4DMedical (ASX: 4DX) shares are up 21% today. The rise in 4DX shares comes from the announcement that they’ve signed up a couple of medical practices in the US. This is not what we would normally think of as being material news. Their new tests for $299 a time, a practice might use a few of them, so what’s the big deal here? The answer being that it’s only just a couple of weeks back that 4DX announced that CMS (ie, Medicare) had announced that it would pay for such tests.
As we said about 4DMedical: “This doesn’t then mean that 70 million people are going to have the scans. But it does mean that no one is going to be dissuaded from having one by the cost of it. It also doesn’t mean that doctors are going to start using the scans. That’s a medical decision, obviously. But it does mean that doctors are not going to not use them on the grounds of cost. “Respiratory imaging technology company 4DMedical (ASX: 4DX) has confirmed that its XV LVAS procedure is to be included in a key medical treatment reimbursement program in the United States.” As we say, this is about who is willing to pay for the scan. As it’s now to be the government then there’s no sticker shock to prevent people from having one. This significantly increases the fair value of 4DX of course.”
Well, OK, so what’s the new news on this? 4d medical
4DMedical share price from Google Finance
Today’s announcement: “Respiratory imaging technology company 4DMedical Limited
(ASX:4DX, “4DMedical”, or the “Company” today announces that it has signed agreements to deliver XV LVAS® scans at imaging facilities located in the Detroit and Memphis communities.” Or, another report: “The breakthrough announcement comes as PrecisionIR, a leading radiology practice in Detroit, Michigan, and Memphis Vascular Centre in Tennessee, have both signed Software as a Service (SaaS) agreements with 4DMedical to offer XV LVAS scans in their outpatient clinics.” Breakthrough’s doing a lot of work there.
Any sensible management - and we’ve no evidence otherwise about that of 4DMedical - will have had salesmen out, sniffing around, in the lead up to the CMS decision. “If we get payment approval, will you sign up with us?” sort of selling. So, this isn’t that gee, the scans have been on the market two weeks and look, people are already signing up! However, it is true that now that the Feds have agreed to pay for the scans then yes, practises are willing to sign up. There’s still a way to go of course - there are many practises and it would be nice to sign them all up.
So this is not a material announcement, in the sense that they’ve signed up a couple of practises to use $300 tests. But it is informative about the business prospects. Now that Medicare will pay for the tests then yes, it does appear that at least some practises will use them. Which is good, no?
4DX Price at posting:
78.0¢ Sentiment: Buy Disclosure: Held
4d medical
today announces that it has signed agreements to deliver XV LVAS® scans at imaging facilities located in the Detroit and Memphis communities.” Or, another report: “The breakthrough announcement comes as PrecisionIR, a leading radiology practice in Detroit, Michigan, and Memphis Vascular Centre in Tennessee, have both signed Software as a Service (SaaS) agreements with 4DMedical to offer XV LVAS scans in their outpatient clinics.” Breakthrough’s doing a lot of work there.
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