4DMedical is a software company aiming to improve the tools for lung disease diagnosis. 4DX has developed a four dimensional lung imaging platform XV Lung Ventilation Analysis Software (XV LVAS) which utilises mathematical models and algorithms to convert X-ray images to quantitative scan data.
XV LVAS is approved by the FDA and TGA for clinical use in the US and Aus, and is able to analyse the regional lung motion and airflow in 3D across the lung anatomy.
The Global respiratory market is a $31 Billion US per annum opportunity with 377 million respiratory diagnostic tests performed annually. Key respiratory diseases include asthma, Chronic obstructive pulmonary disease (COPD), lung cancer, Covid, TB etc. The XV LVAS software utilises five planar fluoroscopy images and therefore uses a much lower amount of radiation compared to other diagnostic tools such as CT or nuclear medicine. Fluoroscopy machines are readily available within hospitals and imaging departments and don’t require large capex spend on hardware for hospitals. The pay per scan SaaS model means hospitals don’t have any upfront costs for implementation. Gross margin for the software is expected to be approx. 90%.
There are currently 8 clinical trials active in leading US hospitals. Including: Cleveland Clinic, Duke University, Vanderbilt University, John Hopkins, University of Miami.
4DX also have a number of clinical pilot sites in both the US (28 sites) and Aus (13 sites).
4DX anticipates the results from these clinical trials, will begin to be presented at key international conferences and published in medical journals throughout the remainder of the year.
Pipeline:
As well as the SaaS solution 4DX is also commercialising a ventilation perfusion (VQ) solution which evaluates airflow and blood flow in the lungs without the use of radioactive or contrast agents, and a dedicated XVD Scanner a dedicated lung function scanner enabling both XV LVAS and VQ outputs. Received a $28.9 Million funding grant for the XVD Scanner.
Management:
Technical founder led company with CEO Andreas Fouras a former aerospace engineer who has transferred his knowledge of airflow modelling to the medical world. Responsible for the 4DX IP. Moved to LA to set up the US office.
Of note, Dr Sam Hupert CEO of Pro Medicus is an advisory board member.
Risks
The main risk is that current clinical trials reveal the software isn’t clinically useful. I think this outcome is low probability considering the current testing techniques don’t offer any airflow information and perfusion scans require contrast (i.e. extra medical resources).
It may be possible for some of the larger healthcare companies e.g. Siemens, GE etc to develop algorithms to perform airflow analysis but 4DX have the first mover advantage and are vendor neutral.
Another risk is that the development of the hardware scanner burns through cash delaying profitability. 4DX currently has $80.9 mill cash.
I attended a recent presentation from Andreas which he delivered to a technical audience. Some key takeaways were:
- 4DX are looking at developing airflow analysis for CT data, which may increase usage of the software.
- Software currently requires a high end C-arm X-ray imager but they are close to releasing a solution for lower spec machines.
- Reconstruction time for the algorithm is approx. 3 hours which is fine for a diagnostic scan but as calc time is reduced, use cases could be increased, e.g. daily imaging of lung radiation therapy patients.
- Detailed a clinical case where lung changes were observed 8 months ahead of CT imaging.
Keen to hear from any Doctors in the community for a clinical perspective on the XV software. I have initiated a small position in 4DX but looking for positive clinical trial data and significant uptake of the XV software over the next year.
