Straws are discrete research notes that relate to a particular aspect of the company. Grouped under #hashtags, they are ranked by votes.
A good Straw offers a clear and concise perspective on the company and its prospects.
Please visit the forums tab for general discussion.
Some developments here. First cash flows coming in from sales - extremely small, but a starting point. With R&D refund they only have 2 quarters before they will probably need to do a capital raise. There is a new product aiming at determining heart failure earlier and more readily. FDA approval papers to be submitted very soon (hopefully). My main interest lies in how big the potential market is and the reimbursement possible in the US. This is an educated "bet" on where this may go and I will follow the hopefully increasing cash flows with interest.
EIQ quarterly cash flow Q2 2024.pdf
Nessy
disc: held in SM and RL
Looks to be a well credentialed appointment to help direct a promising product to market.
Nessy
Disc: held IRL & SM
Steady progress to FDA approval. Also searching for a new CEO who is capable of driving the next phase. Credit to the current team to recognise they may need help in taking that step to further commercialisation and cash generation.
Nessy
disc: held
EIQ announcing progress towards "whole of heart solution". This is where their product becomes compelling as it covers most/ all of the conditions a cardiologist is concerned about. The access to the largest echo-cardiogram database should give them the ability to have greater accuracy if their algorithm can utilise it. New SaaS contracts pending
Six new cardiac decision-support solutions to be introduced between November 2023 & January 2024.
Product expansion will significantly increase EchoSolv’s addressable market.
EchoSolv platform advances towards delivering a “total heart solution” for 8 cardiovascular diseases and diagnostic indicators.
1. Diastolic Dysfunction
2. Heart Failure
3. Hypertension
4. Left Atrial Volume
5. Left Ventricular Mass
6. Mitral Stenosis
Based principally on current industry diagnostic guidelines, these new modules fall outside the scope of FDA regulation which allows us to fast-track their introduction to the market.
Separately, new revenue-generating Software as a Solution (SaaS) contracts for EchoSolvTM’s current modules are pending.
“We are also pleased to confirm that our commercial pipeline for EchoSolv’s current SaaS offering continues to build very favourably and we anticipate adding new revenue-generating contracts with hospitals and cardiologists in the near-term. There are a number of avenues to build the revenue base beyond SaaS deployments and a number of exciting opportunities continue to advance in this regard too.”
Held in SM and RL
No revenue for this quarter and a cash burn of $1.7M. Next quarter has $500K options already exercised (remainder CY24, 145M outstanding ranging from 4c to 30c) and $650K R+D rebate. Should see some small revenue start next quarter but with $3.3M cash a raise is looking probable. Significant revenue likely following FDA approval early CY24. IP protection noted in quarterly report as a priority.
Pathway to FDA on-track, with reader study underway and final clearance anticipated Q4CY2023 /Q1CY2024
Echo IQ and EchoSolv(TM) will also be featured by Hydrix Medical at the Cardiac Society of Australia and New Zealand Conferenced in Auckland, New Zealand in August 2023. Echo IQ's Chief Medical Advisor will also be speaking at this important regional conference.
Increased operating expenses, reflecting an emphasis on sales and marketing activities, are starting to yield positive commercial impact, as reflected by the new partnerships and contracts announced . The Echo IQ Board of Directors was enhanced with the appointment of Simon Tolhurst, an experienced lawyer with expertise in competition law and mergers and acquisitions.
Commissioned broker report with a valuation of $0.59 gives a good detailed overview of the company and investment thesis.
Based on our modelling of revenues and expenses, we see EIQ achieving breakeven at the EBITDA line in FY25.
Financing EIQ’s first product EchoSolv™ was launched in December 2022. Growing the business in the near term is dependent on cash from revenue which is currently generated solely by EchoSolv™. As such, and until the product is generating sufficient income, the company will be reliant on access to external funding.
Intellectual property EIQ is using a broad single patent approach across all conditions related to structural heart disease to protect its intellectual property. Its Australian provisional patent application (2022901868) is called ‘Systems and Methods for AI-assisted Echocardiography’. Intellectual property risk, notwithstanding the granting of the patent, could be offset by gaining a first-mover advantage, which – given the multifaceted commercialisation activity to date and lack of direct competition in imaging – seems within reach.
Next heart condition for Echosolv. This starts to build the advantage that EIQ can have if it can continue to leverage the big data lead and keep developing new applications to make their product the must have solution.
Echo IQ introduces new EchoSolv module for Mitral Regurgitation
Mitral Regurgitation is the most common type of heart valve abnormality, and is subject to high rates of under-diagnosis
AI-backed decision support solution designed to increase identification of the progression of chronic Mitral Regurgitation
New solution development complete, with availability from August 2023
Sales pipeline for EchoSolvTM continues to grow with new deployments pending
"We can now pursue sales of the AI-backed software that supports improved detection of two forms of heart disease, thus increasing its commercial appeal to cardiologists, hospitals and healthcare facilities. Prior to the launch of the software in August, we expect to report a number of new sales of EchoSolvTM given the strong growth in our sales pipeline recently.”
Held
First Australian contract in Queensland @70k/year. Sounds like it will also be a test bed for other forms of structural heart disease. Good to see revenue starting and will be interesting to see the next set of results to get some idea of margin.
Highlights:
• EchoSolv to be deployed in Gold Coast Private Hospital representing the maiden sale of EIQ’s AI-backed SaaS technology into a large hospital
• Sales pipeline is building strongly in the US and Australia
The agreement is for an initial term of 12 months which commences upon receipt by the Company of historical measurement data from GCPH for initial review. The agreement includes standard commercial terms for a contract of this nature and is expected to generate revenues to Echo IQ of approximately $70,000 annually. The agreement also provides GCPH with early-access to new AI-backed solutions from Echo IQ designed to address additional forms of structural heart disease.
Gold Coast Private Hospital is a leading Queensland hospital and part of HealthscopeLtd’s network of 42 hospitals across Australia.
Here in rl and sm
EchoSolv to be made available to 700 US cardiovascular facilities through Studycast integration agreement. No details as to how this affects margins (as it clips the ticket on sales) but a good way to make access to EchoSolv easy and raise the profile by being showcased at American Society of Echocardiology Conference.
Highlights:
Integration Partner agreement with Core Sound Imaging
Core Sound Imaging supplies comprehensive imaging workflow platform, Studycast to medical facilities in 49 US states and territories and 7 countries. Agreement will see EchoSolvTM integration made available to 700 cardiovascular facilities
EchoSolvTM to be integrated into Studycast imaging and reporting platform
Rapid uptake to be supported by strong presence at ASE Conference, June 2023 Sydney
Under the terms of the one-year agreement, EchoSolv will be integrated into the Studycast system. Echo IQ will remain responsible for the direct sale of EchoSolv to prospective users, however access to EchoSolv will be simple and fast with this new turnkey integration interface.
User benefits of this agreement include:
1. Every user of Studycast will have access to the integration, enabling them to leverage the diagnostic support power of EchoSolv;
2. Users will be able to embed EchoSolv assessments into current reporting; and
3. Technical integration for mutual customers of EchoSolv and Studycast is no longer necessary with access via built-in integration.
The agreement gives Echo IQ several important benefits as commercial roll-out of EchoSolv accelerates. Studycast customers will be able to gain access to EchoSolv almost instantly. They can do so with zero additional technical integration required, and they can see EchoSolv assessments directly embedded into their existing diagnostic workflow.
Pursuant to the agreement, the Company will pay Core Sound Imaging an integration licensing fee. New and existing users will be able to access EchoSolv via the Studycast platform by entering into a direct sale with the Company.
Comments
Core Sound Imaging COO and founding partner, Laurie Smith, said: “We expect our Studycast clients to benefit immediately from the AI-backed decision support capability of EchoSolv. Having the flexibility to use this novel technology without the complexities of manual set-up will make the adoption of AI in cardiovascular care easier and simpler than many may have imagined. We are delighted to be showcasing EchoSolv later this month at ASE 2023 (the American Society of Echocardiology Conference) and expect our customers to embrace this important solution as part of the Studycast Integration Program.”
Echo IQ Executive Chair, Andrew Grover, added: “Studycast has significant market penetration in US cardiovascular hospitals and this established presence and trust delivers and outstanding commercial opportunity to Echo IQ given Core Sound Imaging’s acceptance of our technology. The value of this two-year agreement should not be underestimated by our shareholders and it is further validation of EchoSolv. Commercial take up of EchoSolv is gathering pace in the US and Australia and we anticipate more revenue-generating deployments to be reported shortly.”
Media from Ch9 and The Australian following the trial results.
Further good results from second clinical trial with some comments in the announcement that suggests a marketing approach. Incorrect/inaccurate diagnosis leading to malpractice suits and an increase in recipients for device manufacturers. Trial was funded by one such company. Now to get the adoption and revenue going.
Echo IQ’s EchoSolv AI technology identified 72% more patients with severe aortic stenosis than human diagnosis alone
• Trial revealed that women were 66% less likely to have been accurately diagnosed than men using human-only assessment: EchoSolvTM resolves this discrimination
• Study was funded by Edwards Lifesciences (NYSE:EW)(Edwards Lifesciences Corp. engages in patient-focused medical innovations for heart disease and critical care monitoring. Its products are categorized into four main areas: Transcatheter Aortic Valve Replacement, Transcatheter Mitral and Tricuspid Therapies, Surgical Structural Heart, and Critical Care)
• Clinical trials now completed at St. Vincent’s Hospitals and Beth Israel Deaconess Medical Center (USA) with more than 40,000 echocardiograms reviewed
• Trial results support rapid commercial deployment of EchoSolvTM in multiple sites and markets
In the United States, diagnostic errors affect an estimated 12 million adults each year. Furthermore, we know that 1 in 3 medical malpractice cases resulting in death or permanent disability are due to inaccurate or delayed diagnosis. EchoSolvTM has clearly demonstrated how valuable it can be in clinical practice and we are pleased to see a number of facilities in Australia and the US evaluating our technology.
Device manufacturers, such as replacement valve manufacturers, could potentially see an increase in suitable recipients for their proven therapies.
We look forward to sharing more news in the weeks ahead as Echo IQ starts to capitalise on these exciting results.”
Ultromics are in the same field received $33M in series B funding in 2021. Spun out of the University of Oxford and built-in partnership with the U.K.'s National Health Service (NHS). They already have partnerships with Mayo Clinic, Janssen, Microsoft Azure and the American society of echocardiography. FDA and CE Mark. Need to read more of the research to see where Echo IQ is going to have enough advantage to catch up in US / Euro market.
Ultromics receives FDA Clearance for its Breakthrough Device EchoGo® Heart Failure: An AI-based platform that enables precision detection of heart failure with preserved ejection fraction.
HWH could be an interesting company to keep an eye on and has gained some interest recently. Small cap of 64M and only has 980k earnings but increasing at a reasonable rate. 3.8M cash at hand but burned 3M last year so may need to raise capital at some stage soon.
AI is always difficult to assess. From what I can read they have a variety of components of their business. Intelfuze takes data from multiple sources as well as human input to predict any outcome. Was originally developed for use in military intelligence and still have a contract in place for this it seems. Appraise, Mailout and Elvis platforms help prevent health insurance fraud (working with HCF currently). Their software is also being used in the fintech environment to help enable lenders assess potential clients with a high degree of success. Have just purchased Echo IQ which is possibly the most exciting opportunity. This AI review of echocardiograms can help with the earlier diagnosis of aortic stenosis (a fairly large problem in the community) which can lead to early treatment and reversing of the condition. They have been fully funded by Edwards Lifesciences, a US$74B health care company in the US, for a clinical trial of the platform and will advance to FDA approval after. Obviously a potentially massive market for them. Working in the health industry I can see this being potentially a large opportunity and that seems to be showing in the share price right now.
Management looks strong with reasonable skin in the game and plenty of performance options available. Izzy Whitelock as CEO has solid experience in AI but is still young enough to be sharp, and is backed up by Andrew Grover and Stephen Formica who both have many years of experience growing businesses.
As for valuation, that is where I struggle and would be happy to accept opinions. In its current form it is probably over valued (may reach break even in 3 years if it sustains 45% yoy growth), however if its study in to aortic stenosis is positive and approved by FDA it could be headed for exponential growth or a takeover target.