Keeping up with the technology curve can be difficult for health care professionals and especially so for dentists and dental specialists. With a rapidly changing landscape the ability to leverage advanced imaging technologies to comply with emerging standards of patient care means that dentist professionals have to keep abreast of a rapidly changing array of technology options.
When delving into a wide variety of new imaging options available, dentists who are already familiar with LED Medical (LMD:CA) from its successful VELscope product are likely to turn back to this familiar brand as they move forward. Being an established company that can boast an existing relationship with much of its customer base positions LED Medical well to execute on this opportunity.
LED Medical is ready to enable customers with an expanding portfolio of innovative imaging products and services that promise to improve patient care while creating work flow efficiencies as dentist’s transition from an analogue to digital work flow. We talked with David Gane, LED Medical’s CEO, to get granular about the company’s product offerings and plans for the future.
EQ: Why don’t you start with a brief introduction to the company?
David Gane: LED Medical Diagnostics Inc. is a TSX Venture company founded by the previous CEO who is also the co-inventor of the VELscope. The VELscope is the world’s leading device designed to assist dentists and other health care professionals in the early discovery of oral mucosal abnormalities including oral cancer and pre-cancers. We currently have approximately 13,000 VELscope customers worldwide. In October 2013 I joined as CEO and transitioned the management team and the company from a single product strategy to build a high value dental imaging company with a comprehensive portfolio of imaging products and services.
EQ: Speaking of which, could you talk just a little bit about your newest offering, the LED imaging cloud?
David Gane: Like other healthcare providers, dentists acquire many images during the diagnosis, treatment planning, and treatment of their patients and they have a need to visualize, store, and share this image information in an efficient and secure way. Creating workflow consistency and workflow efficiency is a core-competency desire at the center of every practice. The LED Dental Imaging Cloud is a secure way to store images in the cloud that allows clinicians to view, enhance and share them from anywhere they have an internet connection. The imaging cloud is a software as a service (SAAS) platform that we offer which is value-added service to our imaging devices. The imaging cloud solves the workflow, case management, and collaboration issues at the center of many practices by allowing the dental office to manage, enhance and share these images with the patient, insurers and other providers on the treatment team. It’s really quite wonderful.
EQ: Beyond the way that it improves the care that the people are receiving, it's also a subscription service that is going to produce a new revenue stream, correct?
David Gane: That's right. The subscription based nature of the LED Imaging Cloud provides a low cost to entry for the customer, which we feel will remove friction from the sales funnel, and will provide the Company with a growing source of recurring revenue over time. We also think that as practices become familiar with the imaging cloud that it will evidence excellent levels of retention, making our customer base even easier to retain. Our subscription model with its SAAS delivery and the highly visible benefits of using the cloud is not unlike the broader SMB/enterprise solutions being deployed across much of the technology space. We’re excited about this.
EQ: Tell us a bit more about your core product, VELscope.
David Gane: Our core technology is the VELscope Vx. It is an affordable, easy to use, hand held device cleared by the FDA and Health Canada for use by dentists and oral health care practitioners as an adjunctive device to be used in the comprehensive oral examination of the patient. It’s technology platform was developed in collaboration with the British Columbia Cancer Agency and is based on the direct visualization of tissue auto fluorescence and the changes in fluorescence that occurs when abnormalities are present in the mucosal tissues. It’s a great product to assist in the early discovery of a number of mucosal disorders including, infection, pre-cancerous tissue and oral cancer. It is sold through distribution with an MSRP of approx. USD $2800 and incorporates a single per patient use disposable called the VELcap which protects the patient from cross contamination and provides recurring revenue to the company. Think Razor, razor blade model. Although we’ve greatly fragmented our revenue concentration we’re incredibly grateful to have such a reliable, recognizable, trusted product.
EQ: And what about the RAYSCAN Alpha?
David Gane: RAYSCAN Alpha is a next generation extra-oral dental imaging technology from RAY Co, formerly a Samsung Company. It takes two-dimensional and three-dimensional radiographic images of the patient with high image quality at low radiation dose. It's multi-modal meaning that one can purchase this technology in different configurations from a simple panoramic machine to a low dose CT configuration. This product has been awarded a number of international design awards and is destined to be a leading device in this rapidly growing product category. It is a very strong utility and application for all dentists and dental specialists. The RYSCAN Alpha is a strong complement to our line of imaging hardware and software offerings, especially our Imaging Cloud.
EQ: Both VELscope and RAYSCAN are going to be compatible with the imaging cloud correct?
David Gane: That is right. Our entire line of image acquisition devices can interface with the LED Imaging Cloud. What makes the Imaging Cloud such a strategic and competitive game changer for us is that it ties together our entire portfolio. We now have a full service, comprehensive platform that can provide closed loop services, both hardware and software, to a dental practice. To our knowledge, this is unique. We think this positions us not only to be offensive in the space but also defensive in that our platform and its capacity would be hard to replicate.
EQ: The existing impression of your brand in the dental care community gives you an excellent chance to leverage your company’s reputation in offering this new service, does it not?
David Gane: So this is a really important part of our story. We currently have a large user base of VELscope customers that are looking for technology solutions as they transition from analog film to digital solutions and also from 2D to 3D imaging solutions. The profession is rapidly adopting a digital and CAD CAM workflow which is improving work flow and patient experience. This will be a definite profession evolution once completed but in the interim our customers are obviously concerned about getting the transition right to avoid the stresses and setbacks that can come from not having the correct vendor. We think that with our experienced team and the product portfolio we have assembled that we will be successful in leveraging our loyal customer base by providing these customers innovative imaging technologies combined with white glove customer service and support. That’s really our difference maker, our customer service in combination with the technology. We’re a unique resource for our customers to lean on in a time that could cause significant disruption to their practice.
EQ: Are they any major events that investors should be on the look-out for over the next year?
David Gane: We are on a rapid revenue growth trajectory and plan to continue growing organically but we are also interested in a strategic acquisition or two. The management team has experience in M&A in this space which is an asset we’ll leverage opportunistically. Also, we plan to make additional product release announcements in the near future. In addition, CAD CAM is a new but rapid growth opportunity in dental imaging as dentists get away from taking traditional putty impressions into the realm of optical scanners that work in the mouth to create digital impressions. This is a very disruptive and exciting technology that improves accuracy and drives down the cost of dental laboratory deliverables like crown, bridges, and orthodontic appliances. These are just a few of the reasons that dentists are adopting these new digital technologies and again reiterates the sea change we’re seeing in the broader space. We’re going to make an announcement in that CAD/CAM dentistry area relatively soon.
EQ: It sounds like an exciting time to be with the company.
David Gane: It really is. Dentistry is at a unique crossroads right now where imaging is no longer just about diagnostics but also about image guide treatments that are changing the way dentistry will be practiced going forward. It is truly an exciting time and we feel really, really good about our product portfolio and the talent we’ve been lucky enough to put together.
EQ: Do you have any additional closing comments?
David Gane: Our focus on best of breed imaging technologies coupled with white glove services has proven to be a key competitive advantage for us and is attributable to our early success. Our knowledge of the market and the evolution of the dental space has allowed us to identify new technologies and services with which to leverage the sales, marketing and support asset that we created last year. There is an abundance of exciting technologies in the world that really like our imaging focus and direct sales model, as it gives them fast access to the North American market, the world’s largest for dental imaging technologies. This year will be about continuing to grow the revenue with new products and services while optimizing our cost structure to ensure we maximize shareholder value.
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