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Volpara 3rd cash flow positive qrtr.
Guidance upgraded and expectation of net positive cash flow positive for FY24 - a full year ahead of previous expectation.
A super solid announcement from VHT today. I am personally a massive fan of Craig and Teri’s tight reigns over the Volpara purse strings. Well done and a very positive announcement if planning to reduce debt facilities is a huge sign of faith that they will turn this business cash flow positive and soon.
The AI azure announcement about cardiovascular capability of Volpara’s data is pretty exciting. Speaking as someone who looks and retinal vessels all day the potential use case here is huge. Retinal images certainly can be incredibly good indicators for cardio issues. Using AI to power up and identify people at risk while having mammograms has the potential to save countless lives and the countless healthcare system dollars. This I predict will be the making of this company.
Hi all,
I would be interested in every thoughts on analyst consensus for VHT from simply Wall Street.
Is this price target similar to your calculations. Interested in all thoughts and your @mikebrisy.
AI and breast screening using Volpara algorithms showing exciting real life promise for early cancer detection. Presented at the latest ECR conference is pretty big news for the company. A standard of care for the future?
Breast density AI, risk and genetic testing discussions going mainstream. Always good that awareness is being raised.
Finally FDA states women must be informed of there breast density score on breast screening. Hopefully this means more impending sign ups to Volpara Risk programs for breast screening companies in the US. The company is hopefully well placed to take advantage of this change.
Looks like Terri is kicking goals and delivering those elephants. A great start for Volpara for 2023.
Volpara / Neuren /Promedicus all listed as likely 2023 winners.
Source you can take with a pinch of salt.
The last few years have been brutal for most Healthcare stocks on the ASX. Possible transition back to this area.
Well done Teri and team. Working toward landing elephants she was discussing in her interview. A substantial contract announcement - no financial details yet. But RadNet has signed for Risk pathways as well which is good to see.
ASX RELEASE (copied from latest asx announcement)
Volpara signs contract with RadNet
Highlights:
• Volpara signs contract with Radnet Management, Inc., a subsidiary of RadNet, Inc.
• Contract includes Analytics and Risk Pathways, both deployed in the cloud
• Risk Pathways to be embedded into eRAD, RadNet’s electronic medical record system
• Contract incorporates a volume-based model with potential upside
Wellington, NZ, 4 July 2022: Volpara Health Technologies (“Volpara,” “the Group,” or “the Company”; ASX:VHT), a global leader in software for the early detection of breast cancer, today announced that it has signed a contract with Radnet Management, Inc. (“RadNet”), for an initial contract period of 42 months, with the mutual option to extend.
RadNet, based in Los Angeles, California, is the largest provider of outpatient imaging services in the United States. RadNet has 9,000 employees and operates across 353 imaging centres in seven states.
The volume-based contract sees RadNet implementing Volpara® AnalyticsTM and Volpara® Risk PathwaysTM software throughout its organisation. Volpara Analytics’s artificial intelligence will consistently manage mammography quality across RadNet’s 350+ sites. Volpara Risk Pathways provides risk-based screening to ensure RadNet patients have access to essential imaging and genetic testing. Planning for the implementation has begun, with go-live projected in 2023. Management expects that revenue generated under the agreement will be material to the Company.
Volpara Group CEO Teri Thomas said: “Volpara is pleased to partner with such a large and well- respected organisation as RadNet. Together we will save even more families from cancer. This is a broader partnership than a simple software purchase. We look forward to a deep engagement with RadNet as part of our focus on industry impacts and customer success of ‘elephant-sized’ industry leaders.”
Authorisation & Additional Information
This announcement was authorised by the CEO of Volpara Health Technologies Limited.
Volpara #Cautiously Optimistic
Thank you to Strawman for organising this interview with Teri and bonus extra surprise of Craig.
My take aways (I have not read any other VHT straws on interview yet as we will all have our different perspectives and I am looking forward to doing so):
CEO Impressions:
-Teri is impressive and refreshingly honest. She understands Saas and medical technology from a practical perspective. I believe this was lacking and lead to lag in break even for the company. While Ralph is literally the brains of the operation sometimes academics can be lost in the details and minutia and fail to assess the macro factors for their own companies. I feel that Teri might be the answer to this gap.
-Interesting that Teri was Ralph’s strategy advisor so she clearly saw the gaps in this company and solutions to fix it before she became CEO
Company Mission:
-I liked the refocus on Volpara as an AI company that is focused on risk assessment: With this lens the acquisitions made over the past few years makes a lot of sense.
-Although this admittedly hasn't been integrated well yet, you can certainly see the blue sky of amalgamating breast, heart and lung technology seamlessly in the future.
-VHT has a gold mine of 65 million images as Andrew said the virtuous circle this will give Volpara an untouchable MOAT in efficiency and detection of risk in breast and hopefully the lung and heart space eventually.
Market Penetration:
-The clarification around market penetration was transparent clear and something I felt had been very poorly articulated to shareholders over the past few years. There were often discussions on podcasts and forums around the gap in ARPU and the slow build. Furthermore, I was occasionally concerned by the low figure ARPU sighted on new contracts. I have to admit I hadn’t fully understood the complexity and separation of the volpara suites before. I did not understand that companies were often only buying 1 or 2 components of the full data fit out.
-I was concerned myself about this quoted number of 37% of women in the US being touched by a Volpara product with no profitability or even breakeven goal in sight. Now I understand this better. Teri’s explanation of the division and the more realistic figure of 10% penetration helped me to understand how early in the adoption cycle this company really is. There is masses of room to evolve, grow and expand to reach profitability. That is in the US alone.
Strategy:
-Craig clarified that there are no plans to change the size of the sales team.
-Teri’s big fish tactic to target the owners of the operating sites seemed very smart. A buy in bulk approach for VHT plus a- mass data capture approach to improve AI
-The $10 M facility plus the $18 M cash on hand and no debt gives the small cap investor a sigh of relief. I do believe with efficient capital management a cap raise may be avoided in the near future.
-FY 23 targets are still flagged as achievable despite the current economic climate.
-I look forward to the July strategy review announcement.
Microsoft:
-Terri’s explanation of this was clarifying. What an incredible opportunity.
-VHT owns the IP and can create a whole new risk assessment suite with no capital outlay. The condition……use AZURE hosting which they do now anyway. WIN WIN.
-This also gives the tech staff and Ralph a chance to use their skills on what they know best.
MOAT:
-Huge Volumetric data bank of images 65 million
-Software that is compatible with any hardware- No other provider can claim this
-Broad church of imaging, risk and genetics offered only by Volpara- all competitors offering only piecemeal approach.
-The integration with electronic records is not to be underestimated for utility and adoption. And the CEO with her background from EPIC would have very good grounding in the importance of this.
-Security- Teri filled me with confidence that this is an area that Volpara is very much focused on.
Summary:
As a long-term investor I am going to hang in there. I like what I see. I think Teri is whip smart and capable of bringing VHT to break even quickly all while planning for future asset growth in the form of lung and heart suites.
I will be happy with a 20-30% topline growth but I have a suspicion that given the MOAT and lack of genuine competition this growth may be exceeded over the next few years, even in this current economic environment.
Very nice to see insider buying and at these levels Volpara is finally looking like reasonable value. I must admit I will likely hold off buying until July strategy review to see what these guys have planned fiscally for VHT to achieve breakeven.
I do note the theme in my investing - those who own the data, feed the AI foundation maps and run the world.
Seems this applies to VHT , 3DP (or manipulate the data and find answers quickly) and NEA
Really appreciate the access to the CEO's Andrew. Well done on another excellent meeting. Great questions from the Strawman community.
Cheers
Nnyck
Volpara investor call announced to discuss lung cancer screening expansion in the US. Will be great to hear plans and strategy. Tuesday 28th. There is an opportunity to lodge questions. I am hoping fellow Straw persons may sit in the call and provide insights for those of us stuck at work.
Volpara Lung #opportunities #strategy #growth #increasing TAM
Volpara’s Lung screening ASX announcements and additional strategy direction have been coming thick and fast. The two new major partnership agreements were announced to the ASX on the 16/09/21 and 8/09/21.
News
Volpara announces Lung screening expansion plans via strategic relationship with Seattle -based lung AI Company -Precision Medical Ventures (PMV) trading as RevealDx.
This is the second lung expansion announcement in the past month.
@Seymourbutts (I can’t take this seriously as I type) wrote an interesting straw about Volpara recently, expressing some concern about the companies shift away from their core breast product offering and potential dilution of business strategy with this increased focus on lung screening. I believe he stated that overall this was positive but he did have some concerns.
Thanks @Seymorbutts (ha ha) for your insights. This lead me to spend a little more time thinking about this too and I went back and read multiple announcements again. The beauty of the Strawman.
My Strawman conclusion
I think I came away with more respect for the management teams direction and business strategy.
I am impressed that Volpara is thinking about building multiple verticals. I think the MOAT this company is establishing, to borrow Ian Olsen’s terminology, is a “soup to nuts” model of screening and cancer detection.
My interpretation of Volpara’s strategy is as follows –
- Build excellent software platforms or partner with solid businesses with unique attributes which can be merged into Volpara’s software
- Overlay unique AI technology to streamline and minimize false positives and allow for cost effective one time captures.
- Use this data to build databases and inform AI tech to help medical professionals to interpret scans accurately, quickly and easily.
- With results in hand send patients through to aligned businesses for further diagnostic tests, including genetic testing (with kick back thank you very much)
- Detect early and accurately.
- Minimize overall costs to the health system with unnecessary biopsies, scans and treatments.
This model seems very applicable across different areas of medical screenings. So taking this successful process and applying it to Lung Screening seems like a sensible and cohesive fit. Volpara’s asx announcement in 2019 summarises its goals nicely:
“Volpara is building out its platform for delivering well-curated AI and other software applications to assist its customers in their efforts to reduce the mortality and cost of breast cancer. “
So Volpara has a unique software offering currently which includes (These points taken directly from its June 2019 announcement):
- Breast density – the Volpara®DensityTM clinical application helps identify this risk
- Poor image quality – Volpara®EnterpriseTM software and the Volpara®Live!TM system help reduce this risk
- The radiologist not seeing the cancer – Transpara reduces this risk
- The radiologist misinterpreting the cancer’s appearance – Transpara reduces this risk
So Volpara offers great base software and AI then adds Plug-Ins through acquisitions, partnerships and mergers.
These bolt on products improve screening and increase offering and ultimately ARPU per patient.
Hit repeat for Lung Screening
I hope Volpara expands further into other verticals and becomes a household name for patient screening. The S&N of the screening world. This strategy will increase ACV and reduce execution risk through diversification.
Volpara states Lung screening has a clear benefit in reducing mortality rates. Analogous to the solution Volpara was trying to solve with breast screening, lung cancer screening also has had a high incidence of false positives. This means that lung screens can inaccurately identify nodules or anomalies, where there really are none. This creates massive unnecessary stress for patients and a burden on the health system, due to unnecessary further screenings and diagnostic tests.
The synergistic purchase of MRS in 2019 brought this companies unique Lung cancer screening into the Volpara fold. MRS uses low dose CT to screen patients for lung disease and cancer. This system was re-branded Volpara Lung. The idea is to screen patients accurately, then apply AI tech to help delineate the nodules or lung issues found.
Volpara Lung is currently used in 8% of the US market. Volpara reports the TAM for lung AI screening to be an estimated US$750 M globally. A slice of this market would be a nice addition to the companies’ overall ACV.
MRS Systems Inc – a foray into Lungs acquired by Volpara in June 2019.
What does it do?
MRS Systems Inc was a US based Medical software company purchased by Volpara for its comprehensive patient tracking and communication software plus a radiology reporting platform for sub-specialty radiology applications including breast and lung imaging.
MRS Systems was used in breast cancer clinics in the US and was a competitor to Volpara. The purchase of MRS increased access to US based clinics from 400 sites to over 2,000.
Purchase had 6 primary benefits
1. Increased market access through new sites
2. Increased reach of Volpara’s enterprise management software
3. Mass addition of data to feed Volpara’s AI algorithms to improve its breast screening algorithm.
4. Increase ARR
5. Cross sell opportunity increase
6. Increased ARPU through additional product sales for women screened and new contracts
Let’s do it again with Lung Screening!
The benefit of RevealDX – a bolt on: The latest announcement
RevealDX is a leader in AI for lung nodule diagnosis. The press release states that this is the step after detection. RevealDX claims to be the most advanced lung cancer decision support software globally.
It is important to note the risk with this partnership is that RevealDX AI Lung is currently only CE marked and does not have TGA or FDA clearance. This could be problematic if clearance is delayed or rejected.
For Volpara’s US$250,000 investment via a convertible note they receive non-exclusive rights to sell the RevealDx AI-Lung product in the US. But exclusive rights to sell the product in Australia and New Zealand. The convertible note appears to be a smart option to gain access to this technology. A win/win as RevealDX can use the funds to offset the costs involved in gaining TGA and FDA clearance and complete pivotal trials.
Volpara also wisely has negotiated the appointment of its own board member to RevealDX’s Board.
RevealDx purports to differentiate significant nodules from non-significant nodules with its AI. This will ensure Volpara Lung partnering with RevealDx will help patients to be diagnosed earlier and optimise treatment outcomes.
Riverain Technology – another Lung Screening bolt on
Volpara has also collaborated with leading US lung imaging company Riverain Technologies to drive growth in the US Lung screening market.
The market opportunity is large as identified by the TAM but to boil this down 15 million people in the US are eligible for lung screening at US$250 per screen.
So Volpara Lung provides advanced, integrated and adaptable reporting, tracking and risk assessment. It covers everything from scheduling to diagnosis. Helping to track overdue and follow up exams. It also has the added benefit of automatically applying for reimbursement through the American College of Radiology Lung Cancer Screening Registry.
Riverain add to Volpara Lung by using its unique AI to detect lung nodules. Riverain efficiently detects lung nodules and it’s Clear Read suite improves clinician’s ability to accurately detect disease using patented vessel CT and X-ray suppression tech – for earlier more efficient detection of lung abnormalities.
So Volpara Lung is essentially patient reporting tracking and risk assessment software and is now combined with Riverrains robust AI detection solution.
Plus RevealDX unique AI nodule detection solution.
Summary
Volpara is showing leadership and strategy in the development of its Lung Screening arm. Volpara is proving diligent at building great software and AI and discovering excellent aligned and synergistic companies to partner with and increase market share and patient ARPU.
I feel Volpara is currently undervalued as the Lung Screening potential is not fully priced in. I look forward to surprise ACV increases due to their bold moves.
Happy to hold IRL and Strawman.
Cheers
Nnyck777
90 Seconds with Ralph Highnam CEO of Volpara
Summary released 3/9/21 Stockhead
· He emphasises the strong start to Q1 FY22.
· Promotes the 2 new US team members Jill Spears (Head of Sales and Marketing, from GE) and Ann Custin (Director, CEO and CFO of Semens Medical)
· 98 Patents granted
· Breast cancer awareness month in October. New website to be released.
· Ralph emphasises partnering more and more around lung cancer – keen to replicate what they do in breast to lung. Push for lung cancer screening as a major part of their business model.
I note the share price up 8.2% last 7 days to $1.26 the market seems to be focused back on this stock. Has been a slow grind for the past year, down -5.3% on total 1 year return, according to Simply Wall Street.
Investment thesis Volpara (VHT) #still a bull case
I have been holding this stock long since May 2019 where I purchased my original tranche at $1.69. I opted in during the previous capital raise in 2019 and bought more stock at $1.50.
My reason for investing initially in Volpara was that I was impressed with the technology and I appreciated that this was a founder lead business. Ralph Highnam appeared to be a very pro-active CEO. The expanding integration of AI and medicine is an area of interest of mine. Volpara’s technology effectively improves the accuracy and the interpretability of breast scans. This helps to streamline decision making for clinicians, minimize anxiety for patients and improve breast cancer detection rates (by incorporating breast density scores) and therefore patient outcomes.
Volpara had an impressive start launching in the US and adopting a decent market share at a very early stage for a relatively young company. I was resolute on my initial investment however I have been disappointed with its performance since purchase. VHT closed at $1.10 on Friday 6th of August 2021.
It is important as investor to take a step back and to look at the reasoning for staying the course with a particular company. I never realised that my biggest challenge wouldn’t necessarily be knowing when to buy but in knowing when to sell.
COVID has understandably impacted the growth of so many health companies as the priorities of regulators such as the FDA as well as hospitals have shifted. It is impossible to know how much longer this situation will impact life globally. However amongst shutdowns and turmoil in the US Volpara reported in its recent 4C Q1FY22 that it had still expanded its market share (only very slightly) to 33% of US women.
The silver lining with this stock is the increasing ARPU of $1.42 to $1.55. What excites me is the muli-product options that Volpara has now set up in some of the new contracts which will see ARPU increase to $5.87 in some instances. The ability to integrate additional, complimentary services such as genetic testing and expand ARPU very quickly is what is keeping me invested.
For a great discussion on Volpara’s latest results I recommend the latest Australian Investors Podcast. This has an excellent discussion on Volpara’s latest results and an illuminating discussion on Volpara’s handling of ARR.
So personally despite being underwater in this stock I still believe Volpara is a great value proposition especially at these prices. I expect future ARR to come from increasing ARPU as well as future synergistic relationships with genetic and possibly complimentary screening products as well as increasing product adoption rates amongst US breast screening services and providers.
I think we will likely see SP return to last weeks highs above $2 on positive FDA announcement for mandatory breast density screening. This will give VHT a competitive edge. With MRS acquisition the company is very well placed to extend market share in the US. Also awaiting 10 year breast density RCT study results from Netherlands which will hopefully add further support to VHT density AI tech and increase company MOAT.
Currently I believe SP held down until Wed 26th, 2019, 12 pm. Final retail offerings will be closed. Max offering of 1 share for 27 owned, offered at trading discount of $1.50 per share. Maximum extra allotment of double this amount on approval from VHT. Capital raising for MRS acquisition.
I expect to see significant lift in SP over the next week or two as positions consolidated. I am very happy the ASX SP bottomed out around 1.65 during the last weeks. Suggests a lot of confidence in management and future direction of this company.
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