• Medical devices offer faster route to commercialisation than drugs
  • How newly listed Curvebeam AI aims to grab market share
  • Stockhead reached out to Curvebeam AI CEO, Greg Brown


Despite the recent rally, the ASX Healthcare Index (XHJ) is still down almost 10% from 12 months ago.

Healthcare is fundamentally considered a defensive sector and has always been a stable and recession-resistant one.

Many experts argue the market is currently overlooking that aspect, and has oversold the sector to levels that might have created pockets of undervalued stocks.

Medical devices for example, is one segment that could well be underpriced.

Typically, medical device manufacturers deliver faster revenue growth than a traditional pharmaceutical biotech due to the fact that clinical drugs take much longer to be approved than a device.

Greg Brown, the CEO of recently listed Curvebeam AI (ASX:CVB), said that medical devices companies can take advantage of an exisiting government reimbursement by simply staying within existing technology, but offering it in a totally new way.

“You can gain access to the already existing reimbursement that is there, and that’s a much quicker pathway to commercialisation,” Brown told Stockhead.

“And if companies can align or take advantage of a pre-existing reimbursement, it helps to take out the risk.”

Brown believes there’s a lot of opportunities here in Australia for medical devices companies to do just that, including Curvebeam AI.


How weight-bearing CT scans improve outcomes

Curvebeam AI listed last week at 48c after raising $25m at the IPO round.

The company develops and manufactures a range of specialised medical imaging (CT) scanners and the supporting clinical assessment software.

Based in Melbourne, it’s known as a leader in cone beam CT imaging, paving new frontiers in artificial intelligence (AI)-based bone and joint analysis.

Curvebeam’s flagship product, called the HiRise, allows medical professionals and surgeons to assess the bone health (mainly of elderly patients) for fragility risk from foot to hip in a standing position.

Brown explained that CT scans of our joints, when they’re done via a lying position or non-weight bearing, can erroneously show totally healthy and normal joints.

“A lot of people know they’ve got an issue, but it doesn’t come up on the CT scan when they’re lying down.

“But when they stand up, you can see exactly where the impingement is and the positioning of the bone, so doctors can see what’s going on in that joint,” said Brown.

This allows for better diagnosis of the condition in the knee or ankle of the patient and an understanding of the surgery required.

At an initial capital cost of USD$410,000 and assuming 10 scans per day, the payback period for HiRise users (excluding costs) is around 1 year and 5 months.

Curvebeam has so far placed 40 HiRise units in hospitals since receiving FDA clearance in late 2020, with 75% of those in the US market.

The company is also developing a product called SkyRise, a device that scans the upper half of a patient’s body, including the spine.

“Spine is by far the biggest anatomical issue, it’s around three-fold more prevalent than knee problems,” said Brown.

SkyRise allows doctors to look at both the shoulder and spine with a full body scan under natural weight-bearing, and is expected to launch in 2026.


Using Artificial Intelligence

Curvebeam AI’s products also utilise deep learning and artificial intelligence (AI), which eliminates all the manual steps a doctor would have to otherwise take in order to give recommendations to osteoarthritis patients.

Brown explained that 60% of people with advanced osteoarthritis have an untreated fragility, with the number one risk factor being that a joint could loosen, come out, or even get fractured.

But when a surgeon decides surgery is required, they need to do a bones mass density (BMD) test first, which calls for a trained operator – and a two or three-month waiting list.

“But now, instead of needing that trained radiologist, our AI platform runs all that automatically off the scan for the surgeon.

“All they need to do is press a button and they get the report, it takes about 20 minutes. The surgeon now gets a second billing, as well as the BMD results at the same time,” said Brown.

As a business, Brown says Curvebeam AI is a hybrid of both hardware and software, and believes there’s a massive market to serve in our ageing population.

The company is initially targeting the US market, where it sees the prospect of strong sales growth in osteoarthritis diagnoses.

Its recent partnership with US distributor Stryker has enabled the company to immediately have 500 sales reps on the ground ready to penetrate the lucrative market.

“I also think it’s important for investors to note that I have invested $6.1 million of my own cash into this company. My partner also has $15 million of his own cash in this.

“So we’re not doing this for the fun of it. We’re not asking investors to take a risk that we’re not willing to take,” said Brown.


Other medical device stocks on the ASX


Mach7 Technologies (ASX:M7T)

Mach7 is changing medical imaging focusing on enterprise solutions.

The company’s  enterprise imaging solutions are broken up into three modules including:
1. Vendor Neutral Archive (VNA)
2. Universal Viewer
3. Workflow Orchestration

CEO Mike Lampron said “the industry is still focused on radiology but slowly moving towards enterprise imaging”.

M7T started in 2010 started as a startup company in Burlington, Vermont in the US, then listing on the ASX in May 2016 through a reverse merger with ASX listed 3D Medical.


Nova Eye Medical (ASX:EYE)

EYE is tackling two of the biggest diseases leading to blindness in the developed world – glaucoma and macular degeneration – and has a very strong presence in the US.

Headquartered in Adelaide, EYE’s business is 70% in the US market, with the rest in Europe and China.

In April this year, EYE received a US FDA clearance for its iTrack Advance canaloplasty device.

For over a decade, Nova Eye’s proprietary iTrack canaloplasty microcatheter has been used across the globe, and the iTrack Advance is the next generation version of the device.

Sales in the USA for the three months through to July 31 were US$2.2 million, up 32% on the pcp.


Volpara Health Technologies (ASX:VHT)

The NZ-based medical imaging stock specialises in the early detection of breast cancer.

Earlier this year, the US FDA finalised a new federal regulation requiring mammography facilities across US to inform patients whether their breasts are composed of dense tissue.

The new regulation 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.

In July, Volpara won the global Healthcare & Life Sciences Partner of the Year Award, chosen from a set of more than 4,200 submitted nominations from more than 100 countries worldwide.

The award recognises a partner organisation that excels at providing innovative healthcare and life sciences solutions based on Microsoft cloud technologies.


EMVision Medical Devices (ASX:EMV)

EMV has developed a potentially cost effective, portable, medical imaging device using electromagnetic microwave imaging for diagnosis and monitoring of stroke and other medical application.

In the June quarter, EMV was awarded $5 million in non-dilutive funding under the Federal Government’s MMI Medical Products Translation stream to establish commercial production of the first-generation brain scanner device.

Development of the second-generation device is progressing, with an advanced prototype for further bench testing and health human volunteer testing expected in the near-term.


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.

They also make a portable bomb detection camera, but the company says the brain CT market is worth a whopping $5bn.

MX1 says it’s on track for the first human clinical trials of its Brain CT scanner at the Royal Melbourne Hospital in the first quarter of 2024, with the objective to confirm proof-of-concept for imaging of stroke patients.


CardieX (ASX:CDX)

Cardiex develops the CONNEQT Pulse wearable that provides measurements of both brachial blood pressure (the pressure at your arm), and central blood pressure (the pressure at your heart/aorta).

The company nabbed FDA 510(k) clearance for the device earlier this year.


Now read: Strokes cost the Australian economy billions, but these biotech players could change that


At Stockhead we tell it like it is. While Nova Eye a Stockhead advertiser, it did not sponsor this article.