In the first half of 2024, Medicalgorithmics, a technology company from the sWIG80 index, has successfully continued to acquire new customers, focusing on the monetization of contracts and increasing sales. Since announcing its strategy for the years 2023-2026 last year, the company has gained 13 new partners, including five in the USA, and expects more contracts soon. Thanks to a strategy developed in collaboration with BioFund, the company’s largest shareholder, there has been a significant increase in revenue from AI-based EKG analysis services in the USA, which is a standalone and the most important product. In the second quarter of this year, revenues increased by 132% from the first quarter, with the number of patients tested in the USA increasing by over 200%.
“The key element of the strategy currently being implemented by Medicalgorithmics is the transformation of the business model. In the global medtech market, we are no longer seen as a manufacturer of one of many EKG monitoring devices, but as a provider of state-of-the-art diagnostic software based on unique AI algorithms developed by the company after BioFund’s investment in 2022. Thanks to this change, we have a much greater potential for global business growth. In the USA we already see a dynamic increase in the number of patients served, which in the second quarter was almost three times higher than in the first quarter. Despite short-term financial weakness, we maintain our pace of development and investment in new technologies, keeping business costs at the same level. We anticipate an improvement in these financial figures due to further revenue growth from new customers and organic growth with current partners,” says Maciej Gamrot, Member of the Board for Finance at Medicalgorithmics.
The increase in revenue for Medicalgorithmics will be generated thanks to cooperation with 13 new key partners and others, with some projects currently in the integration or pilot phase. In the following months, they will move to the commercial phase, generating revenues. The company is working to acquire new customers in the field of EKG analysis in the US, EU, and APAC markets, and is developing safety services in clinical trials. In September, Medicalgorithmics signed a contract with a third customer in this important segment, the Canadian Population Health Research Institute. At the same time, the company is intensifying efforts to increase revenues from the portfolio of customers acquired before the new strategy by offering services such as EKG data analysis from third-party devices and a new patch Kardiobeat.ai.
In the second quarter of 2024, the company completed the technological transformation in the field of cardiac arrhythmia diagnostics, obtaining FDA registration (the US Food and Drug Administration) for the DRP platform, previously CE-certified in Europe, and CE certification for DRAI algorithms, which obtained FDA registration in 2022. The certification of DRAI algorithms enables them to be offered as a separate product, sold in the USA and globally, alongside the DRP platform or PCClient integrated with customers’ devices.
A groundbreaking scientific study, DRAI MARTINI, presented at the ESC Congress 2024 held in London, involving over 14,000 patients and more than 50 cardiologists from the USA, Canada, and Europe, demonstrated that the DRAI algorithms commit 14 times fewer errors in confirming critical cases of cardiac arrhythmias in patients than EKG specialists. The results of the study will soon be published in a leading medical journal, showing how the leading technology developed by the company improves the efficiency of EKG analysis after its implementation at the customer’s.
Medicalgorithmics’ EKG technology offering will be significantly strengthened following the anticipated CE certification for its VCAST technology. This will allow Medicalgorithmics to offer a unique combination of AI-supported arrhythmia diagnostic tools and AI-assisted solutions to noninvasively diagnose coronary artery narrowing, which are the leading causes of ischemic heart disease leading to heart attacks.
According to the published results for the second quarter of 2024, Medicalgorithmics achieved a revenue of 5.9 million PLN, compared to 7 million PLN in the first quarter of the same year and 9.7 million in the second quarter of the previous year. The quarterly decrease is solely due to lower revenues from the sale of proprietary devices that have been a significant source of revenue for the company for years. This is also the result of the completion in the first quarter of 2024 of the generational exchange of PocketECG devices with customers (the fourth generation replaced the third).
According to the adopted strategy, the sale of diagnostic services is growing dynamically. In the second quarter, Medicalgorithmics achieved revenue of 5.4 million PLN from this, 11% more than in the first quarter of the same year. Compared to the second quarter of 2023, the sales are lower by 41%. This is the effect of ending the exclusive cooperation with a long-term partner in the USA in December of the previous year, which limited the company’s development opportunities in the American market. Based on five contracts in the US IDTF market, Medicalgorithmics has already recovered these revenues by 53% (Q2 2024 vs. Q4 2023). The company also saw an increase in revenues from the sale of AI services on the American market in the second quarter by 132% compared to the first quarter.
As of the end of June 2024, the balance of cash funds was 10.5 million PLN, compared to 33.2 million PLN a year earlier. After the end of the first half of the year, the company received a 2.3 million PLN price correction for the sale of Medi-Lynx and further strengthened its financial position thanks to a loan line of up to 3 million USD from BioFund Capital Management LLC, the company’s largest shareholder.
Source: https://managerplus.pl/medicalgorithmics-notuje-dynamiczny-wzrost-przychodow-z-uslug-ai-w-usa-i-kontynuuje-transformacje-modelu-biznesowego-69827
