Resonance set for US pilot study

Resonance Health Group (ASX:RHT) has signed a memorandum of understanding with a US radiology service provider for a pilot study in preparation for the commercial launch of its FerriScan diagnostic test.

FerriScan is a non-invasive test which measures the iron content of the liver, and can be used to detect and treat iron overload disorders including thalassaemia and hereditary haemochromatosis using specifically configured MRI machines. Scan data is analysed at a centralised RHAS image processing centre using proprietary software.

Under the proposed agreement, the US radiology chain will perform the MRI component of the FerriScan test and will be responsible for billing and collection activities. Resonance Health will perform the FerriScan analysis and both parties will collaborate on launch plans and reimbursement strategy.

"We are taking a staged approach with this partner with the view that we would like to maintain a long-term strategic relationship with them." said Resonance Health director of marketing and sales, Glenn Smith.

"The pilot study will help us understand what information and education we will need to provide them with. The choice of sites will be the most major and influential sites that the US partner has -- and from a clinical perspective we get the most influential clinicians for iron loading diseases who are now able to refer patients to FerriScan-enabled sites.

"Even in this initial pilot phase we will be able to leverage off their substantial and significant marketing and sales force to promote the FerriScan service."

The pilot phase is due to commence in the fourth quarter 2005. The identity of the US radiology chain remains undisclosed until a definitive agreement is signed, but Australian Biotechnology News understands the deal could represent access to more than 200 sites and will not be an exclusive arrangement.

"This agreement doesn't limit our opportunity in the US market or our ability to spread FerriScan through other centres in the US," Smith said.

To coincide with the pilot study, Resonance Health is also planning an expansion of its marketing effort through profile activities at the American Society of Hematology (ASH) and the American Association for the Study of Liver Disease (AASLD).

Financial results

Resonance Health generated its first revenues in the 2004-05 financial year -- AUD$121,568 from sales of FerriScan to both patient customers through Australian pilot marketing activities and through the provision of FerriScan to Novartis Pharmaceuticals. Total revenues were up 475 per cent to $283,179.

The company's loss was down 51 per cent to $1.9 million, and the company has $1.5 million in the bank, up from $1.27 million last year.

"The message in these figures display we are providing the initial model of four scans per month per site. We are accelerating toward profitability and reaching our goal of returning value to shareholders," said Smith.