Busy day prowling the halls of Vancouver’s brokers today, jamming CEO meetings from 8am through to a few minutes ago.
Caught up with the crews from Health Space (HS.C)*, Eguana Technologies (EGT.V) and Equitas Resources (EQT.V)* – more on all of those later in the week.
Two stories, however, were pitched at me today that warrant discussion immediately: Imagin Medical (IME.C), and Loop.
Imagin is a medical hardware play that comes out of tech developed out Boston way. In a nutshell, they’ve zeroed in on bladder cancer with new technology that, they say, will make cyst identification quicker, less invasive, and eventually something that could be handled in a doctor’s office.
As of now, if you have a suspected bladder cancer tumour, your doctor can either go to surgery and rip you open like a barbecued chicken, or can hit you with a red dye called Cysview that, besides being considered toxic, helpfully stains your tumour under the right kind of light. FDA approved, but only to a point – you’re allowed to use Cysview once, then you’re done.
Imagin CEO Jim Hutchens, who has more experience in this sector than you should ever ask him about if you have somewhere to be in the next half hour, says his technology uses a special green light that requires far less of the Cysview – perhaps 90% less – which means you should be able to go back and check a few times to make sure the cyst is cleared, all the time using scopes through the bellybutton rather than cracking open ribs.
This is important, becomes some kinds of bladder cancer return at a high rate, and you don’t want to be having some dude’s hands messing about with your innards too many times.
Hutchens knows his pitch, which was apparent when he peeled it off to the boardroom at Heywood Securities this morning, but the whole FDA scene is a dog’s breakfast of broken promises and broken dreams, so I decided to tag along to the next pitch session, in front of a guy I knew would be able to call bullshit if bullshit was indeed on offer.
Sequoia Capital’s James Beesley came from the health care industry before he became ensconced in the public markets. His company was one of those behind Health Space (mentioned above), beta-carotene animal feed additive play Avivagen (VIV.V), and (before the went to public markets hell) Patient Home Monitoring (PHM.V) and Convalo Health (CXV.V).
Beesley asked pointed questions and didn’t beat around the bush. And Hutchens had his answers in good form.
Bottom line, Hutchens says he can get his product through animal and clinical trials over the enxt 18 months, get through the minimal FDA approvals needed to allow an existing approved treatment to change slightly, and get his product to market by Q1 2018. Beesley questioned that timeline, especially the FDA process, which Hutchens has pegged for a year, but the CEO says he’s already working on that end and doesn’t expect things to get prickly.
And he says he can get there with just $4m spent over the coming two years.
If I have a criticism with Hutchens, it’s that he’s just too into his story. I mean, there are going to be speedbumps ahead – there always are – and he likes to breeze on through those. But he has chops in the business and says the technology is already working, and expect to largely finance that $4m through warrants that are already out there, so he doesn’t expect the risk of failure to be outrageous.
What are the chances someone else will come in an just take the company over? If they can prove what they need to over the next six months, high, I think. That development cost is not outrageous at all in this space, and the upside if they get things worked out is ridiculous.
The stock has held well since listing, even creeping up a little. I’m not ready to jump in, but admit there’s every chance it’ll shift up and not see this price again. Will be talking to them again soon.
Loop isn’t into a public ticker yet but will be soon, and this is a deal that, frankly, I’ve talked to a lot of informed people about and heard the same questions about every time.
Loop is a scooter-sharing deal. Very green; electric scooters with telematics built in, matching up to an app on your phone, allowing you to grab a scooter and go whenever such a move is convenient.
The tech is developed so the company knows when the scooter is low on power (and will give you incentives to take it back to a charging station), when it’s being ridden by an idiot (accelerometers will cut the engine if it’s bouncing about, stopping too hard or not matching the driver’s weight for some reason), and where it is at all times. The company is selling franchises in cities around the world and expects 35 of those within five years. There will be three next year, including London, Vancouver and Beirut.
- What if someone just leaves it in an alley? (the app tells potential riders there’s one nearby)
- What if it runs out of energy? (the telematics tell the driver’s app, hey, can you park this thing at a LoopHub so it can charge up? We’ll give you bonus credits if you do..’)
- Is it insurable? (Yes, at $400 per year, which is miniscule)
- What happens if a scooter is damaged? (the company has credit card info on file, and cameras on the vehicle, so..)
- What’s stopping someone from replicating this thing on a wide scale? (18 months of dev time on the tech, and sourcing of the bikes that have the tech included)
- Why not just sell deals to large companies who would drop it into many cities at once – say, for example, companies with offices in areas not served well by transit, or rental car companies that don’t want to get left behind by the ridesharing trend, or colleges, or…? (Answer: Not a bad idea)
- What craziness does a municipal government need you to go through to approve the concept? (None. It requires no infrastructure beyond roads)
- Helmets? Lice? (Now you’re just being picky)
I went into the Loop pitch, as did several others I’ve spoken to, unconvinced that it was ready to go public. There’s a little revenue but not much, there’s yet to be a pilot project run, and with bike sharing and car sharing and Uber and Lyft, there’s a case to be made for this space right now just being hard to penetrate for a small startup.
At the same time, the valuations being discussed for all of the above companies are peaking, and ridership doesn’t seem to have plateaued yet, so perhaps this is the exact right time to shove in and compete, while it’s still somewhat doable.
I hope to talk more to both companies in the weeks ahead, but can safely confirm both pitchmen did more to convince me they’re onto something than not.
Thanks to Brayden Sutton, James Beesley and Justus Parmar for the hookups. Also thanks to Jay Martin of Cambridge House for the juicy Cannibal Cafe burger – The House has several interesting conferences coming up that are dead on into the younger investor space, including one focused on drone companies that I will definitely not miss.
Kyler Hardy, of Equitas Resources, bumped into me often enough today that I’m starting to believe he’s got a GPS tag on my back. He says loads of EQT news is coming, and that he’s off to Brazil shortly to oversee the pouring of concrete.
Most of our watchlist stayed level today, so not much news to report otherwise. Stay thirsty, my friends.
FULL DISCLOSURE: An asterisk denotes a company that I have a commercial relationship with and/or own stock in. Do your own due diligence, big fella.Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.