E Medigus, A High-Risk, High-Reward Micro-Camera Play

The technology is applicable in many use cases, both medical and industrial, and they keep expanding these, for instance at the start of the year (PR):

it has filed an application under the framework of a consortium for a European grant for the development of a fluorescent colonoscope from Horizon 2020 fund. The expected duration of the project is four years, and its budget is 3,000,000 Euros and its intention is to improve the ability of early detection of colorectal cancer.

In addition to Medigus (MDGS), three universities from Germany and the Netherlands (Helmholtz Zentrum München, Technical University of Munich, University Medical Center Groningen) and a German company (Amcure), are parties to the consortium. While the universities and the other company will focus on the development of molecular-chemical aspects of the fluorescence molecular endoscopy of malignant and pre-malignant colorectal tumors, Medigus will be responsible for the development of a revolutionary colonoscope, which will contain two cameras, one for HD white light imaging and one for infrared vision (NIR).

However, a lack of finance also constrain the growth of the business, in 20-F, management argues that:

We have a limited sales and marketing infrastructure and have limited experience in the sale, marketing or distribution of products. To achieve commercial success for any product for which we have obtained marketing approval, we will need to establish a sales and marketing infrastructure or to out-license our products. In the future, we may consider building a focused sales and marketing infrastructure to market ScoutCam™ and potentially other product in the United States or elsewhere in the world.

This is basically the same problem they have with the MUSE and the reason to sell that business, but on the other hand, any proceeds of selling the MUSE business can be used to build the sales apparatus for the ScoutCam technology and that has even raked up sales already without this.

Even so, the products sort off sells itself as the company is already able to serve multiple industries like aerospace, medical, defense, industry and more.

Among the company's high- profile projects, are two successful projects for NASA. The company developed custom-made camera and illumination which were integrated in remote refueling robot and tested outside the International Space Station, providing live video from space. For additional info, click here.

Over the past six month, ScoutCam expanded and deepened its presence in various fields by selling its products and strengthen collaborations with leading international companies and organizations, such as large defense organizations, global nuclear reactor group, medical companies and more.

And there is more to come (20-F):

Our most advanced camera is a prototype CMOS-based camera measuring only 0.99 mm in diameter transmitting 45,000 pixels in HDMI format, which we believe to be the smallest video camera ever produced. This camera is based on “through-silicon-via” technology whereby the electronics pass  vertically through the sensor, permitting smaller diameter devices. This prototype camera will not be commercially available in the foreseeable future.

The 20-F also contains a useful summary of the competition:

The main devices that compete with our miniature cameras are manufactured by Awaiba, Fujikura, MicroCam (Sanovas), Precision Optics, Opcom,Misumi and FISBA. The miniature cameras of each of these vendors differ in various factors include image quality and resolution, camera shape and dimensions,sensor technology, optic characteristics, and user flexibility and customization. In recent years, OmniVision, a global leader in CMOS sensors, expanded itsinterest in micro sensors, and in supporting them with optics and video processing solutions. We use OmniVision sensors in the MUSE ™ system as well as inmany of our ScoutCam ™ projects and strive to strengthen our partnership with OmniVision.

Strategy change

The company appointed a new CEO in April and changed its strategy (from the 20-F):

In the recent months, we have materially changed our business model, adjusted our exclusive focus on the medical device industry to include other industries, abandoned our strategy to commercialize the MUSE system, transferred our ScoutCam activity into our subsidiary, and we are assessing several new ventures. We cannot guarantee that these strategic decisions will derive the anticipated value to us and to our shareholders, or any value at all.

So:

  • Trying to sell its MUSE business.
  • Broadening the appeal of the ScoutCam to other industries (and with some immediate success, as we showed above).
  • Entering other sectors (see below).
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Disclosure: This article is part of a new “UnderCovered” series of exclusive articles featuring companies with limited coverage. Authors are compensated by TalkMarkets for their time, and ...

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Joe Black 1 year ago Member's comment

Interesting company, but still waiting for it to recoup where it was just last month. It's been a bit up and down since then.

Shareholders Unite 1 year ago Author's comment

Yep, they have some interesting technology which is applicable in numerous situations.

Investment Advisor 1 year ago Member's comment

Sounds like good things are on the horizon for this company.

Barry Hochhauser 1 year ago Member's comment

Frist I'm hearing of this company, but it sounds like they are on the cutting edge of some impressive stuff! Taking a closer look at $MDGS.