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Edited Transcript of VHT.AX earnings conference call or presentation 27-Jan-21 10:00pm GMT

·32 min read

Q3 2021 Volpara Health Technologies Ltd Earnings Call WELLINGTON Feb 16, 2021 (Thomson StreetEvents) -- Edited Transcript of Volpara Health Technologies Ltd earnings conference call or presentation Wednesday, January 27, 2021 at 10:00:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Craig Hadfield Volpara Health Technologies Limited - CFO & Company Secretary * Katherine Singson Volpara Health Technologies Limited - CEO of Volpara Solutions Inc * Ralph Highnam Volpara Health Technologies Limited - MD, CEO & Director ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Good morning, everyone, and thank you for joining Volpara's quarterly results investor webcast for Q3, covering the 3-months period ended the 31st of December 2020. Joining us on the line today, as you can see on the screen right now is Volpara's group CEO, Dr. Ralph Highnam; Volpara Health CEO, Katherine Singson; and CFO, Craig Hadfield. Before we hand over to Ralph this morning, please be This presentation is also being recorded. I'd now like to hand over to Dr. Ralph Highnam, CEO. Ralph, please go ahead. -------------------------------------------------------------------------------- Ralph Highnam, Volpara Health Technologies Limited - MD, CEO & Director [2] -------------------------------------------------------------------------------- Thank you, Sam. Hi, everyone. Thank you for taking the time this morning to hear about our strong Q3, which ended 31st of December 2020. Volpara's health technology companies integrate best care platform assisting the delivery of personalized patient care and whose business model is predominantly based on software as a service or SaaS, and we're on a mission to save families from cancer. We have much to cover today, including traditional 4C cash numbers, which again show strong cash receipts despite coronavirus, strong sales growth to give ARR or annual recurring revenue of just under NZD 21 million. Our low churns were retaining about 20% of the U.S. market now for screening. The latest information we have re breast density in the U.S. around the FDA legislation. Then we want to give you some exciting news about some of the genetics partnerships, which we were working on for the last year. And our plans to really start to accelerate now out of COVID as we start to see an end to the pandemic with all the vaccines and other things coming through. I'm very happy to be joined today, as Sam just said, by Craig Hadfield, our CFO; and by Katherine based over in Silicon Valley, and we are very happy to answer any questions at the end of this call. Before we jump into the main commentary, let's just note the changing U.S. dollar versus New Zealand dollar. The U.S. dollar has weakened by about 10% over the last quarter. That obviously reduces our cash receipts and ARR, on the plus side, reduces our U.S. costs, which account for about 50% of our cost base. So please bear that in mind as we go through these numbers. Okay, let's review then the 4C cash metrics, which were posted up earlier this morning onto the ASX platform. We're happy to say that during Q4, we had cash receipts from customers of over $4.6 million. It's above what recorded last year, despite our moving from capital to SaaS, despite the U.S. dollar weakening and despite the effects of coronavirus. Looking more deeply into those cash receipts shows the receipts from SaaS customers actually rose by more than 20% over that period. And over the full year, our overall cash receipts are up by over 20% as well. Those receipts demonstrate what we've talked about a lot since coronavirus and the pandemic started, the resilience of the company, the resilience of the business model, resilience of the industry, strong demand for our products and a strong desire globally to use our products to help women have early detection of cancer. During the quarter, very pleasingly, we had net operating cash flow of just over NZD 3 million. That is very much ahead of our internal expectations or well within our budgets and the fourth quarter now of reducing outflows. Cash on hand at the end of Q3 was just over $60 million, obviously, very healthy and the result of the capital raise in April 2020, which aim to strengthen the balance sheet, but also give us the ammunition for potential further M&A, should the right opportunity arise at the right price at the right time. And certainly, things are starting to move now on that front. Turning now to the SaaS or recurring revenue metrics. Let me remind you that most new quotes or for any Volpara product are now SaaS, although there are a few still historical capital deals come over the line. In fact, we've got a small one today from Taiwan, which is always good to see coming in. During Q3 then, despite coronavirus and a lack of physical trade shows, including our biggest trade show, RSNA, which is usually in Chicago, we booked our largest ever Q3, adding over USD 700,000 of net new ARR or NZD 1.1 million, taking our total to USD 13.5 million. Or just under NZD 21 million. I think fair to say, Katherine and the whole U.S. team does an outstanding job during that period as well our sales team in APAC, in particular. The -- that jump up then was -- in total ARR was somewhat offset by those U.S. dollars, which we talked about at the start. The strong Q3 come from a mix of very significant upsells, major new deals and the continued migration of customers from the older version to the MRS products to the last -- to the latest one. Many of the deals were multiproduct Volpara breast health platform deals, and they really show the appeal of that platform, but how -- also how important and successful the acquisition of MRS was in June 2019. The range of ARPU for those deals range from $1.43 to just over $5, depending on products and the volumes of women being screened. And our overall ARPU actually jumped 5% up to $1.22. Net churn of ARR remains low, and we continue to have at least 1 product, helping about 27% of the U.S. screening population. Plus, of course, now many more in Queensland, thanks to Volpara Enterprise deal we signed with them for 5 years. This is the second public screening program service signing up to Volpara, and all these (inaudible) stations, all these deals will be watched and noted globally. But also, the other important thing for us as a company is we are incredibly humbled to be given an opportunity to help the women and the lives of many of our early investors which, of course, many of those live around Brisbane and so on. That installed base, at 27% installed base continues to be vital over this new period. No trade shows, now is the time to really focus on the pipeline we have and mining that installed base or upselling opportunities, which we've done extremely well in Q3. And -- but although I should add, we do have a strong pipeline now, new sales lining up at bigger sites as a result of the strategic changes we made in mid-2020. One very notable deal we did during Q3 was one of our biggest [knowledge] customers based in Texas, moving from Volpara Enterprise, our enterprise-wide quality assurance stool to a much broader package renewing for a further 5 years in the process for a deal doubling the ARPU. Yes, we as a company, obviously, SaaS, we live and die on our customer happiness. It's great to see these customers coming back to us and buying more. So look, in short, Q3 was strong despite coronavirus. Sales pipeline remains strong despite coronavirus. Nonetheless, no in-person trade shows and coronavirus obviously reemerging strongly around the world. Uncertainty does remain, and we need to keep on our toes to adjust to the varying business environment as we go. Okay, before we go to question, I really want to update you on 2 things. One, then, we've not heard any updates about the U.S. breast density legislation. Obviously, it's been an extremely chaotic and confusing time in Washington and around the FDA, in particular, but with the transition to a new administration there, we really do believe things will start settling down. And we'll update you as soon as we hear anything about that legislation. Secondly, in April last year, we announced a partnership with Ambry Genetics. And it's taken a while because of coronavirus to get installed, to get some sites up and running, but it's really starting to bear fruit, and we'll start to see the first cash actually get paid over to us now. And we just want to talk really about some of the interesting dynamics at play in that relationship. We agreed with our Ambry to help our customers, the breast imaging centers, identify women at high-risk who should go into additional imaging such as breast MRI or even genetics testing with Ambry. Now remembering that breast density is a critical component of those risk models. And Volpara density is the only commercial density product in the world's leading cancer risk model, Tyrer-Cuzick 8. And excitingly then, the first of Volpara sites now to go live with this new genetics program have detected significant numbers of women with the BRCA genes. They are the kind of women like Angelina Jolie who are extremely high-risk of breast cancer, and you really want to get and act and help them reduce their risk very, very early on. So extremely, we're very happy to see the kind of numbers we're seeing and the number of those genes and the number of women that we're helping. But importantly, and commercially, we've also started to receive those first revenues from that new service being offered. And yes, as we've indicated in the last call, the early indications at the sites using our platform to score risk and then offer genetics testing, our average ARPU is increasing very significantly to a level that you could actually be pretty much a game changer for us. More widely then, just in the U.S. and elsewhere around the world, we really are seeing a strong interest in risk assessment, genetics testing, and that's driving many of those upgrade sales we talked about. That interest is coming as people fully understand the benefits of early detection and risk assessment to get to that point. But also then, many of the societies like the American College of Radiology in the U.S. are starting to push risk assessment, for example, they are pushing risks at age 30 to understand your risk and then sit down your screening protocols. But then, other groups now like CMS, which sets down reimbursement levels, it (inaudible) consider doing breast cancer risk scoring as a key indicator of quality of a breast cancer service, and they are moving in the U.S. to a value-based care with the higher the quality, the more reimbursement you generally get. So that move from CMS (technical difficulty) you are going to get a bit more reimbursement. So incredibly important dynamic for us going on there. The -- so those dynamics, obviously, a great potential. We're going to look to ramp and risk -- ramp risk and then -- and genetics ratios at this coming year. Okay. With that then, I'd like to open the floor to questions to myself, Katherine and/or Craig. Thank you. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Thank you, Ralph. (Operator Instructions) The first question to come through is, any idea when the FDA will come through dates' [files]? -------------------------------------------------------------------------------- Ralph Highnam, Volpara Health Technologies Limited - MD, CEO & Director [2] -------------------------------------------------------------------------------- Yes. It's a great question, [Steve]. So this is around the FDA legislation on breast density, as I'm sure everyone on the call knows, many states have got that legislation in place now. The FDA, 18 months ago, said they were going to introduce it as a federal legislation. It was meant to be October. But October last year was obviously full of our issues in D.C. and the U.S. in general. They then said there'll be an update in the fall, which is around now and we're very anxiously to hear more with that move to a new administration, the FDA commissioner has changed. So no doubt there is some discussions going on. But as soon as we hear anything, we will let you all know. But we are at the whim somewhat of the U.S. situation settling down somewhat. -------------------------------------------------------------------------------- Katherine Singson, Volpara Health Technologies Limited - CEO of Volpara Solutions Inc [3] -------------------------------------------------------------------------------- Yes. I would also just add to that, that obviously, COVID has just taken a front seat in so many ways that it's been a challenge on that front. But as many of you know, we have laws in, I think, 37 states. And so -- but certainly, a federal mandate would be excellent. -------------------------------------------------------------------------------- Operator [4] -------------------------------------------------------------------------------- The next question is changes on the competitive landscape. -------------------------------------------------------------------------------- Ralph Highnam, Volpara Health Technologies Limited - MD, CEO & Director [5] -------------------------------------------------------------------------------- Yes. That's a good question, Sam. We are seeing -- you're always around RSA, which is December, you always see what the competition is doing. And we still see no competition out there with the whole platform. We see bits and bobs. We're seeing new density players coming on, trying to get into the market. Or we see a new update to someone doing analytics, but we still see no one really coming to the party. We're a fully integrated platform, and that really is one of our key differentiators. But I think fair to say, people are seeing our success. They are starting to buzz around the space more and they are looking ways to get in. So it's absolutely critical for us as a company to keep on innovating, keep on pushing ahead and keep on leading this space. -------------------------------------------------------------------------------- Operator [6] -------------------------------------------------------------------------------- We have a question coming around the breast screen Queensland. So the question is how many women are involved in the QLD screening program? And has that contract been included in the ARR? -------------------------------------------------------------------------------- Ralph Highnam, Volpara Health Technologies Limited - MD, CEO & Director [7] -------------------------------------------------------------------------------- Craig, correct me if I'm wrong, but I think it was about 150,000 women or so in the Queensland public screening service. So we are extremely pleased that another public screen service has signed up, and we're extremely pleased, as we said earlier, to be helping many of the women and the lives of the early investors into Volpara. The ARR from that deal has been included into our update, is an interesting deal and the ARR we've included is for Volpara Enterprise, they're starting off on quality assurance. But certainly, there's an intent, and it's already kind of built into the contract that we can extend to include other products as Queensland and kind of the overall Australia kind of desire for information change. Craig, I don't know if you want to add to that? -------------------------------------------------------------------------------- Craig Hadfield, Volpara Health Technologies Limited - CFO & Company Secretary [8] -------------------------------------------------------------------------------- The only thing I'd add is -- to what you already said is it's originally just for enterprise. So it excludes density and other modules as well. Those are already factored into the contract and already priced. So sort of, as Ralph alluded to, if, for example, density legislation changes in Australia that mandates it, we would automatically increase that ARR and switch on access to density and based on the pricing that would significantly increase the contract value. So this one was about getting our foot in the door, landing and expanding basically. -------------------------------------------------------------------------------- Operator [9] -------------------------------------------------------------------------------- The next question is, can you explain a bit more about the Ambry partnership? And how the process works when a woman comes in to be scanned and how they get referred? -------------------------------------------------------------------------------- Ralph Highnam, Volpara Health Technologies Limited - MD, CEO & Director [10] -------------------------------------------------------------------------------- Yes. Let's talk about this. So there's a couple of ways that the partnership is working, but I'm going to talk about the ideal way, which is what our engineers have just released and where we're moving to. So let's say you've got a fall Volpara breast health platform. The woman comes in to get screen, she fills out her information into a tablet, which is a Volpara product, such as BMI, family history and so. Breast density takes -- or she has the x-rays, breast density is computed by Volpara density that flows into the risk calculator. That risk score then -- so the density is combined with the family history and other factors to give an overall risk score. If that is over a certain number, then the site is informed that, that woman might be eligible for breast MRI. But also, if it goes over a certain number, the site is asked, do you want to -- this one is actually eligible for genetics testing as well, she might be a BRCA carrier. Do you want this -- what they call a test request form automatically sent over to the genetic counsels related to Ambry? If the sites agreed to that, then those forms just automatically flow to Ambry, genetic counselors contact the woman. And again, if she's applicable, if she wants to do it, she goes on for that genetics testing. And then those genetics testing testing results also flow back into that clinic. The reason I kind of spell that out a bit there was the key to all these things is workflow and those electronic forms, the electronic transfer of data, and it just makes the whole thing simple and easy for everyone involved, from the women who can fill that out on a tablet or on a phone before she even gets to the clinic all the way through to that electronic referral at the end. Now the way it kind of commercially works is every time a woman actually goes on for genetics testing, Volpara gets paid a certain sum of money. That number is confidential, commercially confidential. But as we said in the release, it does significantly increase our ARPU. So we're very positive and pretty excited around these relationships, and we look very much forward to accelerating in that direction over the next wee while. -------------------------------------------------------------------------------- Operator [11] -------------------------------------------------------------------------------- The next question is, can you tell us more about the deal in Taiwan and other activity in Asia, please? -------------------------------------------------------------------------------- Ralph Highnam, Volpara Health Technologies Limited - MD, CEO & Director [12] -------------------------------------------------------------------------------- Yes. The -- at the start of this year, as COVID hit, as we told the market, we were going to focus on U.S., Australia and New Zealand. Frankly, we can't -- we [got] Asia quite a lot, Japan and Taiwan and other places out there. To trade shows, to tell people about the products, we've kept on keeping things warm remotely. And we've got a new APAC person base actually out in Sydney, who is doing all this work now with our distributors up there. And it's a small capital deal for density in Taiwan. So yes, we still have distributors in South Korea, Japan, Taiwan, Singapore, Malaysia, all working hard for us or being run out of our Sydney base. Most of those deals tend to be capital deals. And just like in some ways with Europe, our focus in Asia is getting all the luminaries, which we just about have now, making sure they're fully aware of the Volpara brand, and really getting them doing world class research. So countries up in Asia can really start to understand breast density and how important it is to breast cancer screening and the risk of the women out there. -------------------------------------------------------------------------------- Operator [13] -------------------------------------------------------------------------------- We've got a couple of questions here about the Australian market. So the first one is, what is the overall penetration in Australia and customer appetite locally? -------------------------------------------------------------------------------- Ralph Highnam, Volpara Health Technologies Limited - MD, CEO & Director [14] -------------------------------------------------------------------------------- Yes. So the reason we -- as many other people focus on the U.S. first is -- the U.S. is mostly private clinics, whereas outside the U.S., it tends to be public screening. So most screen in Australia is public screening. It's around 800,000 women a year are screened in that public scene. We now have 2 states, 2 of the smaller states signed up with Volpara Enterprise. They are the innovator states. So just in terms of public screening, you've got the 150-plus you have all we've signed out, which hasn't gone live yet due to coronavirus. So public screening, we're probably covering 20%, 25% of the women there. So we've got a long way to go to help in many more win there and plus 200,000 over here. In New Zealand, however, in private screening, we've got -- we've obviously announced some of these deals before like Sonic Queensland. We have some excellent sites down in Melbourne, some excellent sites in Sydney. As you go to places like the Wesley in Brisbane, but then you go across to Adelaide, almost every single clinic in Adelaide actually has our software as well. So it varies very much state-by-state and private to public. We're happy with where we are now. But obviously, we want to start pushing on and really getting those big public screening programs in the bigger states to recognize the value that we bring. -------------------------------------------------------------------------------- Operator [15] -------------------------------------------------------------------------------- Thanks, Ralph. Now you did answer a little bit of this in the prior question. But the next question is, when do you expect more general acceptance and adoption from other strait -- other states of the value of your product in Australia following the Queensland example? -------------------------------------------------------------------------------- Ralph Highnam, Volpara Health Technologies Limited - MD, CEO & Director [16] -------------------------------------------------------------------------------- Yes. So these public screening programs, and the reason we were so excited last year in December when we got our first one. And then now Queensland has come aboard as well. They all talk to each other. They all follow best practices and globally, not just in Australia, but globally. So they are important. We are talking to all of them. We have trials underway with at least 2 of the other big states in Australia, and we're doing a lot of work here in New Zealand in various ways. And obviously, we've got the SKUs trials going on around Europe also. So yes, look, we are working them. They are all slow. On the other hand, they're all extremely high quality, and they want to do the best thing for the women. And as soon as they see the hard evidence coming through from those studies like Project DENSE, which we announced last year, [planned] when they see the results from Queensland and elsewhere. We're very confident in starting to kind of drop the dominoes one by one over there. -------------------------------------------------------------------------------- Operator [17] -------------------------------------------------------------------------------- And the next question we have is, can you contrast and compare Volpara with Pro Medicus? -------------------------------------------------------------------------------- Ralph Highnam, Volpara Health Technologies Limited - MD, CEO & Director [18] -------------------------------------------------------------------------------- Well, it's pretty easy. Pro Medicus is fundamentally an enterprise-wide viewing platform, whilst our key skills are around AI on images and in data handling. So with the acquisition of MRS, we move very much from being an imaging AI company to being an imaging plus data AI company, and we've got a massive data set behind us, and we see massive potential in those data sets. So although we both operate in the radiology space, we very much are targeting different customer sets. And we've got very different offerings to those customers. -------------------------------------------------------------------------------- Operator [19] -------------------------------------------------------------------------------- Thank you. We've had a couple of questions come in around cash flow. So the question is, when will you expect to be cash flow positive? -------------------------------------------------------------------------------- Ralph Highnam, Volpara Health Technologies Limited - MD, CEO & Director [20] -------------------------------------------------------------------------------- So always a question for Craig, but certainly, as you've seen in our 4Cs over the last period, part of our planning, especially during coronavirus has been to keep growing, keep solid growth, but really get the company orientated towards cash flow positive, if that makes sense for us to do so compared to going for much more substantial growth. Craig, do you want to add a comment on that? -------------------------------------------------------------------------------- Craig Hadfield, Volpara Health Technologies Limited - CFO & Company Secretary [21] -------------------------------------------------------------------------------- Yes. I'll just add, we do have a significant cash balance. So at this point, there is no concern about having to do another capital raise, et cetera, et cetera. But to reiterate Ralph's point, at this point, we're focusing on growth. But we have got our costs under control. And as you can see from the 4C, the cash outflow quarter-on-quarter is trending downwards consistently. So we're definitely on the right path. And we hope balancing growth versus cash flow breakeven as well as we can. -------------------------------------------------------------------------------- Operator [22] -------------------------------------------------------------------------------- Thank you, Craig. The next question is for Katherine. Is there any update on Project Thumb? -------------------------------------------------------------------------------- Katherine Singson, Volpara Health Technologies Limited - CEO of Volpara Solutions Inc [23] -------------------------------------------------------------------------------- We continue to work with the prototype partners on Project Thumb, and we'll probably have an announcement on the release for 2021. Certainly, that's been -- I think it started with 1, and now we have 3 prototype partners, and so we continue to evolve that and work across the ocean with our product marketing group out of New Zealand as well. And so we have people both in Seattle, Washington and Wellington working on that. So it's an exciting move, as you know, into communicating more succinctly with women in a visual approach and not just the words on a letter following up on a mammogram. -------------------------------------------------------------------------------- Ralph Highnam, Volpara Health Technologies Limited - MD, CEO & Director [24] -------------------------------------------------------------------------------- And Katherine, I'll make one other point on that as well. Project Thumb is incredibly important for women. We are actually convinced on that, and it's going to drive demand for our products as well. But also, we had a question earlier about competition. One of the great things about Project Thumb is it involves our imaging skills plus our patient tracking software. So it's kind of that our ability to integrate those products really puts us way ahead of the competition around having the ability to do things like Project Thumb. So they're really kind of unique differentiators and substantial barriers to entry. -------------------------------------------------------------------------------- Operator [25] -------------------------------------------------------------------------------- The next question here is, is there a projected ARPU for the end of the financial year? What are the main issues that affect -- that increase -- or affect the increase or decrease of ARPU? -------------------------------------------------------------------------------- Ralph Highnam, Volpara Health Technologies Limited - MD, CEO & Director [26] -------------------------------------------------------------------------------- Yes. We're very, very pleased with the way ARPU is going, which seems to jump up in ARPU of 5% over the quarter, and it must be up, it's been up very significantly since the start of the year. We've not put out there any projections on ARPU. But Craig, I'm not sure if you want to talk a bit about it. But clearly, we see that increasing, and we see multiple ways of increasing it from where we are. -------------------------------------------------------------------------------- Craig Hadfield, Volpara Health Technologies Limited - CFO & Company Secretary [27] -------------------------------------------------------------------------------- Yes. So a couple of things on that. I think if you go back for the last sort of 4, 5, 6 quarters, you'll see we've consistently increased the ARPU at about 5% per quarter. So I don't see us deviating from that trend much right now. So you can take $1.22 and add 5% and you're going to be on the margins there. The couple of things that impact on ARPU are obviously new deals. So the more deals we sign, of which every single deal we signed today and since the acquisition of MRS are significantly higher than $1.22, obviously adding to that. Anything that decreases ARPU would be potentially customers that we've lost. But the ARPU calculation is simply ARR divided by our market share. So if our market share goes up or down, if we lose customers or gain customers, that impacts on the number. Likewise, as the ARR number increases. So our focus is on minimizing churn and maximizing net new ARR. And with those, we will continue to see an increase. And we are definitely going to be seeing increases every quarter from now on out because our ARPUs are significantly higher than $1.22. -------------------------------------------------------------------------------- Operator [28] -------------------------------------------------------------------------------- Thank you, Craig. We've got time for a couple more questions. And if we can't get to all of them, we'll make sure we follow-up after the webcast. The next question is, can you please talk about the current sales model and how you're attracting new leads? -------------------------------------------------------------------------------- Katherine Singson, Volpara Health Technologies Limited - CEO of Volpara Solutions Inc [29] -------------------------------------------------------------------------------- I can take that one. So we put a lot of things in place about 6 months ago with the reorganization of our sales force to amp up our digital efforts and marketing. And as Ralph said before, with no RSNA, and very limited in person sales, that has really been a great investment for us. I think also to just -- the team working together across not just our direct sales force, but our customer success organization and our clinical experts that have deep knowledge within the industry as well as our new marketing communications group. And so it's a combination of many different aspects of education. We have monthly webinars where we profile different customers each month. And we've had a tremendous amount of participation in that as well as remarketing that content. We've also gone into certain aspects of digital advertising. We addressed SEOs and different search engine optimization to make sure that we come up in all of our searches. And we've also even done some telemarketing. And as you know, we've rebranded and we're getting ready to relaunch our website into a very different look and feel. So all of these combined has really created momentum for us within the pipeline, I think, 10 months ago, none of us knew how this would go. And so I'm incredibly proud of the talented team that we have across the world working together to make sales happen despite COVID and the devastating effects it's had here in the U.S. Do you want to add anything, Ralph? -------------------------------------------------------------------------------- Ralph Highnam, Volpara Health Technologies Limited - MD, CEO & Director [30] -------------------------------------------------------------------------------- Yes, Katherine. Let's just advertise, there's a webinar coming up this week, I think, from a couple of big U.S. sites. If you go to our LinkedIn page, you'll see we have another webinar. It's all about EQUIP and how to make your whole experience with EQUIP is all about quality in the U.S., much easier to deal with when the FDA orders comes in, you use Volpara and print out a report and due there. So there's a whole webinar on that this week. So you got all that LinkedIn page, you'll see the details. And please do feel free to join that. -------------------------------------------------------------------------------- Operator [31] -------------------------------------------------------------------------------- Thank you, Ralph. The next question is, expanding on the competitor landscape, there was a news article in late December around the world first discovery using AI to examine mammograms and can alert those who are at high-risk years earlier than other methods in collaboration between Melbourne Uni, BreastScreen Victoria and Cancer Council Victoria. What are your thoughts on this? -------------------------------------------------------------------------------- Ralph Highnam, Volpara Health Technologies Limited - MD, CEO & Director [32] -------------------------------------------------------------------------------- Yes. So that work is by Professor John Hopper down there in Melbourne. We've -- I've known John for probably 20 years now, and we actually (inaudible) very closely with John on some of that work. And we have a project funded by one of the cancer charities actually over there in Victoria to work up some of those ideas. So yes, we're pretty excited around that. The whole concept is that breast -- it's not just breast density that's important. There are other factors in the image, which are also indicators of breast cancer risk. So we're working with John, looking at breast density plus these other factors to come up with an even stronger risk factor a bit further down the road. I will say it's still quite early days on that. There's been several good publications, but you want to get to that point where it's reproducible on any x-ray machine anywhere in the world before it's really commercially ready. I don't believe we're quite there yet, but certainly, we look forward to continue to work with John and the other people on that project. -------------------------------------------------------------------------------- Operator [33] -------------------------------------------------------------------------------- Thank you, Ralph. We're getting close to our end time now, so I'll just ask one further question. And if we didn't get to your question, we'll make sure we follow-up after the webcast. And the last question is, thank you for your answer regarding the comparison to Pro Medicus. Can you elaborate on Pro Medicus' initiative to enter the breast screening area and why Volpara will stay ahead of them? -------------------------------------------------------------------------------- Ralph Highnam, Volpara Health Technologies Limited - MD, CEO & Director [34] -------------------------------------------------------------------------------- Yes. So obviously, I think they were targeting FDA for June or something this year, but I'm not seeing them get FDA clearance, although I know they've got CE clearance. So there are several kind of aspects of that. One is Pro Medicus targets these huge kind of academic networks like Yale, for example, where they're doing their breast density work, which are -- they are part of our market, but only a small component really of our overall market. So the market segments that we target really are very, very, very different, although there is some overlap. Pro Medicus breast density, from what we've seen on the CE marking, is very similar to the approach from Hologic and other companies around the space. They just go from A,B,C,D which is okay in certain circumstances, but we prefer a much more scientific basis. We believe breast density is a continuous number because we believe each breast is different and you shouldn't just characterize it as A,B,C,D. It's such a continuous range. And it's those continuous numbers which really make breast cancer risk prediction in cancer risk score like Tyrer-Cuzick much, much, much more powerful. Imagine if you are a -- if you remember, we've got ABCD, right, but C is a huge range. The breast cancer risk for a low C versus a high C is very, very, very different. So if all you're doing is give an ABCD, you're not differentiated between a low c and high C, and it could be with Volpara, a high C might actually qualify you for MRI, which actually might detect a cancer and save your life. So there's a lot of power in continuous measurements, and we are have big belief in the kind of scientific continuous measurements of density rather than the subjective way of doing things. -------------------------------------------------------------------------------- Operator [35] -------------------------------------------------------------------------------- Thank you, Ralph. I'm sorry, we will just ask one further question that's come through before we hand back to Ralph. And that is, can you talk to progress on any acquisitions you're looking at? -------------------------------------------------------------------------------- Ralph Highnam, Volpara Health Technologies Limited - MD, CEO & Director [36] -------------------------------------------------------------------------------- Yes. Obviously, we said last year, April time that we did -- we raised money there to strengthen the balanced book through COVID because there was a huge amount of uncertainty around COVID, obviously, but also to look at M&A opportunities. But it always has to be the right deal at the right time at the right price. We've been very patient over the last 9, 10 months, and I have to say over the last month or 2, opportunities have started coming towards us, which are much more properly priced given the world's situation, and certainly, we are starting to see a much more encouraging signs now around M&A and people being reasonable. And there are some pretty exciting deals around there now, which we are continuing to look at, but with that still that same sense of discipline that we're not going to pay over price. It has to be the right deal at the right time at the right price. -------------------------------------------------------------------------------- Operator [37] -------------------------------------------------------------------------------- Thank you very much, Ralph, and we will wrap up our Q&A at this point. I'd now like to hand back to Ralph for some closing remarks. -------------------------------------------------------------------------------- Ralph Highnam, Volpara Health Technologies Limited - MD, CEO & Director [38] -------------------------------------------------------------------------------- Well, thanks, [all]. Thanks for your attention today. Thanks, Craig and Katherine for coming on. Thank you, particularly Katherine, for an outstanding Q3 from the U.S. sales team. But also the -- Anton and the Australian sales team has also done an amazing job. Thanks for your time today. You can see that we're very excited about where we are, where we're going, but also, we're incredibly pleased with are these initiatives like Project Thumb coming through to really help empower women all the way through to things like the Queensland deal and given us the opportunity really to help many of the women actually live around us and live around our investors. So with that, thank you, and we look forward to seeing you on the 4C in Q4. Thank you. -------------------------------------------------------------------------------- Katherine Singson, Volpara Health Technologies Limited - CEO of Volpara Solutions Inc [39] -------------------------------------------------------------------------------- Goodbye.