This document provides an analysis for a corporate venture capital fund to identify potential investment targets in the point-of-care diagnostics segment. It outlines the client's problem of seeking new revenue sources and growth options. The document analyzes segments using the VESSEL framework, identifies point-of-care diagnostics as the most promising, and provides a SWOT analysis. Four companies are then shortlisted in this segment based on an assessment framework. The most attractive target, a pharmaceutical IT company, is identified based on organizational compatibility, synergy, and financial considerations.

1. Define
Research
AnalysisSynthesize
Recommend
Approach
Target Screening
Segment Screening
Identifying Investment Segment
Task
MAVERICK @ CAMPUS
Submitted By
Team Kolaveri
Senthil kumar, Alok Sharma, Debi Prasad Dash
SCMHRD, Pune
CASE STUDY ON
CORPORATE VENTURE CAPITAL

2. Define Research Analysis Synthesize Recommend
Client’s Problem
Company’s growth is
difficult, because US
pharmaceutical
industry is facing
significant challenges
Key Factors/Issues
Patent Expirations
High Pricing Pressure
Regulatory Scrutiny is
tightening
Innovation in Approach
Identify Revenue Sources
Create future growth
options
Spur innovation
Already done by client
EstablishedCorporate
VentureCapitalFund
Our Problem
To identify 2-3
companies for
Strategic Investment
Segment identification
Lay out of Framework
Prioritize the segments
Company identification
Approach for Short
listing the Companies
Assessment Framework
for companies
Identify Potential
investment target
We have to do
Drying drug pipelines
Initial Hypothesis Tree

3. Segments with Priority
Stake
holders
Trade off
VCF
objective
Stake
holders
benefits
Define Research Analysis Synthesize Recommend
Segment Analysis : VESSEL Frameworks
Economic
Scenario
Economic Scenario
Global Economy
Import/Export Regulation
Demand & Supply
Number of M&A deals(2011)
Industry Analysis
Market Size
Market Growth Rate (past)
Technological Advancements
Market share of top 5 players
Growth Potential
Future Potential Growth
Market Opportunity
Expansion of the vertical
Innovation in Approach
Stake holders involvement
Regulatory Bodies
Company, Channels
Consumer Behavior
Investor Sentiments
VCF Objective Payor Provider
Benefits Trade off Benefits Trade off
Sector Limitations
Revenue Model
Innovation
Synergy with old business
Bottom line growth

4. Define Research Analysis Synthesize Recommend
VCF
Objective
(Priority)
Wellness Clinics Point of Care Diagnostics Accountable Care Organization
Solution
Payor Provider Payor Provider Payor Provider
Benefits Trade off Benefits Trade off Benefits Trade off Benefits Trade off Benefits Trade off Benefits Trade off
Sector Limitations
Revenue Model NA NA NA NA NA NA
Innovation NA NA NA NA NA NA
Synergy with old
business
NA NA NA NA NA NA
Bottom line growth NA NA NA NA NA NA NA NA NA
Economic Scenario Industry analysis Growth Potential Stake Holders Involvement
GE I/E DS MA MS MG TA T5 FP MO EV IA RB CC CB IS
Healthcare IT
Software
Tele Health devices
Wellness Clinics
Point of Care
diagnostics
Clinical Research
Organizations
Health Care
Training
Accountable Care
Organization Solution
3 21
good ok bad

5. Define Research Analysis Synthesize Recommend
Selected Segment : POC Diagnostics
Strength
•Patient Centric: Tests available at patient’s site
•Offerings: 30 common tests (∼68%) of all are available.
•Industry Growth rate: 18%
•Technological advancement: expansion of the test
menus on the marketed diagnostic devices
Weakness
•Skilled Staff: employment of clinical laboratory workers
in the U.S. is expected to grow from 328,100 in 2008 to
373,600 by 2018.
•Cost: higher unit cost of testing than central laboratory
•Multiple sample collections: for unavailable test at
POC
Opportunities
•New Segments: DNA testing for personalized medicine:
Theranostics
•Alternate diagnostic tests: expansion of the menus like
Visiongain’s analysis of the blood , coagulation testing
Threats
Development of home-care diagnostic equipment:
Equipment facilitating Personal insulin level check and
other diagnostic report at home are a potential threat for
this industry
SWOT
Alternate
Business
Model
Our company can market drug manufactured
by it through this channel, this will be an
additional point of sale at consumer end.
Skilled staff sent at customer site can suggest
the medicine depending on the test results
and can provide prescribed medicine and
diagnostic strips for future use.

6. Define Research Analysis Synthesize Recommend
Approach used for listing out the companies in this segment
High
Substantial Investment
MovementBuilding
Longterminterest
ProjectLevel
Longterminterest
Low
Minimal Investment
X Axis: Level
of funder
interest in
organization
Y Axis: Level
of resource
investment
by funder
High level of
investment and
Long-term
interest in
organization
Our Venture
Capital Fund
Investors Intention
The Decision Matrix Governance Structure of the board & selection process
Focus on the board of directors
overall direction of the organization
Leadership Executive Director & Key leaders of the
Organization
Vision, Mission and Challenges company
facing
Development How the company raised its fund
Strategy for growing or diversifying funding
base
Finance Budgeting Process
Report review Process
Internal control & Management System
Liquidity and Cash Management
Human
Resource
Management
Obligation to mandated government
regulation
Human resource function in the Company
Salary Structure and Employee Relation
Communicati
ons
communication with audiences or
constituencies
marketing or external communications plan
Filtering of Companies is on the basis
of these 6 strategic Parameters

7. Define Research Analysis Synthesize Recommend
Short listed Companies under the selected Segment
Company
Name
Product/Services
Investor Relation/
Collaborations
Scale of
Operation
MBio
Diagnostics
MBio Array System: combined
HIV/Syphilis/Hepatitis C Virus
serology system evaluation
MBio CD4 System: HIV
Detection
investments exceeding $20 mn
University of California, San Diego
(UCSD)
Foundation for Innovative New
Diagnostics (FIND)
POC Diagnostics,
Innovative optical
Technology
Nipro
Diagnostics
TRUEresult® System
TRUresult: TB, HPV detection
TRUtech: CArdiac Marker,
Tumor Marker
TRUtrack
Walgreens, CVS, and Rite Aid Blood glucose monitoring
Test strips
Monitoring accessories
Biolytical
Laboratories Inc
INSTI™ tests for diseases such
as Hepatitis C and Syphilis
INSTI HIV-1 Antibody Test
INSTI HIV-1 Antibody Test
Controls
HIV-1 Antibody Test
privately-owned Canadian Company
federally incorporated in 2002
point-of-care in vitro
medical diagnostic
devices.
POC Diagnostics
Clinical Antibody tests
Ultradian
Diagnostics
Biologue: an electrochemical
biosensor that measures
glucose within interstitial fluid
The Company was able to achieve this
significant milestone for less than
$2.5M in equity investment.
• The State University of New York
Research Foundation
• Rensselaer Polytechnic Institute
• New York Biotechnology Association
Technology platform:
biosensor components
for point-of-care testing
Self diagnostic products

8. Define Research Analysis Synthesize Recommend
Strategic Investment
Our venture Capital Funds Target
Life Cycle of Business and its mode of Operation
Company Alpha Beta Gamma Sigma Delta
Revenue Not available $1.5mn $12mn $15mn not available
EBITDA $0.2mn
EBIT
Previous Funding $220mn seed funding $55mn Not available need funding
Funding Turnover 21.82%
Financial Decision

9. Assessment
Core
Competency Alpha Beta Gamma Sigma Delta
Leadership CEO is successful
COO - head of global
operations of large
social media company
weak advisory
board under grad students successful CEO
Business Model
model earning recurring
revenues sales driven model
licensing based
model
services based
model
unclear business
model
Partnership
2 key industry
partnerships NA NA NA NA
Innovation disruptive technology
innovative social media
platform
cloud based
technology
robust rules based
platform
highly innovative
product
Sustainability strong competitors threat scalable unclear unclear
Market Dynamics proven market fast growing well established consolidated market nascent market
Consumer
Adoptability strong strong strong
weak due to
competition unclear
IT medium medium strong medium weak
Financials
good investment already
present medium
high funding
turnover unclear startup stage
Work Force srtong strong strong
inexperienced
students weak
Risk Assessment low high low high medium
Exit Policy(Easy
to Exit) costly to exit easy to exit affordable to exit affordable to exit costly to exit
High Medium Low
Define Research Analysis Synthesize Recommend
Assessment Framework for Potential Investment targets

10. Define Research Analysis Synthesize Recommend
Assessment Framework for Potential Investment targets
Item Comments
Executive director resume Required
Organizational chart Essential (if they don’t have, Let them to draw)
Board member list with affiliations Required
Board minutes for the last year Required
Monthly financial statements for
the last year
If they don’t have, It’s an weakness for the
evaluation.
Projected cash flow for next 12 Months Important (without Audit is also acceptable)
Policy regarding internal controls Essential (Write up is also acceptable)
Job descriptions for each position Required
Copy of personnel policies May not be in place yet
Sample employment agreement
and/or hire letter
At least one is required.
A sample newsletter Optional
A sample of any constituent or
fund appeal mailings
Important, it can help to understand the
organization’s fund-raising capacity.
Any planning documents Not required, but helpful for discussion purposes
DOCUMENT
REVIEW

11. Define Research Analysis Synthesize Recommend
Most attractive company from ‘Potential Targets’
1: Organizational Compatibility
2: Organizational Synergy
Skill
Strength
Opportunity
3: Financial
Consideration
System
Strategic
due
diligence
Shared
Value
Current Funding
Investment Plan
Shared
Value
Mobility, collaborative,
integrated health system
Strategic
due
diligence
Data security, privacy,
ownership, SLAs
System Scalable, automated and
secure, cost effective and
flexible data sharing
Skill Strong team having grip
in the market
Current
Funding
Investment Plan
Total
funding : 55
Million
Revenue :
12M in 2011
Funding turnover
is 21%. It shows a
good positive
signal for further
investment
Strength Opportunity
Unprecedented
level expertise in
Pharmaceutical
IT services can
be achieved
through Cloud
Outsource large
pharmaceutical
data to cloud
servers.
Reduction in
data centers.

12. Thank You

13. Appendix
1st VESSEL analysis for segment screening :
(Clink on Excel sheet for details)
2nd VESSEL analysis for Prioritizing segments:
(Click on Excel sheet for details)
Appendix : Framework Reference
1: McKinsey Way (book)
2: ZENESYS Consulting
3: Deloitte
4: La Piana Associates (Assessment tool)

14. Appendix : Reference (Links Used)
Clinical Research Org
http://www.bionity.com/en/whitepapers/49043/outsourcing-in-clinical-research-the-indian-perspective.html
http://blog.nasscom.in/nasscomnewsline/2009/05/emerging-vertical-%E2%80%93-clinical-research-outsourcing/
http://www.frost.com/prod/servlet/press-release.pag?docid=244280315
http://oig.hhs.gov/oei/reports/oei-01-00-00190.pdf
http://www.iom.edu/~/media/Files/Perspectives-Files/2012/Discussion-Papers/Drug%20Forum-
Call%20for%20CTE.pdf
Accountable Care Org
http://www.accountablecarechoices.org/news/can-accountablecare-organizations-improve-health-care-while-
reducing-costs--1
http://online.wsj.com/article/SB10001424052748703300904576178213570447994.html
http://www.accountablecarechoices.org/news/?offset=20
http://www.ncqa.org/portals/0/publiccomment/ACO/ACO_%20Overview.pdf
Health Care Training
http://futurehealth.ucsf.edu/Content/29/2011_11_California_Healthcare_Workforce_ACA_v2.pdf
http://www.bizjournals.com/sacramento/news/2011/11/14/report-health-care-staffing-california.html?page=all
Point of Care
http://www.scientiaadv.com/blog/2011/02/17/looking-at-point-of-care-diagnostics-through-a-new-lens/
http://bccresearch.blogspot.in/2012/04/global-point-of-care-diagnostics-market.html
http://www.visiongain.com/Report/739/Point-of-Care-Diagnostics-World-Market-Outlook-2012-2021
http://www.visiongain.com/Press_Release/132/The-total-point-of-care-diagnostics-market-will-reach-20-9-billion-
dollars-in-2015-says-visiongain-report
http://www.espicom.com/point-of-care-diagnostics
http://www.veripath.co.za/articles/presentations/Point%20of%20Care%20testing%20-
%20A%20Clinicians%20perspective.pdf
http://www.healthcareitnews.com/news/lab-staff-shortages-call-better-point-care-diagnostics

15. Wellness Clinic
http://www.free-press-release.com/news/200801/1199574941.html
http://thewellnessrevolution.paulzanepilzer.com/hof.php
http://www.ny-forum.com/forumblog/2011/06/technology-advances-driving-health-innovation/
http://www.bhsea.org.za/
http://www.ibisworld.com/industry/corporate-wellness-services.html
Health Care IT Sofyware
http://www.informationweek.com/news/healthcare/EMR/229500682
http://blogs.alternet.org/speakeasy/2010/03/24/a-global-perspective-on-us-health-care-reform-passage/
http://blogs.alternet.org/speakeasy/2010/03/24/a-global-perspective-on-us-health-care-reform-passage/
Tele Health Devices
http://www.guardian.co.uk/healthcare-network/2012/jan/16/will-2012-telehealth-take-off
http://www.informationweek.com/news/healthcare/mobile-wireless/231601670
http://healthinformatics.uic.edu/telehealth-device-shipments-could-exceed-2-million-by-2013-says-market-research-firm-
800601113/
http://www.nytimes.com/2010/11/23/health/23monitor.html
Appendix : Reference (Links Used)
Company shortlist
http://www.niprodiagnostics.com/
http://mbiodx.com/
http://www.ultradian.com/
http://www.biolyticalus.com/company.html