New Investment Opportunity: MedAware
AI-powered prevention of medication errors, prescription abuse
- Life-saving platform prevents dangerous medication errors, prescription abuse using advanced AI, big data technology used in FinTech fraud detection
- Protects hospitals and pharmacies against lethal mistakes, reducing legal exposure and liability of institution and doctors
- Multi-year, multi-million-dollar OEM strategic co-development and licensing agreement with Baxter International (NYSE: BAX), all relevant milestones met and paid for
- Advanced negotiations for second OEM co-development deal with leading medical device company in the medication delivery space; strong pipeline with in-patient, long-term care, and closed-door pharmacies
- Company expects to have signed 5 pharmacy contracts by the end of 2022, projected to generate $8.5M ARR; 2023 contracts projected to generate $21.4M ARR; 2024 contracts projected to generate $39.5M
- $10M-$15M Series D round led by OurCrowd and Sanara, Israeli biotech VC
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Dear Josb,
Each year, hundreds of thousands of patients are injured or fatally harmed by adverse drug events and erroneous prescriptions. Medication errors harm an estimated 1.5 million Americans annually, resulting in thousands of preventable fatalities.
OurCrowd is investing in MedAware, an Israeli healthcare startup whose platform enables healthcare providers, payers, and pharmacies to provide superior risk management by identifying and eliminating a wide range of prescription errors, as well as dramatically minimizing false alerts. The details in this email are based on information received from, and verified solely by, the company.
The Problem
Preventable medication errors contribute to direct costs of $21B and indirect costs of $77B each year in the US alone. Legacy rule-based monitoring systems do not catch these errors efficiently and generate large numbers of false alarms. The resulting death and illness expose practitioners, staff, and institutions to multi-million-dollar legal and other costs, with resulting high insurance premiums.
The Solution
MedAware applies advanced AI and big data analytics from FinTech fraud detection technology to prevent dangerous medication errors and prescription abuse. The medication safety platform can save lives, reduce costs of unnecessary hospital readmissions, improve patient safety, and improve overall healthcare efficiency and quality.
In a recent hospital-based test of MedAware's platform, the system demonstrated a high degree of accuracy with 60% of its alerts to pharmacists resulting in a prescription modification, compared to the rule-based, legacy monitoring system average of only 5%. MedAware's platform succeeded in mitigating alert fatigue common with the legacy monitoring systems which on average alert pharmacists to 32% of all prescriptions with a large percentage of false alarms. In this test, MedAware flagged less than 1%, with a majority yielding actionable results.
The Customers
Over the past two years, MedAware has met all relevant milestones and received full payment for them from Baxter International (NYSE: BAX) as part of a multi-year multi-million OEM co-production agreement in which MedAware is embedding its technology in Baxter infusion pumps. MedAware is also in advanced negotiation with another provider for an OEM co-production agreement to embed the MedAware software in prescription-technology robots for precise automated drug dispensing.
The Pipeline
In addition to the OEM deals, MedAware is positioning itself for significant recurring revenue with a strong pipeline of software as a service (SaaS) agreements. In Q2 2022, the company signed an agreement with CareWell Health Medical Center, an inpatient pharmacy in New Jersey, and with the Illinois-based MMP, a closed-door pharmacy that next year will be servicing over 10,000 long term care beds. By year-end 2022, the company expects to sign contracts with a major closed-door pharmacy servicing 120,000 beds and another two inpatient pharmacies each servicing 2,000 bed health systems. MedAware expects to conclude negotiations in Q1 2023 with a 4,000-bed inpatient pharmacy health system, and with two additional closed-door pharmacies in Q2 and Q4.
Revenue Forecast
The company forecasts that the five contracts it expects to sign by the end of 2022 will generate $8.5M ARR subject to completion of certain integration milestones. It projects contracts due to be signed in 2023 will generate $21.4M ARR, while those expected to be signed in 2024 are forecast to generate $39.5M.
The Market
The global pharmacy management system market is forecast to grow from $18B in 2021 to $35B by 2026 at a CAGR of 14.6%. Global pharmacy automation–the target market for MedAware's OEM co-development deals–is projected to grow from $5.8B in 2022 to $10.5B by 2030 at a CAGR of 9.8%.
The Team
Co-founder and CEO Gidi Stein is a practicing physician, as well as the chief architect of several algorithm-rich startups in Israel. Stein has an MD from Tel Aviv University (TAU) Medical School and a PhD in computational biology from TAU. CTO Moshe Meiseles has over 20 years' experience in building R&D teams and delivering successful product with startups including Memco which was acquired by Computer Associates for $550M and New Dimension Software acquired by Texas-based BMC Software for $675M.
The Round
OurCrowd has an allocation of up to $2M in this $10M-$15M Series D round with 20% warrant coverage for amounts invested in the initial closing of the round which is scheduled for September 8th. The proceeds will be used to strengthen and increase sales, marketing, and customer success management.
Meet the CEO
We're hosting a webinar/conference call on Monday, August 15th, at 6PM Israel / 11AM New York / 8AM San Francisco for investors to meet CEO Gidi Stein and learn more about MedAware.
The MedAware Solution
The platform identifies adverse drug events, eradicates dangerous and sometimes lethal medication errors, and identifies patient-specific risk of opioid dependency by applying advanced machine-learning algorithms and outlier detection mechanisms like fraud detection solutions in use by financial institutions worldwide.
By continuously mining data gathered via millions of electronic health records, the software can accurately flag potentially life-threatening prescriptions that conflict with the profile of the patient, physician, or institution.
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