4DMedical and Philips Forge Strategic Distribution Partnership in the U.S.
4DMEDICAL LIMITED (4DX) Share Update September 2024 Thursday 26th
4DMedical Signs Landmark Reseller Agreement with Philips for U.S. Market
4DMedical Limited (ASX: 4DX) has announced a significant distribution agreement with Philips, marking a transformative step in the commercialization of its respiratory imaging technology in the United States.
Instant Summary:
- 4DMedical signs a comprehensive distribution agreement with Philips.
- Philips gains exclusive distribution rights to 4DMedical products for U.S. government customers.
- The agreement spans five years, leveraging Philips' established partnerships with the VA and DoD.
- Philips to earn margins between 20% and 35% on end-customer sales.
- An investor webinar is scheduled for Tuesday, 1 October.
4DMedical and Philips Advance to a Reseller Agreement
In January 2024, 4DMedical announced a Teaming Agreement with Philips to establish a strategic collaboration aimed at evaluating Veterans with deployment-related respiratory disease (DRRD) and other respiratory conditions. Since then, both companies have been working together to develop solutions using 4DMedical's software and Philips' fluoroscopy and CT systems.
The newly signed reseller agreement allows Philips to add 4DMedical and Imbio products to its catalog, offering them as third-party solutions to its U.S. customer base. The five-year agreement grants Philips exclusive distribution rights to 4DMedical's products for U.S. government customers, including the VA and DoD, and non-exclusive rights for other U.S. customers.
Market Opportunities and Size
This agreement opens a transformative commercial pathway for 4DMedical in the U.S., leveraging Philips' long-standing relationships, particularly within the VA and DoD. Philips has been providing innovative solutions to these entities for over 45 years, with 50% of VA clinics currently using Philips imaging solutions.
The opportunities within the VA are substantial. The PACT Act, a US$280 billion commitment over ten years, covers numerous respiratory illnesses, providing healthcare eligibility to 6 million Veterans exposed to airborne hazards. 4DMedical's XV LVAS® and LDAf are leading non-invasive technologies capable of assessing DRRD.
Outside the VA, the U.S. market is significant, with an estimated 10.9 million Thoracic CT scans performed in 2019, costing approximately US$5.7 billion. Recent CMS reimbursement for XV LVAS® and CT LVAS™, paying US$299 and US$650 per scan respectively, further enhances the market potential for 4DMedical and Philips.
The distribution agreement with Philips is poised to significantly boost 4DMedical's market presence in the U.S. Leveraging Philips' established relationships with the VA and DoD, 4DMedical can expect increased sales and market penetration. This partnership is likely to enhance investor confidence and positively impact 4DMedical's stock price.
Investor Reaction:
Analysts are likely to react positively to this announcement, given Philips' strong market presence and the significant opportunities within the VA and broader U.S. market. The agreement's potential to drive substantial revenue growth for 4DMedical will be a key focus for investors.
Conclusion:
Investors should take note of this strategic partnership between 4DMedical and Philips, as it represents a significant step forward in the commercialization of 4DMedical's respiratory imaging technology. The upcoming investor webinar on 1 October will provide further insights into this transformative agreement.