Intelligent Ultrasound on track to hit higher guidance

Intelligent Ultrasound (IUG)Follow | IUG followed news of its extended partnership with GE Healthcare - the world’s largest medical imaging company – with a first-half trading update that confirmed it’s on track to meet broker Cenkos’s previously upgraded revenue target for 2022. 

Revenues for the six months to 30 June 2022 are expected to have climbed 64% to £5.9m thanks to a robust performance in its core UK simulation division. Although sales from its indirect global reseller network slipped 37% to £0.5m as a result of China’s extended Covid lockdowns, direct sales in the UK and US – which make up the bulk of the business – jumped over 80% to £5.1m, helped in particular by a high number of one-off orders related to NHS training. 

Alongside the strong trading in simulation – which sells products used to train healthcare practitioners in the use of ultrasound – IUG reported continued progress in its earlier-stage Clinical AI business, which develops deep-learning based algorithms that are incorporated into ultrasound machines used by clinicians to help with image interpretation.

The division said revenues in the half tripled from a year ago to £0.3m, and with its ScanNav Assist AI now integrated into a second GE Healthcare machine – the Voluson Expert 22 – broker Cenkos points to “a clear pathway for growth” for clinical AI sales. 

That should improve further with the anticipated FDA approval of its ScanNav Anatomy Peripheral Nerve Block, designed to help healthcare professionals perform ultrasound-guided anaesthesia with enhanced accuracy. That’s expected in the second half, along with the launch of a handheld version of its NeedleTrainer technology in September. 

Stuart Gall, CEO of Intelligent Ultrasound Group plc, commented: "This has been an excellent start to the year. Our simulation products have performed well in the UK and sales of the new clinical AI product range are starting to grow. 

“The recent announcement that our ScanNav Assist software has now been incorporated on GE Healthcare's new Voluson Expert 22 ultrasound machine is particularly encouraging. We remain confident that we can meet the market expectations of £10m revenue for FY2022 and build a successful 'Classroom to Clinic' ultrasound business in this exciting sector of the market."

View from Vox

IUG is rapidly cementing its position as a leading provider of AI and simulation to the ultrasound market, as demonstrated by its partnership with industry leader GE Healthcare.

The introduction of AI into medical imaging is a rapidly growing area of the ultrasound equipment market, which is expected to grow from $7.8bn this year to $12.9bn by 2028 following Covid disruption that held back growth in the last two years as medical conferences were cancelled.

That’s delayed IUG’s ability to deliver early revenues from its Clinical AI division, but as the world reopens – and face-to-face selling opportunities return - the exclusive partnership with industry leader GE Healthcare - which has around 50% of the market for the 25,000 obstetrics and gynaecology machines sold each year - has the potential to deliver significant royalty revenues to IUG. Broker Cenkos suggests that the expansion of the partnership to include the more fully functional Expert range could bring a higher per-customer royalty than the entry-level SWIFT machines.

IUG’s shares have held steady this year in difficult markets, reflecting its comfortable funding position, and the progress it’s making developing products that continue to drive the company towards profitability. Cenkos expects sales of £10m and a reduced Ebitda loss of £2.1m in FY 2022 ahead of a ramp up of Clinical AI royalties and the rollout of new variants of the ScanNav AI platform, including solutions for the nascent home scanning market.