ImpediMed has just announced a device with the potential to make it Australia’s next big medtech company.
It’s called SOZO, Greek for “to save or rescue”.
The small Brisbane-based outfit has been doing a slow, but steady, burn since it was founded in 1999, building non-intrusive ways of monitoring the human body.
The key is something called bioimpedance spectroscopy, a way of measuring the fluid levels in someone by passing tiny electrical currents through the body and recording the resistance.
From this data, the health or otherwise of parts of the body, some of them critical such as the heart, can be determined.
Currently the technology is being used to help those recovering from breast cancer, who become prone to fluid retention, but the potential is only limited by the imagination of science fiction writers.
The next big one is monitoring heart patients, keeping them out of hospital, keeping them healthy and saving hundreds, if not billions, of dollars.
SOZO is a kind of high tech set of bathroom scales which wouldn’t look out of place on the USS Enterprise.
Place hands and feet on the machine and it gathers information on 256 measurements to work out your state of health.
Eight body sensors and four weight sensors measure body composition, fluid status and hydration. SOZO apps running on a smartphone or tablet then provide data to be used by individuals or doctors.
Personal versions can now be bought for under $500. The first devices will arrive in Australia within the next two months and deliveries will start around December.
News of this sent ImpediMed’s share price up 10% to $1.69 on Thursday.
It looks a prop for a movie:
The company says the device gives a detailed picture of health at a cellular level, can send data to a doctor and is a fine tool for staying fit.
UBS has had ImpediMed shares in its three small cap funds for some time now. Victor Gomes, fund manager at UBS small caps, says the company is starting to get acceptance within the medical community.
“It’s still an early stage medical device company,” Gomes says.
“It’s been one of those overnight successes 10 years in the making. It’s been hard work but all credit to the management team.
“They actually, unusually for this sector, overachieved both in terms of outcomes and in terms of timeline.
“I am not saying they are a Cochlear (bionic ear) or Resmed (sleep apnea treatment) but that’s how they started and the platform on this looks as impressive as those two. It’s very promising.
“But as it stands today, it still burns cash. You can’t put an earnings multiple on it yet.”
However, analysts are forecasting significant revenue either this financial year or in 2018. Canaccord Genuity Australia sees the company with net positive earnings in 2018 with $61 million in revenue from about $5.8 million in 2016.
“The really big market is targeting chronic heart failure,” Gomes says.
“That is multi billion dollars. The economics are very powerful for this.
“Fluid retention around the heart and the lungs is a precursor to exacerbation in people with chronic heart conditions.”
“It’s all about keeping people out of hospital and saving money. The ImpediMed solution promises to do that with more accuracy and also cheaper than any current monitoring devices.
“I think they are only just scratching the surface for applications of this technology.”
This week ImpediMed announced that giant Scripps Health in the US will use the SOZO in a study for monitoring patients with heart failure who are currently being tracked using pulmonary artery pressure monitoring.
The company also has a three-year joint development agreement with Mayo Clinic in the US.
In February the company raised $75.1 million in equity funding from sophisticated and institutional investors at $0.95 per share.
The funds are being to expand sales and marketing activities and to pursue the chronic heart failure opportunity.
The share price has doubled since April to be trading at $1.75 today.
CEO Rick Carreon told Business Insider he thinks the market was surprised at how quickly SOZO became a reality.
“We really wanted to have something that was elegant, streamlined and can be used sitting down or standing up,” he said.
“It could be used in the home, a clinic or a big institution. We worked several years on the ergonomics. We worked hard so that when someone comes up they automatically want to put their hands on it.
“The plastic is curved in case you have arthritis. Time an energy went into the details of it so that it looks futuristic but we wanted to get away from a medical device that looked old and stodgy.
“The stand is perfectly aligned, you’re not overreaching, you’re not uncomfortable.”
Going to hospital or a clinic is a journey of a series of devices used to gather data, including a blood pressure cup and someone taking your pulse.
With SOZO, the readings are automatically taken when you place you hands and feet on it. The potential is to track quickly a number of disease, cancers and conditions.
“When the patient is tested we take 256 data points within seconds and that data can be mined for a number of key things,” says Carreon.
ImpediMed is working towards being able to transmit that data to a doctor’s surgery or a hospital, no matter what software is being used. Last month ImpediMed announced a partnership with Redox to expand the capabilities of electronic health record integration.
“We are really on the cutting edge of patient remote monitoring,” he says. “In the US that’s where medicine is going because the amount of money we are spending on health care is beyond anywhere else in the world on a per capita basis.
“It’s all being driven by managing these patients at home. Technology can be a significant game changer.”