Final yr, once I met the CEO of Butterfly Community, a point-of-care ultrasound machine maker, through the annual J.P. Morgan Healthcare Convention, the Massachusetts firm was in the midst of a turnaround. After being in enterprise for 12 years, income had slid and the general public firm’s inventory was buying and selling at round $1. 2024 could be the yr the corporate would get its “mojo again” promised Joseph DeVivo declaring that Butterfly Community must show income progress as soon as once more.
Final week once I met DeVivo, he was smiling ear to ear.
“We launched our third product – iQ3 in February [2024]. We grew 14% within the first quarter. We grew 16% within the second quarter. We grew 33% within the third quarter and we simply ended off the yr at 35% [in the fourth quarter,” he declared. “I call that mojo. It’s 25 percent growth for the year. And the best part about it is it came in from everywhere. There was no one big deal.”
The fourth-quarter end and year-end percentage growth are based on preliminary unaudited earnings the company released during JPM. In the third quarter ended Sep 30, the GAAP results indicate that Butterfly Network had revenue of $20.6 million, up from $15.4 million in the same quarter in 2023. It narrowed its third-quarter loss to $16.9, or 8 cents a share, compared with $27.4 million or 13 cents per share from the same period in 2023. The company’s stock is now trading at nearly $4, up from $1 just a year ago.
Much of the revenue growth in 2024 came from market adoption of iQ3 — 80% of sales in the U.S. in the third quarter was the iQ3 product, DeVivo said, adding that the company sells around 20,000 to 25,000 devices a year. He described the third-generation device as much more powerful with higher processing power and improved image clarity.
“The image quality is the difference between a three and a seven-megapixel image on the camera,” he said.
That allows the device to be used in hospital procedures as opposed to Butterfly Network’s first and second-generation devices, DeVivo said. For example, it can aid in needle placement in anesthesiology and cardiac scans in the ER. And it’s not just a matter of being powerful enough to be considered for hospital applications. With this device, Butterfly Network may be able to compete with better known device makers — GE Healthcare, which makes portable ultrasound devices, such as the latest VScan Air CL and the VScan Air SL.
The VScan Air CL is appropriate for obstetrics, abdominal imaging, MSK applications while the VScan SL for fast cardiac and vascular evaluations. Both are dual probes and their starting price are $4,855 and $5,499 respectively.
DeVivo was quick to draw a contrast.
“So I believe with our most recent product, we have [become] — at a minimal — equal to GE and I do all the pieces they do, however with one probe,” he mentioned. “They’ve [two] 6,000-dollar probes. I’ve one 4,000-dollar probe.”
Massive ultrasound machines made by the likes of GE and Philips use piezoelectric crystals whereas the Butterfly Community makes use of semiconductors. The hand-held ultrasounds made by Philips (Lumify) and GE (VScan) have been an development making ultrasound moveable and accessible on the level of care however utilizing the identical piezoelectric crystals used within the bigger units. However DeVivo declared that Butterfly’s iQ3 makes use of ultrasound-on a-chip know-how and is ready to scan wherever within the physique utilizing a single machine whereas Lumify and GE merchandise nonetheless want completely different probes to scan various things.
“PZT-crystal units, together with carts and handhelds, require not less than 3 completely different crystal transducer heads to permit for whole-body scanning,” an exterior spokeswoman additional defined in an e-mail. “Whereas Butterfly can do all 3 (and extra superior modes) on only one probe that switches between the arrays digitally through our one chip transducer — and at a decrease value than a single PZT probe.”
DeVivo sees Butterfly Community main the digital revolution in ultrasound in the identical approach that digital cameras finally unseated the likes of Kodak and any cameras requiring movie. Although he additionally will let you know that he doesn’t see a future the place handheld units makes bigger ultrasound machines redundant.
However, DeVivo is so certain of the aptitude of iQ3, the homepage on the corporate’s web site reveals a facet by facet video comparability of the picture high quality between that machine and GE’s VScan CL product. Right here’s a nonetheless picture from that video:
Butterfly Community is starting to get traction amongst massive well being techniques, DeVivo mentioned. College of Rochester Medical Heart is a buyer. With out naming the establishment, he shared the story of how a well being system official referred to as the corporate to precise frustration that docs who purchased Butterfly Community’s moveable ultrasound machine have been bringing it to their work and creating information residing outdoors the in-house EMR system.
“It was a compliance problem and the docs knew this however they didn’t care,” DeVivo recalled. “We went into our database and we searched all of the docs with an e-mail tackle in that establishment. And in that one city, 140 docs had personally bought a Butterfly machine.”
What Butterfly did thereafter was supply them middleware that will import all that information into the EMR and different items of Butterfly’s software program together with schooling modules and reimbursement modules.
“And they also bought our software program,” he mentioned. “We have been in a position to give them the info they didn’t have as a result of all the pieces goes within the cloud. And as we speak they’ve nearly 600 units.”
DeVivo mentioned the massive ultrasound units in hospitals aren’t going to get replaced by moveable handhelds however the semiconductor-based know-how “provides a layer of early detection” — particularly on condition that not many sufferers are despatched to radiology given the excessive value of imaging. Having this readily available implies that major care docs and even specialists can rule out sure issues nearly instantly.
The opposite benefit with the Butterfly Community is simply the sheer quantity of knowledge and pictures the corporate as has amassed over time. DeVivo touted that the corporate has round 100,000 iQ units around the globe and 21 million pictures and that picture quantity is rising every day. The corporate can prepare fashions on these information.
“If I wished to have 10,000 coronary heart scans and I wished to coach an AI mannequin on these, you could possibly do it,” he declared. “Go ask any one in all these firms what they’d do to get 10,000 coronary heart scans, lung scans. So we’re the one firm that’s totally networked and has that database.
One other level of differentiation is the “Butterfly Backyard” the place AI firms are constructing apps off of the corporate’s information and machine. As an example, ThinkSono, which is an ultrasound AI to detect deep vein thrombosis .
“You plug your Butterfly in whereas their app is open and the imaging from our machine populates their app. So what which means is daily or each time a brand new app is offered, my machine will get extra highly effective, it has extra functionality,” DeVivo defined.
This helps the app developer promote its product to Butterfly’s prospects whereas the latter’s units get extra performance. In 2024, firm signed 17 such partnerships, DeVivo mentioned.
The general purpose, finally, is to get entrenched deeply inside well being techniques.
“We have now a number of very massive prospects they usually produced some information round their expertise and we’re beginning to return to some current prospects that possibly have our units in a single or two departments and speaking to them a couple of broad primarily based deployment,” DeVivo mentioned. “I believe that’s over the subsequent one or three years, that’s the subsequent large section of progress.”
Photograph: lvcandy, Getty Pictures and Butterfly Community
