of $1000 each and the applicator units for a marginal profit of $70 each. As EpiSLS moves to launch, we believe our go to market strategy spans three phases. Phase 1 will consist of targeting point of care testing in surgical settings at large academic medical centers. We will focus on confirmation of penicillin allergies during perioperative testing. Approximately 3.8 million people each year are given second line antibiotic treatment before surgery due to misdiagnosed penicillin allergies and lack of point of care testing. This costs the US healthcare system $950M in unnecessary costs and leads to 1200 deaths. This is the ideal beachhead market because academic medical centers have the resources and interest in innovation to adopt our technology and our cost savings potential will have huge impacts on their bottom line. In phase 2, we will begin focusing on downstream expansion from academic medical customers looking to sell into affiliated medical groups and office settings. We will expand our applicator offerings to target allergies more commonly seen in office settings (e.g., tree nut, animal dander, grasses, pollens). Allergy testing already has established CPTs that we can utilize for reimbursement and our analysis shows that we can still offer physicians strong profits while making 80% – 90% profit margins of our own on each test. Finally, phase 3 will shift to strategic partnerships with retail pharmacies and clinics (CVS minute clinic, Walmart Care Clinics) to further spread our technology and get it closer to the patient experience.

The Team: Parker Martin MD, MBA, MEng (Electrical & Computer Engineering) class of 2023 is the inventor of the technology. He conceived the idea while on his medical school clinical rotations to address patient needs he witnessed firsthand. He is responsible for development of the technology and prototyping of the device. He invented all aspects of the device including the basic science, hardware, and software development. Cory Cooney MBA class of 2023 has seven years of experience in medical reimbursement strategy. He drives fundraising efforts, business development, and launch strategy. He is responsible for producing a financial reimbursement model which will allow epiSLS to enter clinics and hospitals in an effective, sustainable way.

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