iPill

Early Stage

Remote Monitoring Technology to Combat the Opioid Crisis

Analytics

Raised to Date: Raised: $57,399

Aggregate Commitments $

Platform

StartEngine

Start Date

02/24/2021

Close Date

05/21/2021

Min. Goal

$9,999

Max. Goal

$1,070,000

Min. Investment

$399

Security Type

Equity - Common

Funding Type

RegCF

Series

Seed

Price Per Share

$1.50

Pre-Money Valuation

$7,500,000

Rolling Commitments $

Status
Funded
Reporting Date

05/31/2021

Days Remaining
Funded
% of Min. Goal

574%

% of Max. Goal

5%

Likelihood of Max
Funded
Avg. Daily Raise

$667

Momentum
Funded
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Location

Rowland Heights, California

Industry

Healthcare & Pharmaceuticals

Tech Sector

Medtech

Distribution Model

B2C

Margin

High

Capital Intensity

Low

Business Type

Growth

iPill, with a pre-money valuation of $7.5 million, is raising funds on StartEngine. The company is manufacturing a pill dispenser connected to a smartphone application. The dispenser helps to address and combat the opioid crisis by actively controlling opioid usage. The smartphone application ensures adherence to prescriptions. John Hsu and Sherie Hsieh founded iPill in 2019. The current crowdfunding round has a minimum target of $9,999 and a maximum target of $1,069,999.50, and the proceeds will be used to launch the product, perform the clinical study, and achieve manufacturing growth. iPill has been designated as a breakthrough medical device by the FDA and has received FDA Class I registration.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$0

$0

COGS

$0

$0

Tax

$0

$0

 

 

Net Income

$0

$0

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$0

$1,500

Accounts Receivable

$0

$0

Total Assets

$0

$1,500

Short-Term Debt

$0

$0

Long-Term Debt

$0

$0

Total Liabilities

$0

$0

Financials as of: 02/24/2021
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Ratings KingsCrowd Startup Rating Methodology Article

Analyst Report Analyst Report Methodology Article

Synopsis

The opioid crisis represents one of the greatest mass traumas in modern medical history. In the 1990s, pharmaceutical companies launched mass-scale campaigns to convince doctors that opioids would not lead to addiction for patients, and physicians in turn began prescribing them at high rates. Use and abuse has grown exponentially since then, with an estimated 21-29% of patients who are prescribed opioids to manage chronic pain misusing them.

In 2019, an estimated 50,000 Americans died from overdosing on opioids. In addition to the human toll, the economic impact of opioid abuse adds up to around $78.5 billion per year. Prescription opioids can also serve as a “gateway drug” to even more serious addictions, such as heroin. Americans across the political spectrum agree: prescription opioid addiction is an absolutely massive problem, disproportionately but not solely affecting males under 50. 

While there is agreement that opioid addiction is a massive problem, advocates differ on how best to address the crisis. One company with an eminently practical approach to preventing future abuse is iPill. The iPill solution is a blocky storage device connected to a phone app which dispenses prescription pills on a medically managed schedule. By actively ensuring that prescriptions are followed, the device controls usage of opioids and has proven effectively tamper-proof. It is single-use and upon detection of interference can destroy the pills, preventing the patient from using them.

Not only does this control of medication dispensation ensure that patients themselves do not abuse their prescriptions, it prevents other members of a household from accessing the medication as well. The product is still in development. However, during the FDA approval process, it was hailed as a “breakthrough” medical device and granted Class I Registration. 

iPill’s current StartEngine raise has been rated a Neutral Deal by the KingsCrowd investment team.

Price

To launch its product, perform a necessary clinical study, and build up manufacturing, iPill is raising capital through common stock at $1.50 per share. The company’s pre-money valuation comes in at $7.5 million. This valuation is attractive in comparison to other startups that are currently raising funds. However, as iPill is currently pre-revenue, the revenue to valuation multiple is a major mark against the company. Thus, the price score for iPill is low.

Market

The anticipated market size for opioid drugs in the U.S. is $18.4 billion in 2020, accounting for more than half of the prescription pain medicine market. While this is a healthy market size, iPill will not have full access to it since the company is not selling or manufacturing opioids. Instead, it is aiming for a relatively small slice of that market with its dispensation solution. iPill plans to primarily focus on dental offices, addiction treatment centers, clinical research organizations, and pharmacy-insurers. The company’s product is covered by insurance, which does help expand the market opportunity slightly. However, iPill’s offering is still rather niche in comparison to the overall opioid market. As a result, iPill’s market score is middle of the road.

Team

In its pre-product stage, iPill is headed up by a lean two-person team of medical professionals and entrepreneurs. CEO and founder John Hsu has an MD from Loyola University Chicago Stritch School of Medicine and has spent nearly three decades working in anaesthesiology at Presbyterian Intercommunity Hospital in Whittier, California. In addition to strictly medical experience, Hsu has some experience with business development in his role as CEO and founder of Quivive Pharma, which is developing an oral stimulant to prevent opioid overdoses and addiction. It is a perfect companion company to iPill.

Sherie Hsieh is iPill’s COO and works with Hsu both at iPill and Quivive. Hsieh has a BS in Clinical Laboratory Science from San Francisco State University. In her role at Quivive, she serves as director of marketing. She is a clinical toxicologist and is a co-founder of a small real estate trust in California. 

The iPill team brings medical industry expertise as well as leadership experience. While both Hsu and Hsieh bring some minor entrepreneurial experience, neither has grown a startup into a large firm or achieved any exits. Taking all this into consideration, the team score for iPill is above average. 

Differentiators

The iPill dispenser is an innovative solution. The company has secured three patents, including one for its tamper detection system. Its tamper-proofing is part of what makes the product stand out from competitors, which are neither covered by insurance nor immune from interference. iPill faces a relatively small number of these competitors, considering the massive scope of the crisis it is addressing. Its designation by the FDA as a “breakthrough” technology points to the company’s success at developing an entirely new solution for a market in need. Therefore, iPill’s differentiators score is its highest across all five metrics.

Performance

iPill’s performance cannot be gauged in a financial sense, as it does not yet have a product. However, on a technological and business level, it’s doing well. As discussed above, FDA approval has come with a rousing endorsement, and the product has won awards. The company is also in talks with organizations in all three segments of its target market to run pilot programs. The startup has nothing definitive to present yet, but it has time to secure these deals as it begins to develop the product for at-scale manufacture.

Due to the lack of financial records or revenue, iPill’s performance score is quite low.

Bearish Outlook

While iPill has excelled on the technological development stage so far, its early stage leaves several questions unanswered for investors. The company’s proposed business model of recurring sales to pharmacies, dentists, and treatment centers has yet to be proven profitable, and product manufacturing of this single-use, custom device could prove problematic. Given that its team’s expertise lies mainly on the medical and technological sides, it is unclear just how successful iPill will be as it moves from development to the business side. No matter how effective a product is, everything comes down to how it is produced and sold. If iPill is unable to realize the monetization of its solution, the company may struggle to provide a return to its early investors.

Bullish Outlook

The opioid crisis isn’t going away anytime soon. Indeed, all evidence indicates that opioid abuse has grown significantly worse during the COVID-19 pandemic. The iPill dispenser is cheap, effective, and offers a clear and simple use to an urgent problem. It’s hard to ask for more from a product.

Assuming iPill can quickly undergo its required study and refine its product through pilot programs, it stands ready to become an indispensable tool for physicians to manage prescription opioid use as effectively as in a hospital environment. The foundation has been laid for a successful business model that could be up and running with revenue in the millions within the next few years, dominating the space.

Executive Summary

iPill is offering a new approach to combating America’s devastating opioid abuse crisis. Pills are stored in a tamper-proof, phone-connected dispenser that is accessible via fingerprint. The dispenser ensures that the patient receives pills on a medically-ordained schedule. The device is designed to detect any intrusion and destroy the stored pills, serving as a foolproof way to prevent abuse.

While the product is still in development for mass production, in FDA trials it was hailed as a breakthrough product and has won awards for its innovative design. However, the company has yet to achieve monetization, and it is unclear if the founding team will be able to successfully pivot from product design to full manufacturing and selling. The market opportunity for iPill is also niche in nature, and failure to capture a large portion of the market could result in slow growth for iPill. For all these reasons, the company is a Neutral Deal at this time.

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to support@kingscrowd.com.

Analysis written by Benjamin Potts.

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Platform: StartEngine
Security Type: Equity - Common
Valuation: $7,500,000

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