Hi everyone, I'm Ron Feiner from the Medical Device Team at Oppenheimer. Welcome to the 2024 Oppenheimer Healthcare MedTech and Services Conference. Very happy to have with me Hyperfine. With us here are CEO Maria Sainz and CFO Brett Hale from Hyperfine. Hyperfine develops the Swoop Portable MR Imaging point-of-care system, and Maria will have a presentation. After that, if you have any questions, please type them into the Q&A, and I will get them over to her. With that, I'm happy to turn the microphone over to Maria. Thank you.
Thank you. Thank you very much, and thank you for the opportunity to present to all of you here today our Hyperfine story. So I'm going to move through our disclosures and get things started. So, as was just mentioned, we have a unique ultra-low field portable brain MRI system. It is the first in its kind, and we're developing clearly a new category of brain MR. Our vision is to make sure that we transform the opportunity around brain MR in making brain MR accessible, equitable, and affordable across the continuum of care, across healthcare systems on a global basis, to serve a vast majority of patients that today, unfortunately, do not have ready access to MRI. What our device does is provides really a clinical decision-making tool so that a clinician can make an early and/or a timely decision around the care of their patient.
They could use our device to make a treatment decision. They can also use our device to make a discharge decision, and both of those have incredible clinical value, but also very significant economic value. As I've said, it is brain MRI, so it actually allows us to access patients of many different brain conditions. But the most exciting opportunity in front of us is the opportunity to play in the care of Alzheimer's patients, and I'll go into that in greater detail in a minute. So, one question, and no one should question the value of MRI. Conventional MRI has been around for a while, and it is clearly a gold standard of minimally invasive, high-quality diagnostic modality for many conditions. However, it is also widely accepted that it is a very limited field, and it suffers from many limitations, the first of which could be just cost.
It is very costly to install a brand new conventional MRI. The cost of the equipment gets added to the cost of fitting the facilities. It requires reinforced floors and shielded rooms. It also requires highly trained and today very difficultly available MR technicians to operate the equipment. With that comes, which many of you may have experienced, significant delays in scheduling an MRI when you have it available to you, and in many settings of care in many countries throughout the world, really a non-availability of an MRI. If we're talking about the hospital setting, a critically ill patient in a critical care unit will also be at risk of significant adverse events if the patient is transported down to the MRI suite versus being able to get a brain scan in the critical care setting they are. So this is our Swoop system.
It is a first at ultra-low-field. Our field of strength is 64 millitesla. So at 64 millitesla, we provide diagnostic quality brain images that are clinically relevant for the clinicians that are reading them. Because of our low field strength, we are safe at any site of care, from a critical care surrounded by a lot of other medical equipment for those patients to an office, to a physician's office in any sort of office building in town. We are the first in this space, and we have a highly proprietary position with 150 patents. It is platform technology, so we're not wedded to just one indication, one brain condition, but we're applicable across many, from acute conditions to neurodegenerative conditions and chronic conditions as well. We are creating truly a new paradigm in brain imaging, making it accessible and affordable, and also equitable.
When we think about global healthcare, our clearance from FDA provides very broad indications for use. So we do not have any age restrictions. We can scan brains from birth to death. And we also do not have any condition limitations. We can do any brain scanning under our current label. We are commercially available. We've been traditionally focused in the U.S. marketplace, and in the U.S. market we are reimbursed using the same CPT codes as conventional MRI. And we also have an emerging global footprint through a number of research partnerships, as well as a partnership with the King's College London for brain imaging of infants in low and middle-income countries. That was funded by the Bill & Melinda Gates Foundation. So this is the new phase of brain MRI. On the left, you see a pediatric patient reassured by their family.
You are not going into a room all by yourself. Your family can stay by your side, hold your thigh while you're being scanned with our system. It is a transformative patient experience. The middle picture shows you how it travels. It travels down standard corridors through standard doors, up and down standard elevators. It can go from the third floor CCU down to the emergency room in a matter of minutes. To the right-hand side, you have a critical care patient being scanned. You see that patient is intubated and also connected to a number of important monitoring and life-saving devices, and he or she is safely being scanned at their critical care setting without a need to move or incur any risk or clunky transport to the conventional MRI.
With this, I think it's quite obvious that we bring a lot of value to the three main constituents: the clinicians, their patients, and ultimately the hospitals and the healthcare institutions. It is truly a highly differentiated patient experience. Any of you that have had an MRI, hopefully, that picture on the left showed how different and more patient-friendly an experience it is. The clinical team is able to use information quickly, timely, early, to make, again, as I said, treatment decisions or discharge decisions. Both bring a lot of clinical and economic value. Hospitals look at it as a way to augment their conventional MRI capacity, which, as we said, is full of challenges.
And with that, either realize incremental revenue from freeing up the conventional MRI for outpatient scans, or potentially decreasing the cost of the care episode by being able to more swiftly move the patients from a critical care unit to a step-down unit, or possibly discharge a patient a little faster because of the ready access to MR imaging that is incredibly valuable to them. So how are we driving the development of this new category and the growth for our business from the immediate to the long term? We have traditionally, and we stay quite focused on the hospital setting today, primarily in critical care and in pediatric use.
We're quickly expanding to the middle section here of this slide, where we have our eyes on an adjacency to our hospital setting in the emergency department for acute stroke triaging, and a very large opportunity right at our doorstep in being able to be part of the amyloid targeted therapies that have come to the market for Alzheimer's patients in the last couple of quarters. Longer term, my personal vision is that they should not be any different than mammograms to monitor breast health for women throughout the world. This is about well-brained. This is about bringing this to the community setting.
Somebody in the U.K. told me the other day to High Street or Main Street, I guess, in the US, the community setting and the primary care setting, so that all of us, after a certain age, or if we have certain risk factors, would have the benefit of knowing earlier what might be brewing in our brains and be able to actually act on it at a time when it is a lot less devastating to us, to our families, and definitely less costly to our healthcare systems. I want to double-click on Alzheimer's. I seem to be spending most of my time on Alzheimer's lately, but I wouldn't.
I think I have heard enough that the last year alone has brought one-of-a-kind and highly anticipated developments in the field of Alzheimer's care, starting with diagnosis, where there is now a blood biomarker and a blood test that replaces a spinal tap for the diagnosis, CMS covering more than one PET scan, so that patients actually can be diagnosed at different times in their life by not being restricted to just one PET. And last, but not least, the first approval of the first amyloid-targeted therapy for Alzheimer's with Leqembi from Biogen and Eisai. I hope I don't need to share with you how incredibly large this opportunity is. The estimate is that half of the 150+ million people in the world suffering from dementia in about 25 years from now will have Alzheimer's, and there is over $1.3 trillion to spend on it.
If you go to the bottom right-hand corner, these amyloid targeted therapies have come to the market with labeling that requires that patients have at least 3 MRIs in the first year of therapy, and those are after, or sorry, before infusion number 5, number 7, and number 14. These infusions are happening every two weeks. So where do we fit in? We fit in right right there, because we do have an indication that allows us, without any additional regulatory clearance, to scan the brains of Alzheimer's patients. We can also scan these patients wherever is most convenient for them. We'll talk about the initial data gathering that we are embarking on in this field, and we're going to be placing our scanners adjacent to the infusion centers to make it a one-stop shop for those patients and their care partners.
Again, I think we are not only able to help in the elite care for Alzheimer's, but we are definitely a tool that can actually make Alzheimer's care a lot more equitable throughout the world, as well as in low-resource settings in the US alone. This is the buzz, and the buzz keeps getting stronger and louder around really the time is now to really think about Alzheimer's patients having options, and us thinking that these options are options that all Alzheimer's patients deserve, not just those of us that have the benefit of highly sophisticated care plans. The highlights are across business journals, as well as very reputable journals as to the merit of the new drugs. I just came back from a conference in Lisbon around Alzheimer's.
A lot of people that have been in the field for dozens of years are really at a time that they did not even envision being in their careers with new developments in Alzheimer's care. So as you think about how we're changing the paradigm, think about what is happening with a conventional MRI for these patients. Their treatments are happening at infusion centers. But now they need to go separately to an imaging center, if available, at a very prescribed point in time to get their safety monitoring for potential ARIA-related side effects, which is what the FDA labeling is. That is significantly more burdensome than it should be for both the patients and their care partners. Under our new paradigm, we can be at a hospital-based infusion center. We can be at a standalone infusion center.
We can be at the neurologist's office and actually provide that opportunity to safely monitor the patient there and be cleared for the next infusion center. So we literally can be and meet the patient and their clinicians where these can bring most value, but also bring most efficiency and most convenience. So given how enormous this opportunity is, how well suited it is for what we offer, we have really mobilized in starting to build an Alzheimer's program as part of our focus areas for 2024. We are going to be commencing a utility study, comparing our ability to detect ARIA complications and comparing how Ultra-Low Field MRI, portable MRI, compares to the conventional high-field MRI in detecting ARIA complications. This data will be acute data. It won't require any follow-up, so we'll start seeing this data yet this year.
This is how ready and actionable this opportunity is for us. At the same time, we are going to be working on really understanding the market and understanding how this market is shaping. A lot of it is in the making. LEQEMBI only came to the market literally in Q4 of last year. But with that, we're really building a new set of relationships, new advisors, new key opinion leaders, understanding the different sites of care for these patients, from the memory clinics to neurology office to the hospital setting. And really understanding how the market is shaping with really the advantage of really being very agnostic as to how it shapes. We can be there.
Last, but not least, is really helping this market figure out how to optimize the workflow, so that this is truly a therapy that can expand the way the clinical efficacy warrants, and without bumping into workflow challenges. Beyond Alzheimer's, just a few slides to show you how we do business. There are three strategic pillars that I believe are the foundation of our business: innovation, clinical evidence, and commercial expansion. On innovation, incredibly proud of the team on two fronts, the iterative notion of innovation. We have had eight clearances since our initial clearance by the FDA in 2020.
Most of them have been a combination of hardware features and AI software, AI-powered software features, and then a key to innovation is our regulatory capability, which allows us to actually get the clearances in a relatively timely manner, and also add not only U.S. clearances, but also international clearances. So we have CE certification under the new MDR regulations, and we have a number of other Canadian, Australian, New Zealand certifications as well. On the clinical data front, as I said, these studies and these publications only show the potential of the device and foster adoption. They're not intended for regulatory purposes, since our labeling is very broad. We have over 30 publications to date. Actually, just today we got one more publication with patients undergoing our scan when on ECMO, which is extracorporeal membrane oxygenation.
For those of you that may not know, but it basically is life support. We already have publications and studies across the continuum of the three types of opportunities that I described in a previous slide. We're actively enrolling in ACTION PMR, which is a stroke, acute stroke study, and very soon you will see another name underneath that, ACTION PMR, when we launch imminently the Alzheimer's utility study, which will be another prospective study that we undertake. From a commercial perspective, traditionally very focused on U.S., with just a small handful of international distributors. As we've turned the page over to 2024, we've realized that we probably can focus on a number of select large international opportunities starting this year. So we're putting in place that infrastructure, and we start to see some revenue generation from those investments towards the back end of the year.
Then there's always an opportunity to grow from there into a broader global footprint, probably more like 2 years plus out. So I'm going to turn it over to Brett, just cover the financial profile, and then I just have one or two wrapping slides.
Thank you, Maria. We will be hosting our full year 2023 earnings call next week. So we look forward to more information on the full year. What I've highlighted here are our Q3 year-to-date information that is publicly available. We're very proud of the transformation of our business, starting with the top line. Q3 year-to-date 2023, we posted 60% revenue growth compared to the same period in 2022, really driven by a variety of things that Maria commented on earlier, the expanding use cases.
We see a broad range of use cases, even in the beachhead markets that we are in today, the growing body of clinical evidence, a skilled commercial team, and strategic price increases. We've increased the price associated with our device the last couple of years. And so we've seen a nice uplift in terms of our average selling price of the device. That has translated into a very healthy gross margin for our business, even at the scale of business that we're at today. We have a very healthy gross margin. We have over 40% gross margin Q3 year to date 2023. And then, lastly, spending discipline. That's been our high focus area for the business. We posted a 40% reduction in our cash burn Q3 year to date 2023 versus 2022.
We have over $85 million of cash and cash equivalents as of September 30th, 2023, and we have a cash runway for the business through the end of 2025. So we have the financial wherewithal to execute upon the business plan that Maria talked about. With that, I will hand it back to Maria for closing comments.
Thank you. So I have a great leadership team, two of us here. But Tom is also an incredibly accomplished Chief Operating Officer. All technical developments and clinical developments are under his remit. And I'll just close by saying, yes, we are the first FDA-cleared, portable, ultra-low field brain MR system. We are here to not cannibalize the conventional MR system, but really make MR really accessible, available, affordable across the continuum of sites of care and global economies.
We have demonstrated to be a prolific engine of both innovation and data. We have a very clear growth footprint from the hospital setting to the community setting, with a near-term opportunity around Alzheimer's that is incredibly compelling. Our financial profile at our small scale is solid. And we're doing this with a team that is committed to delivering year after year. Thank you.
Thanks, Maria. I popped on. Hi, everyone. Steve Lichtman from Oppenheimer. I'm gonna turn it to Ron, actually, for the first question. And I have a question, and we do have a question that came in through the line as well that I'll get over to you. So Ron, why don't you go ahead first?
Yeah. So if you guys can talk a little bit about kind of the business model. Is it purely capital equipment placement?
So you sell the device to the hospital, and that's where it ends, or is it every time the device is used, do you generate some sort of revenue, or are there services, consumables associated with it? And how do you see them kind of change the gross margin profile over time with those kind of things?
I'll address that based on the U.S. So we sell the device up front. Our MSRP is $425,000. That covers the installation of the device and the first year of technical support and software upgrades. Starting year two, we have recurrent revenue, which is service revenue. It's 10% of the acquisition cost. So it's $42,500 per year, and that covers the technical service and the software upgrades from years two and beyond. We usually do 5-year contracts. So there's four years of recurrent revenue from a service component.
And of course, that builds up over time as the installed base grows. We have had two price increases in the last 24 months. Price, per se, has not been a barrier to adoption. So our gross margin performance, as Brett was just mentioning, was also a function of our improved pricing. Price, of course, is not the same globally. So as we expand a little bit more outside of the U.S. and operate through distributors, we'll have a blended ASP. But that's sort of, I think, the parameters that you were asking about.
Great. The question that came in, Maria, was, you know. Given your the question is, you know, you have a novel product offering and first mover advantage. You know, what has kept sales traction from being even more rapid or being more robust? What are the pushbacks from potential buyers?
So we do have a first mover advantage, but we're also building a new market. So any of you that are veterans in health technology know that it does take a little bit of time to really establish a new category. Most of our business to date has been in the hospital setting, and in the hospital setting we probably have the most complicated alignment of stakeholders to make a decision to really add on this kind of brain MR to their suite of MRI offerings. On the one hand, it is a still MRI. So radiology weighs in heavily, but they are ultimately not the consumer of it. A clinician could be a neurosurgeon, could be a stroke neurologist, could be a neurointensivist. It's usually the champion.
It's a connected device, because you want to make sure that it's connected to the electronic medical records as well as PACS system. So there's a cyber component to it. And then, of course, it's a multi-year contract. So you have a legal and financial component to it. So it is capital equipment, and it is a new market. Probably that is what has caused what I have often quoted to be 9+ months in terms of sales cycle, and often not within the capital budget, which is a blessing and a curse, because we have access at the price point we play for two strategic funds. Which are great. But sometimes they're also repurposed for other things. The roof leaks, or there's some other capital equipment that becomes a little bit more important at that point in time.
So I think, as we start looking at our vision and getting outside a little more squarely in the decision of a clinical user, I have high confidence that we're gonna be accelerating and streamlining the sales cycle.
All right. You know, the question I had was, you mentioned during a presentation, Maria, you know, the numerous infusion centers, both on the infusion side and infusion center and outpatient that are potential. So as you think about where to target in terms of, you know, sort of logistically being close to these centers. How is that? You know, how are you making those decisions? And how many centers should we be thinking that you'll initially be targeting here?
So that's part of, I think, the second and third pillar of our program here, which is.
We really are a little bit agnostic as to where they need it. We want to put it where it is most optimizing of workflow. So in some in the utility study that we're starting, we're gonna be having five devices adjacent to infusion centers. But I also have heard other people that would prefer to have it in the neurology clinic as those patients come back to them for follow up. And that is a better place for imaging. That is their recurring sort of care visit. So we would like. We can plug into any workflow, any care model, any care navigation. Also, these drugs will evolve over time. And probably will go to sub-Q and injections at home. So maybe the infusion centers are long term, not the place where this really goes, but it may need to be in nursing homes.
It may need to be in memory clinics. All of those are. Yes, we can. Yes, we can. Yes, we can. And we can also move. So nobody is forced. If you're you don't need to build anything next to an infusion center to then not use it when this goes sub-Q. You can literally wheel it from the infusion center to the neurology clinic when patients don't need it anymore. So we are playing with that versatility, and we're really trying to understand where the market is shaping and where that workflow is optimized by what we offer.
What should we expect this year in terms of your sort of visibility in front of potential customers at conferences and things like that, as you continue to educate the market on ultra low low field.
So right now, the utility study data, the first.
We're looking for ARIA. ARIA presents in about 10% of the patients. So we're not. We're gonna need to enroll a number of patients before we see ARIA cases. But we will see them this year. I am convinced we will. There is an Alzheimer's meeting at the end of July where we're gonna be on the floor, and we're gonna be showing that you can scan in any site of service. We are already engaged with a number of new KOLs. Not only in telling our story, but really using their advice as it relates to how we should be thinking about utilizing this tool to the benefit of clinicians, their peers, and their patients. And last, but not least, I would say we're going to be also working on really understanding what are exactly the protocols of brain imaging that are being used.
Just like we did with 8 clearances of AI powered software for our other sort of image, we could potentially undertake some kind of additional sequence refinement, or something like that with our software. If we feel that that might be necessary. So we'll see data. We'll see more engagement with KOLs. We'll see presence at conferences. I just came from an international conference, and I was a little bit of the fly on the wall, walking the hallways and realized that most people have never heard of us. So we need to. We need to change that, and we're changing that this year.
Great. Well, we're out of time. I wanted to thank Maria and Brett for being with us today. Thanks, everyone, for joining us. Hope you have a great rest of the day and week. Thank you so much.
Thank you.
Thanks for the opportunity.