4DMedical Ltd (ASX: 4DX) shares are catching the eye on Friday morning.
In early trade, the small cap ASX stock is rocketing 45% higher to 64.5 cents.
Why is this small cap ASX stock rocketing?
Investors have been fighting to get hold of the respiratory imaging technology company's shares this morning after it announced a major agreement in the United States.
According to the release, 4DMedical has signed a distribution agreement that appoints global healthcare giant Philips (NYSE: PHG) as an authorised reseller across the United States.
This follows the signing of a teaming agreement with Philips in January to establish a strategic collaboration to advance solutions to evaluate Veterans with deployment-related respiratory disease (DRRD) and other respiratory conditions as part of a broader lung screening initiative.
Management notes that this agreement establishes a transformative commercial pathway for 4DMedical's product suite in the United States by leveraging Philips' long-established and significant existing commercial partnerships.
These existing relationships are particularly strong within the Veterans Affairs (VA) and the Department of Defense (DoD), where Philips has been providing innovative solutions for over 45 years. It highlights that 50% of VA clinics currently use Philips imaging solutions.
Massive market opportunity
Management believes the opportunities within the VA are twofold.
Firstly, the two parties will work together to support the need for scalable, non-invasive lung screening in support of the PACT Act. The PACT Act represents a US$280 billion commitment over ten years, covering numerous respiratory illnesses as presumptive conditions, providing healthcare eligibility to 6 million Veterans exposed to airborne hazards while on deployment.
It notes that 4DMedical's FDA-cleared XV Lung Ventilation Analysis Software (XV LVAS) and LDAf are currently the two leading non-invasive technologies capable of assessing DRRD.
Secondly, management believes 4DMedical's comprehensive portfolio of products is extremely well placed to provide actionable insights to frontline VA physicians treating patients with chronic lung disease. This is particularly important when considering that Veterans have three times the rates of chronic lung diseases compared to the general population. The VA annual healthcare budget is more than US$330 billion per annum.
The small cap ASX stock's CEO and founder, Andreas Fouras, commented:
The agreement with Philips sets a new benchmark in lung health and transforms our ability to deliver our technology to patients and their doctors. Together, Philips and 4DMedical will deliver lung function analyses for all lung disorders, including unexplained dyspnoea (shortness of breath), asthma, COPD, and interstitial lung disease (ILD).
