4DMedical expands US market reach through strategic distribution agreement with Philips

4DMedical (ASX:4DX) has signed what it sees as a transformational distribution agreement that will provide it with further access to US markets.

The respiratory imaging technology specialist has expanded on a previous agreement with leading global healthcare company Koninklijke Philips (Philips), which will now become an authorised reseller across the United States.

4DMedical announced in January this year that it had signed a teaming agreement with Philips to advance solutions for evaluating US veterans with various respiratory conditions as part of a broader lung-screening initiative.

Non-invasive screening

Philips and 4DMedical agreed to work together to support the need to scale non-invasive lung screening in support of the US PACT Act, which extended eligibility for benefits to an additional 4.5 million US veterans.

Philips has long-established and significant existing partnerships with both the Department of Veterans Affairs (VA) and the Department of Defense (DoD).

Since signing the additional agreement, 4DMedical and Philips teams have been collaborating to develop solutions for toxic exposure and lung screening using 4DMedical software and Philips fluoroscopy and computed tomography (CT) systems.

Reseller agreement

Their collaboration has also been developing the reseller agreement under which the 4DMedical and Imbio portfolios have been added to Philips’ product catalogue and will be offered as a third-party solution to its US customer base.

The five-year agreement will give Philips exclusive distribution rights to the 4DMedical suite of products with its US government customers (including the VA and DoD) and non-exclusive rights with all other US commercial customers.

4DMedical chief executive officer Professor Andreas Fouras said the agreement will transform his company’s ability to deliver its technology to patients and their doctors.

“Together, Philips and 4DMedical will deliver lung function analyses for all lung disorders including unexplained dyspnoea (shortness of breath), asthma, chronic obstructive pulmonary disease (COPD) and interstitial lung disease (ILD),” he said.

Actionable insights

“4DMedical’s comprehensive portfolio of products is extremely well placed to provide actionable insights to frontline VA physicians treating patients with chronic lung disease, while also serving all physicians triaging respiratory conditions across the entire veteran population,” Professor Fouras said.

“This is particularly relevant when considering that veterans have three times the rates of chronic lung diseases such as COPD compared to the general population.”

The VA’s healthcare budget is more than $480 billion per annum.

Initial transfer pricing

Philips will earn margins between 20% and 35% on end-customer sales of 4D’s XV LVAS, CT LVAS and Imbio products.

XV LVAS is lung airflow imaging software that processes X-ray scans to provide detail not available via other modalities, while the CT LVAS software operates on CT scans to provide functional lung health imaging for patients with unexplained dyspnoea.

LTA provides visualisation and quantification of the lung textures that are key to identifying ILDs and other fibrotic conditions.

With Philips required to maintain exclusive rights to US government customers, the agreement stipulates minimum thresholds for annual sales targets within that sector, across the full term.