Did you know that more than 50% of infants born before 25 weeks don’t survive, and that the leading cause of death among children under 5 years of age is premature birth? In 2015, there were 1M premature infants that died globally.

It is estimated by the World Health Organization that ¾’s of these deaths can be prevented with cost-effective care. For babies that survive and make it out of the NICU, their future prospects can also be grim, with most babies falling into the lowest 10th percentile of infants in terms of height and weight.

One such method that could help with this is ‘kangaroo mother care,’ (the baby is carried by the mother with skin-to-skin contact and frequent breastfeeding). Now the reality is, when infants are that premature, this type of care can be near impossible because the baby is just too fragile.

A solution is needed that provides premature infants with an environment that mimics that of a mother’s womb. A place that provides the type of moisture, static temperature and nutrition that a premature infant needs to develop like a full-term baby.

Unfortunately, current NICU solutions that try and provide the closest thing to ‘kangaroo mother care,’ are too hostile with heat lamps that dry the infant’s skin, and humidified portholes that need to be opened and shut for evaluations, which create too much variation in temperature for the infant to maintain homeostasis.

Amnion Life is a revolutionary effort to improve on the incubators we have now. Their iteration of the incubator, the AmnioBed, recreates the conditions inside the womb to minimize the amount that infants need to adapt to new external conditions.

The AmnioBed is designed with water that contains minerals, electrolytes, and other essential nutrients, and heats the solution to 98.6 F, the body temperature that the infant would normally be exposed to inside the womb. Infants are then submerged in this solution with a harness to ensure the infant’s head is above water at all times. Infants can, therefore, absorb nutrients through their skin from the AmnioBed’s water and maintain healthy body temperatures. It’s the closest thing to a mother’s womb that has ever been created.

There are a number of advantages to using the AmnioBed. First, water is much more efficient at transferring heat than air. The fact that the baby is submerged in heated water, rather than the current practice of portholes, means that an infant’s body temperature can be kept at a healthy level more consistently than with current devices.

Even more, when an infant needs to undergo assessments, the AmnioBed’s water also does not have to take 20 minutes to rebalance interior conditions. Because of AmnioBed’s water composition, infants are also able to absorb essential nutrients through their skin from the surrounding water, much like they would inside the womb, which is a significant improvement on the current practice of using IVs.

IV saline, which is used to replace water loss from their underdeveloped skin, has also been associated with chronic lung disease and is risky when not administered with the correct balance of other nutrients. In essence, there are many advantages to keeping premature infants in womb-like conditions that current practices cannot address.

With 15 million infants born premature globally every year, the market for for neonatal intensive care is valued at $6.2B, and is forecasted to grow to $9.09Bn by 2024. A new solution that is less abrasive than current incubator solutions that can lead to timelier release of premature infants and decreased mortality rate is desperately needed.

With neonatal intensive care unit (NICU) costing nearly $3,000 per day, any solution that can reduce time in the NICU and improve outcomes will be positively received by the medical community. Amnion Bed’s technology seems poised to provide a truly promising solution to drastically improve the current standard of care.

Amnion Life, founded in 2016, has simultaneously made headway in realizing the potential of their innovations and generating additional uses for their intellectual property rights.

In April of 2018, the first prototype of the AmnioBed was completed, and the company is in the process of testing their prototype.

Even more, they hope to design and develop a secondary device to mimic the umbilical cord, where incubators may provide essential nutrients and oxygen to an infant’s umbilical vessels, where they would naturally receive their nutrition. Further down the line, they also hope to create similar long-term care units for adult burn victims and other patients. This platform approach further enhances the long term prospects of this business.

1. Strong Stakeholder Incentives: AmnioBed is based on the concept that given the right care, premature infants may have a higher growth rate, and therefore be discharged from hospitals sooner.

Currently, preterm infants stay in the NICU for 46 days on average. These numbers are even higher for extreme preterm infants, with Florida reporting a 110 day stay on average.

This means that extreme preterm infants undergo nearly 42-46 weeks of gestation, compared to the normal 40-week gestation period. Given that the AmnioBed can provide better care and therefore reduce the time an infant takes to be discharged, hospitals will be able to service more infants in a shorter amount of time, with fewer incubators.

In fact, stakeholders on every side of premature births benefit from this innovation. Parents of infants can rest easier knowing that their infants are being kept in conditions similar to what other infants who were born at their due dates would undergo. Infants are clearly better off without the added risks of unstable external conditions, and the potential dangers of water and heat loss.

Society in general also benefits off of shorter hospitalization periods. With such a high cost associated with NICUs, a reduction of just three days in preterm infant length of stay represents a potential $1.1 Bn decrease in societal cost.

This comprehensive set of benefits to all stakeholders means that the AmnioBed is likely to be well-received by the market.

2. Strong Product-line Potential

In pioneering this new perspective on premature infant care, Amnion Life has an advantage over competitors in generating other products that perform similar functions. For example, their idea for creating what is essentially an artificial umbilical cord has similar implications and societal benefits as their AmnioBed.

Additionally, the business model is attractive from the fact that the device is only one way to monetize the technology. It’s very much a razor-razor blade model, where once they sell the unit to a hospital they will drive continued revenues off of selling consumables (amniotic fluid cartridges, catheters and lines, filters, etc.)  and maintenance of the equipment. This makes the top line revenue opportunities attractive as each unit drives long term recurring revenues.

Their plan to eventually expand into developing devices tailored for burn victims or other long-term care patients also represents the potential applications of their innovative new idea. This means, the company will not simply stop growing if it saturates the premature infant care market, but instead Amnion Life can expand to other aspects of the healthcare industry as well. Put simply, platform technologies help to create more market opportunity.

3. Long Investment Horizon & Risks

Amnion Life estimates that the AmnioBed may take two years of testing or more, to ensure that the product is market-ready. But, even after the company is satisfied with the quality and safety of their product, the FDA still needs to approve their product, which takes on average another six months. So, investments in Amnion Life are likely to have a long time horizon and inherently hold more risk, due to the potential that the FDA does not approve their product.