Intelligent Ultrasound reports ‘a very positive year’ despite COVID-19 impact
(IUG ) trading Update for the 12 months to December 2020, illustrates a Company with enough operational flexibility to weather the COIVID storm, whilst investing for future growth.
Financial Highlights
Despite the disruption caused by COVID, IUG expects to reduce its operating loss by over 8% - to between £4.1m and £4.2m (FY19: loss of £4.6m) – primarily due to reduced selling and marketing expense.
The reduction in operating costs will help minimise the impact of lower revenues from the Group’s Simulation Division, which are expected to be approximately 11% down on FY19, ‘entirely due’ to the impact of the COVID-19 pandemic.
Total operating costs for the firm include around £2.0m (FY: £2.0m) of expensed R&D costs primarily attributable to investment in the Group's Clinical AI Division. Group management, plc costs and share-based payment charges were also flat at £1.0m (FY19: £1.0m).
Cash, as of 31 December, is expected to be approximately £8.8m (FY19: £7.3m), post a £5.2m placing completed during the period.
Operating Highlights
Simulation Division
Sales from its direct UK and US sales team are expected to have grown by over 15% to £3.8m (FY19: £3.3m), helped by strong sales from the Group's ScanTrainer and BodyWorks simulators, which incorporate the group’s ‘free of charge’ Covid-19 lung training module.
However, sales in Europe and Asia, that are made through MED’s reseller network, were impacted by Covid-19 restrictions and are expected to have declined to £1.4m (FY19: £2.6m).
Clinical Division
The group’s Clinical AI Division had ‘a successful year’ announcing in October 2020 that GE Healthcare's Voluson SWIFT ultrasound machine, that incorporates Intelligent Ultrasound's ScanNav Assist AI technology in its SonoLyst software, had received CE approval for sale in Europe and 510(k) clearance from the FDA for sale in the USA.
GE’s SonoLyst is the first AI software to be launched under the Group's long-term licence and co-development agreement with GE Healthcare. It is the world's first fully integrated AI tool that recognises the 20 views recommended by the International Society of Ultrasound in Obstetrics and Gynaecology mid-trimester practice guidelines for fetal imaging.
In October 2020, the Group also announced the submission of its ScanNav Anatomy Peripheral Nerve Block (PNB) software for both CE and FDA regulatory approval.
Based on feedback from both regulatory bodies, first sales in the UK and Europe are still expected in the second half of 2021; however, the restrictions imposed by Covid-19 on progressing certain additional US studies may push back FDA regulatory approval.
The Company said it expects to be able to announce initial sales from its Clinical AI division when it releases its 1H21 interim trading statement.
Commenting on the trading update, Stuart Gall, CEO of Intelligent Ultrasound Group said the group had seen “a very positive year” despite the impact of Covid-19, commenting:
“The Clinical AI Division has continued to perform well, with GE Healthcare's Voluson SWIFT ultrasound machine, that incorporates Intelligent Ultrasound's ScanNav Assist AI technology in its SonoLyst software, receiving CE approval for sale in Europe and 510(k) clearance from the FDA for sale in the USA.”
He said, “Although Covid-19 has impacted both the signing of a second OEM agreement and the regulatory approval process for ScanNav Anatomy PNB, we still expect first product launch and initial revenues for this, our second clinical AI product, to be in H2 2021.”
He added, “Finally, the Simulation Division has worked extremely hard to minimise the negative impact of Covid-19 on 2020 sales revenue and we are confident that, on-going global pandemic restrictions permitting, the Group will return to revenue growth in 2021."
Shares in Intelligent Ultrasound have recovered strongly from lows of 10p at the height of the COVID crisis to trade within a tight range between 14p and 16p over the past three months. Investors should be pleased the Company has shown agility in managing its cost base during the pandemic whilst maintaining investment in its Clinical AI division, which is expected to be a significant value driver for shareholders in 2021.
Reasons to Follow IUG
Intelligent Ultrasound develops AI-based clinical image analysis software tools for the diagnostic medical ultrasound market and hi-fidelity VR simulators for the ultrasound training and education markets.
Global Partnership with GE
Intelligent Ultrasound announced in 2020 that it had been working closely with GE to commercialise its AI technology. GE launched the “Voluson SWIFT” ultrasound machine in October 2020, that incorporates Intelligent Ultrasound's ScanNav Assist AI technology in its SonoLyst software. GE now has CE approval for sale in Europe and 510(k) clearance from the FDA for sale in the USA.
GE Healthcare's SonoLyst is the first AI software to be launched under the Group's long-term licence and co-development agreement with GE Healthcare. It is also the world's first fully integrated AI tool that recognises the 20 views recommended by the International Society of Ultrasound in Obstetrics and Gynaecology mid-trimester practice guidelines for fetal imaging. The Voluson SWIFT is the first of the three product types in GE Healthcare's Voluson range to offer SonoLyst.
The GE Voluson SWIFT, when deployed in private healthcare settings, increases the speed of ultrasound procedures whilst ensuring correct quality levels are consistently achieved.
This has the potential to increase revenue for the operator and therefore provide GE Healthcare with a more compelling sales proposition than that of its competitors.
Prof Aris Papageorghiou, Professor of Fetal Medicine, St George's Healthcare NHS Trust, London called the technology a “big advance for ultrasound imaging in women’s health.”
He added, “I have worked in the field of AI in ultrasound for over ten years, yet I am still amazed at the level of accuracy that has been achieved. You can really see how Intelligent Ultrasound's AI technology, incorporated in the SonoLyst software, will improve efficiency, make the learning of ultrasound easier and reduce omissions and errors.”
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