Radiopharmaceutical company Cyclopharm (ASX: CYC) is set to begin commercial sales of its lung imaging device Technegas in the US, following the Food and Drug Administration’s (FDA) stamp of approval on September 30. In doing so, Cyclopharm is entering an anticipated $280 million addressable Pulmonary Embolism market.

Cyclopharm can start selling its product immediately and will finish assembling its first batch of 200 generators. The Company plans to send the first air shipments to the US by early November. Additionally, it will implement its planned marketing strategy, using its sales and operational expertise in 64 countries where the product is already approved and established. 

Cyclopharm Managing Director James McBrayer said, “The USFDA approval for Technegas has been achieved through the persistence and the hard work of our highly skilled global team along with the unwavering support of our Board and shareholders. Importantly, USFDA approval has also established a platform for maximising the clinical use of Technegas across a wide range of respiratory applications going forward.”

Technegas is primarily employed to detect and treat Pulmonary Embolism (PE) (a condition in which one or more of the lung’s arteries is blocked with a blood clot). The US reports up to a million PE cases annually, and the disease has a low survival rate, making Technegas an attractive solution.

The USFDA approved using Technegas not only in diagnosing PE but also for the broader purpose of “Visualization of Pulmonary Ventilation” or witnessing a patient’s breathing. This extensive approval forms the foundation of Cyclopharm’s Beyond PE expansion plan, which aims to apply this technology to various respiratory conditions, including COPD, asthma, Long-term COVID, and Pulmonary Hypertension. This strategy opens up a significantly larger potential market for Technegas in the United States in the future.

Based on the expected high demand in the US sales model, Cyclopharm will supply and install Technegas generators in nuclear medicine departments to encourage their adoption and use. The Company has already established agreements for third-party distribution, generator servicing, installation, and administrative support for Technegas in the US.

The expected high demand is a product of Technegas lobbying for the approval of US clinicians and their representative bodies. This resulted in the reception of 420 formal expressions of interest in Technegas.

The USFDA categorises Technegas as a unique type of product, which is both a drug and a device (a “drug-device Combination Product”). This classification includes the Technegas Generator, the single-use Technegas Crucible, and the Patient Administration Set (PAS) as interconnected components that work together. The approval from the USFDA applies to the entire Technegas product, from its production in Australia to distribution. 

To establish itself in the US market, Cyclopharm plans to leverage its experience of introducing Technegas in various global markets, including its largest market, Canada. In Canada, the Company has effectively replaced competing products currently in use in the US to the point where nearly all lung ventilation procedures in nuclear medicine in Canada use Technegas.

In the US, about four million procedures are conducted each year to rule out the presence of PE. Of these procedures, 85% are performed using Computed Tomography Pulmonary Angiography (a.k.a. CT-scans or CTPA). The remaining 15%, i.e. roughly 600,000 procedures, rely on nuclear medicine instead of CT for diagnosing PE. This group includes patients with contraindications, such as pregnancy, renal problems, allergies to CT contrast agents, or radiation concerns.

Cyclopharm’s initial target is these 600,000 nuclear medicine imaging procedures for PE, which it estimates to represent a market worth around US$90 million annually. The Company feels that it can attain a 50% market share in this segment within the next two to three years, with the potential to expand to over 80% within a three to five-year timeframe.

Given its unique drug-device classification by the FDA, the Company informed that there’s a high barrier for entry to competitors in the US, giving it plenty of room to grow. With over $18 million at the end of June 2023 and a new board, Cyclopharm is entering FY24 with the cards in its favour.