2021 earnings released: EPS AU$0.001 (vs AU$0.002 loss in FY 2020)

The company reported improved earnings, revenues and profit margins.

Full year 2021 results:

• Revenue: AU$3.78m (up 3.0% from FY 2020).
• Net income: AU$585.9k (up AU$1.30m from FY 2020).
• Profit margin: 16% (up from net loss in FY 2020).

Up over 80% yesterday, up 7% pre-open today. The previous RHT products had limited population demmand, the fatty liver scan is a huge market.  Here is an article from stockhead yesterday re FDA approval...

Resonance Health (ASX:RHT) is the latest health stock to obtain FDA approval.

The company’s HepaFat-AI software monitors liver health and by analysing traits in MRI datasets. Namely, volumetric liver fat fraction (VLFF), proton density fat fraction (PDFF) and steatosis grade.

It can help in the management of several diseases including Non-Alcoholic Fatty Liver Disease (NAFLD) and obesity.

It is estimated that between 24-30 per cent of the world’s population has NAFLD right now. If its prevalence continues to rise, the healthcare burden over the next decade could increase to over US$1 trillion in the USA alone.

Having obtained FDA approval the company can now market HepaFat-AI for commercial distribution in the USA.

Why FDA approval is a big deal

FDA approval is always a critical step for small caps seeking to enter the USA. Most obviously it lets them sell their device into the world’s largest healthcare market.

But the degree of rigour and scrutiny the FDA gives is seen as a further sign of confidence that companies can “make it anywhere”. In fact in some jurisdictions, companies can re-use the same clinical data to gain approval from their regulators.

It is also a catalyst for share price re-rating as evident in Micro-X (ASX:MX1) and Avita Medical (ASX:AVH) as well as the solid debuts of already FDA green-lighted 4D Medical (ASX:4DX) and Control Bionics (ASX:CBL).

Resonance Health chairman Martin Blake concurred.

“This is a great milestone in the company’s history; a magnificent advancement in the field of quantitative MRI,” he declared.

While the company has not yet won clearance in Australia and in the Europe – TGA and CE Mark approval respectively – it told shareholders it is working towards both.

RHT just received US FDA clearance/ approval for the hepafat  AI scan for the detection of fatty liver

For patient investors with a bit of risk tolerance, Resonance Health is an interesting little company with good potential. Unlike many small caps, they hit cashflow positive last year, but are expanding their technology portfolio.

Their base product basically is AI interpretation of MRI scans, initially developed to detect high iron in the liver. It is now considered the gold standard for measuring iron toxicity as it is safer, less painful and cheaper than having a surgical biopsy.  People at risk of iron toxicity include people with thalassaemia, haemachromatosis and cancer survivors who have had multiple blood transfusions.

The complany then utilised their AI technology for assessment of cardiac and liver iron toxicity, and fatty liver-a huge problem with the ever expanding obesity problem (excuse the pun).  

The have an agreement with Siemens group, and recently announced they have partnered with the Telethon Kids Institute to develop their product to assess cystic fibrosis.

Their initial product is already generating revenue, but it is interesting to watch how the company develops additional uses for their product.