Video Transcription
Alex Jiao 00:02
All right. Hi everyone. My name is Alex Jiao. I am the CEO of Scout Health, and we are developing fast, accurate, and cheap diagnostics for the home and clinic. So why at-home testing? Well, in the United States, every year, there are over 250 million annual in-clinic visits for acute conditions that could be tested for at home. So basically, if you go see your general practitioner for a respiratory bug, or take your kid to urgent care because they have a sore throat, you're spending a lot of time in waiting rooms. At Scout Health, we find it ironic that despite the incredible advancements that we're seeing every day in medical technology, like here at LSI, we all still have to wait in a waiting room to diagnose the common cold. This is the status quo because even though COVID popularized at-home testing, the rapid tests that were distributed during COVID are not accurate, and newer accurate molecular tests are very expensive. The CDC recently looked at the accuracy of the rapid antigen tests, and they found that the sensitivity of these tests is actually less than 50% during active infection, which is worse than a coin flip and prevents clinical utility. On the other hand, newer tests, like the Q Health COVID test, have a sensitivity of over 95% but are much more expensive, with a price tag around $75 for the test, and this really prevents widespread adoption. Q iPod hit a market cap of close to $2 billion in 2022 based on the premise of at-home testing, but they were unable to reduce their costs and their test price, and ultimately went bankrupt this year. At Scout Health, we've developed a platform that can rapidly commercialize accurate and cheap molecular tests. Our platform is supported by our patented chemistry, which is called loop de loop. This essentially enables faster and cheaper test development. We then use our platform to develop tests on our connected system, which includes a very small, $50 reusable hub, as well as our mobile app. And the net result of all of this is a test that you can use at home, which is lab grade. Our COVID test has a sensitivity of over 95% and an accuracy of over 99% with PCR, and received an emergency use authorization through the FDA. But all of this is at the cost of less than a copay. To expand on our platform and our IP a little bit, loop de loop is a game changer for the development of diagnostic tests for two main reasons. The first is that it prevents or obviates the need for integrated sensors or custom cartridges in manufacturing. What this results in is just dramatically lower cost of goods for each test. So on the left, you can see our COVID test is just three simple components with our proprietary chemistry in the test tube, and we can test for multiple targets in that single test tube, meaning multiple multiplex testing with a very simple format, which makes it easier to manufacture and produce as well. Additionally, loop de loop allows for much faster test development. Because of the simple design, we can use repeatable processes and standard lab equipment to quickly collect test data, optimize these tests, validate them pre-clinically, and then launch them. We've gone from target to clinical trials in as fast as two months for some partners, and this allows us to also respond to emerging threats such as avian flu and monkeypox. On the front end for patients, our $20 test price point unlocks at-home testing, which is convenient with a very familiar workflow. So how this works is, you're at home and you feel sick or you have a health concern, you can go to your local pharmacy and buy a test or order one online. Once you have your test, you can run it at home on your hub, receive your results within 30 minutes on the Scout Connect mobile app, and because our tests are lab grade and the test system is digitally integrated, you can actually send those test results directly to your provider, who can review the tests and prescribe follow-on care and treatment as necessary. In terms of our test menu, we are focused on a pipeline of four core tests that can replace the majority of these acute in-clinic visits by the end of 2026. Health verticals that we're going after include respiratory health, sexual health, women's health, and family health, and we believe that this represents about a ten billion test revenue opportunity for these four tests. Our goal is to be the system that is first to menu, meaning a comprehensive test menu for primary care for people at home. In terms of our pipeline, the furthest test development is our respiratory test, Respiratory Scout, which will be entering clinical trials this flu season. And right behind it is our sexually transmitted infection (STI) test, STI Scout, which will be entering clinical trials next year. But we're not solely focused on primary care infectious disease. Seventy percent of clinical decisions rely on lab testing. So after we launch our core test menu, we will begin to expand into additional health verticals. The first is chronic disease testing. Over 133 million Americans are impacted by this, and we believe developing tests for these conditions represents a $23 billion annual opportunity. Additionally, because of the design of the system and compatibility with additional types of chemistries, we are ready to partner with other companies to investigate testing for additional biomarkers for patient monitoring, which represents about 14 billion lab tests per year. Altogether, we think that the total addressable market for at-home testing is near $68 billion, and although we are an early-stage company, we have been fortunate to be able to generate revenue through contract development from a number of different organizations such as the NIH RADx program, CARB-X, and Johns Hopkins. And to date, we've generated about $16 million in revenue, which supports the development and launch of new products. We have an additional $31 million in contract revenue in review. So contract revenue is very beneficial for the company because obviously it supports our overhead and our operations, but additionally, it leads to the commercialization and launch of new test products. So based on our current contract pipeline, we anticipate transitioning primarily from contract revenue generation to test sales by 2027, and based on conversations with our distribution partners and retail channel partners, we estimate we can generate $57 million in sales revenue with our core test menu, and just as a reference, Q Health had $64 million in 2023 last year with COVID only. The other advantage of our IP is that at scale, we can increase our margins because of the simplicity of the manufacturing. So on launch with a $20 price point, we'll be hitting margins of 50% per test. But as we begin to scale and hit a volume of production of about a million tests per year, we can actually increase our margins to over 80%. The team behind all of this is very lean and very technically focused. Cam and I are co-founders of this company. We actually met in grad school getting our PhDs at the University of Washington 14 years ago, so we know each other pretty well. Prior to this, I was a stem cell biologist, and I started a company in 2015 called Silene Biotech, which I sold in 2019. Cam is a diagnostics expert and worked at Sandia National Labs as a staff scientist. He's actually the inventor of the loop de loop chemistry, which has then been patented and owned by Scout Health. Behind us, we also have a stellar management team with decades of experience in IVD and med device manufacturing, as well as a number of notable investors and advisors, including James Park, who founded Fitbit and was CEO before the Google acquisition. So we're kicking off a $6 million Series A, and this will be used to launch our first FDA 510(k) cleared test and start commercial sales. Previously, we've raised about $6.5 million in seed funding, which we used to de-risk the platform, validate the chemistry, and receive FDA authorization for our COVID test. So our Series A will build on this traction by allowing us to validate through the clinical trial our respiratory product, Respiratory Scout, and start sales in 2025 through the EUA process. Like I mentioned, we also have additional support possible from organizations like CARB-X, SPARTA, and NIH, and even though the Series A has just started, we are talking to a number of strategic investors and partners who are interested in the round, and a number of our inside investors are interested as well. So currently, we're looking for a lead or co-lead to help us close out this round. So if you're interested in our funding round or what we're doing at Scout Health, please find me during the conference, or my contact info is here in the slide. Thank you.
