By guest author Praveen Kumar
Tissuepro is a fledgling business founded by Miami-based Lenny Marcovitz, who has created a rapid tissue processing machine that he will sell along with the chemicals needed to run it.
Marcovitz says that he always had an interest in new ideas and how to develop them. He is a graduate in biomedical engineering and has experience managing the various aspects of bringing a product from idea to market, including patenting, outsourcing, manufacturing, marketing, and related activities through his company, Simuhealth Inc., which sells a device that helps nurses train for a specific skill. Marcovitz got the idea for a tissue processing company from Harold Essenfeld, the owner of the pathology lab at which he interned in 2007. Essenfeld, a partner in Tissuepro who has been a pathologist for more than twenty years, owns a high-volume private hospital pathology lab, is co-inventor of a machine that is manufactured by Sakura Finetek (one of the biggest manufacturers of tissue processing machines), and has given advice to tissue processing companies.
Tissue processing is one of the steps in preparing tissue for analysis. Processors move samples through ethanol baths of progressively higher concentration to remove water from the tissue. A hydrophobic clearing agent then removes the alcohol and is replaced by wax or resins that suspend the tissue in a matrix and allow it to be sliced in thin sections so that it can be analyzed.
There are approximately 5,700 histology labs worldwide, and estimates for this specific market are $650 million with growth of 7% annually. Marcovitz says that the device has a market of $400 million and the chemicals $40 million. Tissuepro will be selling its machine for about $70,000 (a one-time fee) and the chemicals for $7,000 per year per customer. The company’s top target segments are hospitals, reference laboratories, and private labs.
At present, there are several companies that make tissue processors. The top players are Ventana, Dako, Sakura, Leica and Thermo Fisher Scientific. Marcovitz aims to comete by providing a quicker, cheaper, cheaper to maintain, and one-protocol-fits-all rapid tissue processing machine. For histology labs, the less processing time, the better because the quicker a hospital gets the samples out, the more profit it can make. This is because hospitals are paid a set fee per sample by insurance companies. Tissuepro is also designed to use less chemicals than existing devices, saving labs money. At the time of writing, competitors’ tissue processors had retail prices similar to the proposed price for Tissuepro.
To understand labs’ needs, Marcovitz contacted about twenty different histology labs and attended conferences, learning that any machine that makes the process quicker by a significant amount will drive labs to purchase that device. He has also received positive feedback on the other characteristics of his machine.
Marcovitz worked with various suppliers to create the device. He outsourced the product development. His device has a custom-built LCD screen created through the coordination of an engineering firm in the United States and a Chinese LCD manufacturer. He is now working on making the machine mass manufacturable; he will then test it, submit a final patent for it, and submit all information needed to get an Underwriters’ Laboratories (UL) listing and the appropriate approvals and certifications.
Once that is done, the machine will go to Essenfeld’s lab for beta testing and Marcovitz will create literature on how exactly it is making Essenfeld’s lab more efficient and profitable. At this stage, Marcovitz is attending conferences to showcase the device and distribute information about it. He expects to get sales leads through these conferences. Also, he is contacting laboratory equipment distributors to have the processor featured in online catalogs and magazines. Marcovitz says that using above strategies will help him to pick up some momentum. The goal is to penetrate at least 7% of the market by year three. The company is planning to hire more personnel in order to cope with higher sales orders, management, and the logistics of chemical and device distribution.
The company, which does not yet have revenue, is looking for an initial investment and would like to find something within three months. The ideal investor should have some knowledge of the market and be willing to act as an advisor. There are no plans for an exit as Tissuepro is brand new. Marcovitz will continue to attend major conferences and exhibit the device to raise awareness, purchase marketing space in physical and online journals relating to histology, and publish in peer-reviewed scientific journals relating to histology and hospital operations.
Tissuepro presented at Sramana’s 1M/1M roundtable on August 5, 2010. The recording of the session is here [17.00–32.00]. You can also find Sramana’s recap here. Sramana advised Marcovitz to explore possible service projects with Quest Diagnostics and Labcorp, two of the largest companies in his target market, and see if they can generate some revenue with which to fund the project. An alternative would be strategic investment from Quest or Labcorp.
This segment is a part in the series : 1Mby1M Incubation Radar 2010