ASX All Ords stock rockets 18% on FDA clearance

This stock is making very healthy returns on US news.

| More on:
A man wearing a white coat holds his hands up and mouth open with joy.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The All Ordinaries (ASX: XAO), or All Ords, stock 4DMedical Ltd (ASX: 4DX) jumped 18% today after the ASX healthcare share announced exciting news out of the FDA in the United States.

The respiratory imaging technology business has received clearance from the US Food and Drug Administration (FDA) for its IQ-UIP product. This is an advanced AI-driven lung diagnostic tool to "revolutionise the diagnosis of usual interstitial pneumonia (UIP), the hallmark radiological pattern for diagnosing interstitial pulmonary fibrosis (IPF)."

What this FDA approval will do for the ASX All Ords stock

The company said its acquisition of Imbio in 2023 enabled it to provide its referrers with a comprehensive portfolio of functional and structural lung analysis tools. 4DMedical said this portfolio, combined with its cardiology analysis suite, was unique to the company and provided a "meaningful current revenue stream as well as the opportunity for significant growth".

According to the company, FDA clearance of IQ-UIP "adds another important component" to the portfolio and will be actively offered to referrers in Australia and the US.

4DMedical explained that this offering, combined with CMS reimbursement in the US, facilitated growth opportunities in various markets, including the VA, private radiology, respiratory, and cardiology specialists.

However, receiving FDA clearance for IQ-UIP is one of the three products that could trigger the obligation to pay US$5 million of consideration in 4DMedical shares to the sellers of Imbio Inc. This was approved at the company's extraordinary general meeting (EGM) on 22 January 2024. Shareholders of the ASX All Ords stock will be updated once the issue of shares is finalised.

CEO comments

The 4DMedical managing director, CEO and founder Andreas Fouras said:

IQ-UIP represents a transformative step forward in addressing the challenges of diagnosing and managing UIP.

Its deployment promises to shift the standard of care from reactive to proactive, improving patient outcomes while offering significant benefits to healthcare providers and pharmaceutical developers.

UIP and IPF are an important and expensive part of healthcare, and there has been strong interest in this offering from both doctors and drug developers since winning FDA Breakthrough Device Designation in 2023.

Why IQ-UIP helps the healthcare industry

There are a number of benefits of utilising this product, according to the company.

Firstly, it's meant to enhance diagnostic accuracy – it "quickly and accurately identifies UIP patterns such as subpleural fibrosis and honeycombing". It also enables earlier intervention and management, potentially extending survival rates and improving the quality of life.

4DXMedical also pointed out that IQ-UIP has the potential to "shorten clinical trial timelines and reduce costs for pharmaceutical companies by providing a reliable imaging biomarker and patient selection tool".

Clinical trials in the sector can reportedly cost more than US$115 million per trial, with the total cost of developing new drugs and taking them to the market potentially being in the billions of dollars.

The ASX All Ords stock said IQ-UIP had the potential to "dramatically reduce the costs and time taken for clinical trials, which will benefit pharmaceutical companies, and also deliver better health outcomes to patients in a faster time frame".

The median survival after diagnosis is between one and two years. The condition affects 140,000 individuals annually in the US, and 50,000 new cases are diagnosed each year. The global IPF treatment market is expected to almost double in the next decade to approximately US$7.81 billion, up from US$4.01 billion in 2024.

4DMedical share price snapshot

Shares in 4DMedical closed at 55 cents today, up 14.7%. Despite today's rise, the ASX All Ords stock has fallen 22% in the last 12 months.

Created with Highcharts 11.4.34DMedical PriceZoom1M3M6MYTD1Y5Y10YALL7 Jan 20247 Jan 2025Zoom ▾Mar '24May '24Jul '24Sep '24Nov '24Jan '25Apr '24Apr '24Jul '24Jul '24Oct '24Oct '24www.fool.com.au

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Healthcare Shares

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Healthcare Shares

Which small cap ASX share is jumping 10% on strong results

Investors have been bidding this stock higher today. But why?

Read more »

Cropped shot of an attractive young female scientist working on her computer in the laboratory.
Healthcare Shares

Why Macquarie forecasts 30-50% upside for these ASX All Ords healthcare stocks

Macquarie updated its target price on these three ASX All Ords healthcare stocks.

Read more »

A woman jumps for joy with a rocket drawn on the wall behind her.
Healthcare Shares

Guess which ASX 200 stock is jumping 10% on big news

This stock is catching the eye with a strong gain on Thursday. But why?

Read more »

a young woman holds her hand to her ear and leans sideways as if to listen to something that's surprising her as her eyes and her mouth are wide open.
Healthcare Shares

Down 15% since January, are Cochlear shares now a buy?

Let's see what analysts are saying about this blue chip.

Read more »

Green arrow with green stock prices symbolising a rising share price.
Healthcare Shares

Guess which popular ASX 200 stock is up nearly 60% in less than 2 months?

Investors who bought this ASX 200 stock in the recent dip have been strongly rewarded.

Read more »

A senior pharmacist talks to a customer at the counter in a shop.
Healthcare Shares

Are Sigma Healthcare shares a good buy now after the merger with Chemist Warehouse?

Sigma Healthcare shares have soared 154% in 12 months. Can this stellar run continue?

Read more »

Doctor doing a telemedicine using laptop at a medical clinic
Healthcare Shares

Up 34% since April, ASX 300 healthcare stock lifts off again today on new milestone

The ASX 300 healthcare stock has been on a tear since hitting one-year lows in April.

Read more »

Shot of a scientist using a computer while conducting research in a laboratory.
Healthcare Shares

Should I buy the dip on CSL shares?

A leading fund manager gives his verdict on the growth prospects for CSL shares.

Read more »