Ventripoint Diagnostics (TSXV: VPT, OTC: VPTDF) is a healthcare company owning VMS+ products that could simply revolutionize the MRI system for heart analyses. The company partnered with General Electrics, and many investors expected a buy-out in 2022. The possibility faded, but we could see the transaction happening in 2023. In the meantime, the company announced the appointment of several distributors, meaning the company aims to sell products and move fast.

Company Overview

Ventripoint Diagnostics (TSXV: VPT, OTC: VPTDF) develops applications for heart disease and imaging modalities. The company designed a VMS+3 product that is more efficient compared to current MRIs:

∑       5 minutes scan time VS 60 – 120 minutes  for MRI;

∑       complete movements from the patient allowed VS motionless for an MRI;

∑       the image availability is immediate VS 1 to 2 days for an MRI;

∑       the analysis only takes 5 minutes VS 15 – 45 minutes for an MRI;

∑       The capital cost is only $50,000. In comparison, the capital cost for an MRI is between the range of $2 – 4 million.

In other words, the technology is convenient, cheaper, and faster than traditional machines. The global cardiovascular diagnostic testing market was valued at $6.8B in 2020 and is projected to reach $15.4B by 2030, for a CAGR of 8.3% during the forecasted period. This is probably Ventripoint’s most giant picture, General Electric. The company can provide direct access to 160 countries, with 480,000 ultrasound units worldwide. Many of us were waiting for a buy-out of Ventripoint by GE in 2022. Still, the company has announced the division of its business into 3 branches, GE Aerospace, GE Vernova, and GE Healthcare, with this last branch traded on the Nasdaq.

According to the company, the spin-off should be completed on January 3, 2023. GE HealthCare expects organic revenue growth in mid-single digits over the medium term. It anticipates an adjusted EBIT margin of high teens to 20% over the same time. Free cash flow conversion is estimated to be more than 85% in the medium term. GE HealthCare expects to drive revenues and growth through innovation, business optimization, and organic investment.

“In this next chapter as a standalone company, GE HealthCare will be even better positioned to advance its mission of precision care while driving growth and margin expansion.”

GE chairman and CEO H. Lawrence Culp, Jr.

Ventripoint could rely on GE Healthcare’s potential buy-out, but Ventripoint goes further. First, the company sponsored and participated in many events to spread awareness. For example, the company sponsored the European Society of Cardiology Congress in 2022. The Congress website (http://esc2022-congress.org/) reports 40,000 participants from 170 countries will hear 5,000 medical presentations during the congress. For the first time, the ESC Conference will be held virtually and in person, providing access to the latest cardiology research and clinical updates from anywhere in the world. The ESC is comprised of clinicians, scientists, and other professionals in the cardiology field. The ESC aims to unite national cardiac societies worldwide to study further and understand cardiovascular disease. The second example is the company’s participation in the DIB-SBC conference in Latin America. The SBC is Brazil’s top professional association, with 13,500 members in 26 regional societies. The DIC-SBC conference, co-sponsored by major ultrasound suppliers in the industry, attracted participants from leading cardiovascular centers, research universities, private clinics, and the government.

“VMS+3.0 is the future of heart analytics, especially for CHD,” stated Dr. Adriana Mello, Vice-President of Congenital Echocardiology at DIC-SBC.

The company also stepped up in the distribution game. On November 17, the company announced MediTek Lifesciences LLC as a distributor for California. MediTek distributes products specific to cardiology research and treatment centers throughout California, USA. MediTek has multiple sales representatives with a combined experience of over 45 years in the cardiology sector. With an established customer base of more than 100 clinical sites, MediTek will grow Ventripoint’s awareness within the California market and further expand its customer base.

Then Ventripoint exported itself to the other coast to sign another distributor in Florida with Arc Group Medical LLC. Arc Group Medical covers the entire Florida Region, and the key data is the company has been integrated into over fifty sites across Florida.

“It is appropriate that the first distributor in the USA is for California, the most populous state in the USA, which is a strategic starting point for the VMS+ family of products to address the heart healthcare needs of the approximately 39 million residents in the state,” commented Dr. George Adams, Ventripoint’s CEO.

2022 Progress

For 2022, the company has marketed its VMS+ products at 12 medical conferences this year. The company also announced distributors in the UK and Europe and has a current sales and marketing team of 33 representatives. The company closed six purchases that have been made year to date, and five more are expected by the end of January to add to the 29 deployed VMS+ units to achieve 40 committed units.

Ventripoint had set a target of 40-45 systems committed to customers by year-end.  The company has received six purchase orders year to date, including orders from Europe, UK, and United States, has three installations being arranged, and five more purchase orders are expected by the end of January. With the assistance of our distributors and our internal sales force, the company now has a list of over 4,000 cardiologists who have a practice where the VMS+ would improve their ability to assess and monitor their patients. In addition, its sales team (direct and distributor) already has a relationship with all these potential US, UK, and Europe customers.  Hence, the company now has an entire funnel of leads. Ventripoint’s sales team has been actively scheduling appointments to make them aware of the clinical benefits of the VMS+.

The company is also supposed to be featured in the National Institute for Health and Care Excellence (NICE) report. Earlier, a false report was shared and then taken down. The NICE report should be very positive and augment Ventripoint’s legitimacy.

Bottom Line

Ventripoint Diagnostics (TSXV: VPT, OTC: VPTDF) is aggressively attacking the healthcare market. The company has 12 to 18 months of cash on hand, has 33 sales representatives, and sales should ramp up quarter after quarter. Many positive catalysts will happen for 2023, and the current company’s market cap proves to be significantly undervalued.

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