G7 DIAGNOSTICS

Financial Plan

Ms. H. GwaniMs. S. JainMs. V. VarkeyMr. A. AwosusiMr. D. IgweMr. P. Waghmare

SAPHVIDTM : For Early detection of Pre-eclampsia

G7 DIAGNOSTICS

Mission:

To provide innovative point of care diagnostic products for early detection of

pregnancy related disorders

Vision:

To become the leading experts for providing diagnostic solutions in the field of

obstetrics

Market need*

• 10% of all pregnancies

• Costs global health care system 2 billion GBP/year

• Pre-mature births (UK): 300 million GBP

• 8 deaths/year (UK)

*National Health Services, 2009

SAPHVIDTM Diagnostic Strip

Technology:

Involves three biomarkers: sEng, Plgf and sflt.

Intended Use:

Early detection of Pre-eclampsia.

Device Used:

Triage Meter

Objectives of the Financial plan•To determine capital structure (Operating budget)

• To help the company frame financial policies as regards cash control, lending and borrowing

•To aid maximal utilization of the limited resources made available to the company

•To determine the NPV of G7 Diagnostics

•To forecast the profit for the forthcoming years

•To obtain the cash flow pattern & determine time for break even

•To decide G7 exit strategy

Financial Policy

•G7 uses the Last in first out (LIFO) strategy for marketing in UK

•Straight line depreciation

Assumptions

•R&D, Clinical trials and Regulatory approvals: 7 years

•Manufacturing and sales (sub-contracted): 8th year- 13th year

•Annual depreciation rate on the capital items: 15%

•Corporation tax rate: 18%

•Partnered with Alere Inc. (Device manufacturer)

Gantt ChartACTIVITY

Development (internal)

GMP manufacture pilot scale (subcontracted)

Clinical trials (subcontracted)

Regulatory approval (subcontracted)

Full scale GMP manufacture (subcontracted)

Internal Quality Control and Customer Support (internal)

Patent filing schedulePatent 1

File PCT NationalEuropeUSA

Year 11 Year 12Year 6Year 1 Year 2 Year 3 Year 4 Year 5 Year 13Year 7 Year 8 Year 9 Year 10

Pricing

Starting sales prices (GBP):

Cost per unit to manufacturer:

•8th year: £2.50•11th year: £ 2.40reduces further by £0.05 per annum thereafter.

Country/ Region

GBP per unit

UK 40

Europe 40

China 37

USA 42

India 35

Africa 35

KEY PERFORMANCE IN

KEY PERFORMANCE INDICATORS:

Sales

Retained profit

Operating expenses

Key Performance Indicator: Sales

year 8 year 9 year 10 year 11 year 12 year 130

50

100

150

200

250

300

350

Sales Volume

UK Rest of Europe China USA India Africa

Years

No.

of u

nits

(000

)

Year 8 year 9 year 10 Year 11 Year 12 Year 130

2,000

4,000

6,000

8,000

10,000

12,000

Sales revenue

UKRest of EuropeChinaUSAIndiaAfrica

Years

Reve

nue

GBP

(000

)

Key Performance Indicator: Retained profit

1 2 3 4 5 6 7 8 9 10 11 12 13

RE-TAINED PROFIT / (LOSS)

-304 -169.28445

52

-334.575002221

6

-429.227576418946

-525.807382279427

-243.393230927178

-315.249308970995

-415.298004231194

214.169204862336

1955.51308982757

6386.31193962814

12164.6771763395

20975.6751208331

(2,500)

2,500

7,500

12,500

17,500

22,500

Retained profit/ loss

RETAINED PROFIT / (LOSS)

Year

GBP

'000

1 2 3 4 5 6 7 8 9 10 11 12 13

-5000

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

Cummulative Cash flow (2011- 2023)

CUMMU-LATIVE CASHFLOW

Year

GB

Poun

dsProjected Cash flow

BREAK-EVEN POINT

1 2 3 4 5 6 7 8 9 10 11 12 13

-5000

0

5000

10000

15000

20000

25000

Cash flow (2011-2023)

CASHFLOW

Year

Year Cash flow GBP( ‘000)

Cumulative Cash flowGBP( ‘000)

1 (383.9) (383.9)

2 (212.4) (596.3)

3 (368.6) (964.9)

4 (450.3) (1,415.2)

5 (536.3) (1,951.5)

6 (191.8) (2,143.3)

7 (294.4) (2,437.6)

8 (395.1) (2,832.7)

9 219.6 (2,613.1)

10 1,953.5 (659.6)

11 6,383.9 5,724.2

12 12,162.3 17,886.5

13 20,973.6 38,860.1

Pay back period:

10 years+ (1954/ 6384)

Approx. 10 years and 4 months

Pay-Back period

1 2 3 4 50

100

200

300

400

500

600

700

Costs GBP ('000)

Costs GBP (000)

Years

Cost

GBP

('00

0)

Key Performance Indicator: Operating Expenses

Estimated cost of Research and Development

1 2 3 4 5 6 7 8 9 10 11 12 13

0

50

100

150

200

250

300

350

400

Total research expenditure

Years (2011-2023)

Cost

GBP

(000

)

Head CountS.No. Head count activity Duration (year) Salary per annum Working pattern

1 CSO Till pilot scale GMP 5 55,0002 days per week during research, 1 day per week for manufacturing

2 Design consultant Till pilot scale GMP 5 950 per day 2 days per week3 Scientist (Ph.d.) Till pilot scale GMP 5 26,000 Full time4 Scientist (B.Sc.) Till development 5 20,000 Full time5 CEO Entire project 13 70,000 1 day per week6 Assistant From pilot scale 3rd year 23,000 1 day per week7 General Manager Entire project 13 55,000 2 days/week8 Assistant Entire project 2nd year 18,000 2 days/ week

9QC maufacturing manager Varies

4-5 year and from 8thyear 55,000 Full time

10 Assistant From manufacturing 8th year 18,000 Full time11 Assistant From manufacturing 11th year 18,000 Full time12 Finance Manager Entire project 13 years 55,000 1 day per week13 Assistant 1 year before sales 7th year 18,000 1 day per week

14Business Develoment Analyst Entire project 17 50,000 1 day per week

15Sales and Marketing director

1 yr. before start of product manufacture 7th year 55,000 2 days per week

16 Assistant 1 Same as director 8th year 18,000 Full time17 Assistant 2 Same as director 9th year 18,000 Full time

18Customer support Officer

After sales and marketing 8th year 25,000 Full time

19 Assistant When sales start 8th year 18,000 Full time20 Sales and order officer Year when sales start 8th year 25,000 1 day per week

1 2 3 4 5 6 7 8 9 10 11 12 13£0.00

£100.00

£200.00

£300.00

£400.00

£500.00

£600.00

£700.00

£800.00

2011-2023 Total Managemt/Admin cost (£'000)

Year 2011- 2023

Cost

in £

'000

Management- Administration cost

S.No. Phase Duration (years)

Estimated Cost involved GBP (‘000)

1 Research and development

3.5 1,273

2 GMP pilot scale manufacture

1.5 781

3 Clinical trials 1.5 409

4 Regulatory approval 0.5 160

5 Full scale GMP manufacture

5 3,846

Estimated costs involved during each activity

Exit strategy

• Exit at the end of 13th year

•Reasons: - Enough profit to cover all the expenses

- Fierce competition - New upcoming technologies •Possible acquirers: Alere, Roche, Perkin Elmer

Summary

• According to our financial analysis:

• Break even: 10th year

• At the end of year 13:• Sales: GBP 42.8 million• Net present value: GBP 11.1 million• Cummulative Cash flow: GBP 38.8 million

THANK YOU