FYI | Dec 12 2018
By Pitt Street Research
Setting global benchmark in pain assessment
PainChek is a Sydney-based pain assessment tool provider. Considering lack of any global benchmark in pain assessment, PainChek is expected to set a new global standard with its innovative product. The artificial intelligence (AI)-based mobile app uses facial expression to map and quantify pain. Considering millions of patients suffer from dementia globally and cannot explain pain explicitly, this utility app has exponential growth opportunity.
PainChek can address large global markets in both dementia patients and in children. The PainChek pain assessment tool is a medical device that has been developed from a concept to a market reality within two years, receiving peer-reviewed publications and regulatory clearances in the process. It has now been commercialised and is experiencing rapid growth in sales and clincial use in Australia, with immediate overseas opportunities including Europe and Asia to be addressed soon. PainChek's business model is low cost, characterized as it is by partnerships with 3rd party software suppliers globally. PainChek's team has proven experience in the medical device space.
Valuation range $0.08-$0.16 per share
We currently value PainChek at 8 cents per share base case and 16 cents per share optimistic case using a DCF approach with what we think are conservative assumptions on commercial expansion. Our valuation relates to what PainChek has achieved over the last two years in bringing its app into Residential Aged Care in Australia. Should the management be able to expand market outreach aggressively, launch a child version of the app commercially, and gain additional regulatory clearances for US and global launches, there will be considerable upside to our current valuation.
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