Postmortems on diagnostic testing start-ups: reports of commercial successes and failures and the case of the Zombie life science company. Issue 1 (17th September 2020)

• Record Type: Journal Article
• Authors: Peabody, John; Burgon, Trever; Paculdo, David; Ouenes, Othman; de Belen, Enrico; Richey, Mike; Thayer, Richard M; Urdea, Mickey
• Is Part Of: BMJ innovations. Volume 7:Issue 1(2021)
• Page Start: 11
• Page End: 17
• Publication Date: 2020-09-17
• Subjects: diagnostics -- economics -- inventions; Medicine -- Research -- Periodicals; 610.72
• DOI: 10.1136/bmjinnov-2020-000431
• Languages: English
• ISSNs: 2055-8074

Abstract

Abstract : Background: From 2014 to 2017, more than 1000 diagnostic companies were launched, securing more than US$10 billion in investment. Methods: We performed an in-depth exploration of 28 diagnostic companies to differentiate successful and failed startups, plus a third 'Zombie' state where companies have achieved financial solvency but without long-term viability. Results: From these data, we created a five-phase, 13-item framework indicating the corporate health of a diagnostic company as it progresses from conception to commercialisation. We found 6 successful companies, 14 failures and 8 Zombies. On a scale of 0–26 points (two points per item), successful companies averaged 24.5 points (range 22–26), failures averaged 4.5 (range 0–16) and Zombies averaged 12.3 (range 3–23) (p<0.001). To determine if there was any predictivity to this framework, we looked at only the first two phases (concept and feasibility/planning) of progress and found a distinct gradient in success potential based solely on these first two phases. Conclusion: Our five-phase framework generated a score that could predict diagnostic companies more likely to successfully and sustainably enter the market from those more likely to fail.