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Summary
- 4DMedical launched its ASX IPO two weeks prior, backed by the US Food and Drug administration approval, to market its lung-imaging product.
- The Company is targeting the US and Australian market for the increasing number of cases of COVID-19, creating opportunities galore for respiratory diagnostics companies
- The platform, XV technology received FDA approval in May for its usage in ventilation analysis software.
- The XV technology provides results in three hours using a cloud-based interface and earn.
Melbourne domiciled, Medical-technology Company 4DMedical Limited launched its ASX IPO two weeks prior backed by the US Food and Drug Administration granted approval to market its lung-imaging product. And why wait? The Company is catering to the respiratory health market, which is currently at its peak, thanks to COVID-19 pandemic that causes acute respiratory problems.
Apart from the cases arising from COVID-19, millions of people suffer from various respiratory ailments such as chronic obstructive pulmonary disease (COPD), Asthma, tuberculosis, Lung cancer and many more.
According to United for Lung Health, 384 million people suffer from COPD, 334 million people are affected by asthma whereas 10 million suffers from tuberculosis and around 1.76 million people die because of lung cancer every year.
With millions of people affected by respiratory problem, the respiratory diagnostics market is valued at more than $US30 billion ($45.8 billion) a year. With such a vast market to cater to, let’s understand how 4DMedical is placed in the current market scenario.
The XV Technology platform
Founded in 2012 by Dr Andreas Fouras, 4DMedical (formerly ‘4DX’) boasts of a diagnostic imaging technology indicated for respiratory system to assist physicians diagnose lung diseases. The platform known as XV Technology is a patented X-ray imaging platform that delivers results via cloud-based Software-as-a-Service (SaaS) model within three hours. The Company works on a pay-per-scan model.
The Company believes XV Technology is a less expensive option than current market procedures and does not require capital expenditure to make it compatible with existing hospital and clinical equipment.
The Company intends to address the problem of poor-quality information received by the patients and doctors and believes that improved information is required to make informed decisions leading to better healthcare treatment.
The platform, which is currently at a product development stage, has received FDA approval in the United States in May for its usage in its ventilation analysis software. Dr Fouras expects a TGA approval for its imaging technology in 2020.
XV Technology is considered having an edge over current lung-imaging techniques. 4DMedical's technology identifies parts of the lungs which are receiving less air whereas current imaging techniques provides an overall picture of the amount of air a lung is taking in. The XV Technology assists in the early diagnoses of acute respiratory diseases such as asthma, COPD, or lung cancer, enabling the requirement of proper treatment at an early stage.
4DMedical has both granted and pending patents in Australia, the European Union and Asia, which indicates the forthcoming development would be propelled by the sale of other products of the Company.
Dr. Fouras visualised the XV Technology in 2005 while working at Melbourne’s Monash University as a professor of mechanical and aerospace engineering and researcher.
Target Market
4DMedical is eyeing the United States market because of its increasing cases of COVID-19, creating an opportunity for its lung imaging diagnostics technology. In 2019, the US spent more than US$13.7 billion on respiratory diagnostics through 73.5 million procedures.
The Company’s second target market is Australia where US$281 million was spent to perform 5.3 million procedures in 2019.
The COVID-19 pandemic has augmented the market significantly in both the US, and Australia creating opportunities galore for lung diagnostics technologies.
As on 17th July, there are more than 3.697k COVID-19 cases, with over 141 thousand casualties recorded. The Company anticipates that the increasing coronavirus cases would increase the demand for lung health assessments significantly.
IPO and Use of Funds
4DMedical launched its IPO two weeks earlier than scheduled. The A$45 million IPO has been priced at 73 cents per share with an implied market capitalisation of A$189 million or an enterprise value of A$138 million, according to terms sent to funds.
As per funds, the proceeds from the IPO will be used for marketing through clinical trials and trade shows, operating expenditure including governance and working capital costs, research, development of products, for sales and distribution.
Trade shows, which the Company regularly attends include the American Thoracic Society annual conference, Radiological Society of North America, a biggest radiology meeting worldwide, and American College of Chest Physicians, annual meeting.
The Company is also planning 10 clinical trials to be conducted in the US to further exhibit the XV Technology sensitivity and the platform’s capacity to identify and provide beforehand warning of early-stage illness.
IPO costs, costs related to US sales and distribution including clinical liaison and reimbursement costs, and intellectual property and trademarks related costs from the proceeds would be deducted.
