Hyperfine(HYPR) - 2024 Q4 - Annual Results

Company Overview Hyperfine is a medical technology company focused on the Swoop® Portable MR Imaging® system, led by an experienced executive team Introduction to Hyperfine and the Swoop® System Hyperfine has developed the Swoop® Portable MR Imaging® system, the first FDA-cleared, AI-powered portable MRI for brain imaging, designed to improve access and economics with proprietary technology and existing reimbursement codes - The Swoop® system is the first FDA-cleared portable MR brain imaging system, utilizing ultra-low-field MRI and AI-powered software[10][35] - The company holds a strong intellectual property position with over 150 patents for its proprietary technology[10][42] - The system is commercially available in the US through a direct sales channel and internationally via distributors, supported by recent CE approval for its latest software[10][42] - Reimbursement is established in the US under existing CPT codes for both hospital and office settings, facilitating adoption[10][42] Leadership Team Hyperfine is led by an experienced executive team with a proven track record of success, including key members from prominent medical technology and healthcare companies - The leadership team includes Maria Sainz (President and CEO), Brett Hale (CAO & CFO), Tom Teisseyre (COO), and Edmond Knopp (CMO)[8][83] - The commercial and strategy teams are strengthened by executives with experience from leading medical technology and healthcare companies such as Intuitive, Philips, and Ceribell[8][83] Market Opportunity & Growth Strategy Hyperfine targets a multi-billion dollar market opportunity with a clear growth strategy focused on expanding sites of care, geographic reach, and continuous technology development Total Addressable Market (TAM) Hyperfine identifies a sizeable and growing U.S. Total Addressable Market (TAM) exceeding $6 billion, with sequential expansion plans from critical care to broader neurology and brain health markets U.S. Total Addressable Market Expansion | Stage | Timeline | Target Facilities | Market Size | | :--- | :--- | :--- | :--- | | Beachhead | 2024+ | 4,000 critical care units, 5,600 emergency departments | $1.5B+ | | Large Neuro Market | 2025+ | 2,400 neurology practices | - | | Brain Health | 2026+ | 10,700 urgent care facilities, 15,600 nursing homes, 3,600 infusion centers | $6B+ | Growth Catalysts and Strategic Roadmap Hyperfine's growth is driven by a clear roadmap focusing on three main pillars: expanding sites of care into outpatient settings, geographic expansion into new international markets like India, and continuous technology development through a rapid cadence of AI-powered software releases - Site of Care Expansion: The company plans to move beyond US Critical Care into new outpatient markets, targeting Emergency Department entry in 2025 and office-based entry thereafter[14][17][54] - Geographic Expansion: Following the establishment of distributors in Europe and Asia Pacific, Hyperfine is targeting India market entry, with CDSCO submission and approval as key milestones[14][17][54] - Technology Development: A consistent pipeline of innovation is planned, with the 8th and 9th generation AI-powered software released, and the 10th and 11th generations anticipated for the future[14][17][54] New Market Expansion Strategy The company is actively pursuing new market segments by generating clinical evidence and establishing business models for Emergency Departments and Neurology Offices, enabled by new IAC Accreditation standards for ultra-low-field MRI - Emergency Departments: The strategy focuses on the acute ischemic stroke triage use case, supported by data from the ACTION-PMR study to drive adoption in emergency departments and stroke networks[56] - Neurology Offices: Adoption will be driven by the CARE PMR clinical study and collaborations with partners like Lilly and NeuroNet. The company is refining a scalable office-based business model[57] - The Intersocietal Accreditation Commission (IAC) published new standards in November 2024 that include portable MRI, allowing accredited medical offices to qualify for CMS reimbursement, which significantly opens the office market opportunity[58][61] Technology, Innovation, and Clinical Evidence Hyperfine drives continuous innovation through AI-powered software releases, significantly improving image quality and building robust clinical evidence for diverse applications AI-Powered Software and Innovation Cadence Hyperfine maintains a rapid and consistent cadence of innovation through AI-powered software releases, continuously improving image quality and performance with features like AI denoising and deep learning-based image reconstruction - The company has demonstrated a fast cadence of software releases from 2020 to 2024, progressively enhancing image quality and functionality[19][63] - Key software improvements include AI denoising in DWI sequences (Software 8.7), faster imaging (Software 8.8), and advanced image reconstruction using deep learning (Software 8.3)[19][63] Image Quality Improvements Through proprietary software and AI deep learning, Hyperfine has rapidly accelerated the clinical utility of its portable MRI by significantly improving image quality, with further enhancements anticipated - There has been a significant improvement in image quality, particularly in FLAIR contrast, from the initial FDA clearance in Q1 2020 to the 8th Generation software launched in Q1 2024[21][65] - The company anticipates further image quality enhancements with its next-generation (10th) software, which is expected in the first half of 2025[21][65] Clinical Evidence Hyperfine is building a large and growing body of clinical evidence to support adoption across various use cases, with numerous peer-reviewed publications and ongoing prospective studies for future applications - The company has a substantial body of evidence with over 50 peer-reviewed publications and more than 175 conference presentations[66] - Prospective studies are in progress to support new use cases, including ACTION PMR for stroke and CARE PMR for Alzheimer's disease[66] Commercialization and Business Model Hyperfine employs a scalable commercial model with direct sales and distributors, building a global installed base and generating significant recurring revenue from system sales and subscriptions Commercial Strategy and Global Footprint Hyperfine employs a scalable commercial model with a direct sales force in the U.S. and a network of global distributors, achieving an installed base of over 175 Swoop systems globally by December 2024 - The company utilizes a direct sales model in the US and a distributor network for international markets, including Canada and other regions[68] - As of December 2024, the global installed base exceeds 175 Swoop systems, which includes both commercial and research units[68][70] System Economics and Revenue Model The company's business model is built on an initial system sale followed by significant recurring revenue from software and technical service, driving attractive margin expansion as the installed base grows - The revenue model consists of an upfront system sale and a multi-year recurring revenue stream from software and service subscriptions[71][72] System Pricing | Item | U.S. MSRP | | :--- | :--- | | Initial System Sale | $475,000 | | Annual Recurring Revenue (Software & Service) | $47,500 / Year | Financial Performance Hyperfine demonstrates strong financial performance with revenue growth, positive gross margins, reduced cash burn, and a strategic shift towards organic commercial growth Key Financial Metrics Hyperfine demonstrates solid financial fundamentals with strong revenue growth, significant gross margin improvement, and disciplined cash management, extending its cash runway into the second half of 2026 Revenue and Gross Margin (2020-2024) | Year | Total Revenue | Device Revenue | Service Revenue | Gross Margin (%) | Systems Sold | | :--- | :--- | :--- | :--- | :--- | :--- | | 2020 | $1.5M | $1.5M | $0.0M | -162% | 23 | | 2021 | $5.2M | $4.9M | $0.3M | -78% | 35 | | 2022 | $6.8M | $5.3M | $1.5M | 13% | 37 | | 2023 | $11.0M | $8.7M | $2.3M | 43% | 48 | | 2024 | $12.9M | $10.5M | $2.4M | 46% | N/A | Annual Cash Burn (2022-2024) | Year | Cash Burn | | :--- | :--- | | 2022 | $71.0M | | 2023 | $42.3M | | 2024 | $38.4M | - As of December 31, 2024, the company had $37.6M in cash and cash equivalents, with an expected cash runway into the second half of 2026[27][78] Business Transformation and Revenue Mix The company is undergoing a transformation from a research-focused revenue base to organic commercial growth, with underlying commercial device revenue showing consistent growth despite a one-time purchase in 2022 - The company is shifting from research-driven sales to organic commercial placements, with initial commercialization focused on US Critical Care[28][30] - A one-time purchase of 20 Swoop systems by King's College of London (KCL) in 2022, supported by the Bill and Melinda Gates Foundation, impacted historical revenue figures[30][31] Revenue Mix Transformation (2022-2024) | Year | KCL Device Revenue | Device Revenue ex-KCL | Service Revenue | Total Revenue | | :--- | :--- | :--- | :--- | :--- | | 2022 | $4.6M | $0.6M | $1.6M | $6.8M | | 2023 | $0.0M | $8.7M | $2.3M | $11.0M | | 2024 | $0.0M | $10.5M | $2.4M | $12.9M | Investment Summary Hyperfine offers a compelling investment opportunity as a commercial-stage company with a unique, FDA-cleared portable brain imaging system addressing significant global clinical needs The Hyperfine Investment Opportunity Hyperfine presents a compelling investment opportunity as a commercial-stage company with a first-of-its-kind, FDA-cleared portable brain imaging system, poised to address large unmet clinical needs globally - First FDA-cleared portable, AI-powered MR brain imaging system with strong proprietary technology[84] - Positioned to solve large unmet clinical needs like Alzheimer's and Stroke globally[84] - Growth blueprint is driven by expansion into new sites of care (emergency departments, clinics, offices), new geographies, and sustained innovation[84] - Features a solid financial profile with rapid topline growth and attractive gross margins[84]