Volpara Health Technologies Ltd (ASX: VHT) today announced it is on track to meet its upgraded annual recurring revenue guidance of NZ$17.8 million, subject to one or two major deals closing.
At the time of writing, the Volpara share price was edging higher by 1.3% to $1.16.
The company's March newsletter, released today, stated that the acquisition of Seattle-based MRS last year is paying dividends with sales of its products validating the rationale for the acquisition. Volpara expects to see its average revenue per user (ARPU) increase as it closes some of its bigger deals.
About Volpara
Volpara is a medical technology Software-as-a-Service (SaaS) company which provides practice management software that assists with productivity, compliance, reimbursement, and patient tracking. The company also supports clinical functions for breast screening clinics.
Volpara has been included in the new S&P/ASX All Technology Index (ASX: XTX) which launched in February. The index should help boost interest from retail and institutional investors in companies in the fast-growing tech sector such as Volpara.
FDA approval received
Increasing ARPU was the rationale behind Volpara's licensing of the Transpara computer-aided detection product last year. As of 6 March, the Transpara software has been cleared by the US Food and Drug Administration (FDA) for the processing of 3D breast images, the predominant imaging modality used in the United States. The Transpara software significantly reduces 3D reading time to about 35 seconds per exam.
Over the last nine months, Volpara has built a solid pipeline of leads and interest in Transpara, which have been waiting on FDA approval. With this in place, the sales team is looking to close deals in the 3D software with the first deal, a trial of Transpara, already closed. The number of women screened for breast cancer each year has risen to 92 million, meaning the technology has a large total addressable market.
Lung screening
With the current focus on coronavirus, Volpara expects many more lung computed tomography (CT) scans will be used to screen patients to understand the extent of the virus. Through its acquisition of MRS, Volpara has entered the lung cancer screening business and currently has 8% of the US market. Most lung cancers are found when people are screened for other diseases or conditions, such as pneumonia and now coronavirus.
Volpara is prioritising product development to get its lung product, Aspen Lung, to utilise recommendations for dealing with incidentally detected lung nodules. This software should be ready by the middle of the 2020 calendar year.
Volpara is also assisting Sydney start-up DetectEDx to push out its online teaching tool for radiologists on how to spot coronavirus.
Volpara is closely monitoring the developing coronavirus situation. Fortunately, it has a strong bank balance and as an IT company based partly in New Zealand and partly in the United States, has a strong culture of working remotely.
