Medical technology may have taken a back seat to resources stocks during the mining boom, but the sector has generated a lot more interest of late, with several players in reverse takeovers on the ASX.
Medical technology may have taken a back seat to resources stocks during the mining boom, but the sector has generated a lot more interest of late, with several players in reverse takeovers on the ASX.
Among those companies more established in the market is Resonance Health, which has a track record on the ASX that significantly predates the recent flurry of activity.
The Claremont-based medical technology company has taken its business to the global market, with patented equipment that can analyse iron levels in the liver without piercing the skin.
However the history of Resonance Health reflects the patience required by investors in the sector. The company had its breakthrough moment in the late 1990s, when researchers led by chief scientific officer Tim St Pierre at the University of WA realised they could measure iron in the human body noninvasively.
“It was that kind of ‘ah-ha’ scientific moment,” Dr St Pierre told Business News.
“We had been doing a lot of research in iron, looking at what is known as ‘iron overload diseases’.
“We realised the medical community was requiring some way of non-invasive measurement of iron in the liver, and we thought we were onto something, so we submitted a patent.”
In 2000, researchers set up the private company Innovision Metrics, which then invited SKG Radiology to invest and keep the development process going.
The company remained in development mode for a few years before needing some larger investment, and in 2003 it morphed into the public entity it is today.
Around this time, first health regulatory approvals were granted in the US, and then in Australia and Europe, for Resonance’s liver iron measurement product, FerriScan, which is now used in over 250 hospitals worldwide.
“From then on I suppose the story has been building the volumes of sales in that the first product,” Dr St Pierre said.
“We then started measuring other aspects of the liver that were of interest to the doctors we were talking to.
“We are in the process of identifying the most advantageous aspects to measure from a health and business perspective.”
Resonance has since introduced a non-invasive liver fat measurement technology to the global market, and is at an advanced stage of commercialising technology that can measure the amount of fibrosis in the liver – a type of scaring caused by a variety of diseases.
The company also recently signed a two-year contract with a pharmaceutical business (for an undisclosed sum) for the provision its product in a phase II multi-centre clinical study.
This followed an announcement about collaboration with the CSIRO to apply that organisation’s expertise in the company’s product development pipeline.
Dr St Pierre said the company, which has 15 staff in WA, is a compact organisation that services the globe, with its location in Perth providing a surprising advantage.
“Sometimes people say Perth is a bit out of the way and so on, but with our business model we find that there’s an advantage to being here in Perth,” he said.
“Data from the US and Europe is transmitted to our central analysis facility here in Perth, and while those guys are nicely tucked up in bed asleep, we are processing that data down here and can have the results ready for them, very often the next day.
“So it seems to work very efficiently, and our headquarters will probably remain here in Perth for the foreseeable future.”
While Resonance Health had the capital required for its current activities, it may have to move its headquarters if it was to plan a rapid expansion, Dr St Pierre said.
“Having looked broadly at how companies operate, I have no doubt that it would be easier to raise larger amounts of capital in other parts of the world,” he said.
“If in the future we decide to do a more rapid expansion, then we might well start to investigate those possibilities.”
Resonance’s half-year report dated for year ending December 31 2014 showed a strong improvement in financial performance compared with the corresponding period.
Profit from ordinary activities after tax was up 403 per cent due to a 6 per cent increase in sales revenue, while earnings per share was up to 0.12 cents, from a loss of 0.04 cents in the previous period.
Dr St Pierre also won a 2015 EY Entrepreneur of the Year award in the technology category for his work with FerriScan.
“It was great fun, and with any award it gives you a great sense of recognition; you feel that your hard work is being recognised; all of the team here was elated,” Dr St Pierre said.
