• 4DX’s technology is disrupting decades-old procedures at hospitals
  • The company’s software technology has a huge margin of over 90%
  • Stockhead reached out to 4DX CEO, Dr Andreas Fouras


Every so often, a medical breakthrough results in a giant leap in diagnosis, treatment and prevention of disease that dramatically changes people’s lives.

We saw that first-hand during the pandemic when mRNA vaccines produced by Pfizer and Moderna garnered significant acclaim due to their role in combatting the COVID-19 disease.

Not to be outdone, Australian biotech companies have also had their fair share of medical breakthroughs recently.

In April, Neuren Pharma (ASX:NEU) became the first company in the world to release a drug for Rett Syndrome after the FDA approved its Daybue (trofinetide) oral solution.

And in May, another ASX breakthrough came from  Zelira Therapeutics (ASX:ZLD), which saw its share price almost triple after revealing that its diabetic nerve pain drug works better than Pfizer’s.

There are other ASX biotechs with potential breakthroughs in the horizon, but one company that we think has been flying under the radar is 4D Medical (ASX:4DX).

4D Medical owns the XV Technology, a platform that’s rapidly setting the scene for a step-change in respiratory imaging, disrupting methods that in some cases have been in use for over a century.

The company’s CT-VQ software, built using the XV Technology, was designed to detect diseases like pulmonary embolism, a condition in which one of the arteries in the lungs gets blocked by a blood clot.

4D Medical CEO, Dr Andreas Fouras, explained that pulmonary embolism is often fatal, very difficult to diagnose, and affects around 1 million Americans a year.

“Normally, people with pulmonary embolism will show up in an ambulance or the hospital’s emergency room with tightness in the chest and having trouble breathing,” Fouras told Stockhead.

The current detection procedure is convoluted and expensive. It involves injecting a radioactive dye into the blood stream, followed by a V/Q scan in the nuclear department to show which parts of the lungs are not getting airflow and blood flow.

“The dyes could cause an allergic reaction in some people, and these procedures are expensive (around US$1,500) as well as lengthy, which means that it could put those needing emergency treatment in grave danger,” said Fouras.

4D Medical’s CT-VQ software meanwhile allows patients to get an ordinary CT scan without any dye injection into the body or the need for a V/Q scan.

“You get the CT scan, and then you have our software sit on top of that, which can detect the condition in your body,” added Fouras.


Race to become first mover

Last week, 4DX unveiled this breakthrough technology at the annual conference of the American Thoracic Society in Washington, DC.

The company believes the initial addressable market for the software is potentially 15% of the 4 million Americans that get the V/Q scans each year.

The profit margin on that is mind boggling. Fouras says that he can deploy the software at a cost of around US$4-US$5, while charging patients US$500 to US$1,000 a pop.

CT-VQ is not yet in the market, but it’s on track for submission to the US FDA sometime in calendar 2023.

“There is a bit of a race to get to market for this, and we feel we’ve got a very good chance of being to market first,” Fouras says.


Disrupting decades-old methods

4D Medical’s other product is the XV LVAS (X-ray Velocimetry Lung Ventilation Analysis Software), which is based on the same XV Technology platform as CT-VQ.

The XV LVAS uses X-rays to create detailed images of lung movement and function during breathing. It basically gives clinicians a clearer picture of lung health for pulmonary disorders including asthma, COPD, cystic fibrosis, and even cancer.

The software has been FDA-cleared, and is disrupting current best practice diagnostic tools that have not been updated for over a century.

For example, X-rays have been used since 1895 and are widely accessible, but they have clinical limitations when diagnosing respiratory illness.

Spirometry was invented in 1896 and is the current benchmark in lung diagnostics. However it can only measure pulmonary capacity as an average over the entire lung, and is dependent on patient effort.

Using 4DX’s scan on the other hand allows doctors to see clearly and quickly whether the disease is in the lungs or not.

Fouras says the market potential for XV LVAS in the US is around US$13.7 billion per year with hefty margins.

“We’re charging about US$200 a test, and it costs us about US$10 or so to deliver that test,” he said.


US Veterans a key market

Fouras believes 4DX has an opportunity to bring some really big contracts and sales deals going forward, particularly in the US Veterans markets.

As it stands, the US government budget for veterans is over US$300 billion per year, which provides funding for over 9 million vets in the country.

“One of the key issues they’re facing is that 4.5 millions of those veterans that have come back from service in the Middle East have inhaled toxic fumes while in the service,” explained Fouras.

“And it’s estimated that as many as 10% of them will will contract a condition called constrictive bronchiolitis, which is a nasty disease of the lungs.”

At the moment, the only test that can be done to detect this disease is to perform a surgical biopsy – a procedure that involves cutting between the ribs and reaching in and grabbing a part of the lung tissue for testing under a microscope.

“That costs US$30,000 and is a three-day stay in hospital. Or you could do our US$200 test that takes three and a half minutes to do,” Fouras said.

The big picture for investors, according to Fouras, is that 4DX has a great portfolio of 75 patents, and billion dollar opportunities at better than 90% margin.

“And if you’re going to start delivering on that, you better be ready for competition – and we have been. We’ve been building protection and the moat around our technology since the beginning,” Fouras said.


4D Medical share price today:


Other medical imaging stocks on the ASX

Here are some ASX-listed medical imaging stocks:

Pro Medicus (ASX:PME) 

PME is a developer and supplier of healthcare imaging software and services to hospitals, diagnostic imaging groups and other healthcare organisations in Australia, North America and Europe.

The company was among Morgans healthcare analyst Scott Power’s picks for 2023. Power described the medical imaging company as one of the best growth stories on the ASX over the past decade.

PME has five-year forward contracted revenue of $450m with many of its customers being tier one hospitals and integrated health-delivery networks.

Volpara Health Technologies (ASX:VHT)

The US FDA recently finalised a new federal regulation requiring mammography facilities across the country to inform patients whether their breasts are composed of dense tissue.

The new ruling will significantly benefit VHT as nearly 40 million mammograms are performed each year in the US, of which its software is used to assess the breast density of more than 6 million annually.

VHT has moved to securing deals with several “elephant-sized” industry leaders for recurring revenue growth and profitability.

Micro-X (ASX:MX1)

MX1 produces a range of portable x-ray systems, most commonly used in healthcare applications such as aged care homes and military or humanitarian field hospitals.

The company is also branching out from the medical sphere with its bomb detection Argus x-ray camera commercial launch due in the next couple of months, which is set to be a key catalyst for the company.

Optiscan Imaging (ASX:OIL)

OIL is a leader in development of endomicroscopic imaging technologies for medical, translational and pre-clinical applications.

The company’s tech enables real-time, in vivo imaging at the cellular level in human and animal tissue and is used by leading research institutions and hospitals in North America, Europe, Asia and Australia.

Mach 7 (ASX:M7T) 

M7T has emerged as a leader in enterprise imaging, with three modular products that work to provide an integrated approach to creating, storing and viewing medical images.

The company is working to help hospitals move away from departmental imaging solutions to a broader enterprise approach so clinicians have access to all medical images of a patient rather than just those taken in just their department.

Telix Pharmaceuticals (ASX:TLX) 

TLX is focused on the development and commercialisation of diagnostic and therapeutic radiopharmaceuticals.

The company’s research pipeline aims to address significant unmet medical need in prostate, renal, brain, and hematologic cancers  as well as a range of immunologic and rare diseases.


Considered a much smaller version of PME is a Latin American headquartered next-generation ASX medical imaging company.

IME provides medical imaging software and radiology services in 18 countries including Colombia, the US and Australia.

The company recently announced that RIMAB, its wholly owned subsidiary, has won its first contract with Famisanar.

Famisanar is Colombia’s fifth largest insurance provider which currently caters to over 2.4 million patients.