Let’s start with some numbers: More than 150 million people globally suffer from brain aneurysms. Half a million people die each year from these brain aneurysms. Half of the victims are younger than 50.
Until now, diagnosing and treating brain incidents depended on a time-consuming process. Different medical specialists needed to look at the same pictures and try to determine if they saw the same thing inside the patient’s skull.
Now, imagine what the promise of artificial intelligence could bring. What if new AI tech could diagnose and measure the disease at least 10 times faster than a radiologist? Thankfully, that’s what Milwaukee-based VasoGnosis is trying to accomplish with its diagnostic and surgical planning platform.
Does this breakthrough potential make VasoGnosis stock a buy here?
Developing an AI-Powered Detection Engine
First, let’s go over the basics. A brain aneurysm is a bulge or ballooning in a blood vessel in the brain. It can can leak or rupture, causing bleeding into the brain (hemorrhagic stroke). A ruptured aneurysm quickly becomes life-threatening and requires prompt medical treatment.
When that happens, and once the patient gets to a hospital, they’ll typically have an MRI. It can take anywhere from an hour to four days from the scan time for a radiologist to read the images. The radiologist’s experience is usually the biggest determinant of diagnostic accuracy.
VasoGnosis has developed a brain aneurysm “detection engine,” using an AI algorithm, to find and analyze the aneurysm. According to the startup’s pitch deck, once found, its software performs a risk assessment based on the aneurysm’s location in the brain and the patient’s health profile. It uses 4-D imaging to measure blood flow over time, estimating the stability of the aneurysm and the likelihood of rupture.
The detection engine can do all this within five minutes of the scan. And, thanks to VasoGnosis, diagnosis is no longer solely dependent on the radiologist’s experience.
Developing Medical Software-as-a Service
The Wisconsin-born company has plans and agreements in place to validate the VasoGnosis technology at the Medical College of Wisconsin. It was at the school where Ali Bakhshinejad, president and CEO of the startup, spent more than half a year. He held a fellowship after earning a doctoral degree nearby at the University of Wisconsin-Milwaukee. His interactions with radiologists and brain surgeons — the medical professionals who will be the users of the company’s products — made him realize that AI hadn’t yet been brought to the task of creating a predictive surgical tool.
He discovered that without AI, diagnosis and selection of surgical devices remained a manual, highly subjective process. In addition to being time consuming, patient outcomes were poor. One out of four surgeries result in an unsuccessful outcome, fueling $65,000 in additional healthcare costs in less than 12 months from the original operation.
Here’s one thing to note. The U.S. Food and Drug Administration has cleared more than 30 treatment and intervention devices for brain aneurysms.
It’s not that those devices aren’t effective. It’s the selection and matching of the device to the patient’s unique anatomy and health condition that’s a problem. VasoGnosis enables a medical team to identify — again, using AI and data modeling — the best of those available and FDA-cleared devices for the specific situation, according to the company.
VasoGnosis’ Current Fundraising Efforts
The startup is fundraising in a pre-seed round on the SeedInvest platform. In this round, it has raised $71,000 toward a valuation cap of $4 million. The minimum investment is set at $1,000.
That initial amount enabled the firm to complete its first product and release a beta version of it in late May. Money that it is now raising will be deployed to finish the development of a final product and launch pilot tests and clinical validation trials.
The firm has also been added to Nvidia’s (NASDAQ:NVDA) Inception program, an accelerator for promising deep learning startups.
The Bottom Line on VasoGnosis Stock
While the company is clearly in pre-revenue stage, the tests with those two hospital systems provide a look at the possible business model for VasoGnosis. They project the AI detection algorithm will generate $50,000 a year while each case of surgical planning will bring in $2,000.
If the revenue projections in its pitch prove to be reality, the technology will be in use in 400 hospitals, generating $400 million by 2025.
There are competitors, though, as one would expect, neither is an apples-to-apples rival. HeartFlow has pioneered simulation for surgical planning. It was valued at $1.3 billion in 2018 and has raised $577 million to date. Its focus, however, is cardiovascular.
More brain focused is Sim&Cure, a French firm developing a surgical planning system for aneurysms. However, unlike VasoGnosis, it doesn’t have detection or AI capabilities. The six-year-old firm has raised less than $3.5 million to date. That makes VasoGnosis stock a stronger investment.
Robert Lakin is a veteran financial writer and editor, following fintech, agtech and property tech startups. He was previously emerging markets editor for Bloomberg News in Tel Aviv. He is a contributor to the Powered by Battery blog. Robert does not own any of the aforementioned securities.
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