General meeting for the 2025 financial year. I advise that in accordance with the company's constitution, a quorum is present and accordingly declare the meeting open. My name is Bernie Ridgeway and I am Chair of the Board of Directors and I will chair today's meeting. I'd like to introduce my fellow directors, our CEO, our Company Secretary and other attendees today. Non-Executive Directors Jacque Sokolov should be, he's attending virtually, he's in the U.S., and Kate Hill to my right, John Constantlis, our CEO, Kevin Hart, our Company Secretary sitting right next to me, and then Harvey Parrington, our acting CFO. Also present is Mr. John Ward from KPMG, our auditors. The format for today's meeting will be as follows. Firstly, I will present my chair address. We will then attend to the formal business for the meeting, including a poll on all resolutions.
The meeting will be closed once the form of business is concluded. Following the close of the meeting, John will present a business update. I'll now proceed with the chair address and I'll summarise some of the highlights for FY 2025 and into the first quarter of this year. Continued development of our technical management team and AI-enabled software, the U.S. Food and Drug Administration clearance of our Salix Coronary Anatomy software. This is an enterprise-wide platform that is connected through the Picture Archiving and Communication System, otherwise known as PACS, of the particular health system we are dealing with. After year-end FDA clearance of our Salix Coronary Plaque module, work on our Salix Coronary Flow module in preparation for the Q-Sub meeting with the FDA, which took place in early October.
I'm pleased to say that as reported to the ASX on 10 October, the meeting was positive, provided valuable guidance and confirmed a clear pathway to 510(k) clearance, moving from a research and development focus to a commercial phase as the company matures and moves into the U.S. market in earnest. The U.S. is the best place for us to help save lives and increase shareholder returns. The following advantages exist today. It is a large and growing market with 4.4 million CCTA scans performed every year. Currently growing at 6% per annum. This growth rate is likely to increase with the adoption of the CT first approach by the American College of Cardiology and the American Heart Institute. Attractive reimbursement codes or category 1 codes I should say for SCA, SCP and SCF and that's a major advantage for us.
Our differentiated point of care capability being the only provider with this capability in the space. Lack of market penetration of our main competitors who have a human in the loop approach and are expensive. Initially the emphasis is on our first commercial partners in Tanner Health, Cone Health, and Northeast Georgia and will progress to our smaller SAPPHIRE study partners and John will say more about this in his address. In order to support the partners mentioned and others, we are employing necessary U.S.-based expertise with our first base in Atlanta, Georgia, and we have our first U.S. employee, operations employee, sitting right up there at the moment, and please say hi to Alison after the meeting. Subsequent to year end, we raised AUD 80 million and expect we are fully funded to profitability.
We are at a very exciting phase in the growth of the company and John will cover the outlook in his address. I would like to take this opportunity to thank my fellow directors and the Artrya Executive team for their dedication and contribution throughout FY 2025. I also extend my sincere appreciation to our long term shareholders and for their continued support and trust and I warmly welcome our new shareholders to the Artrya Register. Finally, I wish to acknowledge Matt Regan for his work during the financial year. Also, I'm delighted to be working alongside John, our newly appointed CEO as we continue to grow the business and bring to life the vision we set out to achieve. John has been pivotal in establishing strong relationships in the U.S. Healthcare sector and opening that key market for Artrya. I will now proceed with the formal aspects of the meeting.
The purpose of this meeting is set out in the Notice of meeting which was made available to all shareholders on 13th October 2025. Unless anyone has any objections, I will take the notice as read. There are three items of business for today as detailed on the slide you should now be seeing and we'll present on individual slides the proxies received for each. Two of these require formal resolutions. The specific voting preferences indicated by proxies who had either directed their voting preferences or had left their voting preferences open to be cast by the nominated representative or the Chairman are available for inspection. Where a proxy vote has been given to the Chairman with instructions to vote in favor of a resolution in accordance with the directions on the proxy form, I intend to vote in favor of the resolution.
Any undirected proxies will be voted in favor of a resolution. Voting on all resolutions at today's meeting will be by way of poll. The Company Share Registry or Automic will process the poll votes at the end of the meeting and the results will be announced to the ASX once they are available. The first item is to receive and consider the financial statements for the financial year ended 30 June 2025, consisting of the Director's Report, the Financial Report, the Director's Declaration, and the Auditor's Report. It is not a requirement that shareholders vote in relation to the accounts. However, we are pleased to answer any questions relating to them and any other matters you would like to raise at the moment. As I mentioned earlier, we have John Ward from KPMG with us today and Harvey Parrington, our CFO. Are there any questions on the accounts?
Given that there are no questions, we will move to the formal resolutions that need to be considered. Proxies received in relation to formal resolutions are set out on the following slides. The first item requiring resolution is the adoption of the remuneration report forming part of the Directors' report for the financial year end of 30 June 2025. The Corporations Act requires that a resolution be put to members to adopt the remuneration report as disclosed in the Directors' Report section of the 2025 Annual Financial Report. That's pretty wordy. In accordance with the legislation, the vote on the resolution is advisory only and does not bind the directors of the company. However, the board will take the outcome of the vote into consideration when reviewing the remuneration practices and policies of the company.
I now refer shareholders to the screen displaying the resolution and the valid proxy results. As Chair, I now formally move that Resolution 1, the remuneration report, be put to the meeting in the form set out in the notice of meeting and I call a poll on this resolution to be held at the end of this meeting. Do any shareholders have any questions or comments in relation to the resolution? Given there are no questions, we'll move to Resolution 2. The second resolution seeks the approval of shareholders for the re-election of Kate Hill as the Director of the company. I now refer shareholders to the screen displaying the resolution in full and the valid proxy results.
I now formally move the motion that Resolution 2 be put to the meeting in the form set out in the notice of meeting calling a poll on this resolution to be held at the end of the meeting. Do any shareholders have any questions or comments in relation to this resolution? Given the votes. Kate, welcome back. Thank you. That brings an end to the resolutions required to be voted on at this meeting. As advised, all resolutions for consideration at today's meeting will now be decided upon by a poll of shareholder votes. I will ask Mr. Eric Mervyn from our share registry at Automic to act as a returning officer. If you require a ballot paper, please raise your hand. No one requires a ballot paper, Eric. They're making your job very easy here. Quick job. Yeah. Does everyone have.
Does anybody have a ballot paper? Okay, you should record your vote now by placing a cross in either the for or against square on the paper. You should also print on the ballot paper your name if you are a shareholder, or the name of the shareholder whose proxy, representative, or attorney you are. If you hold multiple proxies, please state this and we will complete the information from the proxies. Thank you. Thanks. Have all persons who intend to vote now voted? I take that as a yes. At an annual general meeting, shareholders are entitled to ask questions or make comments on the management of the company. Do any shareholders wish to take advantage to avail themselves of this opportunity? You have everyone here, Jacque, online. If you have any questions, now is the time.
Can you take questions after John's presentation?
We will. The format is that we'll, in fact, we'll close the meeting, Bruce, and then we can get into John's presentation, which is the interesting part of the meeting, where you find out more about what's going on. Certainly we'll be taking questions during the course of that presentation. Ladies and gentlemen, thank you for your attendance. That concludes the formal items of business for today's meeting. As mentioned earlier, the results of the AGM will be announced to the ASX later today and placed on the website. I now declare the meeting closed and I'll ask John to provide a business update. Thank you, ladies and gentlemen. We're getting into the interesting part of the meeting and John's got a really good presentation to make and a demonstration of the software during the course of the presentation. Over to you, John.
I'm going to go. I'm going to shift there so people can see me.
Yeah.
I need to sit down in the audience. I'm just apprehensive. Thanks, Bernie, and I appreciate the time and thank you everybody on behalf of Artrya for being here as well. From my side, it's just a quick presentation on what we are as a company and the product we've built, but also the pathway to the U.S. which is a very big focus for us going forward. Please feel free either to ask questions during the presentation or leave them to afterwards as well. Then I'll demo the software as well.
I won't go through the detail because Bernie gave a really good summary of this, but it's been a really good and solid year for us here in FY 2025, and the major focus really for us has been to shift from this R&D type of company to a commercial customer company. From the commentary that Bernie gave as well as that you can see on the slide here, you can really see that shift from where we were with FY 2025, with the number of the FDA applications and clearances that we received, as well as the foundation we set in FY 2025, to really where we are now as a company, into FY 2026, where we have our first U.S. commercial customer of Tanner Health.
We're working very closely with Northeast Georgia and Cone to finalize the commercial agreements, and we do expect those to be completed by the end of this year and really have set up a foundation with the SAPPHIRE study, which I'll talk about a little bit later on what our pathway to revenue is in the U.S. and really establishing ourselves in the U.S. with that study as a commercial pathway, but also as a clinically driven study to really lift ourselves into the U.S.. Maybe as a summary, we know it's a big market. The big challenge we see over there is that the standard of care in the U.S. is still very predominantly focused on the traditional mechanism of looking at coronary artery disease, which is around the narrowing of the coronary arteries.
Over the past three to four years, there's been a major shift towards CCTA, which is now considered the first line test for anybody with chest pain. That's been defined by the American College of Cardiology as well as the American Heart Association. What that really means is that the market has grown substantially since then. With the usage of CT now driving that volume, as well as the reimbursement that's available, we see a major push in that volume growing a lot bigger. It's opened up a clear opportunity for us with our Salix Coronary Anatomy platform, as well as our Salix Coronary Plaque module, which is our first entry into the U.S. to start generating revenue. We'll do that with some of those foundation customers that we have, as well as we expand towards the SAPPHIRE partners as well.
We are also working on our Salix Coronary Flow module at the moment, which is running its course through our FDA preparation and submission and clearance in the new year. That really leads to our approach into the U.S. which we've been very, very focused on, firstly on our foundation customers, and then leveraging SAPPHIRE as a mechanism to grow and lift our volume into the U.S. as well. What does that really mean and what's the value proposition for us as a company? Many of the existing shareholders and the new shareholders have seen the slide. I think it's important to reiterate what our value proposition is compared to some of the other players in the market.
We focused heavily on a CT coronary angiogram and what we really look at is processing that scan once the scan is taken and within an eight to 10 minute period, provide a full overview of risk to the doctor that is seeing a patient. What that means is that a CCTA report is written in eight to 10 minutes, a plaque analysis is performed and I'll explain during the demo why that's important as well as a non-invasive blood flow assessment is performed in that same eight to 10 minutes. We have put a huge effort into that real-time processing and we'll continue to do that with our product as we go forward because that's the additional value that we add over and above to our competitors.
It is a unified reporting platform and it means we're able to consolidate multiple solutions into one singular platform so doctors don't have to look at multiple screens and try shift between screens as they report. The primary financial opportunity really for this is that because we are cloud based, our unit cost to process a scan is in the single digit area, which means we're able to share in the reimbursement with the hospital systems and make them profit centers versus some of our competitors that charge more than reimbursement and are really putting pressure on the systems to generate revenue from patients as they come through. Which also means that they are really considering whether the patient should be going for procedure or not, which means the patient is ultimately not getting the right care. We change all of that.
What does that really look like from a reimbursement perspective? There's been a lot of questions on where the reimbursement is coming from. Our base platform, Salix Coronary Anatomy, which was cleared by the FDA in March earlier this year, will be the reporting platform of choice. It's an enterprise-wide solution, so it'll be integrated into all the different databases that a hospital system has as well as the reporting systems. As a scan comes in, it gets processed, the doctor gets the results, and they're able to manipulate that image or the scan based on the findings we provide them and then report a lot more efficiently. There is $325 in U.S. reimbursement available and we charge roughly about $50 for every patient that goes through.
About 70% of patients that come through a hospital system will have plaque of some sort and will run through a plaque analysis and we then process that in the same eight to ten minutes, the results provided. There's $950. That's a new reimbursement code that was established earlier this year as a Category 1 code and will be fully transitioned by the end of this year. That really means that we are able to provide a plaque analysis to a hospital system and allow them to get reimbursed at $950. For that, we discount off that amount, charge roughly about $750 so that they profitable of that specific procedure. The final module which is with the FDA at the moment is our Salix Coronary Flow module, which roughly about 35% of patients will go for that specific procedure and similar process to the plaque module.
We discount off the reimbursement, which is $1,017, and we charge roughly about $800 per patient. Same reasoning. It incentivizes the hospital system to really process the scans and not worry about whether they're losing money off the patient or not in a workflow setting. Before I get to the demo, what it really looks like, and there's two parts to the slide. There's the current approach from a workflow, and I'll talk about some of the inefficiencies that happen over there as well as how we provide that real time analysis back to the doctor. In the top swim lane, you can see that if a patient has chest pain or has a history of heart disease, a smoker, diabetic, etc., based on the guidelines, they'll be sent on for a CT coronary angiogram, and the scan will be taken and that will be sent to.
It's called a picture archiving and communication system or PACS, which is a database where scans get sent to that then is assessed by a radiographer. They prepare the imagery for the doctor and that may take anywhere from a couple of hours to potentially a few days. Before that is done, it will go into the doctor's work list and when they get to their reporting time, they will report that patient in this top swim lane over here. They cannot perform a detailed plaque analysis because the tool sets available do not provide them that opportunity to do that. They cannot also perform a non-invasive blood flow analysis for the same reason, which is really where the competitors have been born from. Clearly is a company out of the U.S. that performs plaque analysis.
HeartFlow, as many of you may know, performs predominantly FFR or blood flow analysis, non-invasive blood flow analysis and have a small component of plaque and elucid plaque analysis, all of these. Once the doctor, once one of these assessments are done, they will request analysis from one of these players that will be then sent to a data center where they have humans working on that imagery that gets quality controlled and they get sent back to the doctor within 24 hours, sometimes even longer. It's a fixed report, the clinician cannot edit the report. If the doctor disagrees with any of those findings, they've got to discuss that with one of the players. That may take days or weeks before that actually comes to a resolution.
Which as you know, here in Australia, but predominantly in the U.S. there's a huge, there's a lot of pressure on the hospital systems for throughput because they've got big backlogs. Any time they wait accentuates and compounds that wait time. What we've done is combined basically both of these into one single reporting platform. As I mentioned, same thing, patient comes in with chest pain or history, etc. Scan gets taken and within eight to 10 minutes we perform the CCTA report, which is the automation of this top line over here. That report is written based on standard guidelines.
The plaque analysis performed as well as a non-invasive blood flow analysis in the same eight to ten minutes, we provide the doctor with all the tools for them to make edits and re-simulate those results in real time so that they can make a quick decision on the patient and the patient care and then move them onto the right treatment pathway a lot faster. Whereas in the top line over here, here we're seeing a lot of days of delay in where the patient and when the patient's actually being sent for treatment. I'll stop there and maybe put some flavor around that through a live demonstration because that will just give some view on that. Just load up the screen.
While John's doing that, one of the other things, apart from the time delays that the current competitors take, they also charge equal to or more than the reimbursement. The cost of doing that scan is actually a cost center to the health system. We're changing that to become a profit center, turn them into a profit center, because we're charging less than the reimbursement, as John said.
Yeah, so if you think of that top swim lane that I just showed you, basically how that's represented on our software is if you look at the center of the screen left, that is basically what the doctor normally sees. Scan comes in, patient gets scanned, scan gets taken, and what the doctor sees on their work list is effectively named data scan, demographic, etc. Every patient is treated the same way. There is no risk stratification, there is no triaging. They are treating high risk patients in the same manner as they are treating healthy patients, which becomes quite complex when you are seeing healthy patients. You can keep those at bay and bring in the more diseased patients to get that workflow moving. What we really perform in that eight to 10 minutes is a calcium score. I'll talk about the impact of that in a second.
More importantly, there is a narrowing assessment and what vessel that is on. There is a risk score, one being low risk, five being high risk. Then there is really a high risk plaque assessment that looks at that inflammatory plaque that causes a heart attack early and allows the doctor to make an assessment whether that is dangerous or not.
Not.
To give you some info on why this is important, a study, quite a substantial study, showed that only a 4%-5% burden, 4% burden of this LAP, low attenuating soft inflammatory plaque, increases the likelihood of you having a heart attack by five. It is a very small burden with massive impact to the patient. It is incredibly hard to see. You can quickly see that in both an inpatient or emergency room setting or an outpatient setting, or like an imaging center, you can quickly treat patients coming through just this worklist over here. If the doctor decides to go into a scan, they can click on the scan itself. That will show a few things similar to what you saw on the dashboard. There is the information up there.
There's an additional risk score which looks at plaque predominantly and that is categorized based on how much they are in each one of the vessels. That really defines a treatment pathway for the patient. The CCTA report is written for the patient, both on a patient basis, but also on a per vessel basis. That's standard reporting for every doctor. We extract an interactive model of the patient's coronary arteries that are specific to that patient and overlay the disease and show the severity and risk for that patient. Maybe just for context, this branch over here is called the widowmaker. Anything from the center of the screen upwards is considered critical for assessing pretty quickly. Doctors want to know whether this area here is blocked or there's substantial disease so they can treat a lot more effectively.
I think the most important piece really is around the diagnostic side, which really is focused on two parts. One, the button up here, which says Plaque analysis, and the other one up here which says CT-FFR or blood flow analysis. If the doctor clicks on the plaque analysis, what they'll get is an overview of the type of plaque and how much of that plaque there is and why it's important. That's broken down into calcified, which is a stable plaque on your coronary arteries, a calcium, a yellow plaque, which is like an LDL fatty plaque. And then further down there was one, some red plaque over here, you can see that over there, which is that low attenuating high risk plaque that forms early and effectively progresses and causes heart attack.
What the doctor normally sees is that you can quickly see why it's important for them to know the subtype of plaque because they are able to treat more effectively. Knowing the type of plaque allows them to be a lot more specific in how they treat the patient. They'll try to transform this red plaque over there into a more stable plaque through certain drug therapy. Same thing with the yellow plaque. They'll give a certain drug therapy like high intensity statin, the colchicine, et cetera, to try to transform that plaque. The second thing we provide then is how much of that plaque there is. That really sets a baseline for treatment. If you come in for a scan on day zero, you get sent for a certain drug therapy. What the doctor wants to know is is this drug therapy making a difference to the patient?
Yes or no? If it is, you'll see the volumes changing into more of a stable area or reducing totally. If it's not, they can change the therapy for the patient. This combination of how much of this plaque there is and the type of plaque gets us access to that first reimbursement of $950. When we click this button, we will charge the hospital system and then they can go recover that through reimbursement. The second pathway is the doctor then wants to know is the plaque causing enough narrowing that it's blood flow restricting to the heart? This artery over here, this is one part of your heart muscle, this artery supplies blood to that part over there.
What they want to know is that is the blood flowing through this little purple area here enough to keep this heart muscle pumping. That is really where the second button comes into play. The doctor clicks that, they get a blood flow analysis which really looks at how much blood is going from the top. Part of this is the aorta flowing through the coronary artery and going past the lesion to see whether that is enough. Now if you think of a hose pipe, as you start bending the hose pipe, that becomes more constricting. That is a similar mechanism to what we are trying to assess, how much of that constriction is post that bend. You can see, I hope you can see it says 0.68. That means that there is only 68% of the blood going through that lesion that is available to supply that heart.
The normal cutoff point clinically is 0.8 or 80%, which means that this patient is not, there's not enough blood flow going through that area and that needs to be opened up. This patient will not only get drug therapy to treat the plaque, they will also be sent on for an invasive procedure like a stent or potentially a bypass graft, depending on how restrictive it is. That's really where one of the major benefits we will provide is our ability to do virtual procedure planning. Instead of having to send the patient on for diagnostic catheterization, which means you put a wire in the patient's leg and push it to their heart, you can do that planning of the same CT scan non-invasively through tools like this measurement piece over here where the clinician is able to measure the lesion length.
You can see at the top marker over here that equates to the screen, it says 2.4 ml diameter. The bottom marker to this bottom here, 2 ml diameter and a length of 45 ml. That is effectively the stent that the doctor has to go order from one of their manufacturers, whether it's Abbott, Boston Scientific, Medtronic, you name it. That is one of the first opportunities that we provide. The second opportunity, which is a major differentiator, is we allow the clinician to also simulate whether the blood flow opening through that stent is going to make a difference or not by adjusting the walls of the coronary artery and opening it up under the assumption that there's a stent there and re-simulating that in almost near real time so they can judge whether that stent makes a difference.
That is a major opportunity and differentiation we have to our competitors. Same thing as the plaque button over here. Once they click that, we charge about $800, they get reimbursed $1,017. They make money off that as well. That really then goes on to the final report screen where everything is written for them and provided as part of the initial review. Within the first eight to 10 minutes, they can edit it. They can send this on to other doctors for review if need be. Once they hit approve, this will then be sent to the electronic medical records system and they get. That activates the whole reimbursement process for that specific patient. I'll stop there before I go into the presentation if there are any questions on that.
I think just pointing out that the flow module is the one. We're going through the approval process with the FDA currently, so we do not have clearance for that yet. We do have for the platform and the plaque module.
If I may make a comment, John, one of the things that doctors are increasingly becoming aware of, especially in the United States, is there's really no reason to do a diagnostic cardiac catheterization. An AI-enabled CTA similar to what John just described literally eliminates the need for much more invasive procedures, freeing up the cath lab, keeping the patient safer, and basically enabling the doctor to go in and see what they need to do much more clearly. They are spending much more time doing interventions rather than diagnosis. Diagnosis can be done with this transformative technology.
Thanks, Jacque. Yeah, I agree with that.
Yeah.
One of the things just to note is that most hospital systems in the U.S. want to use CT from an imaging perspective because they can really grow, obviously grow volumes from that there. Their main interest is to get the patients onto the right elective procedures. Unfortunately, the U.S. is a pay based system. Getting them to the right procedures over here is really where they make money. Using CT and using a solution like ourselves where you can get the patient through a lot faster allows them to increase the volumes for downstream testing and sorry for downstream procedures as Jacque just mentioned. Patient wise, obviously the major benefit is that because of its real time, there is a faster pathway to treatment and ideally removing unnecessary invasive procedures.
Hospital systems, especially when in the U.S. they have four- to six- or eight-week backlogs. A system like ours or solution like ours enables them to increase their throughput and reduce that backlog, but it also allows them to get the right patients onto the right elective procedures as I just mentioned. Hospital systems really benefit from that because they are now making money off a modality which allows them to grow their volumes, but also they're making money because they're able to get patients through to the right procedures. What does our approach into the U.S. look like? We've been very focused in a structured pathway in how we are actually going to tackle the U.S., and that's really based in three pillars. One, our foundation customers, Northeast Georgia, Cone, and Tanner Health; two.
Our SAPPHIRE study, which is a mechanism of not only showing future clinical value through changing standard of care, but also bringing on high volume, high quality centers that we can look at commercializing as part of the study and then really using key opinion leaders as part of that platform to leverage their expertise and their network into other hospital systems in the U.S., and there is a lot of precedent of that here in Australia through companies like Pro Medicus have done that. The SAPPHIRE partners who we've brought on, and today we announced Ascension, who is the sixth largest hospital system in the U.S., that was an introduction through a key opinion leader. We are starting to see that wheel turn a lot more efficiently now through that network as well.
As we go forward into the U.S., you'll see a lot more focus in how we hit each of these pillars to drive that growth for us in the U.S. in 2026. Leveraging those three, our focus is really on revenue growth and that's focusing on those three foundation customers that I mentioned and generating revenue initially off Salix Coronary Anatomy platform, the CCTA reporting platform, as well as the Salix Coronary Plaque module, which is now cleared by the FDA. When we are cleared by the FDA for Salix Coronary Flow, that will bring in the combination of those three, which brings that value to each of these systems to really drive one opportunity for us, but opportunity for them as well. We're focusing on accelerating the SAPPHIRE study from an operational perspective. We should have all those partners announced by the end of this year.
We expect him to have our flow module cleared in the new year as well. Really building on our customer support and customer experience team in the U.S. to be able to work with customers locally instead of us flying from here and trying to support them from there. As Bernie mentioned, Alison Plummer is our first key hire in that space. She's our Customer Success Director who to be honest is quite a unicorn in our because she's not only experienced in customer success and customer support, but she's also a payer and insurer expert. We've got sort of two in the one which is rare to be honest. Welcome Alison.
Yeah, the third pillar is really then scaling and building the foundational platform to scale, which is setting up an executive structure in the U.S., building a clinical advisory board to help us clinically be front facing to many of these hospital systems, as well as setting up the team members together with Alison to help support the foundation customers as well as the SAPPHIRE partners as we bring them on board as well.
If I look at the first pillar from our foundation customers, many of you know we have Tanner Health, we signed them up earlier this year in a commercial agreement, a five-year commercial agreement that is really based on Salix Coronary Anatomy as the first component of that, which is the $600,000 you see of their U.S., but in that pricing agreement we have price for plaque, Salix Coronary Plaque as well as Salix Coronary Flow. At that point we were not cleared for Salix Coronary Plaque. Revenue from Tanner will be over and above the $600,000 as they start clicking on the plaque module as well. Cone Health and Northeast Georgia, we are well down the pathway in advance with them around commercial discussions for the pricing agreement. As mentioned, we expect to have that completed by the end of this year.
The use of or the partnership that we've had with these three has helped us build that foundational platform and blueprint to learn and understand what the U.S. health system is like so that we can accelerate and provide key people like Alison the resources to help us accelerate in the U.S. as we go forward. We'll be using and we'll be working closely with these as reference points for other hospital systems in the U.S. as well.
John, is it worth mentioning the number of scans they do at the blended rate?
Yeah. So these hospital systems perform about 15,000 scans per year. On the previous chart, the pillow chart that I mentioned around our different pricing, the blended rate for all of those modules of ours is around about $850. Which means from these three partners we expect to generate roughly about $12.5 million in revenue from these three, which as we go forward will get us towards break even in FY 2027. As we progress into FY 2028, we start signing to expand that further. We are working very closely with these and we'll accelerate these as we go forward. The second part of our pathway to commercialization in the U.S. is the SAPPHIRE study. That really has two major benefits.
One, a clinical opportunity for us where we have a novel component called Plaque Dispersion, which is a patented technology that really looks at patient risk and tries to identify what that risk may mean for a patient and whether they are going to have a heart attack or not, and then help shapes the way we treat those patients going forward. The second pathway, which is a commercial strategy of ours, is bringing on the centers like Massachusetts General Hospital, Ascension, Piedmont Healthcare and Huntsville Hospital and a few others that allow us to in parallel bring those on as commercial customers, so that we do not have to put a big sales team on the ground, but use the study as a mechanism to drive that pipeline for us towards commercialization. That is really why we are focusing on that support structure that I mentioned a little earlier.
We're going to continue to push these and you'll start seeing more of the collaborators being announced as we go forward through the next couple of weeks. In the new year we'll start kicking off the study, but also then start looking to progress the commercialization pathway with some of these partners as well. What it really means for us as well is not only commercially are we able to have long-standing partnerships with them, but we're able to market our products and build awareness in the U.S. through publications and through conferences, which is key to the U.S. and clinical system for building credibility, for building awareness of who we are as a company.
It's worth mentioning how many scans?
Yep, that's a good one.
Yeah.
The reason why we're focusing on these is that they perform about 400,000 scans a year, this group over here. It's a substantial volume for us. At that $850 blended rate, that's $300+ million in revenue opportunity for us, which is really why we focused on this pathway and not having to build a big sales team on the ground to try to bring in as many customers as we can because A, we're not gonna be able to support it and B, we've got enough build out here just through these partners by accelerating through SAPPHIRE as well. It's a very strategic path that we've taken through SAPPHIRE and key opinion leaders to help us grow our opportunity in the U.S.. The third pillar, as I mentioned, was the operational infrastructure.
What we are now actively working on is expanding into executive team in the U.S. that will help drive our growth over there. We are looking at bringing in a U.S. President that will lead the operational structure of our U.S. entity. Underneath that person we will have U.S. reimbursement specialists, which is currently a combination of customer success and reimbursement with Alison. We may extend those as we bring on more partners. Clinical field specialists. We have made our first hire, ex-Siemens Healthineers employee, but also an ex-HeartFlow employee. We are very excited about her coming on board. She has great technical experience and that role really is a mechanism for us to help work closely with the clinical team in the hospital systems so that they are providing us with the best image quality, and we are helping them on best practices as well.
Integration specialists, which instead of us having to perform all that work over here in Australia, we'll have a team on the ground over there that can work with our team here in Australia and provide that 24/7 integration support when we bring on new customers. We really now are looking at establishing a clinical advisory board, which will be a combination of our SAPPHIRE key opinion leaders and forming part of that clinical advisory board to be the clinical face of the company, not only to drive future product opportunity, but also be the front face for investors as well as introductions into other hospital systems in the U.S.. From that group, as I mentioned, Tanner Health, Northeast Georgia, Cone, if you look at where they are geographically placed, all in that Atlanta, Georgia area, Ascension is in Missouri, so it's a little further out.
From those three foundation customers and Piedmont and Huntsville, they're all in a very close geographic location to each other, which means that U.S. Support podcast that we're trying to set up just makes sense to put that in that Georgia, North Carolina area so that we can focus on those customers. As we bring on the other hospital partners, we'll start expanding those into other team members that are put in the right locations for each of those groups that we bring on. As an example, HCA is headquartered in Nashville, but they have 220 hospitals across the whole of the U.S. They will more than likely need a dedicated support team just to support the size of that type of group. Same thing with Ascension. They've got 90, 92 dedicated hospital systems plus another 27 partner hospitals.
It's a very, very large system that we'd have to work with. Us focusing on, sorry, us focusing on that location is a strategic move for us to be focused on the key partners first, the foundation customers, and then expanding onto the SAPPHIRE partners and then move on from there into others.
The fact that you're moving there.
Yes, and I'll be moving into the U.S. next year, and that will, hopefully, help drive a lot of the business as we go forward as well, just purely because of the relationships that we have with a lot of the hospital systems in the U.S. and what we've opened up up until now. To wrap up where we are as a company, we're very, very focused on three major areas of driving customer and commercial success. The first one is we've got a superior product compared to what's out there in the market, and we'll continue to enhance that through an ongoing, innovative roadmap that will keep on bringing value to customers. The second part is now through the team with Alison is really showing that customer experience and making sure that we've got that great customer experience to compliance to our customers.
Because a product is only one part. The customer experience and the support that we provide keeps them sticky and keeps them better into a software like ours. The final piece is really making sure that we're able to be creative in the value we bring through pricing structure. I don't mean cheap, I mean creatively being able to work with those hospital systems so that they are seeing revenue opportunity and profitability while we generate revenue as well. These are the three major areas we're focusing on. Ultimately those will lead us into what our major purpose is as a company, which is saving a life.
We're driving that heavily as the more we get this product into the hands of our customers, the more opportunity for patients to go through our software and be treated well and be diagnosed properly and hopefully saving their life. To summarize where we are and the outlook from us as a company, our commercialization activities are moving very well and we'll continue to push for revenue growth through our foundation customers. We will be looking to move more of the discussions with our SAPPHIRE partners and closing that off by the end of this year and then moving towards commercial discussions with them over the course of 2027 and 2028. We have Salix Coronary Plaque and Salix Coronary Anatomy cleared.
Our focus is to get the flow product cleared to solidify our foundational platform and really then drive the operational infrastructure in the U.S. so that we can make a meaningful impact in a structured manner and an efficient manner in the U.S. as we go forward for 2026 and beyond. I will stop over there and leave it open for questions if anybody has any thoughts. Yes.
Thank you very much for that, John. Andy Farrance. My name.
Is that on David?
Yeah.
Is it green on the bottom?
Yeah, it seems to be working. Thanks for that, John. Andy Farrance.
My name.
My question is, does the board have?
A target margin for financial year 2026 in terms of earnings and the money that the company gets to keep and grow with?
Yeah, look, I mean, Andy, appreciate the question.
The.
I mean, it's a typical SaaS product. Margin wise, it will be typical SaaS margins, really high. We're focused on making sure we're getting the product into the hands of the customers first and generating revenue. As we grow, the business margin will come from that, but you can just, it's a SaaS product so margins will be high as we go forward.
I didn't quite get the question, but you're talking about the financial performance in FY 2026.
Do you have a target margin in terms of earnings? Second, got barriers, medical partners.
I was curious about whether the board's thinking about earnings margins at the moment.
Yeah, I mean I'm happy to take that. As John said, we're born in the cloud. Typical SaaS margins. I guess if you, if you know Pro Medicus, you know they're, they're generating sort of 90% + GP. Their net NPAT margin is north of 50%. That is what you can expect for, expect from us in a few years time when we've got generating substantial revenue, controlling our cost base. In terms of our FY 2026 performance, obviously we're still building out so we're expecting to make a loss pretty similar to what we're doing, what we've done in FY 2025. It is really around FY 2027. We've been guiding the market to having those foundational customers about 15,000 scans. Hitting FY 2027 at that full cadence. That is when we're around that break even. Currently burning around AUD 5 million a quarter if you convert that.
I think John said that 15,000 scans at $850 blended rate is about $12.5 million , converts to about AUD 20 million at the current exchange rate. That is sort of around the break-even number for FY 2027. We aim to bring on, you know, at least one of the SAPPHIRE partners during the course of FY 2027 so that when we hit FY 2028 we can be profitable and move on from there.
Bruce Fielding, is there a development pathway beyond SCF?
Yeah, we've got a strong and rich roadmap. As we shift away from just the coronary arteries, we're shifting into whole heart as well. The coronary arteries provide a massive opportunity for us. If you look at some of the other major diseases or issues that the heart has, like the structural side, the muscle, the valves, there's things called transcatheter aortic valve replacement, which are high value procedures. When I say high value, this costs $30,000-$50,000 just for the procedure in the U.S. There's a big focus for us to move beyond just the coronary arteries, but to really wrap the whole heart as a whole into what our project roadmap looks like. That's just the one part. Then obviously things like expanding on virtual procedure planning so that there's.
We're not only combining the imaging doctor but also the interventionist into using CT is a major focus for us.
Bruce, you can be rest assured that we'll continue to spend on R&D because it's what we're saying to our customers in the U.S. is that this is what we have now, which is the clinicians telling us it's a game changer having FLO and plaque in the same point of care setting. That is not where it stops for us. As John just explained, we'll continue to develop these new products, but we don't want to get the market too focused on what those new products are until we have the current suite of products in the market generating substantial revenue and profits for shareholders.
Speaking of shareholders, obviously, you know, you focus on the U.S. market driven by the size of the market and your ability to penetrate through the partnerships, which is, seems to be playing out well. Has there been any consideration given to some form of not listing in the U.S. but perhaps depository certificate approach or something like that to create liquidity for the share the company in the U.S.
Look, I think it's a good question if you look at the IPO of HeartFlow and the Nasdaq. Sort of three months ago or thereabouts, massively successful in terms of, you know, shares being issued at $19, currently trading around $35-$36 per share, market cap around $3 billion U.S., AUD 5 billion, I should say. The sophistication in this space by investors in the U.S. is markedly different from what it is here. There are lots of specialists in the U.S., the understanding of the healthcare sector is very sophisticated. This company going forward will have a more U.S. look about it every time we have these meetings as to ultimately where it is listed. That's a decision for the future. It's not for now, but we're, you know, we're certainly aware of, aware of that.
We've had some discussions around that, but we're firmly fixed on the ASX and helping to educate our shareholder base and the investor community around what we're doing, how we're doing it. We've been very fortunate that HeartFlow did list a few months ago because it's quite a sort of a North Star in terms of, you know, someone who's operating in this space. You know, yesterday John and I had a call with an insto that had HeartFlow out here as the leading example of what you do in this space. I would argue that it's not, I mean, fantastically successful listing, but they've got less than 2% of the market. Their main product is a flow product. So 99.99% of their revenue comes from their flow product, 1% from their plaque product.
We're not initially, we're not competing directly with HeartFlow because we've got plaque approved, they've got their flow product, but they've got that human in the loop approach. They're expensive, they charge more than the reimbursement, and they've been around for 10 or 15 years. It's a hybrid architecture or technology that's taking to market. Initially it was sort of server based and the legacy is the fact that it was server based and they're now applying AI to it. Once the human has done their work on the scan. Fantastic for us that they're out there, shows what can be done in terms of valuation uplift. Here we are at sort of AUD 550 million ourselves. We're a tenth of their market cap. You know, we're around, we're here to. We're representing all shareholders and trying to deliver value for shareholders.
We would be derelict in our duty if we did not consider something like that down the track, but it's too early.
Yeah.
I will say as well, Bruce, the interest we get every time I go to the U.S. and represent hospital systems or investors over there is substantial because of all the reasons Bernie just mentioned. I'm in New York from next Tuesday, next week, presenting at a large investor conference over there. Primarily because there was immediate interest when we demoed the software and we showed the analyst, the senior analyst that was part of this group, what we do, there was an immediate invite to present in front of our competitors at that conference. There's substantial interest. I do agree with Bernie. I think there's so much upside just being where we are now that there's a long runway of opportunity before we actually even think of what happens in the future.
How do we handle the questions from the online community?
It's a good question.
David, how do we handle any questions?
Are there any other questions?
There was one from Bill Leister, which I'll address. He is a shareholder of ours. He asked the question, do we generate revenue through the SAPPHIRE study itself or, sorry, are we able to get reimbursement through the SAPPHIRE study itself. It's a retrospective study. We are connecting to the hospital systems, PACS systems and getting scans that are already being performed and being sent to us so that we can analyze those and then perform a correlation to see whether we can predict risk or not. The answer is no, we won't get paid for that. As I mentioned earlier, the pathway is really in parallel to look at commercializing those customers as we go forward.
If you think about an implementation or an integration with those partners, apart from the negotiations around a commercial contract and so on, a key part of it is integrating into their PACS system. We're actually doing that as part of the study. We'll tick that box and it's easy for them to become a commercial customer because the integration into their PACS has already been done.
Quite simple.
But we've.
Sorry John, you've spoken about the reimbursement quite a lot. There's obviously a bit of policy volatility in the U.S. as well. How stable have those reimbursements been and how important is the level of the reimbursement to the potential growth if it was to reduce or change? Seems like you've got a competitive advantage, but perhaps you could just.
No, it's a great question, Nat. Maybe just to retract, how stable are the reimbursement codes in the U.S. for what we have? I'll give some perspective on where it's currently come from. The CCTA reimbursement doubled over the last year and the primary reason is because there's a big shift away from invasive procedures and stress testing because of the inaccuracies or the inefficiencies around downstream testing from those types of procedures. It costs insurers a lot more sending them down those procedures. CMS, the Centers for Medicare and Medicaid Services, doubled CCTA reimbursement. That hasn't decreased and that will continue to increase because you are able to see more patients off a CT scan compared to some of the other procedures. They really see an opportunity for throughput there. The second one around plaque analysis, that has stabilized at $950.
We don't see that changing in the near term or midterm because, same reason, the cost to perform downstream procedures is substantially more than paying the $950 here that CMS is giving. They are trying to incentivize—I won't say, I'll put in bunny ears—screening by looking at plaque, which is a precursor to narrowing, and that narrowing is a precursor to an event. Using the reimbursement and throwing the carrot out to the hospital systems and the doctors to look at plaque will save money downstream and get patients to the right care as well. We don't see that changing either. The third one around the blood flow reimbursement, that increased from $987 to $1,017 probably about eight months ago.
Similar reason insurers, specifically the private insurers, are pushing back on doctors sending their patients to diagnostic catheterization or invasive wire in your leg because it is cheaper to have them do this blood flow analysis through CT than having go for a secondary or third test. We do not see that changing. What we do see is that there is a massive push in the U.S. for value based care, which means that hospital systems are going to be incentivized through the government to report better efficiencies. If they do report those efficiencies, they will be incentivized to a monetary incentive to meet those efficiency standards or to get through more procedures of a certain type. That will continue to support us because we can obviously help those efficiencies and drive the throughput through there as well. Long story. For a long answer. Very.
For probably a short answer, we don't see that changing in the near term.
All right, if there are no more questions, then we'll wrap it up. Thank you very much for your attendance both online and in person. Thank you and have a good day.
Thank you.
Thank you.
Okay.