Lung scanner software group 4DMedical scores breakthrough US hospital contract

Lung scanner software group 4DMedical scores breakthrough US hospital contract

4DMedical founder, managing director and CEO Dr Andreas Fouras.

Investors in 4DMedical (ASX: 4DX) have taken a battering over the past five months, but some will be breathing a sigh of relief after the lung scanning technology company secured its first-ever US hospital Software as a Service (SaaS) contract with the University of Miami.

The news sent shares soaring by more than 55 per cent today to 49cps, recovering all the ground lost since the start of the year.

Until today, the market appeared to have taken a pessimistic view on 4DMedical's heavy cash quarterly outflows of $11.9 million, which were only offset by generous government grants and tax incentives of $14.6 million. In that same quarter the company only received $739,000 in receipts from customers.

Founder-led and headquartered in Melbourne, 4D Medical's offering includes a dedicated XV scanner for the lungs which is faster and non-invasive versus existing options on the market, as well as a software platform approved in Australia and the US that scans lungs utilising existing equipment in hospitals but with its own unique level of detail and analysis. 

The company spent almost $10 million on research and development (R&D) alone in the last six months of 2022, but the latest breakthrough shows the hard work of years is paying off as the company makes strides along its path towards commercialisation. Specifically, 4DMedical signed a five-year contract with the University of Miami to provide XV LVAS (X-ray Velocimetry Lung Ventilation Analysis Software) ventilation reports.

Joint clinical research is currently underway with the university to show the clinical value of 4DMedical's XV technology to address a range of conditions, including Chronic Obstructive Pulmonary Disease (COPD) - the third leading cause of death worldwide, according to the World Health Organisation (WHO).

The Australian Lung Foundation states that around 1 in 7 Australians over 40 have COPD, and around half of these don’t know that they have the condition. If diagnosed early, COPD is a treatable condition.

In January, 4DMedical made note of media exposure in the US after a military veteran with constrictive bronchiolitis undertook the scan at the University of Miami, describing it as a "major step forward for fellow veterans who are suffering from burn pit exposures and are desperate for answers".

"Unfortunately, prior to passage of the PACT (Promise to Address Comprehensive Toxics) Act, the XV LVAS software wasn't available and that meant I had to get a surgical lung biopsy. It was frankly a horrendous experience and incredibly painful," said the veteran, Captain Le Roy Torres.

"With the passage of the PACT Act, the United States Department of Veterans Affairs (VA) and Congress can develop protocols and use cutting-edge technologies that will bring new and expanded health care services to thousands of veterans like me."

The agreement announced today with the University of Miami is expected to lay out a framework for further expansion of the XV technology in the US market.

The technology will be deployed by 4DMedical at the university, allowing for patient data to be processed on demand. The agreement also includes minimum annual fees, representing a "significant milestone" in the US for the group.

"Today’s announcement of our first US SaaS contract reflects the attainment of a key milestone in the company’s commercialisation journey," says 4DMedical founder, managing director and CEO Dr Andreas Fouras.

"Furthermore, the fact this milestone was completed with our clinical trial partners at the University of Miami, who have developed such an extensive understanding of XV Technology, is especially satisfying.

"The company continues to go from strength to strength as commercialisation accelerates. I am excited by recent progress both in Australia and the USA, and I look forward to providing further positive updates over the coming weeks and months."

University of Miami Chief of Pulmonary and Sleep Medicine, Professor Naresh Punjab, said invaluable expertise in applying XV technology had been gained through a long-standing relationship with the team at 4DMedical.

"We believe XV Technology holds enormous potential to enhance clinical outcomes," Punjab said.

"I’m thrilled to be at the forefront of this ground-breaking technology and believe that XV LVAS has the potential to revolutionize the way we diagnose and manage respiratory conditions."

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