EIQ raises $17.3M for commercialisation of AI Heart disease detection tech
Our AI heart disease detection Investment EchoIQ (ASX: EIQ), just raised $17.3M at 30c per share.
We participated in the raise.
Post capital raise, EIQ will have a very nice cash cushion to be able to deliver:
- Commercialisation of its Aortic Stenosis detection tech - FDA clearance for Aortic Stenosis was received in October. That means EIQ can go straight into commercialising its technology.
- FDA clearance for its Heart Failure detection tech - EIQ is about to kick off a validation study for this with FDA clearance expected later this year…
EIQ should now have ~$20M of cash to get all of this done.
The main area we want to see EIQ deploy that cash is in commercialising its Aortic Stenosis tech.
When talking about commercialisation, we aren’t necessarily talking about revenues but in EIQ’s case the metric we will be watching is “integrations”.
More integrations mean EIQ’s tech is being used by more cardiologists which eventually will mean more revenues for EIQ.
This slide from a recent presentation summarised the latest on where EIQ is at with integrations for its Aortic Stenosis tech:
(Watch the full presentation by CEO Dustin Haines here)
Integrations are also very important because once EIQ’s tech has been put into place in a clinical setting, it means any future technology EIQ’s developed can be rolled out almost instantly…
That’s where EIQ’s Heart Failure detection tech comes into play.
Heart disease is the leading cause of deaths in adults, and Heart Failure costs the US healthcare system approximately $60 billion annually.
FDA clearance for EIQ’s Heart Failure tech is expected later this year... and that market opportunity is ~10x bigger than aortic stenosis for EIQ.
EIQ is working toward FDA clearance for its Heart Failure tech later this year:
Meanwhile, all of the integration work EIQ is doing now means EIQ can instantly roll out HF detection tech to those same networks once the FDA clearance comes in…
When will revenues come in?
So in the short-medium term, the key metric we are watching is integrations…
But how and when will EIQ start to turn those integrations into revenues?
First of all, revenues for Aortic Stenosis products are tied to reimbursement code categories.
The category of the reimbursement code determines how often a user of EIQ’s Aortic Stenosis tech can get paid for use.
EIQ’s tech is currently classified as a miscellaneous code where reimbursement approval rates are ~20-40%.
As the category increases, so do reimbursement rates (Cat III = 40-60% and Cat I = 80-100%.
We listened to a webinar with EIQ’s CEO Dustin Haines and CCO Deon Strydom back in March where all of this was explained really well:
Check out that webinar and our key takeaways here: EIQ - our key takeaways from the EIQ webinar yesterday.
Right now EIQ’s Aortic Stensosi tech is in the first category…
BUT EIQ is aiming to have it increased to a Category III CPT code by mid-2025…
Then expectation is ~18-24 months for the submission/approval for Category I.
AS for the company’s Heart Failure tech… reimbursement process’ are already in place…
So EIQ doesn’t have to go through the same workflows it is doing for its Aortic Stenosis tech.
EIQ also doesn’t have to go through the integration process, because all of that work would have been done while commercialising the Aortic Stenosis product.
So EIQ can just switch on revenues for the Heart Failure tech straight away.
EIQ is expecting FDA clearance for the Heart Failure tech later this year:
The following slide from EIQ’s recent webinar presentation sums up that transition from integrations into revenues perfectly:
The 3-month free trial period for EIQ’s Aortic Stenosis tech would have started in ~November. That means by ~May-June 2025, some of those integrations will start switching to paid partnerships… (Which is basically now).
What’s next for EIQ?
🔄 Commercialisation updates for Aortic Stenosis AI tech - we want to see EIQ integrate its Aortic Stenosis tech into more hospitals in the US. We also want to see an update on the company’s application to get category III reimbursement codes approved.
🔄 Strategic partnership updates - we want to see EIQ advance discussions in this area to help rapidly roll out the company’s tech, grow EIQ’s revenue and build market share.
🔄 Australia and NZ pilot program - this program is with a ”leading global structural heart innovation company” - this will advance EIQ’s licensing revenue pathway and be a “proof of concept” study that EIQ can take into the US.
🔄 Heart Failure validation study with US based Group - EIQ expects the study to start this month and be completed by the middle of the year. This will be the precursor to FDA clearance expected later this year.
🔲 Partnership with European re-seller to broaden market exposure - we want to see EIQ expand into new markets like Europe, in a previous webinar EIQ said the company was pursuing this opportunity.
🔲 CE Mark and TGA applications - this is so that EIQ can sell into Europe and Australia.
