Good afternoon, and welcome to the Artrya Second Quarter 2025 Investor Webinar. My name is Danny Younis, and I help with investor relations for Artrya. With me this afternoon, we have the CEO, Matthew Regan, who is in the center of your screen. To the left of your screen, we have the NED and co-founder, John Konstantinopoulos. And to the right of your screen, we have the CFO, Mark Wainwright. Before I hand over to Matt, just a quick note that we will be having a Q&A session at the end. If you have any questions, please type them into the Q&A box at the bottom of your screen. I would now like to hand the webinar over to Matt.
Yep, thanks. Thanks, Danny, and welcome, everybody, so yep, just to reiterate, so to my left, we have the CFO, Mark, with us today as well, and along with John Barrington, one of our co-founders, JK is with us to my right. So we're here to pretty much answer any questions we can. Sort of the format that we'll do is I will just assume that the quarterly has been read by our participants today. I'll just give a very brief overview of that, but then I'll delve into what I think some of the key questions may be for people. Obviously, there'll be some keen interest in where we are with our 510(k) application, and I will absolutely delve into that, and then we'll leave it open for some more questions and go from there.
Without any further ado, yep, so during the quarter, we spent around AUD 1.2 million a month, which is down. We were very conscious of that spend during that sort of Christmas, leading into that Christmas period. We did want to make sure we maintained momentum with our 510(k) application, which we did. That spend will probably look to rise a little bit as we look forward, as I try and bring activities forward for our future FDA applications, notably our SCP product, but I will also delve into that in a moment as well. The other activity, and that's ongoing, is that we are in the very late stage of negotiations with a couple of very key, in fact, two of the top five radiology providers in Australia.
The importance of that for us is not so much financial, but absolutely validation of our product and also about our integration of our product, which we have also been doing with our U.S.-based partners in Tanner, Northeast Georgia, and Cone. You may recall in previous conversations that we had already integrated our product in with the Tanner Health Group. We are 90% done with the Northeast Georgia Health Group, and we're still underway with the Cone Health Group in integrating our product there. The importance of that is that once we do get our Salix Coronary Anatomy product cleared by the FDA, we'll be able to turn those integrations into real products very quickly.
And the learnings that we get from Australia with these two further large groups will also aid us in moving forward once we get our SCP product through, which is the one that actually attracts the CPT code in the U.S, which is where we really start to see some revenue coming into the business. On top of that, John has been the pointy end of the spear for us, leading our charge into the USA. I'll let him talk a little bit more about some of the future relationships we're building with some larger healthcare systems in the U.S. Pretty much everyone did we show our product to in the U.S., as well as everywhere, really, really appreciate what it can do and what it can do for their practices. And we certainly don't get any negative commentary on any of that.
The other key activity, obviously, during the last quarter was a successful AUD 5 million placement aided by Petra. So we're very thankful for that. And we're also thankful for some of the key people that have entered our shareholder list as well, very understanding of where we are in our business and where we look to go forward to. I will make note that Tanner also took up a portion of shares in that placement, so that is a real vote of confidence from a U.S.-based strategic partner in what we can do for them and their business as well. Right, so that's some of the key activity that was underway. Now into the 510(k) application. So we've been guiding the market that we expect to get our clearance by the end of this first quarter, so that's the end of March.
And we are still on track to do that, and we feel confident in doing that. The FDA did come back after our submission. You will recall we did a Q-Sub, a second Q-Sub submission before we put our application in to give us confidence we're on the right track, and we certainly have that confidence now. The FDA came back with six key questions for us. They were all process-related, and none of them were deficiencies, so that also gives us confidence. Some of the questions were around things like cybersecurity. Now, while we put cybersecurity into our application, they wanted to delve into particular detail around that. So we've been able to respond to that question. We've packaged it up. We've had third-party reviews with it, for instance, and we're ready to go.
We will be submitting all six questions as a package back to the FDA towards the end of this month, no later than the 1st of March. That gives us a good 30 days for a response from the FDA for a clearance. We do not expect any roadblocks in any of this process. In fact, we expect we'll deliver our responses back, and it'll be into the FDA's court. I think they have a maximum of 30 days to respond anyway, and we have high confidence in that. But of course, nothing's a lock, and the FDA can do what they like, but we feel we've been delivering everything they need.
Just to give another sort of flavor in some of the questions that we've got, I can't go into complete detail on all of them, but some of the questions were around procedural things like what would be in our user guide and user manual and that sort of stuff. So we made sure that we clarified those pieces or have included those pieces for the FDA's confidence. Another kind of question that we got from the FDA was related around the visualizations of our product. So those that have seen our product, you'll recall that we have an aorta and an artery model that steps down from that aorta, and it's the arteries that we're really interested in. I mean, one of the questions that the FDA was starting to delve into was around the aorta itself. We really had two choices at that stage.
We could have pushed back on the FDA and said, "Well, actually, you don't need to know about the aorta because the only thing that's clinical is around the arteries." We chose not to do that. We could have also pushed back in the sense that because we have such good detail and validated detail around our central lines and vessels, that that in turn allows us to have confidence that the aorta is correct. We chose not to do that as well. In fact, what we chose to do was to play the perfect partner to the FDA and just deliver them the information that they requested. So we've done that as well.
So, all of those sort of things are getting packaged up into one response back to the FDA with third-party reviews and utilizing some key third-party clients over in the USA and clinicians in the USA to do that. One of the questions that I've received recently is, "How often do the FDA sort of answer these clarification questions after you've put in your submission?" And my understanding, talking through our third party that do this all the time, is it's not uncommon at all. Quite often, the FDA are learning through these processes as well. They are not AI experts. They have some people that they can call on for that, but they certainly are not AI experts. And they like to understand each and every application and further their knowledge as well.
So that's why some of the questions we could push back on, but we chose not to. The other reason that we chose not to is that some of the questions actually overlap with the data that we're gathering for our SCP product. So for those that will recall, we have an FDA product, which is our base product. We build on top of that, and we will be self-predicating to our SCP product with that once that is cleared. Our SCP product is the one that attracts the $950 reimbursement code from the U.S., and that is around the sort of SCP volumes and the SCP characteristics as well. So some of the work that we're doing right now overlaps with that as well. So that's something that we're very happy to do. And now on our SCP product, so we're looking well and beyond our current FDA application.
We know we have that in hand, and we're looking towards a sort of end of July, early August clearance for that product. So if you work that back, it's towards the end of April that we'll be looking to submit. We have already done a Q-Sub meeting for this one quite a while ago, but that is still relevant for us and for this product. As we get through our current clinical work with our SCP product, we'll make a decision at that point whether to conduct a second Q-Sub or not. I can tell you at this stage that is not in our plans or our thinking. We think we have the right data, the right processes, and the right information from the FDA already to move to a submission.
But we will be not ultra-cautious, but we'll certainly be cognizant of how our relationship evolves with the FDA to make sure we have every opportunity to get through. On top of that, so with the FDA, we see no roadblocks. So the other key thing is I just want to reinforce there were no deficiencies in the questions that we received. And where I stand right now today, we are on track to deliver that package of work back to the FDA within time for them to give them clearance or give us clearance, hopefully, by the end of March. Danny, I'll move on, but there may be other questions that come with that, and I'll get to those towards the end. Some other stuff that we're going to. So John is actually, as I described, the pointy end of the spear moving into the U.S.
So he is going to potentially move to the U.S. towards that end of July period, coinciding with our SCP product. But before that, John is traveling quite often to the U.S. and has been developing a relationship with the larger health groups over in the USA. JK, maybe just give two minutes on what you're doing there.
Sure. I mean, the primary focus has really tried to shift the three strategic partners that we have: Tanner, Northeast Georgia, and Cone Health, to the point where once we have clearance for Salix Coronary Anatomy, that we can roll that out into the respective systems there and start generating revenue. And then that really obviously goes further once we have the Salix Coronary Plaque. But they've also been really, really helpful and supportive as key opinion leaders in the U.S. market in introductions into more larger, medium to larger size systems. And we're now in discussions with groups such as MultiCare, HCA, who's the largest for-profit group in the U.S., Wellstar, Piedmont, and all of these systems have volumes of greater than 25,000, 250,000, and some over 100,000 CCTA scans per year.
As Matt mentioned earlier, we have a lot of interest from a number of systems in the U.S. I've had to actually dial some of that back because we just cannot handle that demand at the moment. So I'm very much focused on some key strategic partners that are looking for a point of care, a real-time approach solution that can help them become a profit center in the current system, and that's CT-first approach that is being driven in the U.S. at the moment.
Yep. Yep. Thanks, JK. So again, we'll take further questions if there are any on that a little bit later. So the other product that is absolutely still in our workload at the moment is our SCF product, so that is our blood flow product. We are anticipating working through diligently to an end of this calendar year clearance with that product. There has been a fair bit of work going on, underway with that as well, particularly during the last quarter, including engagement of expertise in this area out of Switzerland, I believe, as well, and also with data so that we can ensure that we're getting our models to work in the correct fashion. I will say that as far as development goes with SCF, that one is at around about the 60% mark at the moment. SCP and FDA obviously are. They're done.
So they're now well and truly into that sort of clinical testing phase as far as we are concerned. The other thing that is underway at the moment that will shift us a little bit will be if we can land very imminently, I hope, one of these, at least one of these two large radiology groups in Australia. These will be names that our shareholders will be familiar with. Of course, until the ink is signed, it's not signed, but we are very confident that we will land at least one, if not two, of these counting in weeks rather than months. So that will really shift our operations, at least here in Australia, into that sort of production support space and enrollment, but that will not impact us as far as we're concerned with our target of the U.S. clearances.
So from our point of view, we've got a really clearly defined body of work ahead of us. It's primarily and first and foremost around getting FDA cleared, which we expect by the end of March. It's about getting SCP cleared, which we're expecting by the end of July, and it's about developing and delivering our SCF product, our blood flow product, by the end of the calendar year. One thing I just want to make sure that our shareholders are fully aware of is that the SCF product, when it goes through the FDA process, is a distinct group as opposed to the SCA and the SCP product. So that can largely, if we're ready, happen concurrently. They both, though, require the SCA product as a predicate for ourselves to report against. I think with that, Danny, I'll open up to questions. There may be.
Yep. Absolutely. Thanks, Matt. We'll now move to the Q&A session. Once again, if you have any questions, please type them in at the bottom of your screen. We do have some questions coming through. The first couple, Matt, I think they've largely been answered. It was all around why wasn't the cybersecurity and the demographic data added, but I think you've already answered that.
Let me just refresh on that. So absolutely, those things were, and they were answered in there. But of course, well, with cybersecurity, it's a really interesting one, right? So we have very good expertise internally. We have a very good response, and all that response is accurate today. It's really around them clarifying. So there's always nerves around privacy and security with healthcare products. The same with the sort of demographics. So some of the questions were, yes, you use this sort of level of demographics with your responses, but we want to delve in a little bit more on how much was sourced from the USA mainland versus the Australian mainland, for instance. Interestingly, we have just also put into upregulate our Australian product from a Class 1 product to a Class 2A product with the TGA.
The TGA asked very similar demographic questions that the FDA asked as well. So while we do give responses, they wanted to delve into a bit more detail on that.
Okay. And another question around the FDA, Matt. Is there any other potential requirements pending for FDA? I.e., are there any other potential obstacles where it can be delayed again?
I can never say 100% categorically no, but I mean, I'm at the 95% no. I mean, the questions we got were relatively benign in nature. There were no deficiencies presented. There was a lot of stuff that was accepted by the FDA that gave us real confidence that's very difficult to sort of elaborate on a call like this. So I couldn't see anything coming out of left field, but I also can't guarantee 100% that that won't be the case. They're currently going a process where they're trying to select RFK Jr. for head of the FDA, essentially.
So, I can't rule it in or out what the FDA may do, but as far as we're aware, based on the Q-Sub, based on the responses, based on the information that they've already accepted from our application, that we see no roadblocks coming from the responses we're about to submit.
Okay. The next question is around the AUD 15,000 of revenue last quarter that was in the fourth quarter. So presuming of the current Australian customer, which they assume is the AUD 15,000, what's the maximum annual revenue potential from that account, from that customer?
The way I might answer that, Danny, is that in Australia, the health system is such that it is all cost out and efficiencies. We are never going to shoot the lights out financially in Australia with any number. In fact, we could have 100% of the Australian market, and financially, it would not shoot the lights out at all. The reason that we are pursuing clients in Australia is very much around validation of A, our product, B, because we are born in Australia, and we want to make sure Australian citizens have access to our software and C clinically. We have clinical leaders here that can help us as we move towards the U.S. market. We will never financially make a huge amount of money out of the Australian market.
And I would reiterate that if we were born in America, not in Australia, we would not even be pursuing the Australian market. But we want to because we're born here, obviously, and the founders and some of our key experts early on are all in Australia, and we all want to see Australians benefit from this. And hopefully, in the coming weeks, you'll see that come to fruition in a much more full way.
Yeah. Danny, just to add on to that, that AUD 13,000 in quality revenue, I mean, that's a single site for that network or that group. So that's a very small cardiology center. So that's probably per quarter what to expect. They are looking to expand to another site. But for that group, that's roughly per quarter what we expect.
Yep. Excellent. Thank you. Again, outside the U.S. this time, so looking at the U.K. and Europe. So what works going towards the U.K. and Europe? Are you awaiting the FDA clearance first?
No. So with the U.K. and Europe, so we have done a little bit of work there. So our CE Mark we'll make sure that it's up to date, and we've been through our BSI audits and that sort of stuff. So we're maintaining our applications and our regulatory approvals in those jurisdictions. The reality is, it is for us, with our current finances, a distraction to what the main game is, which is in the USA. It's a little bit like if we were born in America, we wouldn't be in Australia. It's a bit like that for us. The focus is very much on the U.S. market. Now, that's not to say, and we have been working with a couple of parties there, that if people knock on our door that we wouldn't do work with them, of course we would.
But we would be very diligent in our response and our timings with that because we are not putting at jeopardy our U.S. applications.
Okay. The next question is around the competitive landscape, which I think is probably worth talking about. And the investors are asking, do you directly compete with Cleerly in the U.S.?
We will do. What I would say is that we are the only Point of Care solution. Cleerly are not a Point of Care solution. We do all of our work within 10 minutes of the data being uploaded to the cloud. In fact, I know from our last BSI audit that it averages eight minutes for that work. Cleerly uses human-in-the-loop. They have a fixed report that the clinician cannot change. We give the control deliberately to the clinicians so that they can own the report and edit the report as they see fit. So once we have our SCP product available in the U.S., then we will be competing with Cleerly, but we also beat them in price as well and scalability. JK, do you want to add anything to?
Yeah. The big issue with the business model that Cleerly and HeartFlow take is the human in the loop, which means that the clinician has to request a scan that goes into a center somewhere in the U.S., and they've got humans that work on that scan, which comes at a cost and infrastructure. So for them to be able to scale across the U.S., they've got to scale with humans, and that cost is substantial. Our approach since the beginning has been to build everything in a cloud so that it is in a real-time manner that the clinician has access to it. So our unit cost is low. Our profitability is high because we can discount all the reimbursement rates. So it's $950 for SCA as an example.
We discount about 20% off that so that we can make each one of these centers a profit center, whereas all our competitors are making these centers cost centers. So there's a lot of complaint and pushback on them at the moment. And for them to go reduce that cost is quite hard because of the stacking infrastructure they have of humans and the technical architecture that they can only change if they've got to re-architect everything.
Okay. The next question is around the SCP rebates. So the SCP rebate available in the U.S. is around $950 per scan. What percentage of that will be Artrya revenue?
Yeah, so JK just sort of mentioned that we'll discount around about the 20%. So for our shareholders and investors doing their own numbers, we're looking at around about the sort of AUD 750 mark as our charge, leaving the clinicians and the hospital groups about a AUD 200 profit on ordering any particular test. I would also just make sure everyone's fully aware it is a frictionless test to order as far as the software is concerned. The work that's being done already, because it can be done inside that 10 minutes. It is literally a mouse click away from ordering that test and getting the results instantly.
Okay. There is a follow-up question around your competitors. What is stopping HeartFlow and Cleerly from replicating Salix and removing humans from the loop and provide the same on-site service?
Yep. So quite a few things, actually. So they have architected their product to be that sort of standalone system, whereas we've architected it from the very start, which is great foresight from both our founders and the business as a whole right at the start. So that has allowed us to sort of sidestep that work. And I can tell you that's an 18-month process of re-architecting if people want to do that. The other moat is once they do that, they have to go through the whole FDA process as well. So we know that that is probably a 12-month process minimum from start to finish if you have everything in order ready to go. But you can't really start that process until you've developed the software. So there's quite a large moat for them to do it.
I suppose the other question that I would follow up with as an investor is, well, what's stopping them coming to see us, either as a partner or as an advisor or something like that? So that's certainly something that we're cognizant of. We don't expect to see anybody like that until we've got our SCP product, but I wouldn't be surprised if we get inquiries around those times.
Just that, Danny, we also have additional 25 file patterns in place as well around that architecture and the real-time approach, so that does remain a major blocker.
Yeah. So just to reinforce our IP security there, too.
Okay. The next two questions, and I'll do them separately around revenues again. So the first one around revenues is there a revenue stream that is targeted to data mine, quality data of patients that has already been scanned, and can the technology be applied to markets in Asia?
Can it be applied to markets in Asia? Absolutely. That's not a problem at all. That just becomes regulatory hurdles to get in. As far as the data mining and juicing revenue out of that, at the moment, that is not on our agenda or our list. We do have access in quite a few of our contracts, not all of them, but quite a few of them around data and data access, but it's mostly for our model productions. There's all sorts of patient authorizations that have to go through if you use the data for other things and be able to bucket it out and sell it. But I would say that at a macro level, as we start to get more and more clients, that there will actually be opportunity to do that kind of data intelligence things to all of our clients.
For instance, how often are people coming through at this sort of age sex demographic, and how quickly are they going to report it? Those kind of stuff, the ranking type of things, absolutely will be possible.
Okay. The other revenue question is, what do you expect that timeframe to be from signing a contract with the Australian radiology companies to them becoming revenue-generating?
I would think that would be around about a six-week process, six maybe to eight weeks. We know that from our history with Tanner and Northeast Georgia and Cone about how quickly that is to integrate. Of course, some of that will depend on our clients and how quickly they would like to run as well and how far they would like to see that process pushed out through their practices. But that would be my kind of timings on that sort of stuff, Danny. I just have to couple that up with, obviously, the amount of resource I have and where that resource is focused and not upsetting any clients. So that will really change the dynamic of this business as we start to get larger and larger clients into our organization.
Okay. Yep. The next question's rather long. Let me just summarize this. So it's really about your addressable market. The U.S. is 20 x the Australian market. So if you're looking at 20 x $15,000, you're looking at $ 1.2 million. So it's a significant uplift. So in regards to the addressable market, the question from the investor really is around, can you discuss on what basis you might achieve a run rate of multiple times the Australian market?
Yep. Oh, you go first. I can't help you.
So just to maybe start off with a step back, the Australian market is 150,000 CCTA scans per year. The U.S. market is about 4.4 million CCTA scans per year. The likes of Tanner, Northeast Georgia, and Cone, roughly about 15,000 scans per year between the three of them, which gives us around about $11 million in U.S. revenue from those systems alone. To give you a perspective on size, HCA is the largest for-profit group in the U.S. They do over 100,000 CCTA scans per year with that system alone. Ascension in the top five do about 80,000, and are looking to double that over the next couple of years because of their CT-first approach.
So it's not going to take a lot for us in the U.S. by finding either more of the same size customers like Tanner, Cone, or Northeast Georgia to really grow our revenue and land another substantial client like a MultiCare who do about 45,000, Mass General do about 45,000 scans a year that can really help us get that uplift in revenue and profitability as a company.
Okay. We're down to the last question. So this is one more reminder for the last minute. If you want to ask a question, here's your chance. Otherwise, we'll wrap it up with the final question, and the question is around, Matt, you talked about you were looking to land one or two radiology groups in Australia in weeks, not months. What is there still to be done to land those?
Not much. It's ink on the paper, essentially. But the reality is, it's a really big deal for us. It's maybe not as big a deal for some of our clients. They're quite large practices, obviously. Having said that, they are both very supportive of us and what we've been doing. They like our technology. They like what we represent. And they want to be partners with us, right? They want us to be able to engage with us and move forward. But the reality is, it's urgent for us. It's not as urgent for them. But it's literally down to ink on paper.
Yep. Okay. That was the final question. Hang on. One more. Sorry. One more just popped up now. Are you offering discounts to these new Australian clients? Is the final question.
Look, we are. But again, whether it's a small discount, a large discount, or whatever, the quantum of difference in what the Australian medical system is willing to pay for versus what the U.S. medical system is willing to pay for is literally chalk and cheese. What is similar is the sophistication of our systems, and that's why the real value for us is in the validation of our product with real clinicians that have real credibility in the U.S. The size of the system that we're integrating into gives credibility along with Tanner, Northeast Georgia, and Cone into the U.S. It's all about preempting our market into the USA.
Okay then. That concludes the Q&A session. I'll now hand back to you, Matt, for any closing remarks.
Thanks, Danny. And look, thanks, everyone. Look, I completely understand the interest around the FDA. It's certainly a key focus of us as well as we hurtle towards sort of the end of March. Clearly, we want this as early as possible, and we'll be looking to put in our responses in as early as possible, but we want to make sure it's a tick in the box and we get it done correctly and that we are the perfect FDA clearance because we're also hurtling fast along on our SCP product. I just want to make sure everyone's fully aware that we are laser-like focused on just four things, right? It's our SCA product. It's then our SCP product directly after that. Again, the development's done, and we are underway with some of the clinical studies we need to do.
The SCF product, which will follow on beyond that, we're doing that concurrently. And then finally, integration of clients that we will get in Australia. And that's it. That's our focus.
All right. On that note, we'll close it there. Thank you to all the attendees, and thank you to Matt and his team. Thank you.
Thanks, Danny. Thank you, everybody.