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CardieX’s optical sensor strategy lights up: MST Access; reiterates 8.2 cents valuation

Published: 14:55 14 May 2020 AEST

Cardiex Ltd - CardieX achieves breakthrough in sensor technology; MST Access reiterates 8.2 cps valuation
Earlier this week, MST released a ‘Quick Note’ reiterating its valuation

CardieX Ltd (ASX:CDX) is focused on developing the first uncalibrated, non-invasive and cuffless wearable sensor for monitoring blood pressure and other cardiovascular health vital signs.

This development is expected to open up significant commercial opportunities in both medical and consumer markets.

Research house MST Access initiated coverage on CardieX in September 2019 with an 8.2 cents per share valuation using discounted cash flow methodology (current price: 2.4 cents).

Earlier this week, MST released a ‘Quick Note’ reiterating its valuation and highlighting CardieX’s recent breakthrough in sensor technology.

Following is an extract from MST’s research update:

CardieX Achieves Sensor Breakthrough

CardieX subsidiary ATCOR has been able to mirror the hemodynamic waveform at the heart of its proprietary and FDA-cleared SphygmoCor® technology, using a photoplethysmography, or PPG, sensor. PPG sensors are one of the most widely used optical sensor arrays on wearable devices consisting of LEDs and photodetectors. ATCOR has developed specific heart and arterial health metrics features across a range of PPG sensor colour spectrums based on its SphygmoCor algorithm. This is an important technical milestone and paves the way for clinically meaningful cardiovascular data to be obtained remotely from a wearable device.

First major milestone under Mobvoi JDA

CardieX’s PPG sensor breakthrough represents an important first phase milestone for the Mobvoi China wearables joint development agreement (JDA) announced on 11 September 2019. Under the terms of the deal, CardieX entered a multi-year agreement with Mobvoi, Google’s official operating partner in China, for the development of novel and proprietary health technologies, applications, and features to be integrated into Mobvoi’s next generation of smart wearable devices using Google’s Wear OS platform.

Medical grade data from wearable device

ATCOR’s FDA-cleared SphygmoCor technology is considered the gold standard in non-invasive central blood pressure waveform measurement (cBP). Developing a signal processing algorithm based on the same cBP waveform to measure pressure pulse at the heart (aortic pressure pulse) using a PPG sensor delivers by extension medical-grade data. The company has used the algorithm output to design clinically meaningful measures of heart stress, heart age and exercise capacity – a first in wearable sensor technology. Future data outputs planned by the company include cuff-less blood pressure tracking, arterial stiffness, and central and brachial blood pressure.

Potential for global standard & major partners

Separately and in parallel, CardieX will now move forward with the development of a CardieX Sensor Development Kit, or CSDK, incorporating a reference design for a PPG sensor together with the CardieX algorithms. This would allow CardieX to licence its proprietary technology platform to third party device manufacturers in the health-tech industry such as Apple and Fitbit. Given the ubiquitous nature of PPG sensors raises the prospect of the CardieX platform becoming the global standard in wearable devices for clinically meaningful cardiovascular metrics. The next phase of its CSDK should include further advanced algorithms with April 2021 cited for a potential rollout date.

Valuation

Our base-case valuation remains unchanged at 8.2 cents per share using DCF methodology (full details in our initiation report dated 19 September 2019).

 

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