Volpara shares edge higher on FDA approval and business update

Volpara Health Technologies Ltd (ASX: VHT) today announced its March newsletter, containing an update on FDA approval, operations and guidance.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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. 

Motley Fool contributor Kate O'Brien has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended VOLPARA FPO NZ. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

A happy young couple lie on a wooden deck using a skateboard for a pillow.
Share Gainers

These were the best-performing ASX 200 shares in March

These shares made their shareholders smile in March thanks to some very big gains.

Read more »

Businessman using a digital tablet with a graphical chart, symbolising the stock market.
Opinions

2 ASX shares I have been buying in 2024!

I’m a believer in the long-term outlook of these stocks.

Read more »

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.
Opinions

2 of my top ASX 200 shares to consider buying before April

I would happily exchange dollars for these two shares right now.

Read more »