PainChek General Discussion, page-17654

AI in healthcare: ASX small caps discuss their recipe for success

• AI has strong applications in healthcare
• ASX small caps highlight the market opportunity
• The stricter regulatory environment is challenging, but also presents opportunity

A number of ASX stocks are working with advanced Artificial intelligence (AI) and machine learning solutions to improve the field of healthcare.

* spoke this week with three companies in the space, all of which are in different stages of commercial development.

What stood out was the technical aspects around the application of AI, within a sector (healthcare) which is subject to the strictest regulatory standards.

That construct makes the process of developing AI more complicated.

But for companies that spend the time and due diligence to meet those strict criteria, it also provides an important competitive advantage.




AI for aged care

We spoke to in the AI based medtech space is PainChek (ASX PCK).

The app-based platform gauges pain levels for aged care residents by measuring changes in the face.
Speaking with *, CEO Phillip Daffas neatly described the contrast between AI solutions in medical sectors compared to other industries.

“If you think about AI, you’ve got two models,” Daffas said.

“One is static where you develop and apply the technology, and the other is dynamic where you pick up data, learn and change the algorithm in real time.”

“We’re static at this stage, because product development requires clinical validation. To make a change, you’d have to go through that process all over again.”

“So at this stage, it’s difficult to have a dynamic model that’s changing all the time, because that’s not how medically regulated products work.”

The flipside is that companies which reach clinical approval then have the advantage of years of research IP that’s difficult to replicate.

Like LBT, PainChek has reached the commercialisation stage after a multiyear development process.
The company’s technology is contracted to around 65,000 aged care beds across Australia (out of a total of around 210,000).

Daffas said PCK is aiming for the 100,000 bed-mark by June next year.

It’s also pursuing sales opportunities into Europe (where it has CE Mark approval) and other global markets.

PainCheck operates a SaaS-based model, charging a monthly rate of $4-5 per bed for a minimum of one year to use the technology.

And Daffas said the business has pivoted well to the post-COVID era.

“Since COVID-19 hit, we’ve contracted more than 25,000 beds and we’ve done similar number of training programs — all online,” he said.

“So as a business model we’ve pivoted to a fully digital strategy and it’s working very well.”