2017 The new Capital, page-533

Hi all,

Andrew replied to my email today. To recap, here is the original email that I first sent.

"Hello Andrew,

Firstly, belated congratulations on your appointment to Managing Director and on behalf of all shareholders, thank you for the stunning turnaround in the company since taking that position. I've been investing in Capitol Health for over 2 years and from an original small holding I now hold X shares.
If you could indulge me I have a couple of questions regarding the use of Enlitic in Australia.

I recently watched a You Tube video of Kevin Lyman's Enlitic presentation at the Cube Tech Fair. In the Q&A he stated that their patient triage tool is being trialled in Australia but not their CT lung scan as it does not have regulatory approval here.

> Have we applied for approval yet and if so what is the expected time frame for gaining approval?

In late June (19/6/17) I saw several news reports on a new lung cancer screening trial to be carried out at the Royal Melbourne Hospital. The aim of the trial is to improve early detection in at risk patients and also determine if there is any merit to a national screening program. In one report, the argument against a national program was the high number of false positives that can arise from CT scans. Surely this is a golden opportunity for the company to demonstrate the potential of Enlitic and may also be a stepping stone to gaining regulatory approval.

> Is Capitol Health participating in the RMH lung cancer trials (or planning to)?
>If we are not to participate, why not?

Thanks in advance."

(I emailed Andrew again last week with two additional questions which were.)

> From the 2017 results presentation. Am I reading it correctly that the company is to open 3 new clinics as well as looking to acquire additional businesses.

> Is the projected revenue from the new clinics included in FY 2018 guidance?


Here is Andrew's reply:

"Stuart,

Thank you for your email. I apologise for the delay in my reply. As you can understand I get hundreds of investors contacting me each month.

Thank you for your support.

Enlitic has a number of products at different stages of development / approval / clinical application. The 2 main ones we talk about are a chest x-ray triage tool and CT lung cancer screening tool.

Although the TGA (aust), FDA (US), and CE (Eur) differ in requirements for approval / registration Enlitic is taking a multi country / partner approach.

The lung cancer tool is currently the subject of a major piece of work in the US with prominent institutions the outcome of which we hope will be a peer reviewed publication about its use.  This will then be a precedent for clinical acceptance and FDA applications.

In Australia we are progressing the Chest X-ray triage tool.  Its registration / approval with the TGA depends upon its use case. If it is used to influence the Dr at point of care it requires a higher level of approval by the TGA. If it does not like, a post QA review it requires only technical registration.

We intend as announced to use it as a QA tool to review at the end of each period – say each week – the chest x-rays that are reported at Capital clinics. Then the tool provides feedback to the reporting Dr, allowing the Dr to agree or not and feedback to the algorithm.

This has a number of benefits:

• It is a Dr assistant
• It allows Capital to be one of the only networks that has QA review on every case – therefore improving accuracy and reputation for such
• It provides data for a clinical trial as the basis of moving to a point of care advisor to the Dr

We are not participating in the Melbourne trial – it is a large multi site trial not related specifically to what we are doing. Our approach in the US is to use the seminal data set in lung screening the NLST data. Which has longitudinal CT’s and biopsy ground truth.

We used a portion of this data to train the algorithm (along with millions of other studies Enlitic has access to), and the balance as the data to prove the super human predictive power of the tool – which we hope to publish. The aim is reduce false positive and negative rates, and predict malignancy earlier, more accurately and potentially re write the current criteria.

As announced we will open 3 new greenfields clinics in Melbourne this year. They are included in our guidance.

We also intend to acquire clinics in Melbourne this year, which are not in the guidance.

Hope this answers your questions


Andrew Harrison
Managing Director

1. A. Level 3, 81 Lorimer St, Docklands, VIC 3008
2. P. PO Box 836 Port Melbourne, VIC 3207