Volpara Health Technologies Limited (ASX:VHT) CEO, Dr Ralph Highnam talks about the rollout of the company's software in the US and how it is improving breast cancer screening.
Jessica Amir: Hello. I’m Jessica Amir for the Finance News Network. Joining me from Volpara Health Technologies Limited (ASX:VHT) is CEO Dr Ralph Highnam. Ralph, welcome back.
Dr Ralph Highnam: Hi Jessica. Very good to be here.
Jessica Amir: So, for investors that don't know, you provide breast cancer screening software. Just give us a quick introduction.
Dr Ralph Highnam: Jessica, over 500,000 women this year are going to die of breast cancer. It’s been my mission since my days at the University of Oxford to really help reduce mortality by improving breast cancer screening. Our software is now in use in 36 countries around the world, and we've got over one million women in the US now under subscription. And it’s really pleasing to see that we’re improving patient care when women go for screening, and improving the profitability and cost effectiveness of sites doing the breast cancer screening. That’s really led into an appreciation, I think, of the value our company is bringing to the customers. And that’s really reflected in the share price, but also the annual recurring revenue, which has just hit $3.6 million for the last financial year.
Jessica Amir: Congratulations.
Dr Ralph Highnam: Thank you.
Jessica Amir: Now to the rollout in the US, when we spoke last year it was really gaining a lot of traction. So how is it going now?
Dr Ralph Highnam: In the first year of launching, we got 14 customers onto our software as a service platform, VolparaEnterprise. Over the last year, we picked up another 43, to bring it to 57 total. So, a very, very significant ramp-up to that $3.6 million annual recurring revenue. And we're now starting to really ramp that team up in the US, and our aim is to move from 3.2 per cent of US women up towards 9 per cent over the next financial year.
Jessica Amir: And, Ralph, can you just remind our audience what you’re actually doing and what breast density is?
Dr Ralph Highnam: The core AI algorithms at the heart of what we do generate a series of objective measurements from your standard breast X-rays, such as breast density, breast compression and overall quality of the image. And if you just look at one of those, breast density is a very well known risk factor now for risk of developing cancer and risk of missing cancer. And also it’s quite normal out there in the population, so between 40-50 per cent of the population here in Australia will actually have what they call dense breast tissue.
Jessica Amir: And how many women have breast dense tissue and what leads to it?
Dr Ralph Highnam: Yeah, between 40-50 per cent of the women of screening age in Australia will have dense breast tissue. The amount of dense breast tissue is linked to genetics, family history and a whole range of other factors. And the only way of really establishing it accurately is to have an X-ray and to have that assessed by our software.
Jessica Amir: What are the clinical issues with high breast density?
Dr Ralph Highnam: High breast density is linked to the higher risk of developing cancer, but also higher risk of masking a breast tumour, if it is in the X-ray.
Jessica Amir: So, Ralph, why is your software needed and what other measures can it determine?
Dr Ralph Highnam: Measurement of breast density, you can do it by eye, and a whole stream of these other things you can do by eye, but each measurement even by an expert is very, very subjective and time-consuming. So our software automates it and makes it objective, and therefore, more accurate and more consistent over time.
Jessica Amir: What’s really come out of the USA FDA EQUIP initiative?
Dr Ralph Highnam: About a year ago, the FDA decided that breast positioning, the way the breast is positioned on an imaging plate, was the most important part of the quality control for a breast X-ray. And they asked all imaging sites across the US to start recording that positioning, and starting to look for ways to improve it. And our software, VolparaEnterprise, is the only solution out there at the moment which really objectively automatically does all the measurements for breast positioning and then suggests ways in which the technologies can improve what they’re doing.
Jessica Amir: Now to finances and strategy, just give us a quick update.
Dr Ralph Highnam: At the end of FY18, we got annual recurring revenue of just over $3.5 million, which was a big jump up on the previous year. The strategy for this year is we want to drive that number up towards $9 million annual recurring revenue. We’re going to do that by really attacking the US, by starting to target certain countries in Asia and also by starting to raise the price per woman that we’ve been achieving, by developing new products and bringing those through to market.
Jessica Amir: Great. Last but not least, why should investors consider adding Volpara Health Technologies to their portfolio?
Dr Ralph Highnam: We have a massive opportunity ahead of us, and I think that’s been really reflected in the share price, and where we’re going with the share price and overall company valuation. And we’ve got real traction in the US, real first mover advantage, there's significant barriers to entry. We’ve got great sales visibility ahead of us. But also very importantly as well, we’ve got enough fire power after the capital raise of $20 million, which we’ve just completed, to really go on and complete our mission.
Jessica Amir: Wonderful. Dr Ralph Highnam, thank you so much.
Dr Ralph Highnam: Thank you.