Thank you for standing by, welcome to the 4DMedical investor webinar. I would now like to hand the conference over to John Hester, Senior Analyst at Bell Potter. Please go ahead. Thank you very much, and welcome to everyone who's joining the call today. It's my pleasure to welcome you all here to today's webinar. My name is John Hester, and I'm the moderator for today's discussion. We're joined this morning by 4DMedical CEO and Founder, Dr. Andreas Fouras. Also here today is our special guest speaker, Dr. Joseph Mammarappallil, associate professor of radiology, Duke University School of Medicine in North Carolina. Welcome to you both. Our discussion will center on the latest data set from 4DMedical's CT:VQ exam, targeted to patient selection for lung volume reduction surgery, or LVRS, as I'll be referring to it. For those of you not familiar, LVRS is a surgical procedure performed by a thoracic surgeon to remove the most diseased, over-inflated lung tissue in patients with severe emphysema, allowing their remaining healthier lung to work better. The key point is that LVRS is not suitable for all patients, and careful patient selection is very important because the procedure carries a meaningful surgical risk. With this in mind, the findings of the recent clinical trial investigating CT:VQ to aid in patient selection were presented at the recent American Thoracic Society conference in Florida last weekend. Here to tell us more about the study and its findings, it's my pleasure to bring in Andreas, who will introduce Dr. Mammarappallil. Andreas, over to you. Yeah. Hi. Thanks so much, John. It's a pleasure to be here, really thank everyone for their interest in joining the call today. Yes, as John said, we had a really exciting ATS meeting. It was really a great pleasure to have Dr. Mammarappallil there with us. He brings really significant expertise. As a radiologist who has deep expertise in this space, we found that the pulmonologists there were really keen to hear from him, hear his input and his thoughts about how he can benefit their patients and their practices. His thoughts on that. Joe, we do have this paper there, I'd be very keen to discuss it. Perhaps if you could just introduce yourself first, then I think you also had some cases that you also wanted to share. Anyway, if you could just introduce yourself to everybody. Yeah, for sure. Thanks, Andreas, and thanks for everybody for having me today. Yeah, my name is Joe Mammarappallil. I'm a cardiothoracic radiologist at the Duke University Medical Center. Essentially, what that means is I read a whole lot of chest imaging on patients with chronic lung disease. We are coming back from the American Thoracic Society this week, and we were really energized and jazzed about what this technology can do. With my interactions with pulmonary colleagues, we really quite nicely see the benefit of this technology. We're going to be talking about non-contrast CT:VQ imaging. Again, I want to emphasize the non-contrast aspect. Does not require contrast, and we'll go to the next slide. I want to show you some cases. Okay, this is a standard chest CT, and I'm just going to tell you that this patient has chronic lung disease. What do they have? They have dilated airways. We call it bronchiectasis. I did a lot of training, so it's hard for all of us to appreciate those findings, but there is thick wall dilated airways on this non-contrast chest CT. This is what I read every day. This is purely anatomic imaging. I cannot give any functional imaging or functional assessment of these lungs to our pulmonary colleagues. When we add this technique of CT:VQ. Next slide. The first image you get is a purely ventilatory scan, and green is good. What we're seeing here is adequate ventilation of both lungs, the left and the right lung. Really nicely displayed here. The next image shows you the actual added perfusion to the scan. On the next slide. If you look at this is markedly abnormal. Essentially in the periphery, the outer areas of both lungs, what we see is a whole lot of purple, and that represents a lot of perfusion defects. It's a significant amount. When I go back and look at the anatomic image, it is difficult for me to parse out anything of what I'm seeing on that far right image. I am giving our pulmonary colleagues functional imaging here that is telling them that there is a whole lot of perfusion abnormality going out in the outer aspects of the lung. This comes into play big time with patients who may go on to treatment. These treatments become very, very, very expensive, and we want to be able to monitor these patients, and we can't monitor them with just a standard anatomic image. We'll go to the next slide so I can show you this next case. This is a COPD case. A standard smoker. You can see this is a coronal image where the patient's basically standing up, and you can see the lungs are really, really, really big. Anatomically, I can see big lungs, and that suggests obstructive lung disease or COPD, a patient who may be a smoker. If you look at the upper lungs here, you can see a lot of black. That's what we call emphysema, and that's destroyed lung tissue. Now we're going to take a look at adding CT:VQ to this in the next slide. If you look at here, looking at the ventilation image here, relatively normal. There's some areas of red at the lung bases, but certainly this patient is ventilating quite well. Now, if you look at the next image, what we see here in the upper aspects of the lungs are a significant amount of perfusional abnormality. In the apices, the tops of the lung, lots of defects there, lots of decreased perfusion, but even in the mid portions of the lungs as well. As we briefly talked about, this study guides our surgeons into saying what lobe should we maybe take out because it's not functioning, it's not perfusing. Lots of things to be talking about there. One with lung volume reduction from our surgical colleagues, and also with endobronchial valve reduction from our interventional pulmonary colleagues. We'll finish up with this last case here on the next slide. This is a CTEPH case. CTEPH is basically a patient who may get pulmonary embolism, so a whole lot of blood clots, and they get chronic pulmonary embolism with a lot of clots in the lungs. Ultimately, they basically develop a chronic lung disease. If you look at the anatomic image, so this is the image that the chest radiologist is going to read, what do we see? Not too much. They look relatively normal. There are some areas of emphysema, really relatively normal. It comes into play when my right heart cardiologists are saying, "Joe, we're going to put these patients on these new treatments to reduce their right heart pressure and improve their CTEPH findings." How can we actually monitor that? It's very difficult with anatomic image. Here with a non-contrast CT:VQ, if you look at the middle image there, that's a ventilation image. Again, the issue here is not ventilation. Everything is relatively normal, relatively green. However, when you go to the perfusion image, what do we see? Pretty much upper lungs, right greater than left, areas of perfusional abnormality. Certainly nothing I'm going to be able to pick up on that anatomic scan. When you treat this patient, I now have a baseline where I can say, "This is where they're at. Are they getting better with these new meds that are very, very, very expensive?" These are 3 cases that I have that have really helped highlight how valuable this technology is. Again, emphasizing that it's used with our regular CT scans and also that it's non-contrast. Okay, Andreas, or actually, Joe, I'll come back to you. For years now, we've had nuclear medicine to help you in the diagnosis of these patients. Just explain to us how you would potentially use nuclear medicine in these cases and why CT:VQ is transforming your management of these patients. Well, nuclear medicine has been what's called the gold standard for VQ for as long as it's been around. The reason why I like this technique over that is this is done with a regular CT scan, with an inspiratory and expiratory image, and it's also non-contrast. When you add the nuclear medicine portion of it, honestly, it gets very cumbersome because those scans take longer, and they're in the different part of the department, and it's a very, very low-resolution examination where I'm trying to not see the really major perfusional abnormalities that I can see with the CT:VQ technique. It's very difficult with the VQ scan. Okay. Andreas, let's come back and have a chat about then the paper that was released recently and the key findings from that. Yeah. Look, thanks so much, John. It was really great to be able to, with the pre-release of the paper, to share some of these results at the conference. I think for me, what I find exciting about it is that we've really been pitching out there to doctors saying, "Look at this technology. It's a much more convenient workflow. Look at the results. The images that it gives are already natively on the CT, and the quality looks really clean and sharp, and it makes sense that all of those things should be able to benefit your practice and your patients." Here we have our first kind of outcomes-based study that really directly goes to some specific benefits. In the paper, the paper reviewed 50 patients who underwent LVRS, and had 23 of those 50, so 46% of those patients had a successful LVRS. That was where, basically, they had improved lung function after the surgery versus before. The study found that if we had been able to use CT:VQ to streamline, to select the appropriate patients, we would have been able to select a patient group that would have had 76% success. Potential there to have a really dramatic increase in success for that operation, allowing both folks who have low chance of success to be spared, sparing the healthcare system a bunch of money, but also potentially allowing a better review, a better funnel to potentially find even more patients that can benefit from this procedure. Also as Joe mentioned just before, there are other procedures and other therapies that the patients have. It is not just only one option. Mm-hmm. Joe, how do you interpret that data, and how does that aid in your practice in your hospital? Well, like you kind of mentioned, John, putting in endobronchial valves can be a very morbid procedure. I believe the data is somewhere a little bit above 20% will have some complication. When they get complications, it can be really, really bad. If we can streamline those patients and be able to capture the group that's actually going to benefit, you could pivot them from potentially a surgery to an endobronchial valve, or from an endobronchial valve to a surgery. I think it's definitely way better patient care. Okay. In the examples you gave there, that patient with severe or very poor perfusion, what would be the outcomes for that patient, and how would this data change the way you manage that patient? It's interesting because a lot of chronic lung diseases, 15 years ago, you had a disease, it didn't matter because there weren't treatments out there. Now I do a lot of work with pulmonary fibrosis, and those meds didn't exist in 2014. Now they've been around for 10 years. Those meds are really, really, really expensive. Yeah. Essentially we have a very poor way to monitor those with PFTs, which is global metrics. Here we're giving you regional information and functional information of the lung, and you can see that change on follow-ups. Okay. What were the outcomes for that patient with very poor perfusion? He or she had good ventilation, but very poor perfusion. Yeah. That first case was a cystic fibrosis case, and that patient actually went on to lung transplant. In your discussions at ATS in last couple of days, what was the feedback you received from your peers about your presentation and the way you're using this technology? Well, it was really interesting because when I first presented at an innovation hub where a bunch of physicians came, several physicians came up to me and said, "Wait, this is non-contrast? This can be done on a regular CT scan, and I can get functional information by adding one more scan about my patient," and one brought up CTEPH in particular, "and actually get me some numbers about that?" I was blown away by this because I've been talking about this for a year now, but to actually see the pulmonary people say non-contrast immediately on the CT scan, getting functional information, that was very impactful for me. No nuclear medicine results same day. Exactly. Yeah. Okay. One thing I'll say as well, John, Oh, please go, Joe. No, I was just going to say, I can barely read a VQ scan, so I can imagine our pulmonary colleagues. Mm-hmm. Look, in the theater where Joe presented that, we literally had standing room only, and folks kind of crowded out to all around the outside of that. There was so much interest in there. Just more broadly, not wanting to pollute the message of today being largely a clinical and expert message, but you did ask, John Hester, about the level, how folks engage with us at ATS. I'm pleased to say, we've been at ATS 4DMedical for nine years now, and we had more leads generated, more sales leads generated, more doctors coming and visiting the booth and asking how they could use it than we did in the previous eight combined. Really, now that we have this non-contrast solution, I think this is the kind of the moment, the step change moment, adds that convenience around that question. We hear the same question, too. Is it really true? How do you do it? How is it possible that you can do this without contrast? Yeah. It really is changing the level of engagement we get from our clinical colleagues. To Joe's point, I think the key thing there was the functional data that you're getting. The anatomical thing is one thing, but it's the functional data that is really aiding the decision-making process for these very ill patients. Joe, changing tack slightly, how many of these lung volume reduction surgeries does Duke perform each year? Give us an idea on the commercial aspects of the business of this medicine. Yeah. Lung volume reduction, you've got to have a very specialized surgeon who's very good at this to be able to do these kind of techniques. If I had to guess, because I read the radiographs, we're probably doing about 15 a month. That's 150-ish, almost 200 a year. We're a high volume academic center. Yeah. I don't know what the numbers are nationally, but that would give you a Duke impact. That's nearly AUD 1 million worth of revenue a month, just from the surgical fees on working on a $50,000 sort of U.S. number. Yeah decent sort of business. Now, how do you think this will change going forward if you've got better data, able to make better decisions? Well, I can tell you, I just pitched it to a couple of CT surgeons. They were beyond excited to not ever have to order a VQ scan. Okay. I would tell you, it can streamline patients with COPD and really identify, you may be able to capture more of them. You may be able to say, "Hey, there's more of these patients out there based on this type of imaging." Better streamline patients, "Well, actually, that may be an endobronchial valve as opposed to a surgery. Okay. Andreas? Yeah, I think that's really the win-win where the patients are better selected, which is great outcome for patients. If you're speaking to, say, the CFO of the hospital, they get to see that also this widens the net to capture more patients. Obviously that's good from a patient perspective too, where there's more treatments that are available, edge cases can be found and better refined to find the appropriate treatment. Speaking frankly for the business of medicine, being able to widen that funnel and treat more patients, get them the right treatments is good from that aspect of it as well. Yep. Joe, what are the patient outcomes? Sorry, John. I think it's also worth noting that in terms of adopting this or having this spread across the U.S., the folks that do adopt it will get those benefits. Benefits to patients, better patient outcomes, more revenues, and I think that naturally creates the tension, the competitive edge. U.S. hospitals do compete to be the best in their region or the best in the nation, and they want to have the best technology. Best doctors is great, but combining the best doctors with the best technology is the way to get them to the top of their league tables and the best, biggest programs. Sorry, John. Yeah, no. It's fine. Thank you, Andreas, for that input. Joe, to Andreas' point, how do you see that competition for podium space at your hospital? Is that something that your colleagues and yourself aspire to? As far as being the best center- Yeah whatever faculty? Yeah. We're always like, "Hey, how many lung transplants did we do? Well, how does that compare to Vanderbilt? How does that compare to Pittsburgh? How many cardiac surgeries did we do?" No, that's a big deal, and I'm a big lung biopsy and interventional person. I want to know those numbers. Yeah. Just on a pragmatic matter, what difference does this surgery make in patient lives if you get it right? It's interesting. I always thought, okay, you chop out a non-functional part of the lung, does it really help? Then I put in a chest tube on one of these patients, and he told me, "When I came out of that lung volume reduction surgery, I felt immediately better." I was putting another chest tube in because he had a second surgery, and he was like, "I couldn't wait to get the second surgery. I am immediately better." As soon as he was discharged. It's a game changer. Okay. you discussed also the various therapies, the medicines that are available for the treatment of these patients. Does the CT:VQ exam allow you to monitor the performance of those drugs better? 100%, because you're getting functional imaging, and with that functional imaging, you're also being able to get regional information. There may be only maybe it's the right upper lobe that's the only lobe that's doing anything, and you're going to miss that on PFTs. With this, you're going to see the change in the right upper lobe, and I think that in a AUD 200,000 a year drug, that's a game changer. Yep. And if I can just- Yeah, go on. Joe always speaks so well. If I can just try to explain this the way I've had to sometimes. Let's say you have 5 lobes in your lung. When you're doing PFTs, if you're only interested in the data out of 1 of those, the PFT is giving you data from five of them, and that's all combined into the one space. The doctor has to try to work out, do their best to try to understand how much of that signal they're seeing in the change is relative to the lobe they care about versus the other four that are sort of noise on that signal. When you can look at it and see and collect that data directly from each of the lobes on that regional basis, that really changes that signal-to-noise ratio. We get that feedback all the time, that being able to just zoom in and only look at the data from the part of the lung that the doctor cares about is super helpful. Now, Andreas, a couple of weeks ago, you announced a deal, I think it was with GSK or one of the big pharma companies. Yeah, with Glaxo. Yep. Yeah. They are interested in using this drug in their clinical trial process. Let's talk about that for a second then, because it's on the same sort of vein as what we're discussing here. Yeah. I think there's a number of ways that we can assist pharmaceutical companies in their work. One of them is that we can identify and help, exactly as we just discussed here with the identifying, streamlining who are the right people to get lung volume reduction surgery. drug trials can often fail in terms of who are selected to participate in the study. Can you find enough people who fit the criteria as neatly as possible who are likely to benefit? In addition, we can also identify the changes, who's benefiting from that drug throughout that trial. Finally, I think the end goal for us and really the top of the mountain there is when we can be a key part of that development, a key part of identifying who's appropriate for the drug in the trial. We'd love to be that in the clinical world as well, so that folks say, "Okay, let me get a 4DMedical VQ scan, and if they meet these criteria, then I'll put them on the drug because that's what the paper that I read said was the best way." If we can have support from the manufacturers and adding GlaxoSmithKline for their COPD study. We already have AstraZeneca working with us with asthma, cancer, and COPD. Just working out those indications has the real potential for us to make a big difference to healthcare. Lots of people end up on these drugs. It is a long-term opportunity for really significant revenues. In the meantime, there's really meaningful value in that. Folks at hospitals around the U.S. know that AstraZeneca and GlaxoSmithKline really do their DD, and they can see that it gives us really significant validation in the marketplace in the short term as well. Yeah. That's sort of sounding increasingly encouraging. Joe, you're clearly in the early stages of adopting a CT:VQ. Do you anticipate further adoption for this process of monitoring the performance of these medicines? Yeah, absolutely. I think we need more studies like the one we just talked about, the endobronchial valves. As soon as more of those happen, this is going to be an easy adoption just because of how simple it is to get the exam done. Yep. Have you learned anything about the performance of these drugs since you've been using the CT:VQ exam? Anything you didn't know previously? Andreas, you want to comment on that? Yeah. Look, I think, Joseph, I think we're too early to be definitive. Okay On that, in that, Joe's had access to the technology, I guess, advance access for a little bit of time. In terms of clinical use, we really haven't, I don't think, had the technology there long enough to follow patients longitudinally down a drug, down that pipeline. We know with our experience with where we've been working with AstraZeneca for some time, we've been able to show in work with them that we've been able to dramatically shorten the period of time they need to follow patients because of the sensitivity of the technology. We can reduce time points that previously might've been six-month time points down to three or four-month time points because of that increased sensitivity. Okay. Well, that's good. Joe, just back with you. I just want to round out this discussion now. In terms of getting more universal adoption at your hospital and also in other KOL sites and academic medical center sites, what are the keys from this point to more broad adoption, do you feel? I think the key, number one, is just publications. This publication that just came out in the "Blue Journal" I think is going to be a game changer, because now you're going to have the pulmonologists who put in valves are always like, "I need to identify a patient." They have no way to be able to really identify what patients would benefit. As these studies come out, then people will get more confidence in it, and they'll be using it a ton. I'll tell you, the people who are doing procedures see the functional imaging, and they want to do it. Okay. What's the level of excitement at your hospital? You're clearly converted, but you've probably got a number of skeptics there as well. Yeah. Duke is a skeptical society, that's for sure. We were very, very evidence-based. I'll tell you, the images that I've shown, I've been targeting my surgeons and pulmonology colleagues, they are in love with them. Those are the people I want to impact. Our CT surgeons and our pulmonologists are like, "Functional imaging with non-contrast? Tell me more. Yeah. Okay. What's your expectation for your use of this product over the next 12 months or so? Myself? Yeah, also of your hospital. Yeah I imagine it's got a number of hospitals in the group. Yeah. We're a major respiratory center. We see every chronic lung disease. Essentially the way I look at this is I really want to look at it with interstitial lung disease. I know my ILD colleagues who I've shown it to with pulmonary fibrosis, end-stage lung disease. They really want to look at it because that's where the drugs are. I've also been talking to my cardiology colleagues as well, and those patients with CTEPH and right heart dysfunction. All of those patients have perfusional abnormalities, and I think there's excitement in the group to scan more of these people to see outcomes with those people. Okay. You're sort of painting a fairly optimistic picture there. That's all sounding pretty good. Matt, I'll just bring you in. Matt Tucker, who's the Chief Operating Officer and Commercial Officer at 4DMedical. Matt, good morning to you. You're in Sydney. What's your take on this? I'm in Los Angeles. Oh, well there you go. on my way back from ATS. I haven't made it home yet. There you go. go. I can't keep up with you guys. Matt, perhaps a couple comments from you. Well, I think we talked about this prestigious publication in the "Blue Journal," which is the ATS, the conference we have just been at, their major scientific journal publication. As Andreas indicated, we've had record number of sales leads generated, but the clinical team also presented a record number of posters for us. We had nine posters on display. We had at least three innovation hub discussions. Joe and I did one. Andreas and Mike Lester out of Vanderbilt, and Mehul out of Pittsburgh did another one, Trishul Siddharthan, who I think you've spoken to as well, John, out of Miami. Yep gave a third talk. All extremely well attended. Great level of interaction and conversations off that. My team in the U.S. has never been stronger, and their sales funnel has never been stronger, and really happy with the progress. You were at ATS. What are some of the other things that you saw there, some of the other products you've got there that were of interest to clinicians? Yeah. For that marketplace, John, as pulmonologists, we do need to remember the U.S. system is for profit. Very different to the Australian system where we really don't want more people coming in the hospital door. They're trying to attract and find the right patient to treat at the right time, and deliver the right care too. Our population health screening tools, where we do the screening off the PACS and find the appropriate patient and try and take them down into a suitable patient for the bronchoscopic therapies or the lung volume reduction surgeries, or even just a smoking cessation consultation with the pulmonologist. They're really something that was interesting to the group. Incredible conversations around long COVID. This is still a massive population problem, long COVID. That brain fog they get. Yeah The shortness of breath that is just ongoing. Great conversations around how CT:VQ can actually help identify those patients, from a physiological standpoint and not be bound by just pure imaging. Yeah. It'd be nice to get. If I can just jump in, a cheeky point on the end of that too there. I think I certainly observed directly a number of senior clinical teams from the VA visiting the booth over the course of the conference as well. That was exciting to see that happening at ATS as well. Yeah. Obviously your distribution partner in the U.S. is Philips. They would've had obviously very significant presence there as well. What are they doing with this, Matt? They were really well engaged. They were on our booth. They were part of the team really, just part of the family. They're driving a lot of activity at the moment. Obviously working up some VA opportunities for us, which we. will hopefully share with you shortly. There's a considerable number of academic medical centers where we're hand-in-hand working through sales processes in the final stages at the moment. Okay. All right. Operator, I'm going to pause there please, and I would like to invite one or two questions from the audience if there are any. If we could open the lines up, please. Hi. Yes, thank you. There we go. Just waiting for questions. Yeah. Okay. Looks like we'll just keep going for just a minute or two, operator, if there are no questions coming through. I've just been informed that we weren't planning to ask questions from the audience, so perhaps I'll just take a moment just to wrap things up. Perhaps just a final question to Joe. Joe, can you give us perhaps your expectation then for over the next 12 months or so, what you'd like to see in terms of further product development, or is the product there, do you think, that you need? Everything I've seen with the product is it's ready to go. Look, I was blown away by being able to get this kind of information from a non-contrast scan. Yeah. With the validation studies that have been performed, it's just very exciting. I'm ready to use this clinically and just have it take off, and see it in every chronic lung disease and see what it looks like. All right. That's pretty good. Good. Andreas, some concluding remarks from you? Yeah, look, I think it's very encouraging to hear that from Joe. I actually haven't asked him that question myself. John, that's great and encouraging to hear that. On that, firstly, on that topic, we're very excited to be next working to be able to not only now, as we can now replace nuclear VQ, but soon to be able to replace CTPA for acute PE. As I said, with just the incredible level of interest we have, the pipeline really bursting at the seams. A sales team that's really firing on all cylinders. I think, both commercially and clinically, the next 12 months is going to be just completely unlike anything we've had at 4DMedical before. Andreas, you've got an ongoing clinical program as well. Is it appropriate to talk about any of those upcoming studies at this time? Look, we're getting very close to being able to talk publicly. We're going to be doing a large multi-center study to be able to evaluate our technology, to be able to go up against CTPA. We're just not quite in a position to add much more than that. What I can say is that's really been very organically driven. Every time we speak to a site, after they've finished learning about how they can replace nuclear VQ, always someone says, "Can we also replace CTPA?" We'd love to do that. There's a whole range of systemic issues around delivering contrasts, whether it's the allergic reactions. the kidney issues, or the very high level of scans that deliver non-diagnostic results. We get that very organic drive from hospitals asking for that, and we're responding promptly, and I think we'll be putting out something, I think hopefully in the next month or so to really talk through exactly how we're going to do that in detail. Joseph, I imagine you read a heck of a lot of CTPA exams as well. Every day. Yeah. We have a list of about 15 we walk into every day from the evening. Yeah. Yeah. That'll all be done with a single CT scan. There's going to be huge increase in productivity there as well. Matthew, perhaps a couple of just concluding remarks from you as well of your expectations for the next few months. Oh, it's incredibly busy is the short answer. I think you'll see a lot coming from us is all I would say. Whether that be VA, whether it be academic medical centers, other clinics, obviously we've got an eye on Europe, which Andreas has teased about as well. Yeah. Well, we haven't even talked about Europe. Yeah You've got some really good open doors into some of the major clinical hospitals in London as well. That'll be an exciting next leg of growth. We'll wrap it up there. Thank you all for your time today. Thank you, Joe. It's late where you are. Thank you, Andreas Fouras and Matt Tucker, for your time this morning. I hope as the audience you've got some value out of today. We've certainly covered a lot of ground. Thank you for your time, again. We'll wrap it up there. Thank you, operator. That does conclude our conference for today. Thank you for participating.