Ventripoint: Imaging the Heart

How you come across companies to invest in varies from investor to investor but getting “a tip” from a friend is often a great place to start. So when a pal told me about Ventripoint Diagnostics (VPT.V) a couple of years ago I thought I would check it out.

Obviously, I know absolutely nothing about medical devices or cardiology but I do know that hospitals are constantly looking for technologies which will make treating patients more cost effective. I also knew that among other nasty effects of both COVID and the “vaccinations” a host of cardiac issues were cropping up. Which would mean that the demand for all manner of cardiac care was likely to increase.

As the company puts it on its website, “Echocardiogram departments were already near capacity prior to COVID-19 shutdowns.  43-month backlog for imaging procedures in Canada.  VMS+ is needed to help ease backlog.”

The other thing I knew, from adventures in other medical tech companies, is that the development to sales cycle is long. Very long. The fact that VPT was working on its technology back in 2017 and is only now beginning to sell its products is not at all unusual.

What is unusual about VPT is its ingenious “piggybacking” of a software-driven 3D image analysis technology onto existing imaging solutions from 2D ultrasound systems. Which led to a software-based analysis tool for 3D echo and MRI images. What this means is that cardiologists and image technicians can use existing equipment to perform useful and sophisticated analysis of cardiac function. And, yes, there is an Artificial Intelligence component to the software.

The original concept was developed to substitute 2D ultra-sound for MRIs mainly for children. Small children don’t do well staying still in a MRI machine – Hell, I don’t do well in the damned things. So the initial thought was to develop an add-on for ultra sound machines which could create 3D images and analyze them. That technology and software led to the next software which uses the same analytic techniques on 3D echo and MRI images.

The VPT technology and software has been tested and evaluated in numerous clinical settings as part of the ongoing certification process medical technologies require before they can be sold. In May 2023, The Company obtained European Union Medical Device Regulation (EU MDR) certification for its cardiac diagnostic system.

VPT announced on July 18 that, working with its German partner, Angiopro GmbH, Ventripoint’s VMS+ solution has been adopted by Freiburg Hospital as its cardiac diagnostic tool. At this stage, placing VMS+ in one of the largest hospitals in Europe recognized as the supra-regional centre for the treatment of complicated heart disease is a huge milestone for the company. The proverbial “foot in the door”.

While this will undoubtedly lead to other European sales it is also a very solid proof of concept for potential acquirers. Which is the other half of the Ventripoint story, its founder and current Chairman Dr. George Adams, as well as being an innovator, is a serial entrepreneur who has built and sold a number of technology companies.

The one similarity between medical tech companies and junior resource companies is that management is absolutely critical for success. Both in the research and development stage and in the “exit”. The fact is  Ventripoint will almost certainly be bought out by a much larger firm as more and more hospitals adopt the technology.

Adams has done this before. It might be a bit of a tell that on January 3, 2023 Ventripoint announced “it is now time for an operational CEO to drive the Corporation forward,” stated Dr. George Adams, Executive-Chairman. “I will be focusing on strategic issues and governance for the Corporation.”

Ventripoint is one of my few speculative “winners”. I got in at $0.18 and sold the majority of my position at $0.51 for a useful, TFSA protected, profit. So, at the moment, my exposure is “house” money. When that is the case, my preferred strategy is to wait for the sort of development which will take the shares well over $1.00. Have to make up for the still disappointing junior resource companies I own.

It is difficult to value a company like Ventripoint which has barely any sales and is not likely to break even in the next year or two. VPT’s value is in its patents, certifications and evaluations. Currently VPT is trading at $0.30 for a market cap of $47 million. $1.00 a share would take that market cap to $156 million. I am pretty certain Dr. Adams is focusing on that “strategic issue.”

[Disclaimer: This is not investment advice. I am not an investment professional. I am down about 30% at the moment. I will write about companies that I hold. I will disclose any holdings. Do your own due diligence. Do it hard. Call the CEO.

I currently hold shares in VPT.V and while I have no plans to sell anytime soon I reserve the right to take profits as they arise.]