There was plenty of demand for Novita Healthcare (ASX:NHL) this morning, after the minnow stock got some good news from US regulators.

The company announced that its TALi Detect program — a tool used identify potential attention deficits in children — had been approved for reimbursement under the relevant CPT codes.

CPT codes are administered by the American Medical Association, as a way to provide a standardised set of guidelines for clinical validation.

Shares in Novita climbed by more than 50 per cent to 1.7 cents, bouncing off 2019 lows after reaching three cents in January.

Getting the all-clear

The regulatory approval means that Novita will be able to deploy its TALi Detect program before the end of the year.

For starters, it said the Psychology, Neuroscience and Medical Center at Duke University will deploy the program for around 2,000 children.

Novita says TALi Detect is an effective “frontline screening tool” used to determine whether children are suffering from attention deficit disorder.

The company said clinician payments for attention deficit screening services amount to in the order of $US36.04 — an amount that will be split between “participants delivering the service and Novita”.

Novita estimates that the market opportunity in the US for screening services each year is around 8-10 million children, with an average of 2-3 screenings for each application of the TALi Detect program.

The AMA approval means Novita will be able to “expedite discussions with significant potential partners to capture the US market opportunity,” the company said.

In addition to its screening service, Novita is awaiting regulatory approval for its TALi Train attention-training platform “in the near future”.

In other ASX health news today:

Cancer-fighting research company Pharmaxis Ltd (ASX: PXS) has moved onto the next phase of clinical testing for its Lysyl Oxidase (LOX) inhibitor, an oral treatment for cancers including myelofibrosis and pancreatic cancer. After positive Phase 1A results, Pharmaxis has started dosing healthy patients for the second phase of the study.