2020WHU-China - A collaborative manuscript for engineered probiotic start-ups - 2020 iGEM

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2020WHU-China - A collaborative manuscript for engineered probiotic start-ups - 2020 iGEM
2020
                  iGEM

A collaborative
manuscript for
engineered
probiotic start-ups
2020 WHU-China
2020WHU-China - A collaborative manuscript for engineered probiotic start-ups - 2020 iGEM
1
Contents
1.Background..................................................................................................................... 4
   1.1 The application status of probiotics and engineering probiotics.......................... 4
   1.2 The infection in the hospital is relatively serious....................................................7
   1.3 Existing treatments have limitations.......................................................................7
   1.4 Current situation and prospects of synthetic biology........................................... 8
   1.5 The development status and prospects of China's pharmaceutical market........ 9
2.Product introduction..................................................................................................... 11
   2.1 Introduction of our products and technologies.................................................... 11
       2.1.1 Key technology..................................................................................................11
       2.1.2 Mode of production......................................................................................... 12
   2.2 Product advantages................................................................................................13
3.Development and market analysis...............................................................................14
   3.1 PEST analysis........................................................................................................... 14
       3.1.1 Politic.................................................................................................................14
       3.1.2 Economy...........................................................................................................20
       3.1.3 Society...............................................................................................................21
       3.1.4 Technology.......................................................................................................22
   3.2 3C's Strategic Triangle Model................................................................................23
       3.2.1 Customer classification....................................................................................23
       3.2.2 Benefits to customers..................................................................................... 23
       3.2.4 Relationship between the service platform and the target customers...... 23
4.Business model and market strategy.......................................................................... 24
   4.1 Business model.......................................................................................................24
       4.2.1 Research and development mode................................................................. 25
       4.2.2 production mode............................................................................................ 25
       4.2.3 Channel sales model....................................................................................... 26
   4.3 Marketing Strategy................................................................................................26
       4.3.1 Target market..................................................................................................26
       4.3.2 Product strategy............................................................................................. 27

                                                                 2
4.3.3 Price................................................................................................................. 27
      4.3.4 Channel............................................................................................................28
5. Competitive risks and countermeasures.....................................................................31

                                                                3
1.Background

1.1 The application status of probiotics and engineering probiotics

     According to 2001 The Food and Agriculture Organization (FAO) and the World
Health Organization (WHO), probiotics are defined as living bacteria that have an
effective effect on the health of the consumer by ingesting the appropriate amount. At
present, probiotics can be broadly divided into the following four categories:
①Lactobacillus, including lactobacillus, bifidobacterium, streptococcus; ②Lactic
acid-free bacteria, including bacillus and propionic acid bacteria;③Non-pathogenic
yeast, including yeast;④no spore and flagella of a class of bacteria or bacilli.
     At present, probiotics are widely used in food and health care. Some studies have
shown that probiotics can inhibit the occurrence of cancer and other diseases.
However, due to the limited research on the mechanism of action of probiotics,
probiotics are rarely used as drugs. In the food industry, the common probiotics are
mainly used in fermented food, such as yogurt, lactobacillus drinks, kimchi, etc. In the
field of health care products, it can be found in probiotics, that is, health care products
made with probiotics as the main functional ingredients and other substances,
including traditional dosage tablets, capsules, granules and new forms such as oral
liquid, chewing gum, toothpaste and so on.
     In terms of market conditions, Japan is the most developed country in the world
in the probiotic industry, followed by Europe and the United States. In China, the start
of probiotics is much later, but with the improvement of people's health awareness
and business, media publicity, foreign probiotic products continue to pour into China.
In many large and medium-sized cities in China, there is a tendency to consume
probiotics products. Now the international research on probiotics such as lactic acid
bacteria is very active, the product consumption achievement is amazing, the growth
index is increasing year by year, showing an upward trend of development.

                                               4
Figure 1.1.1 Global Probiotic Market Structure Ratio.
     At present, the probiotics industry in the world has reached 40 billion US dollars,
with an annual growth rate of 15%-20%. In the past five years, China's probiotics
industry has been developing rapidly with an annual growth rate of more than 15%.
It is estimated that the product scale of China's probiotics market will reach 85 billion
yuan in 2020.

     Figure 1.1.2 Market size and forecast of Probiotics products in China from 2015
                                        to 2020
     At present, as for the use of drugs, the famous foreign brands include BIO
THREE and Miya from Japan, Medilac-Vita from South Korea, Lacteol Fort and

                                              5
BIOFLOR from France, etc. Take Seres Therapeutics as an example, it is an American
company that uses probiotics to treat clostridium difficile infections (CDI).On June 12,
2015, ser-109, a phase II clinical microbe blend developed by the company, received
the "Breakthrough Treatment" designation from FDA. On August 21 of the same year,
SER-109 was again rated by FDA as an "orphan drug" for the treatment of adult CDI.
     Based on the widespread application of probiotics, synthetic biologists put
forward the concept and assumption of engineering probiotics. Engineered probiotics
are probiotics endowed with special functions after reasonable genetic modification.
They can achieve the purpose of treatment by changing metabolism of the host,
regulating the immune system and resisting to pathogenic microorganisms. They are
important applications of synthetic biology in the field of health care.
     With the development of synthetic biology, the technology of engineering
transformation of probiotics has been constantly improved. At the present, a variety of
probiotics base organisms like E. coli, Lactobacillus and bifidobacterium have been
developed. In addition, there has been a relatively perfect process and method for the
industrial transformation of probiotics, which has greatly expanded the application
scope of engineering probiotics and promoted the commercialization process of
related industries. Due to the high modularization of engineering probiotics,
engineering probiotics has been involved in many commercial fields.
     The development of engineering probiotics is mainly dominated by the United
States, where ZBiotics, a U.S. gene engineering company that focuses on consumers’
health, recently launched the first genetic engineering probiotic – Zbiotics. Zbiotics is
a functional beverage whose central function is to break down acetaldehyde, an
unwanted by-product of alcohol. The advent of Zbiotics is a milestone in the
application of probiotics in biotechnology, with data showing that China has a 10
billion yuan liquor market that involves a 10 billion yuan ingesting market, of which
500 million drinkers, the proportion of people with ingesting demand is 60%, showing
a huge market potential. Meanwhile, the industry benchmark for synthetic biologics,
Synlogic, has started a phase of clinical trials and is gaining momentum.

                                              6
China's engineering probiotic field is in its infancy, with large-scale probiotic
enterprises represented by Koto Bio, abundant reserves of fine strains, complete
technical system and a solid foundation for the development of engineering probiotics,
a good development momentum of engineering probiotics can be foreseen.

1.2 The infection in the hospital is relatively serious

     With the development of modern medicine, there are more and more invasive
operations in the medical process, such as tracheotomy, trachea intubation, inhalation
device, monitoring instrument probe and so on. As well as diagnosing and treating
diseases, these operations can import outside microorganism and damage the body's
defense barrier. What’s more, with the use of antibiotics and other drugs,
drug-resistant strains are continuously increasing, resulting in longer course of illness
and stay in hospital. All of these factors may significantly increase the risk of
infection in the hospital. According to we our interview, the secondary infection in
first-line is indeed widespread, and has a significant negative impact on the lasting
treatment. For example, during this COVID-19 outbreak, a large number of patients
flocked to hospitals, making medical devices full used or overused, of which
particularly short in ventilators – one ventilator may serve many different patients in a
short time. Frequent use coupled with incomplete disinfection is likely to cause
residual of Pseudomonas aeruginosa and other Glolan-negative bacteria in the
ventilators, causing secondary infection in the hospital during the tracheal intination
process.

1.3 Existing treatments have limitations

     For infectious diseases such as in-hospital infections, antibiotics are still used in
mainstream treatment options. According to recent surveys, the rate of carbapenem
resistance in Pseudomonas aeruginosa has reached 26.4%. Drugs target carbapenem-
resistant Enterobacteriaceae (CRE), Baumann's Bacillus (CRAB) and pseudomonas

                                               7
aeruginosa (CRPA) have been identified by the World Health Organization as key
requirements for research and development. At the same time, patients in the ICU are
now often treated with empirical broad-spectrum antibiotics to prevent Gram-negative
bacteria infections. Although this means that to a certain extent to solve the current
house of the Gram-negative bacteria infections, but also will inevitably cause the
resistance of related bacteria to further improve and Gram-negative bacteria infection
drug-free crisis is approaching.
     Due to the limitations of treatment, the market for new therapies for bacterial
infection caused by the widely drug-resistant Gloran-negative pathogen has not been
met, and effective new therapies need to be developed.

1.4 Current situation and prospects of synthetic biology

     There is no uniform definition of the concept of synthetic biology, but it can
simply be described as the fine design of biological systems and the "engineering" of
living organisms, a study that obtains new biological functions by assembling
structural and functional biological components into more complex biological systems.
Designing, constructing and manipulating new biological systems at the molecular
level is the main research content.
     Synthetic biology represents a new trend in the development of biotechnology,
using synthetic biology technology to overcome biological barriers, has made
significant progress in the production of low-cost bio-petroleum hydrocarbons,
efficient and low-cost preparation of hydrogen, integrated biological treatment of
cellulose substances into ethanol, synthetic antimalarial drugs, synthetic
enterobacterials and other aspects of researches. Many scholars believe that synthetic
biology will develop rapidly in a few years, and will be widely used in the energy,
environment, chemicals, materials, medicine and other fields, which will produce
huge social and economic benefits.
     In a research released in May 2020 called The Bio Revolution: Innovations
Transforming Economies, Societies and Our Lives by McKinsey Global Institute,
                                              8
they describe a prospective future for biological applications. They estimate that over
the next ten to 20 years, biological applications could have direct annual economic
impact of between about $2 trillion and $4 trillion globally.
     Additionally, in the field of medicine, synthetic biology research has the
advantages of rich and diverse technology, strong operability and large space for
independent design, which can not only provide new ways for new drug research and
development, but also provide new ideas for drug preparation, and have obvious
advantages in realizing the autonomy and innovation of drug research and
development. In the international community, synthetic biology research as an
innovative technology has become a commercial hot spot, especially because of its
broad prospects in drug research and development and huge profit returns, has
attracted the world's top pharmaceutical companies and investment institutions of
special attention and a large amount of money. It can be foreseen that in China's
pharmaceutical industry, synthetic biology research will be expected to promote
source innovation, promote overall development, achieve breakthrough in drug
research and development, to solve the drug problem of more than one billion people
in China to provide long-term support.

1.5 The development status and prospects of China's

pharmaceutical market

     China's biopharmaceutical industry is developing rapidly. A foreign analyst said
that over the past two or three decades, the traditional pharmaceutical industry has
been dominated by the United States, Western Europe and Japan, but the current
situation is changing very quickly because China has made significant progress. The
analyst said that emerging markets represented by China would continue to grow at a
high rate and would attract more foreign products to China as China's policy
regulations become more transparent and global. Because China is a promising
biopharmaceutical market and ongoing reforms are becoming more and more open.

                                             9
However, China's innovative drug research and development capacity and
investment still have a large gap comparing with foreign countries. China's innovative
drug clinical applications concentrated in the field of anti-tumor, the new virus drug
research and development investment is insufficient, which is directly related to the
poor short-term investment returns of pharmaceutical research. With the spread of the
COVID-19 epidemic, the biopharmaceutical industry has become a pioneer in the
fight against the virus, pushing all parties to re-examine its strategic value, this
outbreak is also expected to encourage the government to pay more attention to and
support the research and development of new drugs. The prospects for biomedicine
are promising, and Bill Gates even predicted that the next world's richest man to
surpass him would have to come from the genetic field. According to the 2019-2025
Market Monitoring and Future Prospects Forecast Report of China's Biomedical
Industry released by Zhiyan Consulting Network, the market size of China's
biopharmaceutical industry will reach a growth rate of 10%-15% in 2020-2025, and
the market size of China's biopharmaceutical industry is expected to exceed 500
billion yuan by 2025.
     The ten key fields mentioned in the strategy document -"Made in China 2025"-
issued in May, 2015, which aims at deploying comprehensive promotion and
implementation of a strong manufacture, includes biomedicine and high-performance
medical devices. The document proposes the development of new products of
chemical drugs, traditional Chinese medicines and biotechnology drugs for major
diseases, with emphasis on new mechanisms and new targets of chemical drugs,
antibody drugs, antibody conjugates, new structural proteins and polypeptides, new
vaccines, innovative traditional Chinese medicines with prominent clinical advantages
and personalized medicine. The government's attention will greatly accelerate the
development of high-performance, high-tech biomedicine and medical devices in
China.
     With the strong support of the national policy, Biolake in Wuhan started
constructing in November, 2008. This bioindustry base focuses on biomedicine,

                                               10
biomedical engineering, bio-agriculture, precision diagnosis and treatment, intelligent
medical treatment, bio-services and other fields and creating a new bio-industry city
integrating research and development, incubation, production, logistics and life. In the
base, the biopharmaceutical park, which covers an area of 6 square kilometers,
focuses on the development of genetic engineering drugs, chemical preparations,
diagnostic reagents and other fields and collocates the largest professional logistics
center in central China, gathered more than 200 enterprises such as Human Fu
Pharmaceuticals, Fessenyus, National Drug Flow, Hikang Bio, etc.. It is an important
new drug creation center, national innovative drug incubator, national new
pharmaceutical creation integrated platform, national genetic engineering drug public
service platform in China. In the field of chemical preparations, Biolake has become
China’s largest production base of antiviral prescription drugs and has constructed the
first cGMP standard soft capsule export production base in China. It can be said that
in the field of biomedicine, with the support of national policies, Wuhan has a unique
advantage in the conditions for the development of biomedicine great prospects.
     In addition, In a research called The Bio Revolution:Innovations Transforming
Economies Societies and Our Lives by McKinsey Global Institute, , which have been
mentioned above, they refer to the fact that the leader of China’s Basic Research
Department said the country was seeking to position itself as a global leader in
synthetic biology, motivated by a need to address the country’s public health, nutrition,
and resource needs.

2.Product introduction

2.1 Introduction of our products and technologies

2.1.1 Key technology
     The project's engineering probiotic species contains two functional modules: the
quenching module and the sensing module. Centering on molecular cloning
technology, the project can realize rapid design-build-test-learn iteration with the
support of physical model mathematical model and put the production of "safe,
                                             11
effective, controllable, and accessible" product-grade engineering probiotics as
ultimate goal. The target of the product is the Gradlan-negative bacterial quorum
sensing system, in which the quenching module is responsible for degrading the
quorum-sensing signal of Gram-negative pathogens, and the sensing module is
responsible for sensing the characteristic quorum-sensing signal of the target strain as
well as releasing the chemokines to recruit immune cells to remove the pathogens.
     The construction of the quenching module requires the heterogeneity expression
of endoesterase or transamase in engineering probiotics, and it is proposed to carry
out a reasonable combination of enzymes and designed engineering enzymes
supported by mathematical models and software to achieve product iterative upgrades.
The design of the sensing module, take Pseudomonas aeruginosa as example, is based
on the quinoxone-like signal of pseudomonas and utilize the strong constitutive
promoter in the engineering bacteria to over-expression of the corresponding
transcription factor PqsR to capture the ligation, after which a phage derivative
system will be used to activate the downstream chemokines expression.
     Considering the controversial about the use of genetically modified organisms in
the human body, the safety form has been designed as following: a suitable
toxin-antitoxin system (TA system) will prevent horizontal gene transfer of important
modules. At the same time, controlled expression of TEV protease will resolve the
possible leak of upstream pqs promotor as well as regulate the secretion of
chemokines. Taking the network of interactions between cytokines themselves into
account, the team plans to combine the product with anti-inflammatory factor drugs
and apply them in an inhaler manner.

2.1.2 Mode of production
     In order to target each kind of Gram-negative pathogens’ specific quorum
sensing system, our initial product has a strong specificity currently, but in subsequent
research and development we plan to combine a variety of pathogenic bacteria
quorum sensing model, together they translate into E. coli as a larger module, to
achieve a broader spectrum of Gram-negative pathogens inhibition effect. The final
strains can be used as a complementary treatment option to help medical workers
cope with nosocomial infections mainly related to ventilator-related pneumonia.

                                             12
2.2 Product advantages

     The principle of our products is to interfere with the quorum sensing system of
pathogens, in order to reduce the exertion of their toxicity and reduce the life
expectancy of pathogenic bacteria. It belongs to the quorum quenching therapy and
can effectively cope with the gradual rise of pathogen resistance, to achieve better
auxiliary treatment results. At the same time, because our products work by degrading
the group signals of pathogens and recruiting autoimmune cells, we can also avoid the
side effects that accompany with common antibiotics and protect the health of patients.

                                             13
3.Development and market analysis

3.1 PEST analysis

3.1.1 Politic
     In recent years, the state has increased its investment in the field of
biopharmaceuticals. The ten key fields mentioned in the strategy document -"Made in
China 2025"- issued in May, 2015, which aims at deploying comprehensive
promotion and implementation of a strong manufacture, includes biomedicine and
high-performance medical devices. The document proposes the development of new
products of chemical drugs, traditional Chinese medicines and biotechnology drugs
for major diseases, with emphasis on new mechanisms and new targets of chemical
drugs, antibody drugs, antibody conjugates, new structural proteins and polypeptides,
new vaccines, innovative traditional Chinese medicines with prominent clinical
advantages and personalized medicine, which clearly take biomedicine and
high-performance medical devices as one of the ten key areas of development and
gives strategic support and protection:
     1) In accordance with the International standard Good Clinical Practice (GCP)
and the Good Laboratory Practice (GLP) to establish a standardized international
cutting-edge and clinical evaluation platform for new drugs.
     2) Optimize the policy of priority review and rapid approval and strengthen the
expansion and construction of the team of review inspectors.
     3) To elaborate and implement the State Council's Opinions on Reforming the
System of Review and Approval of Pharmaceutical Medical Devices(2015) No. 44 to
safeguard the approval of new drugs.
     4) Develop a drug consistency evaluation system.
     And put forward development goals:
     By 2020, encourage a large number of enterprises to achieve drug quality
standards and systems in line with international standards, among which including at
least 100 pharmaceutical preparation enterprises certified by United States, Europe,
Japan and WHO and realize exports; In accordance with international drug standards,
develop and promote the registration of 10-20 kinds of chemical drugs and their
                                              14
high-end preparations, 3-5 kinds of new traditional Chinese medicines and 3-5 kinds
of new biotechnology drugs in Europe and the United States and other developed
countries and accelerate the internationalization of domestic drugs.
     More than 90% of heavy-weight drugs that expire internationally by 2020 are
generic. Break through 10-15 major core key technologies and initially establish a
national drug innovation system and innovation team.
     In 2025, we will basically achieve drug quality standards and systems in line
with international standards, develop new products for chemical, traditional Chinese
and biotechnology drugs for 10 major diseases, realize the industrialization of 20-30
innovative drugs, and 5 product -10 new drugs with independent property rights in
China will enter the international market through FDA or EU certification. We will
build a national drug innovation system that improves and supports external services,
form a high-level innovation team with an international perspective, and promote the
international development strategy of Chinese medicine.
     And, for the implementation of the The 13th Five-Year Plan for Economic and
Social Development of the People’s Republic of China and A Guideline on Emerging
Sectors of Strategic Importance During the 13th Five-Year Plan Period, further
strengthen the biological industry innovation base, promote the modern biological
technology more benefits to the people's livelihood, focus on creating new biological
and economic momentum, the National Development and Reform Commission issued
the Development Plan of biological industry in the 13th five-year Plan, the key fields
of biological industry is divided into seven categories: The industry of biomedicine,
biomedical engineering, bio-agriculture, bio-manufacturing industry, bio-energy
industry, bio-environmental protection industry and bio-service industry were also put
forward. The proposals for technological innovation in the next five years were also
put forward, and the direction of investment development in the field of medicine and
health was also pointed out. According to the Plan, the innovation platform's resource
sharing and open services have basically established a national drug innovation
system with the world's advanced level. The comprehensive capacity and overall level
of new drug research and development have entered the international advanced ranks,
accelerating China's transformation from a large pharmaceutical country to a major
medical country. According to the plan, the compound growth rate of China's
biological industry has reached more than 15 percent since the 12th Five-Year Plan
                                            15
period, and the size of the industry exceeded 3.5 trillion yuan in 2015. By 2020, the
         scale of the biological industry will reach 8-10 trillion yuan, and the added value of
         the biological industry will account for more than 4% of GDP, becoming the leading
         industry of the national economy. According to the relevant analysis organizations,
         under the strategic background of independent innovation, the demand for testing
         safety and effectiveness in the early stage of drug development has greatly increased,
         directly driving the sustained growth of China's preclinical CRO industry in recent
         years.
              Of course, relevant national institutions have also issued a number of other
         policies to strongly support the development of the biopharmaceutical industry,
         including representative of the major policy support as follows:

                      The
Time.                              The name of the policy.          The main content.
           publishing unit.
                                                                        Basic realization of hypertension,
                                                                   diabetes management intervention full
                                                                  coverage, and gradually qualified cancer,
                                                                stroke and other major chronic diseases early
                      State          Outline of "Healthy
2016.1                                                             diagnosis and treatment of appropriate
                  council.            China 2030"
                                                                 technology into the diagnosis and treatment
                                                                   routine. Strengthen the prevention and
                                                               treatment of common diseases such as myopia
                                                                        and obesity among students.
                                                                        Improve the level of research and
                                                               development and preparation of biotechnology
                                                                  drugs such as antibody drugs and tumor
                                         Guide to the
                                                                 immunotherapy drugs. Focus on diabetes,
2016.1             Ministry.   Development Planning of the
                                                               viral infections, tumors and other diseases, the
                                 Pharmaceutical Industry
                                                                 development of low immunogenicity, good
                                                                 stability, strong targeting, long-term, high
                                                                bio-utilization of new products. According to

                                                        16
The
Time.                            The name of the policy.         The main content.
         publishing unit.
                                                              the needs of diabetes treatment in China, the
                                                              industrialization level of long-acting insulin
                                                                     and premixed insulin is raised.
                                                                     Implementation of the hierarchical
                                                              diagnosis and treatment system. Priority will
                                                             be given to the chronically ill patients into the
                                  Notice of the General      scope of family doctor contract services, and
                            Office of the State Council on       actively promote high blood pressure,
                            the Issue of China's Medium-       diabetes, cardiovascular diseases, tumors,
                 State
2017.1                       and Long-Term Plan for the      chronic respiratory diseases and other patients
            council.
                             Prevention and Control of       graded diagnosis and treatment, the formation
                                  Chronic Diseases            of primary care, two-way referral, up-down
                                    (2017-2025)              linkage, rapid and slow division of reasonable
                                                                       medical order, improve the
                                                             treatment-rehabilitation-long-term care service
                                                                                  chain.
                                                                  Making clinical trials easier, reducing the
                                                                time lag between overseas heavyweight
                                                                products entering the domestic market,
                                 Opinions on Deepening
                                                                shortening the time to approve new drug
                            the Reform of the Review and
                                                              applications, extending the patent period for
                 State          Approval System and
2017.1                                                            innovative drugs and increasing the
            council.         Encouraging the Innovation
                                                               affordability and availability of innovative
                             of Pharmaceutical Medical
                                                              drugs, and supporting innovative SMEs and
                                      Devices
                                                               start-ups can benefit from a wider range of
                                                             research and development and manufacturing
                                                                                 options.
                                                     17
The
Time.                            The name of the policy.         The main content.
          publishing unit.
                                                                      Promote the industrialization and
                                                              application of high-end drugs. Promote the
                                                                 development and industrialization of
                                                                 innovative drugs with targeted, highly
                                                             selective and new mechanisms of action in the
                                 Implementation Plan for      field of treatment of major diseases such as
                             industrialization of high-end     tumor, cardiovascular, diabetes, immune
2017.11          Ndrc.         medical devices and key         system, virus and drug-resistant bacterial
                                   technologies for             infection. Support the development and
                                   pharmaceuticals           industrialization of the first chemical generics
                                                             and biosimilars with high market potential and
                                                               high clinical value patent expiration, and
                                                             support the upgrading of the product industry
                                                                through consistent evaluation of generic
                                                                          quality and efficacy.
                                                                    If the time limit for drug registration
                                                             changes, the applications for drug registration
                                                              that are now accepted by the provincial food
                                                             and drug regulatory departments and approved
                                  Announcement on the
                 Drug                                         by the State Food and Drug Administration
2017.11                          Adjustment of drug
          Administration.                                    shall be adjusted to the central management of
                             Registration and Reception
                                                              the State Food and Drug Administration in
                                                              order to speed up the application for clinical
                                                              trials of new drugs and applications for the
                                                                       production of new drugs.
                 Drug                  Opinions on               It is possible to speed up the development
2017.12
          Administration.    Encouraging Priority Review      and market of new drugs with clinical value
                                                      18
The
Time.                            The name of the policy.         The main content.
         publishing unit.
                               and Approval of Drug          and clinically in urgent need of generic drugs,
                                      Innovation              and to solve the contradiction of the backlog
                                                                    of drug registration applications.
                                                                  Make adjustments to the relevant matters
                                                              for the review and approval of drug clinical
                                    Announcement on
                                                              trials, and formally implement the method of
                Drug          adjusting the review and
2018.7                                                        communication and communication of drug
         Administration.       approval procedures for
                                                             research and development and the application
                                clinical trials of drugs
                                                               for implied licensing of new drug clinical
                                                                                  trials.
                                                                   It is stipulated that the communication
                                     Measures for the         and exchange meeting will become the main
                                Communication and             interactive form of communication between
                Drug
2018.1                      Exchange of Drug Research          the applicant and the reviewer on technical
         Administration.
                                and Development and          issues, and the resulting consensus can be used
                                  Technical Review               as an important basis for research and
                                                                   development and post-evaluation.
                                                                  We will improve the dynamic adjustment
                                                               mechanism of the medical insurance drug
                                  Notice of the General
                                                             catalogue and give priority to the scope of the
                            Office of the State Council on
                                                               medical insurance catalogue for qualified
                 State       the Issue of Key Tasks for
2019.6                                                       therapeutic drugs in the list of essential drugs
            council.        Deepening the Reform of the
                                                             in accordance with the procedures. High blood
                            Medical and Health System in
                                                                 pressure, diabetes and other outpatient
                                         2019
                                                                 medication into the medical insurance
                                                                            reimbursement.

                                                     19
The
Time.                              The name of the policy.         The main content.
           publishing unit.
                                                                       The residents are prompted to pay
                                                                  attention to blood sugar levels, guide the
                                                                prediabetes population to reduce the risk of
                                                                  disease scientifically, guide diabetics to
                                                                  strengthen health management, delay or
                                    Opinions of the State       prevent the occurrence and development of
                    State            Council on the           diabetes. Strengthen the health management of
2019.7
               council.        Implementation of Healthy        diabetics and high-risk groups, and promote
                                      China Action             the standardization of screening and diagnosis
                                                               and treatment of diabetes and complications at
                                                                the grass-roots level. By 2022 and 2030, the
                                                                 standardized management rate of diabetics
                                                              will reach 60% and above and 70% and above,
                                                                                respectively.

              The government's attention will greatly accelerate the development of
         high-performance, high-tech biomedicine and medical devices in China. This project
         has a good prospect and huge development space under the environment of rapid
         development of biomedicine industry.

         3.1.2 Economy
              1. Market demand
              In recent years, with the emergence of drug-resistant bacteria, the types and
         dosing of antibiotics needed to treat bacterial infections have been increasing. And the
         real situation is:
              (1) Since the 1970s, it has been difficult to obtain antibiotics with development
         value from microbial metabolites through the method of pure culture of
         microorganisms under laboratory conditions. At present, the research and
         development of antibacterial drugs mainly focuses on the modification or
         optimization of known compounds.
                                                      20
(2) In 2016, 193 member states attending the United Nations General Assembly
signed a declaration pledging to strengthen the control of antibiotics, and China made
it clear in the Declaration of Hangzhou issued at the G20 summit that year that "We
will promote the prudent use of antibiotics and consider the enormous challenges in
terms of their affordability and availability and their impact on public health".
     (3) Meanwhile, the market for new therapies for bacterial infections caused by
extensively resistant Gram-negative pathogens has not been met, with
carbapene-resistant enterobacteriaceae (CRE), Acinetobacter baumannii (CRAB) and
Pseudomonas aeruginosa (CRPA) identified by the World Health Organization as key
needs for research and development.
     It can be seen that the increase in demand for antibiotics and the restriction of
antibiotic use and research and development bottlenecks have formed a huge conflict,
the market demand for new drugs is very urgent. This also provides a huge market
space for antibiotic substitutes.
     The antibiotic pipeline tracking program launched by the Pew Charitable Trusts
is aggregated semi-annually, and an online interactive tool (Antibiotics in
Development 2014) is created to demonstrate trends in antibiotic pipeline
development. This longitudinal analysis highlights long-standing concerns that there
are too few antibiotics under development to meet current and expected patient needs.
     2. Industrial supply.
     There are about ten alternatives to antibiotics (e.g. antimicrobial peptides,
thymus peptides, phages, etc.), but there may be only four or five commonly used on
the market. Although there are many alternatives, each product is defective in some
way and can only be used as an adjuvant therapy, not a complete substitute for
antibiotics. As a result, the available supply of industry is very limited.
     From the above, the huge market and limited supply conditions, effective
antibiotic substitutes such as engineering probiotics have broad economic prospects.

3.1.3 Society
     In recent years, the problem of drug-resistant bacterial infection has become
more and more serious. It is predicted that by 2050, the number of human deaths due
to multiple drug resistance will increase to 10 million, surpassing cancer deaths as one
of the world's major causes of human death. The production of drug-resistant bacteria

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is closely related to the use of antibiotics. Antibiotics kill most of the pathogens and
screen out bacteria that are not previously dominant in the bacterium but have
resistant genes. With the increasing use of antibiotics, bacterial resistance is also
increasing in the round of screening. Gram-negative bacteria are harder to kill than
gram-positive bacteria, and are more likely to develop resistance, leading to more
severe infections. And new drugs are not being developed fast enough to keep pace
with the rise in bacterial resistance. The misuse of antibiotics adds to the problem. As
a result, there are growing calls to limit the use of antibiotics. In this context, there is
an urgent need for a treatment of bacterial infections that does not require antibiotics.
3.1.4 Technology
     Group induction effect (QS) refers to the change of physiological and
bio-chemical characteristics of microbial groups in their growth process, which show
the characteristics not possessed by a small number of bacteria or individual bacteria.
The reason for this change is that when the density of microbial population in the
environment reaches a threshold and the concentration of signaling molecules reaches
a certain level, the signal transmission of related proteins, including the subject
protein, induces or inhibits the signal to be eventually transmitted to the cell, affects
the expression of specific genes, and regulates the physiological characteristics of the
microbiome, such as bioluminescent, antibiotics synthesis, biofilm formation, etc.
Using the QS mechanism for "cell-to-cell communication", microorganisms are able
to coordinate in complex environments to "team combat capability" to better survive
the entire population.
     This mechanism allows bacteria to form high-density biofilms when
Gram-negative bacteria invade the human body, causing great harm to human health.
     Group quenching (QQ) means to inhibits the QR system, the discovery of this
therapy can greatly inhibit the occurrence of biofilms, thereby slowing the bacterial
infection process in the human body. Because it interferes with the internal
communication path of bacteria itself, it can effectively cope with the current situation
of increasing bacterial resistance, so as to achieve a better auxiliary treatment effect.
     Group quenching is one of the key research and development directions in the
fields of medical microbiology, food microbiology and environmental microbiology.

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3.2 3C's Strategic Triangle Model

3.2.1 Customer classification
     Through the analysis of our product technology and positioning ,we can
conclude that our target customers should mainly be medical or immunology research
institutions, or major hospitals and their relevant cooperative institutions or
enterprises, which are summarized as follows:
     1. In the treatment of infections, hospitals will become our most important
customer base at present.
     2. In the area of research or teaching, research institutions in related fields such
as immunology, microbiology and medicine, as well as laboratories in universities,
will form an additional group of clients.
3.2.2 Benefits to customers
     Product Sales: For hospitals, new treatment ideas can be provided, as well as
cheaper and more efficient treatment methods, and for research institutes, new
research materials can be provided to reduce research and development costs and
improve research efficiency.
     Technical services: We will provide technical services for some
biopharmaceutical companies, assist in more efficient and professional R & D of
products, and improve research efficiency and product quality.
     Patent licensing: We will cooperate with biomedical companies to promote the
industrialization of products and create a win-win industrial chain.
3.2.4 Relationship between the service platform and the target customers
     The relationship between customers and us is an interactive relationship.
     The service platform provides a communication platform for target customers:
for researchers, the platform can provide product related statistical data and research
results of other researchers, which helps to better understand the product and lead
further research. For drug sales companies, product feedback and communication can
be carried out on the platform, and personalized customized scheme can be designed,

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that is, engineering probiotics products for specific Gram-negative bacteria. For
consumers, the raw materials provided by the platform are traceable, which helps to
increase the trust of customers and establish a good reputation for the products.
     After our platform provides customers with high-quality services, customers will
become our free advertising, which helps to improve the company's visibility, increase
our influence in target customers, increase market share, attract more funds, further
promote the development and improvement of products and platforms, so as to better
serve customers Households. As a result, a virtuous development cycle has been
formed, so that our projects and products can be more sustainable development.
     Moreover, since the target customers include many research institutions, the
feedback from customers can promote the progress of our technology, and even
discuss and build a probiotics research platform.

4.Business model and market strategy

4.1 Business model

     Our business model is divided into three parts: product sales, patent licensing
and technical services: .
     ① Product sales: we hope to promote the products we have developed (which
can be carried out through the intermediary of pharmaceutical representatives) and
sell them to patients infected with gram-negative bacteria, and make profits by selling
the products.
     ② Patent authorization: in the early stage of R & D, in order to support us, we
can also sell a certain technology or patent in the whole technology system to relevant
R & D units, help them develop related similar products more quickly and effectively,
and promote the development of the whole market environment.
     ③ Technical services: our team has a relatively complete technical system for
the construction of Engineering probiotics, which can provide R & D services for
relevant pharmaceutical companies and help them build engineering probiotics.
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4.2.1 Research and development mode
        We are now using laboratories provided by the college of life sciences of Wuhan
University for independent research, but we are looking for cooperation with
companies or institutions engaged in anti biofilm research or engineering probiotics.
        In terms of research, we are trying to apply the latest research results in related
fields to expand the application of our product technology, hoping to enable the
product to have a wider spectrum of therapeutic effect, that is, it can be applied to the
treatment of all gram-negative bacterial infections. In this regard, we will improve our
product technology and strengthen cooperation with research teams in related fields,
so as to further improve the quality of our products.
4.2.2 production mode
        In the early stage of development, our products will be produced by OEM
companies with production qualification around Wuhan. As an emerging business
team, we lack production management experience and capital, so it is necessary to
find a suitable contract manufacturer for mass production to reduce production costs
and improve production efficiency, so as to enhance our market competitiveness and
enable our business team to focus more on product research and development. Later
in the development of the "negotiator" project, we plan to invest in our own factory to
produce products. The preliminary production plan arrangement is as follows: the
company's production department formulates the production plan according to the
monthly sales plan and the order status, and arranges the production according to the
plan. And each production link is standardized and recorded to realize the traceability
of product quality. The quality department monitors the production process, checks
the strains, finished products and important operation links to ensure the biological
safety and product quality in the production process. At the same time, the company
strictly implements the inventory management system to ensure that the product
inventory can meet the reasonable market demand and improve the inventory turnover
rate.

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4.2.3 Channel sales model
     1. Offline:
     Product sales take a combination of direct sales and sales, sales plans in foreign
markets are realized through distributors, domestic sales by the team set up a sales
team responsible for product promotion, directly to hospitals, biological products
enterprises, universities and biological products research institutes.
     2. Online: .
     Online sales we will adopt the B2B business model and establish official sales
centers on multiple e-commerce platforms. It can reduce the cost of purchasing and
inventory, save turnover time, expand market opportunities and promote the
development of the project. Moreover, the company plans to establish an official
website and build a vertical professional B2B (vertical) B2B) platform, focus all
efforts to build a professional information platform, with the help of the research
results of group sensing of Gram-negative bacteria, effectively connect with hospitals,
biological products enterprises, universities and biological products research institutes,
and develop more in-depth and unique service content and profit model in continuous
exploration.

4.3 Marketing Strategy

4.3.1 Target market
     At this stage, our main target market is patients with pulmonary infection caused
by Pseudomonas aeruginosa. Pseudomonas aeruginosa is a common pathogen of
nosocomial infection, but also a "super bacteria" in Gram-negative bacteria. Its
treatment is difficult, and the market demand for new treatment is large. In addition,
we use engineering probiotics for treatment, which theoretically can effectively treat
infections caused by a variety of Gram-negative bacteria, and has great development
potential.

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4.3.2 Product strategy
     Our products have core competitiveness in principle. In order to show our
product strategy to the market, we have made the following analysis on our products.
      product hierarchy                                 description
         core product               The core product of our project is the biological
                              preparation for the treatment of gram-negative bacterial
                              infection. The advantage is that the use of
                              Gram-negative bacteria group induction effect,
                              immunotherapy, avoid the use of antibiotics, can better
                              solve the problem of bacterial drug resistance.
        formal product              Our expected product is to produce inhaled spray
                              containing engineered bacteria to treat gram negative
                              bacteria in the lungs.
        future product              We hope that we can use our principle to make
                              biological agents that can be used to treat
                              Gram-negative bacteria infection in all parts of the body,
                              and improve the applicability of the products to various
                              infections.
       potential product            Promote new technologies and patents in the
                              process of product development, promote the
                              development of the industry, accelerate drug research
                              and development, and improve the treatment level for
                              Gram-negative bacteria.

4.3.3 Price
     In the early stage of the company's development, we will mainly focus on the
core business of early capital accumulation, actively cooperate with drug companies
and research institutions dedicated to the treatment of Gram-negative bacteria
infection, and sell our products. For this part of the business, considering the
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traditional antibacterial market and the positioning of our innovative products, we
decided to adopt a satisfactory pricing strategy. Through cost and market analysis, we
selected the optimal price which is relatively favorable to consumers, producers and
middlemen. The initial price was 4000 yuan / L. With the expansion of business scale
and the increase of sales volume, the company will achieve the purpose of profit
maximization by properly adjusting the price and influencing the change of sales at
any time.
4.3.4 Channel
     Channels are crucial to the chemical, agricultural, food and pharmaceutical
industries. According to the market characteristics of bacteriostatic therapy, we
developed a channel strategy combining point-to-point sales in the early stage and
agent distribution in the later stage to meet the needs of improving market coverage,
channel flexibility and channel control. At the same time, we will also strictly control
products and services, prices, promotion activities, distribution processes, etc., to
ensure the normal operation of the channel network.
     1.Channel Selection
     As an auxiliary solution for medical treatment, our marketing will make use of
the cooperation between Wuhan University and other relevant hospitals or biological
research institutes to provide point-to-point supply. At the same time, in order to
facilitate sales, we will use two modes of online sales and marketing to promote
synchronous.
     We hope to ensure our sales volume and long-term cooperation with related
agencies through the advanced technology of our products and the effectiveness in
practical applications. On the basis of this long-term cooperative relationship, we can
expand the sales of our products to a national scope.
     In order to further consolidate our market share, while expanding the sales scope,
we will adjust our business model and try to establish a nationwide sales network
through the network or offline organizations, so as to give more timely feedback to
customers' opinions, so as to provide better service or further improve product

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technology.
     2. channel expanding
     Basic steps to develop sales channels:
     1) Looking for target market and delineation of target customers: collect all
target markets in the city, such as scientific research institutes, hospitals,
pharmaceutical companies, etc., and gradually visit them, make a record of the visits,
and delineate the target customers according to the attitude of each customer to our
project products.
     2) Secret interview: visit the market secretly to understand the background of the
target customers: after selecting your target customers, you can visit the market twice
to understand the business philosophy, management ability, financial ability, business
location, brand identity of these potential customers.
     3) Screening: sort out materials, select effective information, visit target
customers again, select customers more in line with the company's culture and
direction, and determine the final sales and cooperation partners.
     4) Negotiate: publicize the company's favorable policies in recent years, the
rapid development of the team in recent years and brand expansion, etc., and focus on
the new policies for new customers.
     5) Signing: make a contract, explain the terms in the contract carefully, and sign
the receipt of explanation of the contract at the same time.
     6) Encouragement: keep abreast of the changes of customers' mentality and
business dynamics at any time. In case of cooperation with patent authorization, it is
necessary to timely track the situation of cooperative enterprises and make timely
adjustments to relevant work.
     7) At the same time, the team plans to expand brand awareness through
exhibitions, lectures, academic conferences and other activities, conduct
word-of-mouth marketing, and carry out long-term and effective cooperation with
hospitals, scientific research institutes and other institutions.
     3. channel control

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1) vision control: timely communication with relevant hospitals, research
institutes and biomedical companies, sharing research ideas, corporate culture,
development ideas and vision; establishing official account or publication of
enterprises, regularly issuing research progress, development status and other
information.
     2) Brand control: brand is an important resource of an enterprise, and the team
insists on brand construction and brand marketing. Establish a good brand image at
the level of relevant hospitals, scientific research institutes and biomedical companies,
and exert influence on the channels. Through this brand, we can reduce the cost of
sales and improve the sales efficiency, so as to control the channel.
     3) Service control:
     (1) Control the production and manufacturing process of products to ensure the
implementation of product quality;
     (2) Adjust sales channels in different stages of product life cycle;
     (3) Through the supervision and management of dealers, ensure the quantity and
quality of products and services;
     (4) Establish a special supervision and evaluation department to supervise and
evaluate the technical services and patent authorization, and timely return visit to
customers.
     4) Interest control
     (1) Control the price of products and services
     (2) Improve the quality of products and services
     (3) Expand publicity channels
     (4) Make the right promotions and discounts
     If distribution is adopted, the appropriate rebate and distribution standard shall be
determined through timely communication with distributors.

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5. Competitive risks and countermeasures

                            Competitive risks and countermeasures.
             Description of the risk                               Countermeasures
    1. Competitors                                     Although the market for antimicrobials
    The main competitors of our product           is more important, but in recent years, the
are antibiotics, including antibiotics and        problem of drug-resistant bacteria is
synthetic drugs. However, China is a big          becoming more serious, and the abuse of
country in the production and use of              antibiotics is exacerbating the problem, and
antibacterial drugs. The annual production        this product can be a good target for specific
of antibacterial raw materials is about           bacteria, the killing of drug-resistant bacteria
210000 tons, and the export is about 30000        can play a very good effect, from the quality
tons. According to the "survey report on          and effect of strong competitiveness.
the current situation of public safe drug
use" issued by the State Food and Drug
Administration on September 1, 2012,
about 25% of China's households have
antibacterial drugs on hand, and 23.9% of
people use antibacterial drugs after
catching a cold. Among the top 100 drugs
sold in China's medical institutions, 29
belong to antibacterial drugs, and the
annual sales of the third generation
cephalosporins alone exceed 1 billion yuan.
It can be seen that antibacterial drugs
occupy a large market share, so the first
problem to be solved is to occupy a certain
market.

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2. Public acceptance.                             The safety of the product needs to be
    Public confidence in GM technology is        fully controlled, and within the permitted
low, and the GM technology used in the           scope in the product description to explain the
production of this product may be                production process for the control of GM
questioned, while oral microorganisms            safety technology, the use of probiotic
may also create a psychological burden on        chassis, a brief introduction to the biological
customers.                                       characteristics of the probiotic chassis used to
                                                 reduce the psychological burden of the public
                                                 on oral microorganisms. And apply for
                                                 relevant permits to improve public
                                                 acceptance.
    2. Promotion and application.                     In view of the current bacterial
         The role of this product at this        resistance problem is becoming more and
stage is more in favor of auxiliary              more serious, and this product can solve this
treatment, the scope of application is           problem well, so at this stage with some
narrower.                                        companies producing antimicrobial drugs to
                                                 cooperate, mutual benefit and win-win
                                                 situation. In the long run, we will continue to
                                                 make technological innovations to enhance
                                                 the therapeutic effect of our products, moving
                                                 from complementary therapy to therapeutic
                                                 direction.

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