Tag Archives: Butterfly

Signify Premium Insight: GE’s Ultrasound AI Acquisition

GE HealthCare has continued to make headlines after spinning out from the broader GE umbrella, making its second acquisition in as many months with a deal for Caption Health.

The move follows GE HealthCare’s January acquisition of Imactis, and sees the healthcare giant pick up one of the better established ultrasound AI vendors. Caption Health specialises in offering ultrasound guidance AI solutions, allowing less experienced users to conduct ultrasound imaging exams.

Given the ability of Caption Health’s solutions to facilitate the use of ultrasound by novice users, GE will first roll out the tool to its point of care and handheld ranges, but there are also opportunities across its portfolio.

Signify Premium Insight: Hyperfine’s Ambition is Rewarded on Index

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In late December, portable MRI developer Hyperfine announced that it had completed its merger with HealthCor Catalio Acquisition Corp., a Special Purpose Acquisition Company. The move, first announced in July, means that Hyperfine is now listed publicly on the NASDAQ stock exchange.

The listing will net the imaging start-up around $160m in gross cash proceeds from the combination, allowing Hyperfine to focus on achieving the ambitious commercial targets the vendor has set for its Swoop portable MRI system, as well as the wider company’s continued growth. Hyperfine is one of a number of innovative start-ups that has come out of the 4Catalyzer incubator, which also names Butterfly Network on its roster. Hyperfine will, in some ways, look to imitate its older sibling, with which it shares a common founder, Dr Jonathan Rothberg, and take on a market leadership position.

The Signify View

The recent trials and travails of young, challenger modality vendors have, over recent months, emphasised how truly difficult success is to find. Even some vendors that have performed relatively strongly have not yet lived up to their original expectation. The aforementioned Butterfly Network for example has used a new technology to reinvigorate a category, and in doing so has displaced almost all incumbents to claim one of the top spots in the handheld ultrasound market. This is especially impressive given that the company’s device has only been on sale since 2018. However, its shares are trading at around $7.50, representing quite a fall from their 2021 peak of almost $30, while its Q3 earnings results presentation in November saw revenue guidance significantly lowered; down to $60-62m compared to the $76-80m given in Q1.

What’s more, these difficulties pale into insignificance when compared to the plights of other challenger modality vendors. Nanox, another vendor promising to revolutionise medical imaging with a cutting-edge technology, currently sees its shares trading at just $13, down from a high of more than $94. Worse, it is facing a class action lawsuit alleging that it misled investors, while also facing increased pressure over the delays to regulatory approval preventing the sale of its core product.

A successful entry into the medical imaging market is no mean feat.

 A Brighter Beginning

Despite these unwelcoming circumstances, this is what Hyperfine seeks to do with its Swoop point of care MRI scanner, and mercifully for the Connecticut-based vendor, there are some positive signs.

For example, not only is the Swoop FDA cleared, but the product is also entering into a completely new market. Touted as the world’s only truly portable MRI system, the device will be free from direct competition. Other modality vendors do offer increasingly accessible MRI systems, at a lower cost than traditional models and with lower infrastructure requirements, but if providers need a system that can be wheeled to a patient’s bedside and plugged into a standard outlet, there is no other option. Even if other vendors sought to enter the market, whether established modality vendors or other smaller challenger vendors, Hyperfine would still have the first mover advantage and be able to establish itself before having to face rivals.

Another of Hyperfine’s strengths is that, even though it is looking to establish a new category of MRI, it is doing do by addressing very definite clinical problems. One of the vendor’s key clinical targets is stroke care. This is a growing market, where products which can accelerate the diagnosis and delivery of care are highly prized; one need only look at the values of some AI stroke care specialists for evidence of that. This is among the high-value use cases which a portable MRI can excel in, with providers able to quickly diagnose haemorrhages at the bedside in emergency rooms, or even within ambulances before a patient arrives at  hospital. Instead of competing with existent products from large modality vendors, Hyperfine is offering a new device with new capability to providers, to address a significant health burden.

Adding weight to these claims are several pieces of research and positive comments, with studies published in the Journal of the American Medical Association Neurology and Nature, giving the device credibility that can be lacking when a new device enters the market. This appears to be resonating with at least some providers, with Hyperfine noting that, as of the end of 2021, it has sold and installed 27 Swoop systems.

 No Easy Path to Success

While Hyperfine, on the face of it, appears to launch onto the NASDAQ from this sound position, there are still several significant challenges that the vendor will have to overcome. In its investor presentation from July, when the firm first announced its SPAC deal, Hyperfine identifies more than 100,000 potential installation targets. To take advantage of this opportunity, however, each one of these targets must be convinced to allocate the $261,000 three-year contract cost into a new device category from an untested vendor instead of investing in proven systems from long-term partners with established service and support credentials. This will require significant market education and investment into sales channels, activities which could quickly eat into the $160m it netted from the listing.

Hyperfine, like many of its young peers, is offering the devices on a subscription basis, at a cost of $7,500 a month. This might make the devices more attainable to some customers, such as hospitals in developing markets, for example, but for most providers in developed markets, the most lucrative customers, this is unlikely to have a big impact.

Even providers with the money and the desire to purchase the systems may still ultimately choose not to. In many countries around the world there is an acute shortage of radiologists. The benefits of having a Swoop system will be negligible if hospitals are limited by their ability to read images, rather than acquire them. Again, Hyperfine is looking to address this. The unlimited training offered with subscriptions could help. More significant could be the adoption of AI-based image analysis tools, but as detailed in Signify’s AI in Medical Imaging report, adoption of such tools is low, and any new product from Hyperfine would require significant investment in datasets for training and in validation.

A High Bar

Even with solutions to these problems, the vendor could still underperform relative to its own ambition. Including units given under grants, Hyperfine has shipped 45 systems so far. To meet its target for 2025 it will need to sell a further 2,803. This, the company estimates, would contribute to a total revenue of more than $300m. While such figures are not impossible, the resource required for this volume’s sales, support, awareness, service and education makes them look very ambitious.

Ambition of this sort, however, is a requisite for such vendors. Hyperfine has successfully been ticking off milestones and its public offering is another mark on that list. It has promising technology, a well thought out (if, once again, ambitious) roadmap, and is targeting an in demand clinical segment.

Ultimately though, Hyperfine will be able to exert no control over its biggest long-term obstacle: entrenched modality vendors. If Hyperfine can develop the portable MRI market as it promises it could find it has some powerful rivals.

Siemens, Philips, GE among others have, in recent years heavily focused on service deals and upsell opportunities, of which there is limited potential in this comparatively affordable MRI category. Further, these larger vendors have also made margin expansion a priority, this would be hard to deliver in a lower-priced category, which could require significant investment to corner, and a focus on volume. However, these detracting factors are, to an extent, self-imposed and potentially short term.

If these larger vendors smell opportunity, and they are willing and able to produce comparable systems to Hyperfine, then the young challenger will have a real test of its mettle. Until then, the outlook is bright. Even if its goals prove to be a little too ambitious, its financial targets a little too lofty, Hyperfine could well be the challenger modality that shrugs off the status quo, and makes strides where others have stumbled.


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Signify Premium Insight: Medical Imaging Modality Predictions for 2022

This Insight is part of your subscription to Signify Premium Insights – Medical ImagingThis content is only available to individuals with an active account for this paid-for service and is the copyright of Signify Research. Content cannot be shared or distributed to non-subscribers or other third parties without express written consent from Signify ResearchTo view other recent Premium Insights that are part of the service please click here.

Co-written by Bhvita Jani, Mustafa Hassan and Simon Harris

By the end of summer 2021, the worst of the coronavirus pandemic appeared to be over. Providers were now tasked with dealing with the enormous backlog of patients whose elective procedures and screening scans were postponed because of the emergency restrictions brought in as a result of the Covid-19 pandemic. As 2022 begins, however, the threat of Covid is back with a new variant threatening to cause further disruption. Against this backdrop, medical imaging modality vendors had been performing strongly, but 2022 will see them need to offer the products and technologies that can help providers with this disruption. They will also need to look after their own houses, and make sure the global and economic volatility does not prevent them doing business. In light of that, here are five predictions that we expect to define the year ahead.

Supply chain management will be crucial

Challenges within hospitals have dramatically intensified as a result of the Covid-19 pandemic, however, there are other, global challenges that vendors must also countenance. Chief among these are the supply chain issues that are affecting companies from almost every sector, with reports from carmakers, food producers, electronics manufacturers and others all being hit.

Medical imaging systems vendors are not immune from this challenge, with almost all the major vendors noting the issue in their latest results presentations. This disruption is likely to have several significant impacts. Semiconductor chips are among the products which have been impacted most acutely. The scarcity of these chips will mean that vendors will have to prioritise their use, using them first in systems that command higher-prices and higher margins, this will drive up the average selling price of systems, compounding increases caused more directly by a shortage of supply.

Smaller vendors are likely to be most impacted by these shortages. Larger vendors have the buying power and international reach to better mitigate against shortages. They have the reserves to stockpile essential resources, and the ability to broker deals with new suppliers across the world.

This supply chain disruption and component shortage will impact every vendor, so will not, in and of itself, favour any vendor over any other. However, how vendors deal with the disruption will have a huge impact. Orderbooks are brimming, but that means naught if vendors cannot manufacture and supply the systems needed to meet them. Management of supply chains will therefore become one of the major differentiators between vendors throughout 2022.

The democratisation of medical imaging will be accelerated by larger vendors

Imaging has already started its journey out of hospital imaging departments. This transition has in many cases been driven by young vendors which mark this decentralisation as their mission. Butterfly Network is among the highest profile of these, having leveraged a new technology and new business models to quickly become one of the market leaders in handheld ultrasound, making its devices an increasingly common sight across inpatient and outpatient settings. Other new vendors, both within handheld ultrasound, such as Exo Imaging, Pulsenmore, and Vave, and elsewhere, such as Nanox, Turner Imaging Systems and Hyperfine, are hoping to imitate Butterfly Network’s success in the transition of imaging out of the hospital.

In 2022 this will change. Large imaging vendors have been a part of medical imaging’s transition away from imaging departments in the past, but this year will see those efforts intensify. This is, in many instances, a result of larger vendors having to create new markets if they are to be able to continue to deliver on their growth forecasts. Growth opportunity within hospital’s radiology departments is limited. This is compounded further by the transition of many providers to longer-term, more holistic vendor partnerships, which further limit sales opportunities for vendors looking to displace competitors.

New clinical settings can provide these sales opportunities. Vendors such as Siemens Healthineers, which late last year announced its MAGNETOM Free.Star MRI scanner are indicative of larger vendors looking to target these opportunities. Siemens, as well as other vendors such as GE Healthcare and Philips have focused on making their products more accessible, with factors such as smaller space requirements and lower infrastructure needs, as well as lower cost and facilitation of less experienced technicians all making their system’s adoption by emergency rooms, orthopaedic, paediatric departments, and outpatient centres more likely in 2022.

Vendors and providers will focus on advanced imaging systems

While there are still growth opportunities across medical imaging, with a range of different modalities performing strongly in 2021, the potential for technical development and innovation within advanced modalities such as MRI and CT means that vendors will be keen to focus on these categories in the coming year.

These modalities offer strong opportunities for growth. Innovations can represent significant steps forward and will give customers and potential customers impetus to buy new systems or replace existing systems. Vendors have responded to this opportunity, and  have already been making sizeable technological leaps forward, with Philips launching a new detector-based spectral CT system early last year, and Siemens officially launching its photon-counting CT system, after it received regulatory approval in September. There were several other products launched at RSNA too, with GE, Canon and Fujifilm launching new MRI and CT products at the event.

These advanced systems will be key battlegrounds for vendors who will look to use their systems to satisfy providers’ ever-present appetite for increased image quality, and, bolstered by improved software and automation, be keen to sell the systems into more departments and clinics than ever before.

There are also other facets to this greater adoption of advanced imaging systems. Another element is the increasing uptake of hybrid systems. As clinical precision continues to play a paramount role in delivering positive patient outcomes and first-time right diagnosis, the adoption of hybrid imaging systems in high-end facilities will accelerate the convergence of different imaging modalities, offering benefits such as seamless workflows with all required imaging modalities to be easily accessible in one room. One of the more recent examples of this is Philips’ latest spectral CT system, which can be used for both CT and interventional applications, for advanced guidance during procedures.

Some of the biggest advances will be seen in medical imaging workflow

Providers’ ongoing desire to acquire better image quality means that they will continue to rely on MRI and CT imaging. However, using these systems can be relatively time consuming and resource intensive.  For providers facing an unprecedented backlog of patients amidst a shortage of fully trained and experienced personnel, this could present a challenge.

However, 2022 will see this obstacle partly addressed by the increased adoption of advanced workflow tools. Providers will, for instance, adopt AI-powered workflow solutions that can be used to maximise the efficiency of medical imaging and increase patient throughput, thereby effectively resulting in a higher return on investment.

These tools, in essence, look to improve patient scheduling, increase the speed at which scans can be conducted and reduce the need for time consuming rescans. This will be achieved through the use of several types of solutions, including those which help support patient positioning; automatic and intelligent protocolling tools which ensure that the parameters of systems are set correctly for the patient to be scanned; and automatic image accept and reject tools to make sure any scans which are not of the requisite quality can be caught early.

Such tools will be particularly valuable in 2022 as providers will try to address the backlog of scans that were postponed in the midst of the Covid-19 pandemic, when many providers across the world stopped carrying out elective procedures. Such workflow tools will be critical to ensure that radiology departments can operate efficiently. These tools will also benefit vendors, with the new solutions helping convince providers to replace or upgrade existing systems.

AI will benefit the technician as well as the radiologist

AI’s use in medical imaging has, until now, predominantly focused on how the technology can help with the reading and interpretation of medical images. This year that will change, with tools increasingly being used to aid in the capture of medical images. In a climate where high staff turnover is a challenge that healthcare providers are facing, increased support at the point of image acquisition is paramount.

In some scenarios, particularly in ultrasound, this will see AI being used to guide users in the acquisition of diagnostic quality images. There have already been some steps in this direction, with the likes of Caption Health’s Caption Guidance software being offered to help novice users correctly perform cardiac ultrasound scans. This ties into the earlier prediction of enabling imaging to be more widely used outside of imaging departments, where technicians are often less experienced and more likely to benefit from guidance. In addition to helping technicians perform the scans, these tools can also be used to automatically take some quantitative measurements from patients, such as calculating the bladder volume and the ejection fraction.

In other modalities the focus will be on reducing the time it takes to capture images and improving the efficiency of radiology departments. MRI and CT scans in particular are time consuming. AI-enhanced workflow optimisations tools, such as intelligent protocolling, can help to mitigate this issue and significantly reduce the time it takes for images to be captured by analysing an initial set of images and then suggesting the most appropriate next sequences based on the initial findings. Additionally, deep‐learning models for image reconstruction in MRI are delivering high-quality images with shorter scan times, overcoming the historical trade-offs in MR between scan time and image quality.

In general radiography, AI can identify potential technical problems during imaging capture to ensure the images are suitable for interpretation and potentially avoid patient recalls when they are not. For example, CXR from annalise.ai can identify technical image factors (exposure, patient rotation etc.) and devices (lines, implants, stents etc.).  Similarly, Fujifilm offers foreign body detection tools on its diagnostic X-ray products.


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Signify Premium Insight: The Puzzles of Partnerships – Ultromics & Caption Health Combine

This Insight is part of your subscription to Signify Premium Insights – Medical ImagingThis content is only available to individuals with an active account for this paid-for service and is the copyright of Signify Research. Content cannot be shared or distributed to non-subscribers or other third parties without express written consent from Signify ResearchTo view other recent Premium Insights that are part of the service please click here.

In a recent announcement, AI developers Caption Health and Ultromics revealed that they were entering into a strategic partnership. The move, which will bring together the two firms’ expertise in AI-assisted image acquisition and interpretation, will, according to the vendors, grant more providers the opportunity to perform ultrasound examinations and help them automatically calculate key indicators of heart function. This should facilitate the earlier and more accurate identification of heart disease. The vendors say the partnership will also help bridge the gap between acquisition and diagnosis, with the solutions, alongside hardware from Caption Health partner Butterfly Network, strengthening the capabilities of a greater range of clinicians.

 The Signify View

As Butterfly Network, and other handheld ultrasound vendors seek growth, they are casting their eyes away from established imaging markets and radiology departments and targeting new customers. These companies are looking to introduce ultrasound into both new geographies and to new clinical settings. In doing so, these handheld systems will, for many users represent their first-time using ultrasound, or indeed, any medical imaging system at all.

These new users require support and guidance, vendors and providers have a role in providing this market education, but AI tools can also play their part, helping inexperienced users capture and interpret diagnostic images. This, as Signify Research wrote in August, was the rationale behind Butterfly Network’s partnership with Caption Health. However, given that ultrasound is much more of a ‘real-time’ modality, than others whose images are typically reviewed after acquisition, the ability to capture images alone is of limited clinical value. Caption Health’s partnership with Ultromics aims to address this gap, by allowing those with the Butterfy iQ+ to not only capture images, but also to discern several key cardiac measurements from them.

The partnership improves the clinical value of both developers, as well as that of Butterfly Network, as an entire package comprised of a device, acquisition and analysis tool, the product is arguably more attractive to a new user than any individual component individually.

 A Tough Sell?

While the capabilities of these partners are well aligned, there are some commercial challenges that must be considered. One of these centres on Ultromics and Caption Health’s revenues. If the two vendors’ products are to be sold alongside Butterfly Network’s handheld systems then there is little room for all three vendors to raise reasonable revenues from a device that, according to the IQ+’s webpage, costs customers $102 per month on a 36 month payment plan, including a three year subscription to Butterfly Network’s ‘Pro’ service. The ability to raise these prices is also limited, as doing so will undermine the scanner’s value proposition, one of its key selling points. Providers’ ability to claim the CMS’ new technology add-on payment (NTAP) for the use of Caption Health’s software will sweeten this deal somewhat, but would still leave them having to pay for the devices initially.

Selling the solutions individually could allow the developers to charge higher prices for the tools, but sales would be lower, and these additional costs for the AI tool’s capture and analysis capability would reduce their appeal in the new markets that handheld ultrasound looks to target. Instead, these vendors must rely on high volumes to be successful. This is possible. Butterfly Network’s most recent financial results, for Q3 2021 show product revenue for the quarter of $10.8m. Although there is some ambiguity brought in by products such as cases and straps, the majority of this revenue will come from the vendor’s iQ+ devices, suggesting sales of around 4,500 units for the quarter. With Signify Research forecasting a CAGR of more than 25% for the sector in its latest Ultrasound Equipment report between 2020 and 2025, Butterfly Network could yet be on track to deliver high sales volume.

A reliance on high sales volume may yet prove prudent given the forecast increase in handheld system unit shipments over the coming years

A Preference for Portfolio

This is one area where larger vendors, which offer a full range of ultrasound products could hold an advantage over the handheld specialist vendors. GE and Philips, for example, have both formed partnerships with DiA Imaging Analysis, currently focused on their point of care offerings. However, these vendors could, in future, also open up the partnerships to their broader ultrasound ranges, potentially offering opportunities across a wider range of devices, rather than relying on handheld ultrasound growth. With handheld devices forecasted to account for just 6% of the total ultrasound market by 2025, in the long term this could prove to be a useful option.

A further challenge will be adding further capability to the software tools. The use of Caption Health’s tools to enable new users to capture cardiac ultrasound images will be of limited benefit if those same users don’t have a fully fledged suite of analysis tools. The partnership with Ultromics, and its EchoGo solution brings analysis of ejection fraction, left ventricular volumes and cardiac strain, but the vendor will need to continue to develop its toolkit if it is to make echocardiography truly accessible.

 A Marathon not a Sprint

These challenges, however, don’t take away from the significance of the partnership between Caption Health and Ultromics. The former’s ties to Butterfly Network means that if all works as it should, an inexperienced user can purchase an affordable ultrasound system, perform an examination of a patient’s heart and almost instantaneously garner certain key metrics. Hardware and software has aligned to offer new diagnostic capabilities to whole swathes of new users. Whether this can be done profitably is another matter.

Butterfly Network’s original approach was to develop the majority of its software, as it does with its hardware, in house. The vendor’s partnership with Caption Health signalled an end to this approach, and the use of Ultromics EchoGo system emphasises it. While these moves significantly add to the vendor’s capability and keep it in step with some competitor vendors such as EchoNous, which has recently partnered with US2.ai for cardiac analysis, it does mean sharing revenues with third parties, which, for a vendor focused on affordability, could prove difficult if sales don’t live up to expectations. Moreover, Butterfly Network is potentially losing out on the opportunity to upsell AI software applications and services compared with competitors such as Clarius who have a stronger focus on developing their own applications.

Despite this, the move remains sound for the AI developers. Sales of relatively narrow AI solutions directly to providers could prove challenging, and direct sales to users in new markets doubly so. By partnering to create a package that is more clinically valuable, the vendors are able to strengthen Butterfly Network’s commercial proposition whilst leveraging it as a potentially far-reaching sales channel.

For handheld vendors such as Butterfly Network and imaging AI developers alike, this increasingly collaborative approach is not a magic bullet. This seems well understood by Ultromics in particular, which, unlike Caption Health, did not enter into an exclusive partnership, suggesting that the vendor sees the handheld market as an additional, rather than integral revenue stream.

As such, collaboration will not completely solve all the issues that the relatively young segment is facing. Despite the AI assistance, market education is still a hurdle to adoption, technical barriers remain with image quality potentially hindering the usefulness of the tools, and other factors, such as the inability of a provider to act upon the results of an exam could undermine the utility of AI-equipped handheld systems in new settings.

But, as the value of the solutions is bolstered by developments such as Ultromics’ and Caption Health’s partnership, the motivation to address the other challenges will increase. The first pieces are being laid, now the rest of the puzzle can start to fall into place.

About Signify Premium Insights

This Insight is part of your subscription to Signify Premium Insights – Medical Imaging. This content is only available to individuals with an active account for this paid-for service and is the copyright of Signify Research. Content cannot be shared or distributed to non-subscribers or other third parties without express written consent from Signify ResearchTo view other recent Premium Insights that are part of the service please click here