Butterfly Network Founder Jonathan Rothberg
By Jarrett Banks
Butterfly Network Inc. (NYSE: BFLY), which makes a pocket-sized ultrasound device that can plug into a smartphone, has gone public through a merger with a SPAC called Longview Acquisition Corp. in a deal that values the company at $1.5 billion.
Butterfly Network, backed by the Bill and Melinda Gates Foundation, aims to transform medical imaging and non-invasive surgery by leveraging advances in semiconductors, deep learning and cloud computing. IPO Edge sat down with Founder and Chairman of the Board Dr. Jonathan Rothberg to discuss going public and the future of medical imaging.
IPO Edge: What has Butterfly created?
Butterfly has created a breakthrough ultrasound solution combining both innovative hardware and novel connected software solutions. We put ultrasound on a chip and made revolutionary improvements in portability, power consumption, and cost relative to traditional ultrasound technology. Chip-based ultrasound enables a single probe to do the work of several by controlling the sensor with software. The probe connects to a mobile app that links to the cloud computing power for artificial intelligence in the user’s hands and allows images to be stored instantly. Our enterprise software platform enables integration with EMR and workflow systems for healthcare providers. Ultimately, we see Butterfly as a solution that can transform care delivery by providing important information to clinicians, earlier in treatment, that supports their decision-making processes.
IPO Edge: How might Butterfly Network change the paradigm of medical imaging globally?
Butterfly has the potential to revolutionize medical imaging by integrating ultrasound into the clinical decision workflow. Today, nearly 4.7 billion people lack access to medical imaging. This is as much a function of the prohibitive cost of legacy ultrasound solutions, as it is about their lack of accessibility and ease of use. It is therefore our mission at Butterfly Network to democratize medical imaging by delivering our portable, affordable and accessible solution to practitioners around the globe. Importantly, Butterfly is not only addressing the problem of lack of access to medical imaging and expanding use cases, but it will also help provide valuable insights earlier to practitioners globally. As healthcare transforms outside of its traditional care venues, Butterfly will be an integral part of the decision making process.
IPO Edge: What is the long-term growth strategy for Butterfly?
Globally, there are millions of physicians who practice in specialties for which Butterfly’s solution has been cleared for use. In the future, as ultrasound data becomes more broadly incorporated into clinical decision support, we plan to access the chronic patient market, representing more than 100 million people in the US alone. Our approach is to expand the market by educating new users in new care settings closer to the patient and identify the information needed to enable earlier care decisions. We want Butterfly in the pocket of every healthcare provider who needs one, and ultimately in the homes of chronic patients to support their health and wellbeing as they manage their disease with their physician. Our aging population, combined with the proliferation of chronic disease has led to an increase in demand for safe medical imaging and monitoring, and the dire financial situation of health systems around the world is leading to irreversible growth of value-based care. As care delivery transforms, we expect Butterfly to be an increasingly larger part of the decision-making process for providers.
IPO Edge: Now that you are publicly traded why is Butterfly a compelling investment story?
Butterfly is attacking a large, $8 billion addressable market and expanding it meaningfully by more than doubling points of care, geographic reach, and use cases.
The semiconductor technology drives our innovation pace with sensor functionality that will meaningfully improve every 2-3 years, not every two decades, and our connected software platform pushes out additional functionality as needed, providing a rapid development pathway. In the future, our foundational technology provides us with the ability to diversify hardware offerings, including wearables, pills and integration with other complementary medical technology.
Most importantly, we have strong alignment and a fully committed team, with a culture focused on building clinical and societal value that will inevitably lead to commercial success and shareholder value creation.
We have a number of attractive investment attributes, including a strong balance sheet and liquidity, low manufacturing costs, strong growth that will lead to a high recurring revenue mix, and a network effect that allows for adjacent investment opportunities at scale.
IPO Edge: How has the Company changed over the past year due to the COVID-19 Pandemic? Has the pandemic changed the way business is conducted and how is imaging being challenged or benefitted?
During the pandemic, we have seen an accelerated use of Butterfly across a variety of cases. For example, the use of Butterfly’s lung ultrasound capabilities has been shown in peer-reviewed literature to assist in the diagnosis, triage, and management of COVID-19. During the pandemic, health care professionals have needed to adapt to deliver medicine in a wide range of venues. The ease with which Butterfly can be transported and disinfected has helped bring ultrasound to where it was needed, reduced the dependency on CT and CXR, and helped clinicians risk-stratify while maintaining isolation protocols.
Jarrett Banks, Editor-at-Large