Company Interview / A hearty tick of approval for EchoIQ

Echo IQ (ASX: EIQ) has secured FDA clearance for its AI-powered heart condition detection tool, now ready for the US market.

Deon Strydom highlights the groundbreaking tech's ability to augment human diagnostics, offering unbiased echocardiogram interpretations across demographics. EchoIQ's next step is obtaining FDA clearance for their heart failure product, leveraging existing tech as a predicate.

Deon mentions potential revenue growth via a reimbursement approach, sharing revenue with hospitals. EchoIQ is already gaining traction with four hospitals signed up!

Full unedited transcript below:

0:00

MedTech, echo IQ has secured FDA clearance for its AI powered heart condition detection tool, allowing it to be marketed in the US. The company is also appointed a new US based CEO, Dustin Hanes, who'll spearhead expansion opportunities in the key market. Let's get more details from echo IQ's chief commercial officer Deon Stratum, who joins me now. Deon, great to see you. Let's just start with, um, what we saw in your product and I guess how important this FDA approval is.

0:31

Gilead. Thanks for having me. Um, yes. Uh, the the approval is certainly validation that the technology has now been validated externally. And what it really does now is gives us an opportunity to commercialize this in the US, across the US, uh, and with the number of customers that we've been in discussions with up until now. So, um, it's a really great validation of all the hard work has happened behind the scenes. And we can now start to commercialize this. So can we take a step back and just discuss what the, uh, tool does? And we're obviously trying to help here with cardiovascular disease.

1:05

That's right. So the main purpose of the tool, what the tool does is the number one diagnostic tool for most of your structural heart exams is the echocardiogram. And so what this allows you to do or allows physicians to do is it automate the interpretation of the diagnosis. But what it does is it's more accurate than human diagnosis alone, but it's opposed and intended to be used with the human intervention. Right. So, um, it augments what the cardiologists are currently doing. And as I said, the main thing that it does, it helps automate the interpretation of echocardiogram.

1:39

Now, I know that you've been looking at the severity of the disease and in terms of what this is achieving in detecting these, um, concerns within the heart, what have you seen in terms of the difference between female and male patients as well?

1:57

That's a really good question, because whether we like it or not, there is some bias in medicine. Unfortunately. You see this everywhere. Right? But but the main thing that the study showed and we did the study at Saint Vincent, Sydney and Saint Vincent, Melbourne. And what the studies show that is, if you are a female, you are 66% less likely to be, uh, sent on for, for a procedure than if you're a male. Um, and that's just a little bit of bias. And also, um, there's some other

2:24

I'm getting some background noise, but there's some other, other conditions that, that, that lead to this as well. So the what the AI does, it certainly gives a standard diagnosis regardless of age, sex and race. And it just, um, standardizes the diagnosis across the board, no matter who the cardiologist is and no matter where the interpretation takes place. So what's the next step? We know that FDA tick of approval is always very key.

2:50

The tick of approval is really key because it gives us credibility in the market to say that what we've said we can do and what we said the technology does and the capabilities of it has now been proven. So the next real key step for us, apart from commercialization, which is really important, the next key step for us is to get our heart failure product, um, FDA cleared as well. So the beauty about the approach we've taken is that our audience to know this product will serve as the predicate for our heart failure technology. So it will certainly be a far more streamlined FDA approach than what we've seen with our external forces. Now, sadly, this is a disease that is actually one of, if not the biggest killer worldwide heart disease or heart failure, I should say. Um, it's always hard to put the human context in terms of money, but what are you seeing in terms of, I guess, potential revenue growth through this tool?

3:46

We're a little bit hesitant to to make comments on what kind of revenue returns will see our approach to go to market is through a reimbursement approach, which means it's pretty much a frictionless sale for the hospitals, right, because we've got a revenue share agreement in place with them. Once we get reimbursement, uh, we share in the revenue. Um, the one thing that I will say, it's software as a service. So the margins on the revenue that we make under high 90s, but to put the exact number on what we expect. I think I'm maybe a little bit premature to do so. Um, I can say that we've signed up for hospitals. Um, even though we've only had one day of FDA or two days of FDA clearance, we've signed up for hospitals already. Uh, and there will be more to follow and more announcements to come in the next, um, before the end of this year. How key is it as well that, um, you get Medicare reimbursement in the US?

4:37

Um, it's not a dealbreaker, but it's certainly a huge advantage if we can. So that's the approach that we're taking. Um, and so a number of sites are now using the technology and the investigational use, um, and just trialling the technology until such time as we get the reimbursement. And at that point it becomes revenue generating. So we've in advanced discussions, um, to be exactly that, more than 230,000 acres analyzed in the US already. So the market's big. The total addressable market is big. You know, the appetite's there from a, um, a hospital perspective, because this is certainly will contribute to the ROI as well. Uh, the more patients that are identified, the most suitable patients that are identified. The more valve transplants I'll get, and all the long term evidence shows as well that earlier intervene with these patients, the better long term results they have. So, um, we're pretty confident that the the traction we've seen so far with the hospitals will continue as we now really ramp up our commercialization.

5:37

And I note that your chairman, Andrew Glover, estimated it could be a $42 million a year market with you assuming 10% penetration. Speaking of what you're seeing in the C-suite, tell us about Dustin Haynes.

5:52

Yeah, so we're extremely excited about Dustin joining the organization. So I've had the privilege of working with Dustin in the past. Um, his form is well disclosed in in the pharmaceutical and medical device spaces. Um, he's come from a really strong background, 25 years of launching new technologies. So everywhere from, um, being in the marketing role to doing reimbursement to bringing new technologies to the market, uh, very well credentialed. And his main focus and his main skillset is around commercialization, so he'll definitely add a lot of commercial muscle to us in the US, and also really good at helping us drive the outcomes and staying focused on our two conditions right now, which is purely aortic stenosis and heart failure. So, uh, he'll remove all the other white noise from us to make sure we can deliver on those expectations to the market. And how confident are you that the market or shareholders are going to be very positive about this latest development, too? I mean, you've done exceptionally well over the past year anyway with the share price.

6:52

We're very fortunate that we've got a very loyal, uh, investor base as well. And the shareholders. So, um, our goal is certainly to make sure that we can show positive returns. Um, up until now, they've been very patient and giving us the space and the room to work through FDA clearance, which we've now finally achieved. So that's one tick off the list. Um, our intention is to make sure that those people that have, uh, invested in us see a return on their investment. So, um, I don't want to be arrogant, but I'm quietly confident that we can deliver on the expectations we've said to the market so far.