Here is a URL of Echelon Capital Markets new report DIAGNOS Inc. (TSX-V: ADK) (OTCQB: DGNOF) (Frankfurt: 4D4) is the subject of new institutional coverage update from the independent investment bank / advisory / equity research firm Echelon Capital Markets. The analyst reiterated the Firm’s current rating of 'Top Pick' for Q122, '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: €1.08). The January-2022 update report may be viewed at https://sectornewswire.com/Echelon-Diagnos-Jan-4-2022.pdf online.
The following are excerpts from the new (January 4, 2022) analyst analysts report;
Headline:
Q122 Top Pick: AI Diagnostic Platform Ready for Broad Commercial Adoption, Finalized MoU with Optical Industry Leader Expected in the Coming Quarter
Event:
DIAGNOS Inc. (ADK) remains a Top Pick in anticipation of the finalizing of the August 2021 MoU with EssilorLuxottica/GrandVision, the world’s largest eye care company, to utilize DIAGNOS’s Computer Assisted Retinal Assessment (CARA) platform to offer Diabetic Retinopathy screenings across 8,000-10,000 of their worldwide locations. ADK is a commercial stage artificial intelligence (AI) company focused on the diagnosis of diabetic retinopathy (DR), the leading cause of adult blindness. Often undetected due to bottlenecks in screening, the disease progresses asymptomatically until irreversible vision loss occurs. ADK’s equipment-diagnostic platform integrates with existing optometry equipment and processes to enable early detection and monitoring of DR by grading the severity of indicators found in images of the retina, which can be difficult using current approaches.
Continued Commercial Interest Validates the Platform’s Potential:
We view the EssilorLuxottica MoU, along with the previously announced deal with New Look Vision, as validation of the AI-based platform’s detailed output, low cost, and ease of implementation. The technology, which is currently being rolled out across New Look Vision locations in Quebec, is clearly ready for broad commercial acceptance, particularly in the optical retail segment. As such, the Company appears poised to secure agreements with an increasing number of optical retailers, networks of healthcare facilities, private and public payors, and strategic partners such as pharma and equipment manufacturers.
AI Addresses Screening Bottlenecks in DR to Prevent Avoidable Vision Loss:
Of the half a billion diabetics worldwide, 20-40% have DR and are at risk of going blind, and 5-10% will develop or see a progression in the severity of DR within 12 months. Regular eye exams are critical to early detection as the disease is asymptomatic, yet only half of patients are screened annually. While ADK’s platform is currently used as a decision support tool, the platform is capable of autonomous detection, pending additional regulatory approvals, and ADK intends to pursue expanded use cases in the near future.
Valuation Increases with Optionality:
While the timeline and scale of a potential deal remain uncertain for now, concluding a deal with EssilorLuxottica would be a game-changer for ADK given the sizeable financial opportunity and the industry validation of its technology platform. To address this optionality, we are conservatively assuming a 50% probability that a deal will be concluded, and that the technology will be rolled out to 4,000 locations over 24 months starting in mid-C2022. This results in a target price of $1.55/shr based on the average of our DCF (11% discount rate and a 5% terminal growth rate) and EV/Sales (10x F2023 estimates) valuations.
Company Description:
ADK is a Montreal-based commercial-stage artificial intelligence (AI) company addressing the critical problem of diabetic retinopathy (DR) - the leading cause of blindness. The Company has developed an image enhancement and AI analysis platform that integrates with existing optometry equipment and processes to enable early detection, triage, and monitoring of DR by grading the severity of indicators found in images of the retina. As the detailed output, low cost, and ease of implementation of its AI-based platform comes into focus, ADK looks poised to secure increasingly larger agreements with optical retailers, networks of healthcare facilities, private and public payors, and strategic partners like pharma and optometry equipment companies.
The full report may be viewed at https://sectornewswire.com/Echelon-Diagnos-Jan-4-2022.pdf online.