Wednesday, June 25, 2014

Zenosense, Inc. (ZENO): Possessing Strong Growth Opportunity with MRSA Detector

Zenosense, a healthcare technology company, is focusing on developing a novel device to detect the Methicillin-resistant Staphylococcus aureus (MRSA) “Super-Bug” frequently found in the human respiratory tract and on the skin. The company with its advance sensory technology is developing more efficient MRSA detectors that act like smoke alarms. This will enable it to grab the demands from hospitals for detecting health-associated infections (HAIs).

The MRSA-detecting device gives Zenosense a greater growth opportunity, as, according to CDC estimates, one out of every 20 hospitalized patients in the U.S. can be infected with HAI, and the annual cost of treating hospitalized MRSA patients is around $4.2 billion. MRSA-infected patients require three times longer hospital stays at three times the cost compared to uninfected patients. These patients are five times more likely to die than other patients. This bacterial contamination affects around two million patients each year and is responsible for annual deaths of more than 100,000 and around 23,000 deaths per year in the U.S. alone. Zenosense is working on its technology to develop and market a device that will enhance the MRSA detection capability, and help it to treat these infected patients. The MRSA device will position the company it to take advantage of this opportunity in the sensory device market.

Extending contract to enhance device portfolio

The company to deepen its footprint has extended its agreement with the Sgenia Group to expand its device portfolio by developing cancer sensory devices. Under this extension contract, Zenosense has the optional right to fund the development of prospective cancer sensory devices that may be based on the Sgenia technology. Based on the funding, Zenosense will have the right to develop, market, and sell the devices based on Sgenia technology. This will allow Zenosense to enhance its expertise in developing new cancer sensory devices. The sensory technology and algorithmic processing in developing the MRSA detection could be used for developing cancer sensory devices.

Cancers such as lung and colon produce volatile organic compounds (VOCs) in an individual’s breath in a similar way to patients infected with MRSA. VOCs are the large group of carbon-based chemicals that can be easily inhaled by humans and can cause severe toxicity. Zenosense’s capabilities and small modification in MRSA detection technology enable the company to develop a device that can detect lung and colon cancer. The low cost, rapid detection device for these cancers is expected to have significant long-term demands.

These types of devices can detect, for example, lung cancer at its initial stage, and on a mass scale. Lung cancer is typically diagnosed at a late stage when only 25% of the cases can be treated; however, early detection could have a cure rate of more than 70%. Prevention practices can reduce the occurrence of HAIs by around 70%, possibly saving $25 billion to $31.5 billion in medical costs in the U.S.

Strong demand for the cost-effective MRSA detector is expected, driven by higher costs related to late-stage detection of MRSA. Zenosense through its subsidiary, ZenonBioSytem, estimated that it can manufacture these devices with the cost of less than $100 per device, and the cost can be reduced to as low as $50 per device. Zenosense will use established Sgenia programming and patent-pending hardware to develop a single sensor that will perform an infinite number of scans, creating tens of thousands of “virtual sensors,” for which other devices require 32 sensors. This will generate a huge cost savings over an array of individual sensors. The low-cost, compact design of the Zenosense device can be worn by individuals in highly sensitive areas in the hospitals.

Zenosense’s MRSA detector will enable it to enhance its presence in the MRSA detection device market.

The e-nose devices available cost around $8,000 each. Zenosense by developing a device 160 times less expensive with superior super-bug detecting capabilities could seize this opportunity, which would in turn generate revenue long term.

Conclusion

By extending the agreement with Sgenia group, Zenosense will have the right to use Sgenia’s technology to improve its efficacy in developing the cost-effective MRSA detectors. This would reduce Zenosense’s operating cost, which was around $448,000 as of December 31. The development and exclusive license agreement also includes cancer sensory devices, and the capabilities of its MRSA device to detect lung and colon cancer will strengthen the company’s financial position.

For more information on the company visit www.zenosense.net

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