More than 100,000 newborns die each year due to the lack of proper management of neonatal jaundice. We at Picterus, a startup focused on solving this global problem of neonatal jaundice, are looking for funding to take our first product to the market. The product is a smartphone app that can accurately screen for neonatal jaundice, which can both have a very high global health impact while simultaneously providing a significant monetary return on investment. However, there seems to be some tension between these two goals, where it is not obvious that the path maximizing impact is the same as the path maximizing the monetary return on investment.
Since we have a clear ambition to help reduce the global mortality and morbidity of neonatal jaundice, we would prefer to find investors who share that goal. However, we are also interested in talking to investors who find our company attractive primarily, or singularly, due to the potential monetary returns. If anyone here knows someone who might be interested in investing in a business such as ours, please do not hesitate to get in touch at [email protected].
In the following, I will briefly describe the global health problem of neonatal jaundice, why our product is a feasible solution to this problem, our plans, and our current funding round. The information provided is far from exhaustive, but it will hopefully pique your interest enough to get in touch or take the time to forward the information to someone who could be interested. Feel free to contact me if you have input or are interested in working with us in other areas as well.
An estimated 114,000 newborns die, and 179,000 newborns get permanent brain damage every year due to the lack of proper management of neonatal jaundice. Three-quarters of these cases occur in Sub-Saharan Africa and South Asia, showing that low-income countries lack the tools and processes needed to deal with the condition properly. There are very few cases of deaths and brain damages occurring in high-income countries, roughly 1 in every 100,000 births. Still, vast resources are spent dealing with the condition, with jaundice being the number one reason for readmissions to the hospital after birth.
Proper management of neonatal jaundice generally requires trained personnel and tools for screening, diagnosis, and treatment. Treatment of the condition is relatively straightforward using phototherapy (strong blue light), and there are several companies now producing low-cost phototherapy devices. Diagnosis is made by measuring the amount of a substance called bilirubin in blood samples. Drawing blood from a newborn is a painful procedure and requires a well-functioning lab and trained personnel to perform the bilirubin measurement. Therefore, screening is always performed to decide which newborns should have their blood drawn. Bilirubin is a yellow pigment that leaks out of the blood vessels into the skin, causing the skin to turn more yellow. Screening can therefore be done by basically measuring how yellow the skin is. Currently, this screening is done either by a reliable but expensive device (~7000 euros plus 500 euros per year) or through visual assessment, which is inaccurate.
In lower-income countries, phototherapy devices and laboratory tools for blood sample analysis are partly available, meaning that they are generally available in larger hospitals and clinics in densely populated areas. However, it is common that families have to pay for the blood samples themselves, which tends to limit their use. Accurate screening is practically non-existent, leading to uncertainties concerning which newborns require blood samples. This, combined with the hesitations of performing blood samples due to pain and costs, leads to severe jaundice being undiagnosed and untreated. In areas without well-functioning labs, visual assessment is substituted for blood samples as a diagnostic method, with even worse results. Thus, the lack of accurate, low-cost screening for neonatal jaundice is a crucial factor causing mortality and morbidity in low- and middle-income countries. (This analysis is a bit simplified to show how and why accurate screening is useful for reducing mortality and morbidity. If you want to read more, see, for instance, "A Global Need For Affordable Neonatal Jaundice Technologies").
In higher-income countries, trained personnel and the availability of high-quality tools have practically rendered deaths and brain damages from jaundice a thing of the past. However, the current trend towards reduced hospital stays after birth has increased the need for follow-up of jaundice after leaving the hospital. The current screening devices are too expensive for midwives and maternity nurses doing home visits after birth. This leads to them having to rely on visual assessment, which they know themselves is highly unreliable. Also, the costs for the families and the healthcare systems having to do jaundice follow-up centrally in larger hospitals and clinics are substantial. Therefore, we have experienced a strong interest in a low-cost screening tool in higher-income countries.
To solve the lack of inexpensive yet accurate screening, we have developed a smartphone-based screening tool that can accurately screen for the condition by capturing a few images of the newborns' chest. The only accessory needed is a paper color calibration card produced at a very low cost. This solution solves the need for inexpensive and accurate screening in both lower and higher-income settings. It can also partially solve problems stemming from lack of training by incorporating decision support and training modules. To see the product in action, please watch this video.
We have performed several clinical studies with the app and published one paper showing high accuracy compared with blood samples, which is considered the gold standard. It is currently validated to have high accuracy for newborns with parents who have Fitzpatrick skin types 1 through 4. This would cover most of the world's population, except newborns of parents from Sub-Saharan Africa. We are working on validating it also on newborns with parents of Fitzpatrick skin types 5 and 6. Still, we need more clinical data for these skin types, which is difficult due to the pandemic.
Documents have been filed to a notified body for CE approval, allowing us to market and sell the app in Europe. The CE approval process will be completed during the fall.
After the CE approval process is finished, we plan to market and sell the app in the Netherlands and Germany as our initial markets. These markets have been chosen because they have home-based care after birth set up so that it is easy for us to enter. From these markets, we will build a base to grow from, improve the product, and simultaneously work towards market entry in low- and middle-income countries.
Up to date, we have been funded by a mix of grants and angel investments. Our current major funding source is an EIC (European Innovation Council) Accelerator grant of 1.7 million euros. Connected to this grant is a commitment from the EIC Fund for 1 million euros of co-investment on the condition that we find matching capital elsewhere. We target a total investment amount of roughly 2.5 million euros for the current funding round, with approximately 1.4 million euros already committed (1 mEUR from the EIC Fund, 0.4mEUR soft-committed by various investors).
Since we have a clear ambition of reducing mortality and morbidity of neonatal jaundice, it would be preferable to find investors who share such a goal. However, we have to be pragmatic and are also interested in talking to investors who find our company attractive primarily, or singularly, due to the potential monetary returns. Besides, it is not obvious from our current viewpoint which path moving forward is optimal for maximizing health impact. It could be that maximizing growth and maximizing impact converge on the same plan. But for the moment, there seems to be at least some tension between these two goals.
So, if you find this business case interesting, or you know someone who might find it interesting, please do not hesitate to contact me at [email protected] to talk or get more information. If you have any input for us on any aspect of what we are working on or just comments to this post in general, I would be delighted to hear from you either over email or in the comments.
Thank you for reading,
Gunnar Vartdal, Founder and CTO, Picterus AS
