‘Next Cochlear’ 4Dx closes capital raise as FDA approval enters sight

The Australian Financial Review featured 4Dx in todays Technology section online.

by Yolanda Redrup

Medical imaging startup 4Dx has raised $2.5 million from a range of retail and high net worth investors, which the business will invest in its clinical trials that will see the company approved by the US Food and Drug Administration by mid next year.

The company, which already has one major deal with Los Angeles hospital Cedars Sinai to use its lung imaging technology, also has an additional $2.5 million committed that is expected to close this week, taking its total series A raise to more than $5 million.

Chief executive Andreas Fouras said the company had developed a strong investor base featuring healthcare professionals and business bigwigs from retail, resources and banking and finance, making him confident the company could go achieve its ambitions of being as successful as Cochlear.

“These investors are just dipping their toes in the water at the moment with us, so that makes me excited about what it means for their ability to take a stronger position going forward when we release strong results next year,” he said.

“The world is starting to notice 4Dx … We’ve got hospitals cold calling us now from the UK, the US and Australia, and asking how they can get access to our technology early … I think we could have 10 of the world’s biggest hospitals using our technology within 12 months of FDA approval.”

Dr Fouras was a Monash University mechanical engineering professor, specialising in wind tunnel imaging, but left his academic career, sold his house and moved to Los Angeles to develop 4Dx.

Current lung imaging technology techniques give an overall picture of the amount of air a lung is taking in, but 4DX’s technology highlights if there are parts of the lungs which are receiving less air, helping in the early diagnoses of lung diseases and more effective treatment.

While the technology is at present being used just for lung diseases, the company has started to invest in research and development to expand it to other organs and conditions. At the moment it has a human clinical trial under way to extend the technology to heart imaging.

“It has the technological capability to be expanded outside of the lungs … we have some patents for heart imaging already and the clinical trial has had promising results,” Dr Fouras said.

“We want to be a global diagnostics company. In the US, and globally, there are significant pressures on the costs of diagnostics, and technology that should be seen as a profit centre is viewed as a burden. So we’re ready to come in and change that and deliver modern, affordable technology that can disrupt the space.”

After completing the lung imaging clinical trial in the first quarter of 2017 and securing FDA approval by mid-year, the company hopes to raise an additional $20 million or more, which will enable it to commercialise its other products currently in development and scale its operations globally.

“We expect to raise the $20 million in two stages through the well-established process of a pre-IPO raise and then an IPO,” he said.

“But the big milestone for us next year will be going public with the clinical trial results. Then we’ll be able to show how well the technology works in comparison to the existing technology in the marketplace. At that point we’ll go back to the market and establish a funding model going forward.”

As the technology was developed while Dr Fouras was at Monash, Monash has held the patents for the technology until now. Dr Fouras negotiated a deal with the university to have all the IP moved to the company when the business had successfully raised more than $6.4 million in total.

“Monash have worked very hard to be supportive and more engaged with industry … Monash said once we’d raised that amount they’d feel comfortable that were weren’t at risk of falling over due to a lack of capital … but we’ll continue to have a royalty agreement with them.”