Meet the CEO: Cyclopharm and the US opportunity

Cyclopharm has established a foothold in the world’s largest healthcare market. The question now is how big its US business can become.

In our new Meet the CEO series, Richard Hemming visits Cyclopharm (ASX: CYC) to speak with CEO James McBrayer about its Technegas lung imaging technology, US hospital adoption and the financial milestones ahead.

For investors, the discussion comes down to a familiar challenge: turning a strong product and a large market opportunity into revenue, improving margins and positive cash flow.

What does Technegas do?

Technegas helps clinicians assess lung ventilation, showing how inhaled material is distributed through the lungs. It provides the ventilation component of ventilation and perfusion imaging, commonly used to investigate pulmonary embolism.

McBrayer explains that nuclear medicine provides information about how the lungs function. Combining it with CT imaging can give clinicians functional information alongside anatomical detail.

Pulmonary embolism has historically been a core application for Technegas. However, McBrayer sees broader opportunities in respiratory medicine, supported by advances in imaging technology.

How big is the US opportunity?

According to McBrayer, Cyclopharm operates in 67 countries, with approximately 1,600 systems deployed outside the US. Despite its relatively recent entry, he says the US has already become Cyclopharm’s largest individual country market by revenue.

McBrayer estimates the US opportunity in pulmonary embolism diagnosis at approximately US$180 million. He sees a substantially larger potential market across broader lung imaging applications.

Those figures describe management’s assessment of the market opportunity. Capturing it requires hospitals to install the technology, clinicians to use it regularly and that activity to generate recurring consumables revenue.

Why the new clinical guidelines matter

McBrayer describes the international lung imaging guidelines discussed in the interview as one of Cyclopharm’s most significant milestones since securing US approval.

He says the guidelines identify Technegas as the preferred ventilation agent where available. This provides an important reference point for clinicians choosing between nuclear medicine ventilation agents.

For Cyclopharm, that clinical support strengthens its conversations with prospective customers. For investors, the test is how quickly it translates into installations and increased usage.

Building momentum through hospital networks

Cyclopharm’s US strategy involves establishing Technegas within a hospital, then expanding its presence across the wider healthcare network.

McBrayer says approximately half of its established US base at the time of the interview came through this approach.

He also describes another source of demand: clinicians moving between hospitals and requesting access to technology they have used elsewhere.

Winning an initial customer can therefore open doors beyond a single installation. Cyclopharm’s presence in leading hospitals gives it a platform from which to build.

What about cash burn and funding?

Richard presses McBrayer on the financial demands of the US expansion, including cash consumption and the potential need for further capital.

McBrayer says Cyclopharm has already invested in its US sales team, equipment inventory and consumables. With that infrastructure in place, additional installations should support revenue growth without requiring the same initial investment.

At the time of the interview, he reports monthly cash burn had declined from approximately A$1.5 million to A$1.3 million. He expects further installations to support continued improvement.

However, McBrayer does not rule out a future capital raising or provide a timetable for one.

For shareholders, the key measures will be the pace of hospital adoption, recurring consumables sales and how quickly revenue growth reduces cash consumption.

Can US growth improve margins?

McBrayer also expects a growing contribution from US Technegas sales to improve group gross margins.

Cyclopharm’s broader business includes distributing third-party products in selected markets. As the sales mix changes, a larger contribution from US Technegas revenue could support profitability.

The opportunity is significant, but execution remains central. Growing the installed base is one step. Building usage and translating that activity into cash flow are the next.

Where does imaging software fit?

The interview also explores the relationship between Technegas and imaging software.

McBrayer describes software as complementary to the functional imaging data Technegas helps generate. He discusses collaborations exploring how that information can support more detailed analysis and patient management.

These applications could broaden the technology’s role over time. The immediate commercial focus remains expanding the US business and demonstrating the financial benefits of that growth.

Watch Richard Hemming’s full interview with James McBrayer, “Cyclopharm: How Big Is the US Opportunity?”, for a closer look at the technology, hospital rollout and milestones ahead.

Disclosure: Richard Hemming disclosed in the interview that he is a Cyclopharm shareholder. Figures and management comments refer to the time of recording.