NZ breast-screening software firm surges on US gains
Volpara Health Technologies shares are on a tear thanks to gains in the US, and an attendant jump in revenue.
The Wellington-based, Australianlisted maker of breast-screening software edged ahead of its guidance when it delivered its quarterly cash flow report to the ASX yesterday and predicted strong gains ahead.
Volpara’s stock has performed solidly since its April 2016 IPO at A50 cents. But it has really taken off over the past few weeks, spiking to an alltime high of A$1.94 on several pieces of positive news.
The first came on March 28, when the US Food and Drug Administration (FDA) proposed an overhaul of the Mammography Standards Act to make it compulsory for all US screen facilities to provide women with information about their breast density — a key indicator of cancer risk.
Currently, there has been a confusion of patchy, state-by-state regulations, Volpara founder and CEO Dr Ralph Highnam told the Herald.
“The Federal law will be much more powerful.”
There will be a regular inspections, and a standardised regime, including a requirement for specific, plainEnglish reports.
It will be good for American women, and for Volpara’s business, because the US accounts for more than 90 per cent of the company’s revenue.
That’s because of the 75 million or so women who are screened for breast cancer each year, around 40 million are in the US.
Here, the National Screening Unit’s BreastScreen Aotearoa programme does not include an FDA-style requirement to discuss breast density results, but “private clinics are likely to use breast-density assessments and can offer ultrasound to women with dense breasts”, Volpara spokeswoman Jenny Shackleton says.
And there was more good news yesterday as Volpara formally confirmed its April 1 revised-upwards forecast that annual recurring revenue (ARR) had increased 86 per cent (vs its rate in the fourth quarter of last year) to $6.63 million.
The company is forecasting 50-80 per cent ARR growth for its 2020 financial year.