Spectral MD (SMD.L*): Interim results from DFU trial shows improvement in DeepView diagnostic accuracy

Spectral MD (SMD.L*): Interim results from DFU trial shows improvement in DeepView diagnostic accuracy

Market Capitalisation: £42.9m; Share price: 31.5p; Target price: 169p - BUY

• Spectral MD announced interim results from an ongoing clinical validation study which is supporting the development of DeepView® for the assessment of Diabetic Foot Ulcers (DFU).

• The ability of DeepView to correctly predict at day one whether a DFU will halve in size by week four (aka diagnostic accuracy) was 86% (previously: 81%).

• Sensitivity (true positive rate) and specificity (true negative rate) was 89% and 83%, respectively.

• The interim analysis was performed in 100 adult subjects with the full study expected to enrol a total of 200 subjects.

• The DFU study is expected to complete enrolment in H1-23 with the Company on track to file a regulatory submission to the US FDA in 2023.

• The Company expects to announce additional EU/UK DFU clinical studies in the near future. • The Group also provided an update from the ongoing burn training study.

• Adult enrolment has completed with the study expected to complete in H1-23.

It is good to see the DFU interim results showing a five-percentage improvement in the accuracy of DeepView. This was already at a high level particularly when compared to current techniques. DFU assessments and subsequent treatment decisions are usually driven by a naked-eye-assessment by a clinician/podiatrist, a highly subjective technique reliant on clinician experience. Currently, patients who present with a DFU receive standard wound care treatments. This is followed by a four-week period of “watchful waiting” to see if wound healing is occurring. Advanced therapies are only applied if the wound is deemed to be not healing after this period. The use of DeepView to predict healing potential of a DFU at day one should support treatment decisions and improve healing rates.

Alongside the DFU trial, the Company continues to make progress on its burn programme. Similarly to DFUs, burn wound assessments and subsequent treatment decisions are driven by a naked-eye-assessment by a clinician. This technique is highly subjective and reliant on clinician experience. This results in incorrect assessment of burn wound healing in up to 25% of cases.

The news follows a positive trading update announced earlier this week for the year-ended 31 December 2022 (FY22). EBITDA losses and cash are expected to be materially ahead of current market expectations (SP Angel FY22 estimates: EBITDA losses $3.7m; Cash at period-end: $12.8m). Unaudited grant revenue is also expected to be higher than market expectations: (SP Angel FY22 estimates: Revenue: $25m).

*SP Angel acts as Nomad & Broker to Spectral MD; One of the authoring analysts has an interest in Spectral MD