Liza welcome to FNN. Resonance Health specializes in the development and commercialization of Magnetic Resonance Imaging, or MRI related technology. How do you sell your service? Is it purchased or paid for with each scan?
Liza Dunne: Our business is involved with the research and development of MRI related technologies and the delivery of those services to the market. We don’t actually deliver MRI technology and equipment to the market per se`, but we’re involved with the development of smart technology for the analysis of MRI images.
Clive Tompkins: Your lead product FerriScan measures liver iron levels. For those not familiar with excess iron build up and its causes, can you explain who is at risk and its incidents in the population?
Liza Dunne: Sure. Iron overload is actually a very prevalent disorder in the community. It generally falls into two main areas. Hereditary Haemochromatosis which is prevalent with people who are from a northern European dissent and it can affect one in 200 people from that origin, is a disorder that results in the excess absorption of iron from the diet. The other community involved with iron overload is those patients who require regular blood transfusions in the management of their underlying disease. The key markets there would be Thalasaemia, Sickle Cell disease and MDS, where the patients need to have the regular blood transfusions, but as a consequence they’re building up excess iron which primarily is stored in the liver. The body has no natural mechanism for excreting excess iron so they need to then go onto some kind of collation therapy to bind and excrete that excess iron.
Clive Tompkins: And how well excepted or proven is your process?
Liza Dunne: Well FerriScan has achieved regulatory approval in Australia, the United States, Canada, Europe and New Zealand. So it’s gone through a very rigorous validation and testing process through extensive clinical studies to produce the data required for those approvals. It’s also been independently validated by large pharma who now use FerriScan as the end point test for the liver iron measure in their clinical studies of iron collation therapy. So it’s had enormous uptake within the key opinion leaders who are engaged in those studies and is seen as the appropriate test to replace liver biopsy as hopefully the new gold standard for measuring liver iron.
Clive Tompkins: Is the scan reimbursed by the government? Or does the patient have to pay for it?
Lize Dunne: In Canada we have achieved reimbursement for FerriScan. We have a submission in to the Australian Government at the moment for funding for FerriScan through Medicare. In parts of the U.K. and some of the large teaching hospitals that look after the big numbers of thalasaemic patients we have gained reimbursement there. We do not have reimbursement at the moment in the U.S. and is clearly a key issue for the ongoing commercialisation of FerriScan, so a major area of our focus.
Clive Tompkins: You have a new product in development, FibroScreen, for scoring liver fibrosis. How long before it will be ready for the approval process?
Lize Dunne: Our liver fibrosis test is going through a prototype phase at the moment. We’ve completed a proof on concept with some good results. We’re now doing some further development on that and hope to have some results next year from that phase of the development cycle, and we would then determine whether to go into the final large validation multi centre study to get the final results we need to then take it through the regulatory process. We would hope to have, by the end of 2011, a product that was ready for that process.
Clive Tompkins: Does this application have the potential to transform the company, given its application in the diagnosis of patients with hepatitis C?
Liza Dunne: It’s probably too early to say that but it certainly I suppose would have the potential to do that. Hep C is an enormous market for us, there is over 4 million people in the U.S. with hepatitis C and a range of other liver diseases at the moment too where liver biopsy is the gold standard for determining the progression of liver disease. So an accurate test in particularly the early stages of liver fibrosis would be a fabulous product to bring to market.
Clive Tompkins: Looking at your most recent financials to the 31st of December, profit came in at just under $300,000 on revenue of $1.2 million. Can you explain the result?
Liza Dunne: We were very pleased with the result for the second half of 2008, recording profit for that period compared to the loss we had in that same period a year ago. We had increase sales and with a prudent management of costs we were able to deliver a profit of that period. We would certainly be planning to do the same in this six month period and therefore deliver a profit for the first full financial year for the company.
Clive Tompkins: And is business at all affected by the downturn?
Liza Dunne: Well being in the health care sector is a fairly well protected sector by and large from the downturn, but most of our contracts are actually in U.S. dollars so the fall in the exchange rate has been a blessing for us, you know really going straight to the bottom line. So we’ve had a windfall in foreign exchange gains.
Clive Tompkins: So what about competition, are MRI manufacturers a threat?
Liza Dunne: MRI manufacturers are not really a threat to us. They do continue to roll out new technology on their scanners to differentiate themselves. Often more in the image acquisition area, but also in the image analysis tools that they deliver as well, but not in the area of the level of technology that we provide in the FerriScan test with the algorithms and the complexities that are in that technology – that’s not really the market for the MRI manufacturers.
Clive Tompkins: Last question. Key to growing the market for your technology is acceptance by the medical fraternity, what is the company doing in that regard?
Liza Dunne: Working closely with the key opinion leaders is a big priority of ours. We participate with them in research, attendance at conferences, we’re often invited speakers at the key clinical conferences, and of course working on clinical trials with large pharma on our collation therapy also gives us good access to key opinion leaders who are involved with research.