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Original research
Postmortems on diagnostic testing start-ups: reports of commercial successes and failures and the case of the Zombie life science company


Background From 2014 to 2017, more than 1000 diagnostic companies were launched, securing more than US$10 billion in investment.

Methods We performed an in-depth exploration of 28 diagnostic companies to differentiate successful and failed startups, plus a third ‘Zombie’ state where companies have achieved financial solvency but without long-term viability.

Results From these data, we created a five-phase, 13-item framework indicating the corporate health of a diagnostic company as it progresses from conception to commercialisation. We found 6 successful companies, 14 failures and 8 Zombies. On a scale of 0–26 points (two points per item), successful companies averaged 24.5 points (range 22–26), failures averaged 4.5 (range 0–16) and Zombies averaged 12.3 (range 3–23) (p<0.001). To determine if there was any predictivity to this framework, we looked at only the first two phases (concept and feasibility/planning) of progress and found a distinct gradient in success potential based solely on these first two phases.

Conclusion Our five-phase framework generated a score that could predict diagnostic companies more likely to successfully and sustainably enter the market from those more likely to fail.

  • diagnostics
  • economics
  • inventions

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