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Interview with Artrya (ASX: AYA) MD John Barrington
April 27, 2022
Artrya (ASX: AYA)
We spoke with John Barrington, Managing Director of Artrya (ASX: AYA) about the unique opportunity now being pursued with Artrya Salix, an AI-based CAD diagnostic support solution that analyses CCTA scans to identify key biomarkers of heart attack. We talked about the regulatory process ahead, the commercialisation strategy and why cardiologists like Salix so much.
See full transcription below.
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Stuart: Hello, and welcome to “Stocks Down Under.” My name is Stuart Roberts, and I’m one of the co-founders of our publication. And joining me on the 20th of April 2022, from Perth, is Mr. John Barrington AM, who’s the founder and managing director of Artrya, ASX code AYA. John, good afternoon.
John: Good afternoon, Stuart. Thank you for having me on the show.
Stuart: I was amazed when I looked at the prospectus for Artrya. Finally, someone has figured out how to use AI to take conventional CAT scans and detect all that vulnerable plaque, which can potentially kill us all, in a mere 15-minute scan. Quite a breakthrough, may I say.
John: It is a breakthrough. The CT scanning machines that you mentioned were invented some 50 years ago, and yet, over those 5 decades, the major predictor of heart attack, fatal and non-fatal heart attack, the soft plaque known as vulnerable plaque, is generally not reported. And so heart disease is the largest cause of death in the world. Some 126 million people worldwide are afflicted by coronary artery disease. It’s responsible for 9 million deaths annually. And the death rate hasn’t dropped significantly over those 50 years, because one of those major predictors of heart attack, the vulnerable plaque, is not reported, as I say. The vulnerable plaque is inordinately difficult to see with the human eye, whereas the machines are looking at pixels on the CCTA scans. The artificial intelligence has learned to detect and report the vulnerable plaque. And so we work alongside the clinicians, the radiologists, and the cardiologists, and we assist them in their detection and, therefore, enable a faster and accurate diagnosis of the patient’s condition.
Stuart: And of course, the beauty of this is, depending on what you’re charging, this is highly cost-effective, because you can then stent or just manage the plaque with drugs, or whatever, but the death rate is likely to be a lot lower once you know what patients are at risk.
John: Well, we’ve seen a number of tragic deaths in Australia in recent times, and in Australia alone, somebody tragically has a heart attack every 13 minutes. So the ability to be able to scan for and identify, assist the clinician to identify, the vulnerable plaque, thus, enabling a treatment regime, it might be dietary change, it might be lifestyle, exercise, it may be drugs, as you say, it may be physical intervention with, say, stents, enables the clinicians to get ahead of the disease in individual patients, and of course, ultimately, we’d like to think at population level. And our purpose is very clearly focused on saving lives. And to go back to your point about the cost-effectiveness, because we can report within 15 minutes, it does speed/accelerate the workflows of the clinicians. And in a number of jurisdictions around the world, we’re still seeing a backlog of scanning due to COVID. We, of course, have the implications of COVID in cardiovascular disease. And while we’re not focused on that, specifically, the requirement for the assistance to the clinicians in speeding the workflows and accurately assessing the detection and informing the diagnosis is something that is well overdue.
Stuart: So Australia is, obviously, a testbed for what you would hope to achieve. We’re due to get regulatory approval here shortly. What’s the plan to commercialize the Salix device in this market?
John: Yes, Stuart, the regulatory approval in Australia has already been granted, and so we are in a position of the software is available, the tool is available for use now. And you’re correct in saying it is a testbed. We have a number of sites in Australia, on the East Coast and West Coast. We will be implementing more pilots over the next month to three months, and those pilots already have given us significant feedback and learnings that are being incorporated into subsequent releases of the software. That then leads us to the United States. We have established a fully owned subsidiary Artrya U.S.A. Incorporated. We’ve established a board chaired by Dr. Jacque Sokolov, who is a prominent cardiologist and executive within health care systems within the U.S. He’s advised many, many organizations. Dr. Sokolov is also chairing our Clinical Advisory Board, which has eminent cardiologists from around the world on that Clinical Advisory Board. And we have co-CEOs now in place in the United States. So they’re opening up the opportunities in the U.S. We are engaged with the FDA now, and we’re going through the FDA approval process currently.
Stuart: And the beautiful part of that process is there’s a predicate device out there comparable to Salix. So you can go through the standard 510(k) pathway rather than having to go through de novo, even though this is a pretty advanced piece of technology we’re working with.
John: Yes, that is correct. It is a 510(k) application, and while it is an advanced technology, we’ve got to be sure, of course, that we match the predicate on that 510(k) application. And we envisage, in the future, there will be continuing applications to the Food and Drug Administration for subsequent developments of the software.
Stuart: So looking forward, over the next 12 months, there’ll be a number of studies in Australia, working through the U.S. regulatory process. What else can we expect to see over the next 12 months of your listed life?
John: We were also appointed last year to the National Health Service, NHS, panel contract in the United Kingdom. It’s a 2+2-year, 4-year, framework agreement, which gives us immediate access into 1,250 trust hospitals throughout the United Kingdom. So we’ve been actively working in the UK. We’ve developed an economic model to demonstrate the economic benefits of using Salix Coronary Anatomy, as the first product is known. We will initiate research in the United States with clinical and hospital and research institutes. We already have a partnership with the Ottawa Heart Institute and Dr. Prof. Benjamin Chow, who is a prominent researcher and cardiologist and director of the Ottawa Heart Institute. He’s an advisor to Artrya and is also on our Clinical Advisory Board. We are completing research consistently with the algorithms and testing, validating the algorithms as we progress in Australia. We’ve submitted abstracts to three international conferences, one national conference in cardiology and radiology. So that work is continuing. We’re actually working across three continents and four countries, headquartered out of Perth, and we now have the establishment in the U.S.
Stuart: I treated its IPO recently on ASX. You had the misfortune of listing at a time when life sciences was moving a little bit out of favor, and of course, we’ve had a shooting war start in Europe at the moment. So the stock’s a little bit underwater from the IPO price. You’re blessed, though, with some people who are true believers in you. One that many of the viewers would know is Bernie Ridgeway, the man who built IMDEX from a small company into a large company. He’s your chairman. Talk to us about how you got Bernie involved in this project and other key players in the team.
John: Bernie was an angel round investor. And our approach to raise the first million dollars, which was in May 2019, was to attract a blue-chip shareholder base, and we did that successfully. Sophisticated investors, of course, by definition, but sophisticated in that they could provide advice where we requested information. So they weren’t getting their fingers in, but they were always available to provide sound counsel. And they did. And Bernie was one such person. Bernie not only grew IMDEX, as you well know, from market cap of 10 million to some 750 million, I think it was, when he left, and it’s gone north from there when Bernie retired. So he has that experience. He’s also established and ran an operation globally out of Perth, Western Australia, and established the base for IMDEX in the United States. So he brings significant experience and wisdom, as do our other shareholders.
We then proceeded through a seed round, which we released the information memorandum for that raise on the day the ASX dropped 9.7% in 2020, with COVID. So we’ve got some track record in that. Our timing in the IPO last November 2021, it was actually the day omicron was effectively announced. All the life sciences, the growth stocks, have come under some pressure. And of course, with the rising inflation and rising interest rates, there’s been, and appropriately so, a shift back to the fundamentals. We are in a growth sector. We will generate our first revenues in financial year 2023. The board and the executive leadership team of Artrya is very focused on the fundamentals. So, yes, it is slightly down on where we are listed, not as much as some other stocks, but our view is, if we keep on doing what we intend to do and, importantly, what we say we are going to do and follow our strategy, then the stock price will accordingly follow. We’ve had a lot of activity over the five months since listing, not all of which we’ve been able to announce, because we haven’t concluded certain arrangements as such. But there are a number of announcements that we’ll be making in forthcoming months.
Stuart: And for investors who don’t know you very well, talk to us about your background. For a long time, you were at Unisys before you went entrepreneurial, with a number of tech companies. Tell us about the journey you’ve been on to bring you to this point.
John: Yes, I’ve had 12 years with Unisys, which is one of the major IT players, of course. I, then, left Unisys to pursue another career. I did a brief time when I was in Sydney at Macquarie Bank, but I was intent in coming back to Perth and establishing a strategy practice, which I did, and advised boards and executive teams for 25 years in growth strategies. Also, as you said, Stuart, I’ve also been involved in startups, and I’ve started a number of tech companies, one of which was in the early 2000s, with data mining, as it was called in those days, but big data, providing information to organizations through Australia and Asia. And predictive modeling works, a little bit of background in that. I’ve chaired a startup platform company. And when my co-founder, John Konstantopoulos, and I met, we had a common interest in artificial intelligence and the deployment for beneficial outcomes. John comes to the partnership and the company with a strong background from IBM and working with artificial intelligence at IBM. So we were able to bring together multiple perspectives. And actually, the medical officer is a world-leading researcher in the area of vulnerable plaque, Prof. Girish Dwivedi, who is the Wesfarmers Chair of Cardiology at the Harry Perkins Institute of Medical Research in Western Australia.
Stuart: Well, John Barrington, well done on what you and your colleagues have achieved. Obviously, yep, Perth is well-known for its contribution to the prosperity of the whole nation, not as well-known for its successful tech startups. But you’re one of a number of successful companies that are emerging out of what’s turning into a hotbed of technology development. So good on you for what you’ve achieved so far, and here’s to the next 12 months.
John: Thank you very much. Thanks for the comments. We have assembled a world-class team here in Perth. Very proud of all our trends and what’s been delivered in a very short period of time, less than three years since we commenced operations. So thank you, Stuart, and we look forward to getting on with our purpose of saving lives.
Stuart: Well done.