The breast defence
“More companies in New Zealand doing R&D will now be able to receive a benefit and that’s good for NZ Inc.”
Craig Hadfield, Volpara CFO
At a glance
- Volpara Health Technologies was formed in 2009 with a mission to personalise breast care through AI and machine learning.
- Volpara listed on the Australian Stock Exchange in 2016 and has so far raised AUD$95 million to help its strong growth path.
- An acquisition this year of Seattle-based company, MRS Solutions, gives it a strong foothold in the US and is propelling the company to leading a more predictive agenda for the breast cancer field.
- Volpara now has 171 staff in total including 79 in New Zealand.
The figures are daunting: some 500,000 women will die from breast cancer this year and big improvements are needed in the early detection of breast cancer with 25 to 40 percent of breast cancers missed by radiologists.
"If you have a fatty breast, very few [cancers] are missed, but if you have an extremely dense breast you see 40 percent or more missed," says Volpara Health Technologies founder and CEO Ralph Highnam.
Ten years ago Wellington-based medtech company Volpara Health Technologies set out to revolutionise personalised breast care globally using artificial intelligence and machine learning. Today, it helps breast imaging centres around the world to detect breast cancers earlier with its breast imaging tools.
Volpara’s imaging tools – delivered via a software as a service (SaaS) model – enable medical centres to personalise measurements of volumetric density (women with dense breasts have a higher risk of breast cancer), breast compression and breast positioning on every mammogram.
“Early detection is critical and breast cancer screening is proven to work,” says Highnam, a leader in the digital breast imaging field for 25 years.
According to Mark Robinson, Callaghan Innovation’s Business Innovation Advisor, when you visit Highnam and his team, it’s clear that they are motivated by much more than revenue and profit.
“Of course they have to care about shareholder returns, but their attitude and commitment to saving lives comes out really strongly. All their meeting rooms are named after people who have been key influencers in breast screening, people like breast density campaigner Dr Nancy Cappello,” says Robinson.
“It has been very personal from day one,” agrees Highnam. “Sadly, on a monthly basis, we hear about former colleagues, friends and family who have cancer.”
Volpara has achieved some major milestones in the last few years. In 2015, it signed its first major distribution deal, then listed on the Australian Stock Exchange (ASX) in 2016, raising a total of AUD$95 million since then. This includes A$55 million this year to acquire Seattle company, MRS Systems, whose reporting system allows healthcare providers to document patient history, risk factors and radiology findings from breast and lung cancer screening.
The deal with MRS has taken Volpara’s market share of the US market from close to 7 percent to 25 percent and doubled its salesforce there.
The US market – where 39 million women go through breast screening each year – now provides 90 percent of the company’s revenue.
Acquiring MRS is also enabling Volpara to build its patient and imaging data, giving it the ability to be more predictive in its approach to catching breast cancer early.
Other recent milestones have seen Volpara reach 171 staff, receive the 2019 ASB Wellington Exporter of the Year award, and the company has been granted its 35th international patent.
“Patents are very important – there are companies in the US trying to compete with us.”
Volpara is squarely facing up to that competition with a showcase of its most sophisticated suite of products yet at a big US trade show.
“We’re presenting products where we are using the second or third version of products we have created thanks to Callaghan Innovation grants,” says Highnam, adding that the next major release will see these products heavily integrated with MRS software.
VolparaEnterprise is a cloud-based analytics product providing vital image quality metrics, while Volpara Live! launched last year, is a product bringing real time quality control, which alerts the technologist if the patient hasn’t been positioned correctly at the time of the mammogram.
VolparaDensity is an important product which enables a volumetric measure of breast density from digital mammography and tomosynthesis data. It helps clinicians judge breast cancer risk and determine who should have additional imaging.
This suite of products makes for a compelling offer in a market where US state laws require women to be told their breast density and options every time they undergo breast screening.
Investing in R&D has played a vital role in Volpara’s success. In the past this R&D has been supported by a Growth Grant but Volpara is now anticipating the benefits of the R&D Tax Incentive, which takes effect this year.
"You can’t just sit around, you need to keep innovating,” says Highnam. “If you stand still, you will die, so we need to keep innovating and the R&D money from Callaghan Innovation is critical."
“More companies in New Zealand doing R&D will now be able to receive a benefit and that’s good for NZ Inc,” says Volpara CFO, Craig Hadfield.
Another advantage of the R&D Tax Incentive for Volpara is the ability to claim for some of their foreign R&D (up to 10 percent of the overall claim) under the new tax scheme, he says.
To date, Volpara has also used project and student grants from Callaghan Innovation to advance their R&D.
Outside the US, Highnam is also keeping a close eye on opportunities in Europe. He is waiting on the results from a randomised controlled trial in the Netherlands on MRI and mammography in women with extremely dense breasts.
Australia is another important market for Volpara, with many private imaging centres buying the product.
“Big things will happen in Australia this year, hopefully in both the private and public arenas,” says Highnam.
While having a SaaS business model typically means internet sales, you still need salespeople in active healthcare markets, adds the CEO, who has a team of three in Australia.
“Breast cancer imaging is very relationship-driven so you need those people on the ground, all with the same commitment as the radiologist: saving women’s lives.”