ImpediMed’s new leadership team looks to grow the company

New ImpediMed leadership team and board committed to company’s success
Private payor and Medicare coverage for SOZO device reaches critical mass in 16 US states
ImpediMed prioritises 11 US states for growth as looks to boost sales and achieve breakeven

During Lymphoedema Awareness Month, just two months into her role as interim CEO and MD of ImpediMed (ASX:IPD), Dr Parmjot Bains says the company has put behind boardroom battles to focus on preventing the painful condition that can affect many cancer sufferers and generate future value for shareholders.

Founded in 1999 and listing on the ASX in 2007, IPD focuses on secondary lymphoedema, which is predominantly caused by damage to lymph nodes due to cancer or treatment for cancer.

The condition causes swelling of certain parts of the body, usually arms or legs.

The company’s SOZO device, incorporating its trademarked L-Dex technology and bioimpedance spectroscopy (BIS), non-invasively, accurately, and quickly measures and monitors fluid status.

BIS for prevention of breast cancer-related lymphoedema is now included in the globally referenced National Comprehensive Care Network (NCCN) guidelines and the Multinational Association of Supportive Care in Cancer (MASCC) guidelines.

The SOZO device is the only US FDA-cleared and clinically validated BIS solution for the early assessment and prevention of lymphoedema.

Interim CEO & MD Dr Parmjot Bains. Source: ImpediMed

Stockhead caught up with Bains and interim CFO McGregor Grant with Morgan’s healthcare analyst Scott Power.

Early detection key to prevention

Bains notes that early detection of lymphoedema, through volume measurement of fluid, is vital for preventing the condition. She says up to 20% of breast cancer patients suffer lymphoedema as a consequence of treatment.

“Prior to BIS, it was monitored with a tape measure taking multiple measurement or a laser guided device where they measure volume through perometry,” she says.

IPD’s PREVENT trial was the largest randomised control trial on lymphoedema prevention, starting enrolment in 2014 and following 1,200 breast cancer patients for three years at 10 sites in the US and Australia.

Eligible participants had planned surgical treatment, including various breast cancer procedures, ensuring a diverse and high-risk patient population for breast cancer-related lymphoedema assessment.

Bains says the trial met its primary endpoint finding that L-Dex is more effective in reducing the rate of chronic cancer-related lymphoedema with early detection and intervention compared to a tape measure.

She says 92% of patients with early detection using IPD’s BIS technology and intervention did not progress to chronic lymphoedema through the three years.

“If lymphoedema is happening but you can’t see it then BIS screening can detect the condition early and then you can reverse it,” she says.

Bains says with a compression sleeve, the disease is reversed in almost all patients with Stage 0 and Stage 1 lymphoedema whereas stage 2 and 3 need more aggressive treatments and the limb almost always never goes back to the way it was previously.

“That data has been so pivotal to show doctors this is the value of early detection where you can prevent lymphoedema,” she says.

“The trial also supported the need to continue to screen regularly over a three-year period as patients can test positive at any point over that timeframe.”

Breast cancer focus before move to all-risk cancers

IPD is currently focused on preventing secondary lymphoedema in breast cancer patients before moving to all-risk cancers, supported by its PREVENT trial protocol and the NCCN Survivorship Guidelines.

There are 290,000 diagnoses of breast cancer made annually in the US, which is IPD’s initial target market.

“Lymphoedema is a significant issue for women with breast cancer surgery and a debilitating long-term condition and SOZO is literally a breakthrough that will change patient’s lives,” Bains says.

The market opportunity for all at-risk cancers is up to ~$2bn of which breast cancer-related lymphoedema is at ~35% total.

“Gynaecology, colorectal and prostate cancers will often involve surgery around the pelvic lymph nodes, with 45-55% of patients at risk of lymphoedema, and our technology can also screen for that in the leg,” Bains says.

Leg lymphoedema screening is supported by NCCN Survivorship Guidelines and reimbursement from private payors with IPD working on accelerating capturing that market opportunity.

Laser focus on priority states in US market

The US as the world’s largest healthcare market is IPD’s target market. Grant says 16 of the 50 US states have reached critical mass, meaning at least 80% of the population in each state is covered for BIS for lymphoedema assessment (CPT code 93702) reimbursement from private payors or Medicare.

Interim CFO & executive director McGregor Grant. Source: ImpediMed

Grant says there are just over 90 private insurers in the US with 85% of those forecast to be providing coverage of CPT code 93702 by June.

“Many insurers are often dominant in particular states and as each insurer commences providing automatic reimbursements you get new states achieving critical mass,” he says.

Grant says IPD has identified 11 states that are their key focus on for growth, with seven having more than 80% coverage between Medicare and the private payors.

“By the end of April, we expect all 11 states to be at critical mass,” he says.

He says once a US state has critical mass it will be easier for IPD to sell their SOZO device with hospitals and health care organisations able to claim reimbursement.

IPD now has 1000 plus SOZO systems deployed globally, with the majority in the US, along with Europe and APAC.

Australia and NZ are also well penetrated with major cancer centres using the device.

Boosting sales for breakeven

IPD is introducing a SaaS patient-based pricing model focusing on high reimbursement states and accounts.

Bains says IPD needs between 500-700 more sales of its SOZO device to breakeven, falling well short in the previous quarter with just 13 sold.

“Thirteen was significantly below expectations and raised a lot of questions about why,” she says.

“A key reason is that organisations and institutes are waiting for reimbursement to come on to buy the SOZO devices with one of the large national payors UnitedHealthcare just coming on in January.

“Until they can get this covered a lot of sites don’t want to bill a patient coming in for breast cancer surgery and then have to bill her on top of that for these lymphoedema tests so coverage is really important.”

She says as priority states achieve critical mass, IPD’s US sales team can focus on ramping up sales numbers.

Bains says the reimbursement block is going so now it’s about driving awareness of lymphoedema and SOZO to doctors and centre directors in those priority states.

“It’s about driving awareness of both lymphoedema and that SOZO is a reimbursed product which can be a new service for them as an organisation,” she says.

“It’s 100% priority focus for us to get to that breakeven and then continue to ramp up,” she says.

The company’s vision is revolutionise patient care through clinically validated fluid and body mass composition BIS digital solutions.

“This product is fantastic technology which just hasn’t been given the fertiliser and sunlight it needs,” Grant says.

Onwards and upwards with new board and management

2023 was a volatile year for the company, with a board stoush over a capital raising and perceived risk to shareholder wealth.

In August IPD announced in accordance with ASX listing rules it had received notice from shareholders holding at least 5% of the votes that directors hold a general meeting of the company to remove four of the existing directors and replace them.

At a general meeting on September 28, four directors were removed and replaced and subsequently the remaining three directors also left the company resulting in a completely new board.

“It’s a great board that is committed to the success of this organisation and with the right skillset and motivation,” Bains says.

“We work together very well and are a highly functioning team.”

Grant says at this stage there are no immediate plans to increase numbers on the IPD board.

“We’ve indicated we’re looking to expand the board but as we think about priorities for the business we’re going to go a bit slower,” he says.

Experience to lead company

Bains is a medical doctor and seasoned healthcare executive with extensive experience in strategy, sales, marketing, commercial execution, and change management across the US, Asia, the Middle East, and Australia.

In her most recent position as Pfizer’s Gulf Cluster Country Manager, Bains effectively led a sizeable team across six countries and six therapeutic areas, including breast cancer.

Her responsibilities encompassed setting commercial strategy, aligning team capabilities, managing reimbursement processes, driving sales and marketing initiatives, and overseeing key account management for the pharmaceutical heavyweight.

These are all skills and experience Bains says will serve her well as she works to refocus IPD after what has been a tumultuous time for the company.

Bains joins a completely new board of five that includes McGregor Grant who was originally appointed as executive chair in September 2023 before being appointed interim CFO two months later.

The former Nanosonics (ASX:NAN) CFO stepped aside as chair in February to be replaced by Christine Emmanuel-Donnelly to concentrate on his critical finance role with IPD and remains an executive director.

Emmanuel-Donnelly has extensive board and health governance experience and is also a non-executive director of wound care company PolyNovo (ASX:PNV).

“We are having to rejig the company and get it going again,” Grant says.

“But there’s a lot of lessons learned from the Nanosonics experience that can be translated into this company.

“With our backgrounds, Parmjot and I both have a pretty clear idea of what needs to happen and how the market operates and so I think we can get this moving fairly quickly.”

Power says he’s confident in the prospects of IPD and says “it will not take long to regain investor support”.

“The new look IPD (board, CEO and CFO) has a laser like focus on delivering increase sales into key accounts and targeting a 10% to 15% reduction in the cost base,” he says.