MedVector

Early Stage

Transforming Clinical Trials

Analytics

Raised to Date: Raised: $906,238

Aggregate Commitments $

Platform

StartEngine

Start Date

10/27/2020

Close Date

07/29/2021

Min. Goal

$9,999

Max. Goal

$1,070,000

Min. Investment

$496

Security Type

Equity - Common

Funding Type

RegCF

Series

Pre-Seed

Pre-Money Valuation

$10,000,000

Rolling Commitments $

Status
Funded
Reporting Date

08/01/2021

Days Remaining
Funded
% of Min. Goal

9,063%

% of Max. Goal

85%

Likelihood of Max
Funded
Avg. Daily Raise

$3,295

Momentum
Funded
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Location

El Segundo, California

Industry

Healthcare & Pharmaceuticals

Tech Sector

HealthTech

Distribution Model

B2B

Margin

Medium

Capital Intensity

Low

Business Type

Growth

MedVector, with a $10 million pre-money valuation, is raising crowdfunding on StartEngine. It is a telemedicine platform that aims to accelerate clinical trials. The platform will connect subjects from across the world to clinical trial sites and increase participation in clinical trials. Scott Stout and Dr. Dennis Patterson founded MedVector in 2017. The current crowdfunding round has a minimum target of $9,999.20 and a maximum target of $1,069,999.95, and the proceeds will be used for the launch of the platform. MedVector platform has access to seven hospitals consisting of hundreds of thousands of patients per year. The company has signed two LOIs and completed three case studies with Novartis.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$0

$0

COGS

$0

$0

Tax

$0

$0

 

 

Net Income

$-512,457

$-311,702

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$26,998

$148,600

Accounts Receivable

$0

$0

Total Assets

$253,690

$188,600

Short-Term Debt

$208,552

$500,302

Long-Term Debt

$0

$0

Total Liabilities

$208,552

$500,302

Financials as of: 10/27/2020
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Ratings

Analyst Report

Synopsis

The COVID-19 pandemic has grown the telehealth industry exponentially. A recent study of U.S medical specialists found that 79% of the respondents had seen an increase in the frequency of telemedicine appointments. The normalcy and increased usage of telemedicine is a trend that doctors and patients see continuing due to its convenience.

One area in which telemedicine will be most helpful is in speeding up the process of clinical trials. On average, the average time to market for a new medication is more than 10 years. In particular,  patient recruitment is one of the largest factors that slows the overall process. Medical patents last 20 years and start with the first patient tested in the clinical trials — so the longer the trials go on, the more money the pharmaceutical company loses.

MedVector is a telemedicine platform that accelerates the clinical trials phase by connecting participants from anywhere in the world to ongoing clinical trials sites. MedVector’s platform looks to be revolutionary, and competition is scarce in this field. The company has existing large hospitals signed on, showing there is already market traction for it. There are concerns, mostly related to the lack of revenue to date. However, if it can continue to build off of the revolutionary product and existing market it already operates in, MedVector could pay off well for investors.

MedVector’s current StartEngine raise has been rated a Deal to Watch by the KingsCrowd investment team.

Price

MedVector is raising with a valuation of $10 million and a price per share of $1.45. The valuation seems to be on the higher side, especially when considering that the company has had no revenue to date. Thus, the company’s price score is slightly below average.

Market

MedVector is operating at the intersection of two markets, the smaller telehealth industry and the much larger clinical trials market. The former is an increasingly growing market. Telehealth is now worth $3.2 billion and has grown, on average, 30.4% each year from 2015-2020. The rise of the COVID-19 pandemic has pushed telehealth into the mainstream, and it seems like a trend that will not go away. 

The clinical trials market is predominantly where MedVector operates. The total market size for this industry sat at $46.8 billion in 2019 and is set to grow at a compounding annualized rate of 5.1% from 2020 to 2027. MedVector’s revolutionary technology that makes clinical trials exponentially faster and easier has the potential to make a large splash into this market. Capturing even 5% of the total market size would have MedVector become a company worth nearly $2.5 billion. As a result, the market score for MedVector is its highest across all five metrics.

Team

MedVector was founded by (current CEO) Scott Stout and Dr. Dennis Patterson. Stout has a financial background, working at companies such as Morgan Stanley and Wells Fargo’s Private Bank. Dr. Patterson brings the medical experience, with 35 years of experience managing hospitals. He also has had previous success with a startup – he was one of the original founders of Wellspring Partners, which was acquired for $65 million.

Joining the co-founders is Mose Cowper (former senior counsel to AMGEN), David Manovich (former EVP for Apple), Trevor Esaki (the CEO of Millennium Clinical Trials), and Teague Sanders (Senior VP of Whittier Trust).

Dr. Patterson’s 35 years of hospital management experience and his already successful startup track record make him well positioned to lead another startup to success. MedVector’s team score is above average in reflection of this strength.

Differentiators

It’s difficult to think of just one aspect of MedVector that counts as a differentiator. This is because the product that the company offers isn’t just building on something that already exists — it’s completely overhauling an entire system.

MedVector is an industry first, the only product on the market that can connect clinical trials participants from around the world with those who are conducting the trial. This completely eliminates the geographic limitations that have been in place for pharmaceutical companies trying to bring a drug to market. If MedVector can continue to build on the success it has already seen within its seven hospital network, this is a company that can and will completely change the entire clinical trial industry. The one drawback, currently, is that MedVector does not hold any patents for its platform or service. Although the development for a comparable product would probably be difficult for many companies, there is a slight lack of defensibility that should be acknowledged. Taken all together, MedVector’s differentiators score is above average due to the revolutionary character of the product.

Performance

There has been no revenue thus far for MedVector. The scope of the business has been laying the groundwork for future successes and testing out the products within the markets that MedVector already operates in. According to the company, the product is 100% finished and only requires small tweaks, and the telemedicine platform itself is also (according to MedVector) 90% complete. However, neither of these products are available for commercial use at this time.

As for the trials that it has conducted thus far, the company looks extremely promising from a performance perspective. MedVector has done three case studies with Novartis. In just seven weeks, it connected with more clinical trials participants than other companies can in years. If that level of success on its revolutionary platform can continue, MedVector is certain to be heading towards becoming a profitable company. 

Due to the lack of financial performance data or revenue, MedVector’s performance score is its lowest across all five metrics.

Bearish Outlook

As with many startups, the lack of revenue and the small amount of cash on hand is always cause for concern. As of the end of the most recent fiscal year, MedVector was operating with just under $27,000 of cash — down from $148k at the end of the previous year. One misstep, one problem with scalability and creating more of the product could lead MedVector towards huge issues. The product and the platform seem to be extremely solid, but can MedVector’s executive leadership do everything needed to acquire the share of the clinical trials market they believe they can? Monetization and scalability are the largest concerns for MedVector currently.

Bullish Outlook

Game changing. That’s the best phrase to describe what MedVector brings to the table within the clinical trials market. The company offers a product that can save pharmaceutical companies billions of dollars by expediting the process of finding patients to participate in trials. Each day that goes by in the trials process is another day with a wasted patent (the 20-year patent clock for a drug begins ticking as soon as the first person participates in the clinical trial), so there is clear incentive for companies to finish these processes as fast as possible.

MedVector provides the product to make this possible, and if scaled correctly, will completely revolutionize the field. Having access to a product like this would put any pharmaceutical company well above their competition, so an acquisition by a major pharmaceutical company is also not out of the question. With an executive team made up of people with strong financial history, and, more importantly, an already successful startup background, MedVector is well-positioned to grow into a profitable business.

Executive Summary

MedVector has been rated a Deal to Watch due to its potentially revolutionary technology, its impressive executive leadership team, and early successes in its case studies with Novartis. The lack of competition is another boost to MedVector. There remains the possibility that the product does not scale well, and the lack of revenue could be scary to some investors – but the outlook for this telemedicine company looks extremely promising.

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

Analysis written by Ethan Thomas.

 

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