‘Delivering in all aspects’: Volpara strengthens and expands as personalised medicines sector leader
Health & Biotech
Health & Biotech
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Medtech Volpara is consolidating its leading position in the growing personalised medicine sector, gaining attention of both the health sector and investors.
Momentum in healthcare technology company Volpara (ASX:VHT) is continuing to grow as the company capitalises on favourable moves towards personalised medicine.
The quality of its technology, recent acquisitions, and shifts away from the “one size fits all” approach towards personalised or precision medicine has increased investor interest in Volpara.
Broker Morgans are bullish on Volpara, recently retaining an add rating and $1.87 price target on the company’s shares. Morgans believes the company is delivering in all aspects of the business and its revenue guidance of NZ$25 million in FY 2022 is conservative.
Volpara focuses on the early detection of breast cancer by improving the quality of screening using artificial intelligence.
The medtech’s Risk and Scorecard, which underscores the value of the Volpara Breast Health Platform, is regarded as the most clinically validated density software to measure breast density considered a risk factor for cancer.
Volpara’s technology is based upon CEO Ralph Highnam’s PhD at Oxford University in the 1990s into the use of artificial intelligence to improve breast cancer screening.
“I was studying electrical engineering focusing on the use of AI and my supervising professor Sir Mike Brady’s mother-in-law had died of breast cancer,” he said.
“Sir Mike is a professor of oncological imaging so we wanted to see how we could use AI to improve cancer screening.”
Highnam said Volpara’s focus on the early detection of breast cancer can not only increase survival rates but also has benefits to healthcare systems worldwide.
“Our objective is the pursuit of our mission – to eliminate advanced-stage breast cancer and save more families from cancer,” he said.
“The earlier breast cancer is detected the greater hope of survival, but it also reduces pressure on health care providers with less prolonged and costly ongoing treatment needed.”
Volpara’s reputation in the personalised medicine sector continues to grow, underpinning its strong financial results.
Cash receipts from customers for Q2FY22 were NZ$7.1m, up approximately 52% compared to the previous corresponding period (pcp) and almost NZ$700k or 11% up on the previous quarter.
Overall, Volpara added more than US$1.2m ARR in Q2FY22, an increase of more than 92% on its previous best Q2.
The company is also well-funded, with NZ$25m of cash on hand at end Q2FY22 with no debt on its balance sheet.
“We had a very strong close to FY21 and have had a strong start to FY22 with $25 million revenue guidanceF,” Highnam said.
“Our revenue is mostly from the US where we cover something like 33% of all women screened for breast cancer.”
As global interest in personalised medicine grows, Volpara is increasing its focus on risk and genetics. The company has undertaken several takeovers and collaborations to capitalise on the space.
Volpara has also acquired CRA Health, a breast cancer risk assessment company spin-off from Massachusetts General Hospital, which is a Harvard Medical School teaching hospital.
Collaborations with Ambry Genetics and Invitae Corporation are also key components of Volpara’s strategy to focus on risk and genetics.
In October Volpara announced it had closed its largest contract to date to install its integrated breast screening platform across the network of a leading US imaging provider. The deal will deliver US$2.15m in revenue over five years, representing US$430K in ARR.
While the company is going well in the US, it is also making positive inroads in Europe as it moves to become a global business over time.
In July Volpara was granted a patent from the European patent office covering the company’s improved breast cancer screening analysis. The patent is effective across 25 European countries.
Furthermore, Volpara has initiated Project Thumb, a multi-phase strategy to reach consumers directly with educational content and increase market share of the company’s proprietary breast density assessment and patient tracking technology.
“It’s our first step toward really empowering women with information they need to make the right decision for their breast health,” Highnam said.
While it remains primarily focused on using its AI for the early detection of breast cancer, Volpara has also consolidated its position in the lucrative US$750M market for lung cancer screening technology through strategic partnerships.
The company has entered a strategic partnership with US-based lung AI company, Reveal-Dx, which is developing its core product, RevealAI-Lung.
The platform focused on leveraging technology and AI to optimise decision support software used in lung cancer assessment, in turn contributing to the optimal clinical pathway for each patient.
“We are increasingly entering the lung cancer diagnostic space,” Highnam said.
“Our lung cancer technology stack is similar to breast cancer and if we add in some more AI it will be a very powerful platform for detection of lung cancers.
“At the moment our core focus continues to be on breast cancer but as early screening for lung cancer gains momentum we want to build our presence in the space.”
This article was developed in collaboration with Volpara, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.