4DMedical (ASX:4DX) share price soars on contract with $305b pharma giant

Investors are excited about the prospects in 4DMedical’s first commercial contract in the pharmaceutical industry…

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The 4DMedical Ltd (ASX: 4DX) share price is ripping ahead today. This follows the company’s latest announcement regarding a commercial contract.

At the time of writing, shares in the medical imaging software company are 12% higher to $1.67.

Let’s unpack the latest announcement.

Breaking ground

Investors are bidding up the 4DMedical share price today on the company’s latest news. According to the release, the excitement stems from the signing of a commercial contract with Novartis AG (SWX: NOVN). For those unaware, Novartis is a Swiss multinational pharmaceutical company. It boasts a market capitalisation of roughly A$306 billion, making it one of the largest pharmaceutical companies in the world.

Furthermore, the contract with Novartis involves the commercial use of 4DMedical’s XV Lung Ventilation Software (XV LVAS). The deal is a first for the ASX-listed small-cap, being the first commercial use of XV LVAS in the pharmaceutical industry.

The agreement will see the respiratory imaging platform used to assess patient outcomes in a clinical program focused on novel therapies to treat Chronic Obstructive Pulmonary Disease. Additionally, the program will be conducted at the University of Miami in the United States.

However, the company noted the contract is not monetarily significant for its business at this stage. Despite that statement, the announcement is clearly positive for the 4DMedical share price today.

Commenting on the news, 4DMedical founder and Chief Executive Officer, Andreas Fouras said:

The program will further validate the application of XV LVAS to improving the lives of those living with COPD, which remains a key indication for the Company’s technology. Whilst the contract is not substantial in terms of revenue at this stage, it also represents the beginning of our commercial relationship with Novartis and expands our commercial product offering to the pharmaceutical and medical device industries.

4DMedical share price snapshot

It has been a volatile past year for the 4DMedical share price. At one point the company’s shares were going for as much as $2.98 before gradually falling to a low of $1.12. Despite the volatility, investors have snagged an 8.2% return over the past 12 months.

Since July, optimism appears to have returned to an extent. This coincides with the release of 4DMedical’s fourth-quarter result.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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