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Valuation Commentary: DIAGNOS Inc. (TSX-V: ADK) (OTCQB: DGNOF) (Frankfurt: 4D4) is a Canadian-based medical software technology company that pioneered 'Computer Assisted Retinal Analysis' (CARA), which automatically analyses the retina (located at the back of the eye) using machine learning / artificial intelligence (AI) technology to identify damage caused by diabetes and cardiovascular issues. For the last 7 years DIAGNOS has commercially advanced its first large-scale application of the technology, primarily aimed at preventing diabetic retinopathy. Entering 2022 marks a pivotal time for DIAGNOS as the technology has recently seen several large players in the eyecare sector and medical field commit to large-scale roll-outs, this is putting pressure on others in the sector to consider a similar move and not be left behind. DIAGNOS' technology essentially transforms eyecare centers into Point of Care and wellness diagnostic centers as the CARA platform also is expected to commercially launch several other large-scale applications, including an application for hypertensive retinopathy (launch imminent) and one for stroke prediction (to begin clinical trials on December 6, 2021 in USA). Complicated medical conditions resulting from diabetes, high blood pressure, and potential stroke can be detected by DIAGNOS' algorithms able to interpret detailed imagery of the retina. Since New Look (with 407 locations in Canada) signed on for CARA platform roll-out DIAGNOS' phone has been ringing from around the globe, essentially other industry participants do not want to miss out on a technology whose time has come. Look for an increase in new business announcements to come from the DIAGNOS over the coming months and years. In fact, Essilor Luxottica (Euronext Paris Stock exchange: EL), the largest eyecare company in the world, with EUR$16+ Billion in revenue/annum and ~18,000 locations, signed a MOU with DIAGNOS in August-2021 and is in active negotiations on terms -- this alone has massive latent catalyst potential for upside share price revaluation of ADK.V as details emerge. Specifically DIAGNOS and Essilor are currently negotiating 3 things; 1) contract for the existing platform, 2) Essilor wants DIAGNOS to do a specific development for their line of fundus camera, and 3) Essilor wants access to future applications DIAGNOS will roll out. The fact the largest eyecare company in the world chose DIAGNOS' technology speaks volumes as to where this is headed.

With all the activity DIAGNOS has on the go it appears a low-risk high-reward proposition: ADK.V only has 69.47 million shares outstanding, there are very little warrants left, and insiders & family office own ~40% of the outstanding shares. DIAGNOS has money in the bank, an untapped C$2 million government credit line if needed, has a high-margin SaaS model (it only costs ~4 cents to process an image that it charges between ~C$5 - $10), is expected to be cash flow positive (based on solid contracts) by June-2022, has numerous new business prospects in discussion now, and is expected to see rapid revenue growth. Astute investors connecting the dots about what is unfolding are apt to do well by establishing a long position in ADK.V now.

DIAGNOS Inc. received its first institutional coverage from the independent investment bank / advisory / equity research firm Echelon Capital Markets, its current rating is 'Top Pick', 'Speculative BUY' with a near-term (12 month) target price per common share of DIAGNOS of $1.55 Canadian (or in US dollars: USD$1.23 or in Euros: €1.09) -- click here to view full copy of their latest (January 4, 2022) report. The original initiating report was exceptionally thorough (~40 pages), the analyst contacted multiple industry participants, and recently (November-2021) sat down for an interview [running time 32 min. Youtube] on his reasoning for making it a top pick entering 2022. Note, the analyst share price target is based on the DIAGNOS’ CARA Platform that is currently in use and does not include progress on the Stroke Predictor application that is the subject of clinical trial news – needless to say a much higher share price target is justified if success in the Stroke Predictor clinical trial is demonstrated.

Click to view Analyst update report [PDF] C$1.55/sh. price target

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Recent Company news of significance

• March 29, 2022 "DIAGNOS Announces Closing of Private Placement and New Marketing Director".

• March 15, 2022 "CAN Health Network and Quebec-Based DIAGNOS Announce Life-Changing Diabetic Retinopathy Screening Program Partnership".

• March 1, 2022 "DIAGNOS Announces Closing of Private Placement".

• February 10, 2022 "DIAGNOS Successfully Completes ISO / MDSAP Audit".

• January 26, 2022 "DIAGNOS Provides Corporate Update for 2021 and Outlook for 2022".

• December 15, 2021 "DIAGNOS will be Attending in San Francisco during the J.P. Morgan Health Care Conference Week to be held from January 10th to 13th, 2022".

• November 23, 2021 "DIAGNOS will start a clinical trial study in the USA commencing December 6th, 2021 for early detection and prevention of Stroke using CARA-STROKE".

• October 28, 2021 "DIAGNOS Delivers World Class Results in the MICCAI2021 Contest: GAMMA".

• September 16, 2021 "DIAGNOS Announces a Multi-Year Contract with Juarez Health & Medical Tourism Cluster".

• September 14, 2021 "DIAGNOS Announces a 3-Year Contract with Cielo Vista Eye Clinic in Mexico".

• September 10, 2021 "DIAGNOS Announces Voting Results of Annual Meeting of Shareholders".

• September 2, 2021 "DIAGNOS Announces a Three-Year Contract Renewal with Optina Diagnostics Providing a Telemedicine Platform to Support their Early Detection of Alzheimer's Disease Test".

• August 16, 2021 "DIAGNOS signs Memorandum of Understanding with Essilor International".

• July 28, 2021 "DIAGNOS Announces a Pilot with Opticalia in Spain".

• July 22, 2021 "DIAGNOS Announces the Official Opening of the AI Assisted Screening Clinic at Magrabi Hospital with the Presence of the Undersecretary of the Ministry of Health of Saudi Arabia".

• July 20, 2021 "DIAGNOS initiates a clinical trial study in the USA for early detection and prevention of Stroke using its new application CARA-STROKE".

• June 15, 2021 "DIAGNOS Announces a Pilot with Hospital Oftalmolσgico Buena Vista Sinaloa".

• June 9, 2021 "IRIS Teams up with DIAGNOS Inc (DGNOF) in a Multi-Year Agreement to Implement Artificial Intelligence Technology with Support From the INVEST-AI Program".

• April 6, 2021 "DIAGNOS (OTCMKTS:DGNOF) Enters into Exclusive Distribution Agreement to Access Massive Global Healthcare Market in DACH Countries and Central Europe of Over 140 Million People".

• March 9, 2021 "DIAGNOS, following a successful Proof-of-Concept (POC) pilot study, is finalising its new application CARA-STROKE to address Stroke prevention and management, a market estimated at $36 Billion".

• March 4, 2021 "DIAGNOS and the third largest optical retailer in Costa Rica Piloting CARA and its Telemedicine technology".

• February 26, 2021 "DIAGNOS Announces Exercise of Stock Warrants and Provides a Cash Update".

• February 24, 2021 "DIAGNOS Announces its Exclusive Strategic Partnership Agreement with Labtician Ophthalmics, a Leader in Canadian and International Eyecare Markets to Address Growing Needs in the Monitoring of Diabetic and Hypertensive Patients".

• February 2, 2021 "DIAGNOS Announces Further Deployment of its AI based CARA Technology in Saudi Arabia".

• January 28, 2021 "DIAGNOS announces the re-opening of its medical testing in Panama".

• January 21, 2021 "DIAGNOS Successfully Completes ISO 13485 / MDSAP Audit".

• January 19, 2021 "DIAGNOS announces a 3-year partnership agreement with the University of Montreal Hospital Centre (CHUM) on the use of Artificial Intelligence".

• January 14, 2021 "DIAGNOS Announces Partnership in Saudi Arabia with Magrabi Hospitals and Centers to Screen Diabetic Patients".

...Click here to view more news releases from source

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A closer look at DIAGNOS' traditional business (targeting vision loss in diabetics) and how the company sees it growing

Diabetic retinopathy is silently blinding millions of people a year, the market size was valued at USD $8B in 2018 and is expected to witness 6.9% compounded annual growth rate from 2019 to 2025.

Figure 4. (above) - Client Test Referral Pathway -- Because the images can be sent over the internet, the doctor can be in a different physical location confirming the diagnosis.

DIAGNOS' algorithms are capable of
   • Automatic classification by level of severity of DR & DME:
      - State of the art Deep Learning technology.
      - Best in class: sensitivity 94% and specificity 88%.
      - Results in less then 2 seconds.
   • Automatic detection of anomalies in retinal photographs.
   • Validation of lesion with simplified grading sheet (AAO).

 
Figure 5 (above) Automated triage can help reduce healthcare labor requirements while increasing patient access to quality care and reducing healthcare expenditure.
 
The diseases targeted by the algorithm include the leading causes of blindness among adults, such as diabetic retinopathy and aged-muscular degeneration. There is an estimated ~500 million people with diabetes worldwide, of that number 0.1% of people with diabetes will lose their vision completely per year if not screened, that translates to 500,000 people per year that will go blind from a curable disease if they are not screened. These diseases are treatable with existing medicine but only if caught in the early stage. However, people at risk are not getting their eyes checked regularly, and therefore going blind unnecessarily, for the following reasons:
 
A). There is a shortage of retina specialist doctors. There are less than 2000 retina specialists in the US versus nearly 50 million diabetics. Clinical guidelines suggest that every diabetic be screened for diabetic retinopathy once a year, obviously impractical for such a large number to be screened under traditional methods by so few specialists. In less developed countries the ratio of specialists to diabetic population is even worse compared to the US and Canada. By using an algorithm to screen patients, DIAGNOS ensures that only those at risk see a doctor, which relieves congestion in the healthcare system, while improving access to healthcare.
 
B). Seeing a doctor is expensive. Retina specialists can charge $300+ per visit, but DIAGNOS' software driven procedure charges out at a comparatively nominal cost per visit, in some cases this fee can be paid by a sponsor (such as the pharmaceutical company) rather than the patient.
 
C). Seeing a doctor is inconvenient. Retina specialists tend to be located in urban areas, and therefore may be inaccessible for rural populations. However, DIAGNOS' system could be installed in Primary Care Facilities, or stores providing low-cost healthcare services, further improving access to basic healthcare.

Figure 6. (above) - Comparison of normal vision vs. what someone with DR might see.

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Below is expanded insight on DIAGNOS Inc. and its technology.

   Content found herein is not investment advice see Terms of Use, Disclosure & Disclaimer.

*Projections, estimates, and assumptions herein are based on journalistic opinion, not Company guidance

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DIAGNOS Inc.'s Governance and Management  Skip to top

Mr Larente has previously held leading management positions with companies such as Siemens, Syscan International, Newbridge Networks, Legent Corporation, Cognos, Tandem Computers and Honeywell Information Systems.
  

Company's web site: www.DIAGNOS.ca   SEDAR Filings: URL

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