Commencing now for anyone interested.

Title: 4DMedical Ltd - Webinar Date: 11:00am AEST, Tuesday 1 October 2024Link:

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Interesting distribution agreement signed with Phillips for the US today.

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02858402-3A651737&v=fc9bdb61fe50ea61f8225e24ce041a0e155a9400

The market seems to like the announcement with about a 30% pop in share price this morning. The devil will be in the detail so I'll tune in to the briefing next week. In my experience in the past (with distribution agreements), adding things to product catalogues is one thing but unless this is retiring quota for Phillips sales reps it probably won't be as valuable as the market hopes.

Interestingly according to my favourite AI's Phillips is only #3 in US market share:

Siemens Healthineers:

• Estimated to hold around 25-30% of the US market share. It has a strong presence across various modalities and is particularly dominant in MRI and CT.

GE Healthcare:

• Another major player in the US, with an estimated market share of about 20-25%. It is also well-established across various modalities and has a significant presence in ultrasound and molecular imaging.

Philips Healthcare:

• Estimated to hold around 15-20% of the US market. While slightly behind the top two, it maintains a strong presence in various modalities, including CT, MRI, and ultrasound.

Big pop of about 16% yesterday with a flurry of trading at the open and just before close (higher than normal volumes) and for the conspiracy theorists … no news!

I’m not sure if anyone else has any idea what’s happening. I’m guessing it might be buying ahead of the S&P index rebalances that were supposed to be on Friday (maybe 4DX is being promoted into a bigger index).

The most recent market update was positive (i.e. USA equivalent of Medicare has decided on the rebate rates for the services) but that’s nearly a month ago.

DISC: Held IRL and SM (but feeling a bit lonely here in Strawman)

Ord Minnett report for 4DX. Going to be 2026 before FCF it seems. Tricky one for me. Price target double todays actual.......

4DX broker report May 2024.pdf

Nessy

Boy, this company sure knows how to kill off any momentum built up in the share price with a capital raising.

This is the second we have had within a few months.

The terms are generous to the institutional buyers not not great for existing shareholders (big discount to the prevailing market price of ~18%, 1 free attaching option with every 2 shares). Existing shareholders don't get an SPP btw.

The acquisition is of US-based Imbio, which is an early stage company which is touted as a "leader" in cardiothoracic imaging. Seems alright, but is this a case of juggling too many balls too early?

Following the stall at resistance in the 70s, we have had additional newsflow this week.

First, with the CT LVAS US FDA clearance on Monday, and then new SaaS contract wins to expand into Detroit and Michigan.

Shares are currently trading well above resistance, and if these levels can hold, will set up well to test the 52w highs over the coming weeks/months.

Nice win for the company which significantly increases coverage. Technically though, there has been a clear rejection from levels that have acted as support on prior pivots (so far anyway, we'll have to wait till the close), so this is probably as good as it gets until the next catalyst.

The SPP and Placement combined raised $45 million (before costs) and is being deployed to strengthen and accelerate the Company’s commercialisation strategy. 

4DMEDICAL LIMITED (ASX:4DX) - Ann: Quarterly Activity Report and Appendix 4C for Q4 FY2023, page-1 - HotCopper | ASX Share Prices, Stock Market & Share Trading Forum

Life support for of $1.1M - 4DX will have to grow profitability eventually though.....

We are extremely excited to have been awarded the $1.1 million CTCM funding announced today. Combining both functional components of airflow and blood flow into a single analytical process represents a dramatic advancement in respiratory healthcare, providing the ideal test for phenotyping, early detection and evaluation of specific treatment responses for high-impact lung diseases such as Chronic Obstructive Pulmonary Disease (COPD), Cystic Fibrosis, pulmonary hypertension and pulmonary embolism.

A total of 28,044,096 fully paid ordinary shares New Shares will be issued to SPP applicants at an issue price of $0.89 per New Share. The New Shares issued will represent 8.1% of 4DMedical’s issued capital and will rank equally with existing shares on issue from their date of issue.

The New Shares issued under the SPP are expected to be allotted on Wednesday, 31 May 2023 and are

expected to commence trading on ASX on Thursday, 1 June 2023. The total funds raised, comprising the Placement ($20m) and SPP ($25m), amount to $45m (before costs).

Proceeds raised under the Placement and SPP will be used primarily to accelerate commercialisation of 4DMedical's respiratory imaging software and significantly strengthen the Company's balance sheet. Funds raised leave the Company with a cash balance of approximately $79.6m after costs as at 31 March 2023 on a proforma basis

Fouras - CEO (2012) circa 23% voting power.

1 Month ago 4DMedical (ASX:4DX) signs first US hospital SaaS contract https://youtu.be/ef8j0lr2JUI

Dr Andreas Fouras

Chief Executive Officer,Managing Director (Since 2012)

Bio

Dr Fouras is the founder, Managing Director and Chief Executive Officer (CEO) of the Group. He is also the Groups Chief Technology Officer being the inventor of its core XV Technology, maintaining a direct role in its evolution and development. Andreas career in academic research has a foundation gained within the Department of Mechanical and Aerospace Engineering at Monash University in Melbourne, Australia. This research into wind tunnel quantification garnered recognition as a young leader in the scientific discipline of fluid dynamics, developing a number of new approaches to the imaging of gas and liquid flow. Following completion of a Masters degree by research and a Doctorate (PhD), Andreas rapidly rose to the position of Professor of Mechanical and Aerospace Engineering and Director of the Laboratory for Dynamic Imaging.

He received accolades from a wide range of premier research bodies including the National Health and Medical Research Council (NHMRC) and the American Asthma Foundation. Andreas applied a novel concept to clinical use through the development of XV Technology, uniquely measuring airflow within the breathing lungs at every stage of the breath, providing both high spatial and temporal resolution at very low dose.

This research has been documented in over 100 peer reviewed publications and resulted in 72 patent applications with 40 granted. In December 2012, Andreas founded 4DMedical resulting from a deeply held personal and professional desire for his work to reach and positively influence as many people afflicted by respiratory compromise as possible, through global clinical translation.

Andreas leadership is evidenced as a commissioned officer in the Australian Army (Infantry) and through the prestigious Australian Davos Connections Australian Leadership Award for 2013. The focus of Andreas substantial intellect and energy is now concentrated upon applying business acumen, drive and innovation to the successful commercialisation of 4DMedicals technologies. Andreas is a member of the Medical Advisory Committee.

Since my last Straw from a couple of weeks ago, price action has continued to be bullish, aided by another positive announcement yesterday.

Price is getting closer to levels which will now act as resistance ($1.15-$1.50). Let's see if it has the legs to chomp through that.

It's been quite the run for 4DX on the back of their first significant SaaS contract announcement, approaching 3x in just a few weeks from the recent low under 30c near the recent highs.

While the market has been happy to extrapolate this development and the valuation looks mighty stretched given it is trading mostly on distant future potential, technically, the momentum has taken the shares above key resistance levels around the mid 70s where price broke down last year. Today's action looked dismal with the price plunging well below those levels (indicating a lack of follow through to sustain further gains), but the buyers have stepped up over the course of the session and pushed it back to support. If it can consolidate around these levels (and the company can back it up with further positive announcements), we could be off to the races again.

Disc.: Small position held IRL.

4D Medical has signed a 5 year contract with University of Miami Hospital to provide XV LVAS software services. XV LVAS software is applied to X-ray scanners already in use at medical facilities.

This is following a clinical trial. with Miami researchers publishing results from their trials a a recent American Thoracic Society conference. The contract is effective immediately.

Early days, but it is proof the product is marketable and builds on its recent contract for using the software on existing CT scanners with I-MED.

I recall (don't quote me), that revenue is around $150 per scan. Each surgeon has about 700 cases per annum. That is about $100 k revenue per surgeon (assuming 1 scan per patient), and there are 4000 surgeons in the US. So that is a TAM of about $400 M USD per annum.....

DISC - HOLD tiny position........

Piqued my interest an wanted to jot down a few thoughts:

Reasons this could be a great company!

- No capex required by hospitals can use existing equipment

- Essentially just software = ability to generate software margins

- Recent significant decline in market cap with general market conditions.

- Seems to be just reaching the point of potential commercialisation. 

- Cool new medical tech (I am an ICU doctor)

First some physiology:

Picture the lungs as giant sponges that inflate and deflate as blood is pumped through the lungs into tiny blood vessels past tiny gas pockets designed by eons of evolution to maximize surface area to ensure efficient diffusion of carbon dioxide and oxygen. Your breathing increases and decreases to match the amount of blood coming out of the heart and vice versa and the amounts tend to remain synchronised and in balance in a healthy person. This is ventilation and perfusion and is often considered together as a ratio "V/Q".

This ratio should be roughly 1. If ventilation is too low for the blood flow (diseased lung) this number goes down. If Blood flow is too low for the ventilation (blocked vein) then this number goes up. Both are bad and are suggestive of different diseases. 

4DX reckon their technology can use equipment that hospitals already have with some new software to look for this V/Q mismatch.

This is a great business model. Software margins highly likely with almost zero capital expenditure required.

Potential indications:

The big money here would be diagnosing (or more commonly ruling out) pulmonary emboli (lung clots) however, there are several issues I have with this technology and this particular indication. 

Firstly the good news; there is no way to diagnose pulmonary emboli in patients other than doing a scan. The symptoms of a lung clot are the same as many other conditions and require a very specific treatment that has significant enough associated risks that you can't really give it without a pretty definitive idea of if there is a clot or not. 

Gold standard is CT pulmonary angiogram.

Unfortunately 4DX scans wont displace this. Squirting radio-opaque dye into the pulmonary veins and then bathing the lungs in 360 degrees of radiation is always going to be a more sensitive scan. I'm not an expert but I probably look at at least one of these scans per week and can usually see if there are any clots well before the radiologist report comes through.

Other scans like a VQ scan or a contrast free pulmonary angiography as they are developing here wont be as good and because the information is somewhat inferred it will be reported as a probability which unfortunately wont instil confidence and unless its very clear will likely just make us want to do a CTPA to know for sure. 

Unfortunately CTPA isn't perfect. It may not be the imaging of choice in young people who we want to avoid radiation where possible or in people who have poor kidney function due to the supposed toxic effects of contrast on the kidneys (this isn't actually a thing but it is a widely held belief in medicine to the point where is may as well be). 

Currently in these situations we do a V/Q scan which is basically a process of photographing a patient with a gamma ray camera while they huff radioactive aerosols and also have a small dose of radioactive fluid injected into vein.

If 4DXs scan proves a viable alternative to VQ scans which can be hard to get, needing nuclear medicine facilities Vs an X-ray then I imagine that people would order them. These scans are not fantastic.

Unfortunately V/Q scans are not used for much beyond identifying PE's (and not for that much anymore) 

- Monitoring lung function following lung transplant.

- Provide preoperative estimates of lung function in lung cancer patients, where pneumonectomy (Chopping the lung out) is planned.

- Can identify shunts (blood bypassing the lungs) 

There will more than likely be some other niche indications for this scan that become apparent over time. I could 100 percent see it becoming part of an extended investigation panel mainly ordered by respiratory specialists along with lung function tests etc. This could take a really long time to permeate the industry though without a hard and fast need to do indication. Currently it seems a bit like a solution looking for a problem.

It must be noted that given the market size a bit of traction could go a long way. To quote the company's own presentation "Given the large market size even low market penetration could see substantial revenue generation with high growth margin" 

Seasoned investors will approach the old "if we could just snag x% of $$$$$ market we will make $$" with the level of skepticism it deserves.

4D Medical reported successful results of Vanderbilt 'burn pit' clinical trial.

Results: XV Technology confirmed diagnosis of constrictive bronchiolitis with less than 0.001% uncertainty. The only alternative to XV Technology for a reliable diagnosis is expensive and risky biopsies.

Market Potential:

1) US PACT Act provides USD $280 billion in additional healthcare benefits to veterans exposed to burn pits and other harmful toxins.

2) US Veterans Health Administration to provide toxic exposure screening to each of the 9 million US Veterans enrolled in the VHA heatlhcare program.

3) 4DX pricing structure with VHA is $171 USD per scan.......

DISC: I hold a small position in 4DX.

Capital Raising Presentation

Applications are due Monday 29th March for those that are holding.

Presentation link

Have a feeling the Friday FOMO rally was due to people reading the recent announcement with the DoD in the USA and maybe securing as much shares as possible so they get their full allocation from the raise.

I've put in my SPP application already. I heard the $40m for the institutional and sophs was fully raised.

Disc: I hold

4DMEDICAL SECURES STREAMLINED ACCESS TO U.S. DEPARTMENT OF DEFENSE & VETERANS AFFAIRS CONTRACTS

 4DMedical Limited (ASX: 4DX, “4DMedical” or the “Company”), a medical technology company focused on commercialising its patented respiratory imaging platform, is pleased to announce that it has been granted a streamlined process for securing contracts with the U.S. Department of Defense (DoD) and Veterans Affairs (VA) through NASA’s Solutions for Enterprise-Wide Procurement (SEWP) program.

This access will allow DoD and VA affiliated healthcare facilities to contract with 4DMedical to integrate and use 4DMedical’s proprietary XV Lung Ventilation Analysis Software (XV LVAS™) to deliver valuable insights of lung health. Revenue will be generated as the Company secures supply contracts from each facility adopting the technology.

The DoD is the largest government agency in the U.S. with 2.15 million active-duty service members and over 730,000 civilian personnel. In addition, the VA healthcare system represents the largest integrated healthcare system in the U.S., providing life-long care and services to eligible military veterans and their families. The VA operates 1,255 healthcare facilities, including 170 medical centres and 1,074 outpatient clinics, offering a variety of care to over 9 million veterans enrolled in the VA healthcare program.

As part of the arrangement, 4DMedical has negotiated a fixed price for its XV LVAS offering at DoD and VA facilities without requiring separate reimbursement. This will streamline commercial engagements with these facilities by having a pre-agreed pricing structure.

08-Oct-2020:  4DMedical Goldman Sachs Healthcare Forum Presentation

The COVID-19 pandemic should be giving a company like 4DX a decent boost, i.e. providing them with a strong tailwind, considering they specialise in digital four-dimensional lung imaging and data interpretation.  They rose +14.11% today on the back of this presentation at the Goldman Sachs Healthcare Forum.

Introduction to 4DMedical

• Founded in 2012, 4DMedical Limited is a Melbourne-based software technology company focused on creating a step change in the capacity of physicians to diagnose and manage patients with diseases of the lung
• The respiratory diagnostic sector represents a global market of over US$31 billion per annum, with over 377 million respiratory diagnostics tests performed each year
• 4DMedical is focused on commercialising its four-dimensional XV lung imaging technology, which utilises proven, patented algorithms to convert X-ray images into quantitative scan data
• Unlike existing respiratory diagnostic procedures, 4DMedical’s proprietary XV technology provides a non-invasive way of understanding regional lung motion and airflow in real-time
• With FDA clearance in place, 4DMedical’s major focus is on US market commercialisation of its XV Technology
• Australian TGA approval for XV Lung Ventilation Analysis Software (LVAS) allows 4DMedical to gain local traction quickly through leveraging existing industry knowledge and relationships
• The SaaS business model offers hospitals access to the technology without the traditional issues of hardware integration, capex, additional staff or re-training
• 4DMedical’s advancement in respiratory diagnostic technology is expected to result in improved patient experiences, earlier intervention leading to improved healthcare outcomes, with reduced costs of care

[I'm not a shareholder, but they look interesting.  I would need to do more work before investing, such as establishing whether they have a credible path to profitability within a reasonable and realistic timeframe.]