February 27, 2022
Cyrcadia, Inc. (“CI”) extends its thanks and appreciation in your interest and support of our endeavors. We are taking this opportunity to provide an update, as well as apprise you of upcoming expectations.
License and Cooperation Agreement with Cyrcadia Asia (“CA”) - Status
Earlier in 2017 CI entered into an Agreement with CA, whereby CA assumed the responsibility and funding of the design, development and delivery of a scalable, commercializable iTBra™ system including upgraded hardware and the full suite of application software as well as automation of our proprietary Artificial Intelligence Analytics. The estimated cost of development with Jabil and Mobile Now is approximately $1.2 to $1.5 million US. As such, the agreement calls for CA to provide timely reporting and status of product development including timelines, milestones and dates of completion and delivery of product (market readiness, product volume availability and delivery terms and schedules).
Many strides have been made in the evolution of the relationship as CA has established its operations, initial staffing and funding. Both CI and CA are in a mode of cooperation, as called for by the Agreement and, presently, both entities are to hold routine meetings where comprehensive updating and reporting will be delivered to CI, enabling implementation of our business, operations and marketing plans. We will be reporting the outcomes of that meeting to move forward on our ability to commercialize the iTBra™ system this year.
Given the above, we would like to update on the internal operations that will allow for CI to “hit the ground running” upon product delivery.
Status of Product Development and Manufacturing
Under CA’s contract with Jabil for the design, development and manufacturing for both entities, CI and CA and according to CA, the development schedule is on track and both CI and CA are expecting functional prototype units for clinical study and market applications in the second half of 2018. Jabil has moved through various levels of development including Engineering Validation (EV) and Design Validation (DV) with Design Verification Testing and Product Compliance Testing as the next and final tasks. From there, the product is released for production (MP Release).
Jabil will manufacture the iTBra™ as the initial vendor for both CI and CA (both companies operating under the global head brand of Cyrcadia Health) hardware at their FDA-approved facility in Shanghai. Full scale manufacturing is scheduled to start in the second half 2018, but in the intervening period, we will be able to obtain fully functional products for pilot launches in the U.S. and other countries.
CA’s other contracted developer, Mobile Now Group, is well down the road of development and testing of the “front end” software application and User Interface (UI). Outcomes of the CA/CI cooperation meetings will provide precise status of development along with timelines and schedules.
*Prototype example of User Interface Screens
Regulatory Clearance, Trials Recap
CI’s current US trial success has allowed us to utilize a Non-Filing Justification (NFJ) with the FDA, under our current FDA 510(k) Class II clearance, enabling CI to go to market. Additionally, CI and CA have contracted with two regulatory advisor contractors to drive to a Class I designation (Over the Counter and direct to consumer markets) allowing for entry into market without the scrutiny of a class II device (Clinical, prescribed by physician market), as the iTBra™ stands now. The intent is launch into both the consumer and Over the Counter (OTC) markets almost simultaneously with the clinical markets. Thus far, indications are favorable for this approach and we will be meeting directly with the FDA in the months to come, declaring our intent. We will report again on the meeting outcomes once definitive. Moreover, CI will pursue a Modified 510(k) through the FDA enabling the rapid expansion of the clinical markets. This does not preclude us from going to market with our existing 510(k), Class II clearance (see the NFJ position above), but will certainly enhance our visibility and buy-in from the medical/clinical community.
The El Camino Hospital and The Ohio State University clinical trials have shown that CI’s scalable device is demonstrating over 84% accuracy, sensitivity and specificity with a 2-hour wear time, vs. the Chronodynamic’s (First Warning System) historic accuracy of 74.5% and a required 48-hour wear time. CI has reengaged with El Camino Hospital to resume (pending CA’s timely product delivery) the paused clinical trials with the new and significantly improved commercializable product. Discussions are underway with the other trial site, The James Cancer center at Ohio State University, to resume the paused trials under the new product design and protocol. A.
Intellectual Property
Since the original CI patents were issued in 2012, the product and artificial intelligence based software has evolved considerably into the wearable and conformable device that it is now. Invention disclosers have been completed and are currently under review by both CI and CA intellectual property counsels. As a result, both CI and CA will own several new patent applications. Those applications can take some years to be examined and approved, but the pending patents themselves will have tangible value to current and potential investors, partners and acquirers. As a result of the deal with CA, CA is also applying for trademarks, designs and patents in multiple countries in the US and Asia, to be assigned to territories that CI serves.
Operations
CI and CA are currently structuring a detailed supply agreement for product delivery including the terms, costs and volumes with timing. Jabil will be a critical element of this agreement and is preparing to collaborate with both CI and CA as the manufacturer on delivery of goods for marketing and sales. This agreement is a critical piece and a significant milestone to realize the conversion to market from design and development. We will deliver more detailed information once the agreement is completed and consummated.
CI is expanding its team with contractors and internal additions. We have retained two groups for marketing/commercialization addressing the consumer/OTC markets: Life Science Strategy Group (LSSG) and the DuPuis Group. LSSG has performed extensive, third party market research for positioning and roll out to the clinical markets. The DuPuis Group has performed deep market research specifically to the consumer/OTC markets, and, as you will see below, has been selected as our strategic partner for commercialization and marketing deployment in the consumer/OTC markets.
For the clinical markets, CI is in discussions with potential strategic partners for the marketing deployment and commercialization for the clinical markets. We will share more in depth information once we have selected that strategic partner.
CI has retained consultant Cheryl Fisher, formerly with the Emergo Group, as our internal Director of Regulatory Affairs, Quality Assurance, and Clinical Affairs (RA/QA/CA). Mrs. Fisher will operate as the conduit between CI and the FDA, as well as manage and guide our Regulatory pathway as described above. Cheryl has worked with the company in an advisory capacity for a number of years and has deep knowledge and familiarity of not only the FDA requirements and processes, but with CI itself.
Finally, CI has retained a consultant to drive the comprehensive processes and agendas currently under way, fulfilling the need for timely execution, team and department accountability, as well as risk management and reporting to the executive team.
More headcount is slated as we prepare to execute our marketing plans. We will introduce you to those capable team members as they come aboard.
Clinical Market Pilots and Market Entry
As previously noted, the first clinical market entries are likely to be with insurance partners working through CA in Asia (and by extension, CI in the U.S.). CI will also launch a lead out pilot in the U.S through Evidation Health (see evidation.com) and its affiliates, Dignity Health and Kaiser Permanente. Evidation, associated with Stanford University and funded by GE Ventures and others, evaluates how the evolution of digital health and wearables can affect change from a care and insurance perspective in the U.S. Through Evidation, the pilot launch will involve a nominal number of subjects with a rapid pace of subscription and validation to both publish and allow leading healthcare providers, insurers and key opinion leaders to observe the value and marketability of the CI solution. This relationship and process provides rapid exposure to the caliber of the business partners and associates of Evidation that would otherwise take years to achieve. These relationships are key to expediting mandates to participants of the insurers and healthcare networks without CI’s need for significant staffing and fundraising to develop an internal salesforce within CI.
OTC and Consumer Commercialization
Our priority now is to finalize and implement our marketing plan enabling the ramp up of sales as soon as possible in 2018 upon product delivery.
We are pleased to report the contracting of the DuPuis Group to implement and execute the OTC/Consumer commercialization plan to put “product on the shelves.” This has been a significant gap for us and their familiarity and deep knowledge of our value proposition is unparalleled. They are an exemplary team to bring us to revenue. More to come as we develop our timing and targets for rollout.
Competitive Analysis
No competitive technologies have materialized that would threaten our business plan. We are confident our intellectual property filings are a significant barrier to market entry and our usage of artificial intelligence software is market leading technology. In addition, our contract for manufacturing in China ensures a high volume competitive product cost.
On behalf of the Cyrcadia, Inc. team, we thank you for your support as we bring this life saving technology to market. We will make every effort to ensure timely and profitable delivery of CI’s technology to the U.S. market and rest of world outside of the territories covered by CA. We are committed to ensuring ongoing communication and look forward to demonstrating further success in 2018 and beyond.
Sincerely,
Matt Benardis
CEO
Cyrcadia, Inc.