Echo IQ shares soar after the FDA approves its aortic stenosis diagnosis.
Having just obtained US Food & Drug Administration (FDA) marketing approval for its aortic stenosis diagnostic,Echo IQ (ASX:EIQ) is preparing to front the regulator for assent for the bigger indication of heart failure.
Emerging from a trading halt this morning, Echo shares leaped 21% on the back of yesterday’s US aortic stenosis go-ahead – the first approval globally for the company.
Pleased – and relieved – Echo executive chairman Andrew Glover said he was “95%” confident of approval.
“We have been in conversation (with the FDA) for 18 months and have followed the process to a ‘T’,” he says.
The company will waste no time in commercialising the AI-based tool, which aims to highlight, automatically, patients with significant risk of the disease.
“Widespread and chronically underdiagnosed”, aortic stenosis is when the heart valve narrows, usually due to calcification, making it harder for the heart to pump blood.
Rather than replace the standard-of-care echocardiograms, EchoSolv AS seeks to add additional diagnostic information to these widely available and cost-effective scans.
But when a patient presents with – say – breathlessness, it takes time and effort to isolate the cause.
The US has about 1.5 million US aortic stenosis sufferers, who cost the health system US$10 billion annually.
Assuming 10% market penetration, Glover estimates US revenue of US$6.5 million per annum. As always, US Medicare reimbursement is the key and Glover expects clinicians to receive US$68-70 per test, with the company pocketing about 25% of this benefit.
Glover adds that the test is also helpful in detecting the disease in patients not considered high risk.
Prior to FDA approval, Echo IQ had entered discussion with parties including large hospital groups, device manufacturers and pharmaceutical companies “on the commercial and clinical benefits of EchoSolv AS”.
With heart failure, Glover estimates a US$42 million-a year market, also assuming a 10% market penetration.
Armed with the results of a supportive Australian study, the company is preparing an FDA application “which we hope to have [lodged] this side of Christmas”.
This morning, the company also appointed a US-based CEO, Dustin Haines to spearhead the US commercialisation.
Haines was a vice president and general manager at the $US105 billion market cap, Nasdaq-listed Gilead Sciences.
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)