DealBox | Q-Med Innovations
We are an asset management technology business developing hardware and software solutions focused on the $3 billion orthopedic surgical instrument kit market. We enable medical device manufactures, distributors and providers with game changing data and analytics that improves bottom-line performance with unparalleled visibility, utilization and control of their inventories throughout the supply chain.
Middletown, RI, USA
Series Seed Round
Reg D Rule 506(c) - Accredited Investors Only
1 Unit : 166,667 Shares Common Stock
07/01/2021 - 11/31/2021
The medical industry faces on-going challenges keeping track of surgical instrument kits deployed into the field, either to sales rep networks or medical facilities. These kits are typically owned by, and assets of original equipment manufacturers, and loaned to medical facilities to support procedures. When assets get misplaced, or lost, resources are stressed, costs rise, and care suffers.
Caregivers need the ability to locate equipment quickly to deliver effective, on-time treatment. By reducing the time staff spends searching for assets, it can spend more time delivering quality care and reduce time delays in the provisioning of care.
In addition, better enabling the tracking of surgical instrument kits reduces the common scenario of “stashing” frequently used, hard-to-find equipment to ensure they have what they need, when they need it.
Existing, state-of-the-art approaches to asset management of surgical instrument kits are not ideal. These include software and mobile applications that facilitate asset management that require manual input, rely on radio frequency (RF) technologies, bar codes and suffer performance issues due to environmental conditions (such as temperature).
QMed’s proprietary, patent-pending1 technology provides asset managers the ability to monitor and report on a daily basis the exact location of each kit, in addition to capturing key data that enables better decisions, resource management and scheduling.
- Best-in-class asset management;
- Enhances preventative maintenance programs;
- Improvement in asset utilization rates;
- Reduction of peak need equipment rentals;
- Better service, cost savings and improved outcomes.
QMed technology allows facilities to see the location of every asset in inventory – in real time. Multi-site facilities have the ability to effectively track equipment throughout their healthcare environment.
The medical device global instrument market is over $21 billion, with orthopedic representing the largest segment, or $3.58 billion annually.
In the U.S. annual orthopedic surgical instrument kit spend is approximately $1.23 billion, followed by $992 million in Europe, $552 million in Canada, $501 million in Asia Pacific and $298 million in the rest of the world.
While our focus is, initially on marketing our technology to the orthopedic segment4, we believe our opportunity extends to the broader instrument market.
Adjacent Market Opportunities
Loose Instruments. The market opportunity we are solving is tracking and management of surgical instrument kits as a unit. However, within each surgical instrument kit there are anywhere between 15 to 30 individual instruments that are unaccounted for.
Surgical instrument kits go to surgery complete with all of the instruments, but they often come back incomplete, missing instruments. Instruments can be misplaced. They can be left behind or separated for their kits in the post procedure sterilization process.
We intend to develop and extend our technology capabilities to track instruments and each tray within surgical instrument kits are tracked. We estimate loose and misplaced instruments represent about 10% of our target surgical instrument kit market, or about $500 million annually.
Hospital Kit Tracking and Management. Surgical specialties except for orthopedics hospitals generally purchase and own the instrument kits. This includes general surgery, laparoscopic, thoracic, obstetrics and gynecology, neurological, urology, vascular and cardiology). These kits are typically kept in large storage rooms, which can be difficult to find and are easily misplaced. We believe this is a significant market opportunity.
Kit Sterility. Surgical instrument kits can be sterilized either with a soft blue wrapper or, increasingly, with a metal container. The metal containers are sterilized in the chamber and their filter system contains the positive pressure and sterility. Quest could be a future solution to monitor and report pressure changes in the container and display with a form of an LED if sterility has been compromised.
Surgery Scheduling. Surgery scheduling software systems are usually a stand-alone system for internal scheduling practices for equipment, staff, and O.R. A natural expansion of the QVue system is to interface directly to the surgery scheduling system so that the reservation and allocation of the instrument kit is done automatically without anyone needing to get involved. Implant inventory is ordered through billing and the kits reserved and allocated. This is a major service benefit for orthopedic companies to offer hospitals in order to facilitate the overall experience.
We have developed the Quest tracking device that attaches to each surgical instrument kit, captures, and communicates its location and use status daily, allowing asset managers to make informed and intelligent resourcing decisions, as well as to ensure that these kits are not misplaced or lost.
Data captured by Quest resides in a cloud and is picked up by our software QVue. Customers have access to QVue through an API connection so that they can connect and pull the data into their own platform. Our solution is open architecture so we can provide the signal (API) and connect to any other software that a customer may be using.
To date, managing field inventory has been unreliable, and resource intensive, requiring significant phone interaction between customer service trying to help support an upcoming surgery and the manufacturer sales force. Determining whether a specific tray is available, whether there is one in the warehouse, and other information critical to planning and providing care, has been a huge challenge.
At best, visibility in asset management has been poor, and reliant on sales representatives for updates and information concerning location and availability of surgical instrument kits. Quest resolves this challenge to key stakeholders in this value chain by providing unprecedented visibility with daily autonomous updates of surgical instrument kit location and availability.
Our tracking system is developed in collaboration with NimbelLink and MetTel. NimbelLink, our design partner, is currently deploying the cellular-based technology in underground applications to monitor and manage utility lines, in addition to the fleet management industry. Our application, the Quest tracking device incorporates this technology with a software tool (QVue) developed specifically for the orthopedic industry.
- Low-powered wide area network provides extended coverage;
- Multiple frequency bands ensure global reach;
- Strategic carrier relationships (MetTel) provide data coverage to more than 165 countries through 650+ carriers via their SingleSIM technology.
- Our device has been fully tested and certified by the PTCRB, FCC, IC and is certified by Verizon, T-Mobile, and AT&T.
Our strategy is to sell into two market segments, the “New Product / New Kit” market segment and the “Field Inventory’ market, which consists of older kits that have been in service to date.
Our plan is to offer the Quest asset tracking solution on a subscription, or Software-as-a-Service (SaaS) basis, at a $25 per month fee.
We have met with more than 65 orthopedic
manufactures that have validated our belief that the
market needs a better asset management solution for surgical instrument kits.
We parse our target market into 3 customer tiers:
• Tier 1 customers are the five market leaders who own about 65% of the total market. Depuy Synthes, Stryker, Zimmer Biomet, Medtronic, and Smith & Nephew.
Tier 2 customers (revenues between $100 to $700 million) are much more in number. We intend to focus our marketing and sales efforts here. These companies are easier and faster to convert than the market leaders. We believe this market segment is where the majority of the innovation is, and target customers are better focused, less bureaucratic, and financially under significant pressure to compete and take market share from the market leaders.The tier 3 customers (revenues under $100 million) typically face financial constraints and deployment sizes are small.
We believe we have a 2 to 3-year window of opportunity to introduce and win market share before other competitors develop and introduce a directly competitive technology.
Implementation and Support
Implementation varies based on whether we are deploying on existing field inventory or new surgical instrument kits. Existing field inventory requires coordinating logistics to pull surgical instrument kits out of the field / circulation to install Quest. In addition, we program all surgical instrument kits and Quest serial numbers map it into QVue, cross reference customer hospital address data against our database, sales regions and territories, ownership, and inventory type.
The basic sales agreement is a 2-year subscription service, wherein each Quest device is under full warranty while the subscription is active. We replace any flawed inventory at no cost to the customer. We have access to all customers and their assets which enables us to seamlessly provide customer service and software training as long as the subscription agreement is active.
Over the past decade orthopedic manufacturers have attempted to address asset management challenges using several technologies, including radio frequency identification (RFID) and Bluetooth tags (BLE) but these have limitations.
RFID uses electromagnetic fields to identify and track tags attached to assets. It requires a reader or scanner to pick up the tag. In our target use case, medical facilities and inventory warehouses would require readers built into their infrastructure, and all surgical instrument kits would have to pass through the scanner. We think this make RFID impractical from a cost and resource perspective.
BLE (Bluetooth low energy) tags require a reader or scanner as an application on the cell phone or other Bluetooth enabled device that can pick up the tag signal when in close proximity. But if the reader is not present, the tag is rendered useless until a reader is recognized.
Several software firms specialize in software and applications that assist sales representatives in orthopedics order replenishment inventory, auto billing and even help with tracking of field inventory. However, these systems are typically heavily dependent on manual input to initiate the change of status of inventory. This leads to a higher percentage of error rate and is more time consuming.
Autonomous Data Collection
Decontamination & Autoclave Events
When transmitter detected
When manually scanned
When manually entered or scanned
Our team brings substantial experience in technology and application development and is well positioned to manage the commercialization of our product into our target market in addition to identification of new markets within the medical device asset management industry.
Vic Nunes, Chief Executive Officer. Vic heads the technical and marketing efforts at QMed as well as the launch of Quest. He also oversees investor relations and fundraising. Vic has spent over 30 years in the orthopedic industry as an executive responsible for two global operations and supply chain organizations, among them Depuy Synthes, a Johnson & Johnson company.
Jeff Adam, Chief Financial Officer. Jeff handles all financial aspects of the company, including financial reporting and investor relations. He is the managing partner of Adam Financial LLP, a boutique CPA firm and has over 35 years of financial, operational, and strategic experience in public accounting, and has served as a CFO in various industries.
Jeff Swider, Chief Operating Officer. Jeff is responsible for sourcing and coordinating with suppliers, contractors, and vendors to develop the best solutions for the company’s clients. Jeff has been in the telecom field since 1995 and has done everything from designing client telecom/cloud solutions to managing sales and operations teams.
Jeff Bush, VP Sales. Jeff is responsible for establishing plans and devising strategies for developing business and achieving the company’s goals. He has over 15 years of successful experience in product launches, business development and sales in the medical device, biotech, and medical software industries.
Kathleen Van Gorden, VP Marketing. Kathleen is a marketing strategist with over 25 years of experience partnering with clients in energy, technology, and healthcare. Most recently she was a member of the executive leadership team for a national non-profit dedicated to improving care and supporting vital research for people with bleeding and clotting disorders. She has partnered with one of the world's largest utilities to significantly evolve their marketing approach and increase participation in energy saving programs, as well as developed groundbreaking marketing and thought leadership campaigns. Kathleen has held positions at boutique advertising and marketing firms, served as assistant director of public relations for The Amos Tuck School of Business at Dartmouth College, and served on community boards and committees.
Shelby Kornbluth, VP Product Development. Shelby is responsible for all aspects of the company’s product development, from concept engineering through commercialization. She has 25 years of experience in R&D and program management spent at Johnson & Johnson, Olympus Surgical Technologies, and Genzyme. During her two decades at Johnson & Johnson, Shelby assumed various roles of increasing responsibility and eventually took on the position of Director of R&D for the Neuro division.
RonnaOneil,ManagerofCustomerAccounts.RonnaisresponsibleforCustomerCareatQMed. Sheacts as a liaison between customers and QMed’s sales and operations teams ensuring that quality and service exceed customer expectations. She strives to build trust and strong long-term relationships with QMed’s customers. She has over 15 years of customer success and onboarding experience in the insurance industry.
Vishesh Desai, Project Engineer. Vishesh supports QMED’s commercialization efforts and is responsible for leading QMED’s testing programs. Vishesh is a recent graduate of University of Hartford where he earned a bachelor’s degree in Electromechanical Engineering Technology.