Injury is inevitable in both elite and recreational sport. Most cuts, bruises, strains and tears can be remedied in a relatively short time frame with minimal ongoing issues.
Traumatic brain injuries are quite the opposite. They can be debilitating, life altering and career ending.
Following increased researcher interest and the findings of multiple studies, the concussion management market is growing. In 2019, revenue generated from the assessment and treatment of concussion based injuries totalled USD $6.8 billion. This market, largely driven by sports related head injuries, is expected to grow at an annual rate of 3.6% from 2020 to 2027.
HitIQ (Proposed ASX code: HIQ) is an Australian based tech company attempting to tap into this through the commercialisation of their smart mouthguard, equipped with sensors to detect and quantify the severity of knocks to the head. According to the Company’s prospectus their mission is to “become a leading provider of intelligent hardware and investigative software analytics to assist with clinical diagnosis and the ongoing tracking of head impact related concussion injury collected via sensor”. They plan to operate under the SaaS model and generate revenue from the sale of subscription licenses on a yearly cost per athlete basis. Subscriptions include full access to HitIQ’s analytics platform and regular product upgrades.
They are yet to be listed on the ASX with an IPO offer price of $0.20 per share with 35 million shares on offer to raise $7 million. Shares will be issued in late May 2021 with the expected date for quotation on the ASX in early June 2021.
The funds will be split between continued research and development, working capital and sales and marketing, with a portion also going to support the cost of the offer.
Data-driven solutions for concussion diagnosis are very much needed considering the current standard of assessment on the field. Diagnosis is heavily subjective and relies on observation and self reported symptoms. In elite athletes there has been a noticeable amount of under-reporting due to their desire to continue to play. Some studies have found that athletes actually learn the correct answers to the SCAT5 survey, a rapid diagnostic tool designed to assess concussions ringside.
The lack of quantitative clinical assessment tools has left leagues liable to lawsuits from athletes claiming the mismanagement of concussions. Leagues are therefore anticipated to be receptive to the technology.
Following a two year trial, HitIQ secured the AFL as their first commercial partner. The league is intending to work with HitIQ to integrate their product and build a league wide head impact databank to better understand the drivers and diagnosis of concussion during games.
In their detailed prospectus, the Company acknowledges the various risks involved. The in-house developed tech that took four years to create is not currently patent protected. The Company does have a patent portfolio in various jurisdictions that are all pending. The Company’s ability to obtain and maintain patents is imperative to their success. The risk of a third party developing superior technology and patenting it first would undermine HitIQ’s offering.
The tech has also not yet been cleared by the Therapeutic Goods Administration (TGA) or Food and Drug Administration (FDA) which have regulations around how medical products are marketed.
HitIQ doesn’t just see their product in use in elite sport. Whilst they are targeting key regional elite markets in the US, Australia and Europe, they believe that their tech has applications in grass roots sports, combat sports, clinical research and even military operations.
With promising tech targeting a serious, preventable health concern and a broad market base this company might just be a hit with investors.
Samantha Freidin is a business journalist at Emerald Financial whilst also completing a Masters of Marketing and Digital Communications at Monash University.
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