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Work It, Move It - And Measure It
BY JAMES DUNN - 29/04/2016 | VIEW MORE ARTICLES BY JAMES DUNN

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DVL - DORSAVI LTD


The wearable device revolution is upon us, and Australian medical device company DorsaVi Limited (DVL) is in the thick of it. But not in the consumer wearables sector: you won’t see DorsaVi competing with FitBit, Garmin, Jawbone and Apple with the latest must-have wearable heart-rate and fitness tracker.

DorsaVi’s wearable sensor technology is aimed at three different sectors: the workplace, the clinic and elite sport. The company holds six patents for a system of sensors and movement analysis software and hardware. Its product suite includes ViSafe for workplace Occupational Health and Safety (OHS) solutions, ViMove for medical and physiotherapy clinics, and ViPerform for elite sport. The products are approved and selling in the US, Europe and Australia. At present ViMove represents about 60 per cent of DorsaVi’s annual income, with the balance evenly split between ViSafe and ViPerform.

As an “advanced” medical device – that is, one providing data that doctors and healthcare professionals will use in decisions – ViMove has had to gain regulatory approval. It has clearance from the US Food & Drug Administration (FDA), the CE Mark in the European Union and the Therapeutic Goods Administration (TGA) in Australia.

Having this approval is a big plus for DorsaVi. Even Apple does not have it, which is why the FDA ordered the tech giant to remove stress monitoring, electrocardiograms and blood-pressure monitors from its iWatches.

The ViMove business uses a wireless sensor technology system that measures movement and muscle activity in the lower back, spine and pelvis – wearable motion and muscle activity sensors record data at 200 frames per second and provide new insights for clinicians and their patients. The ViMove system tracks pelvic and spine movement and provides visual, objective, easily interpreted data to improve the health professional’s assessments, to help choose and manage treatment options, and document therapy and rehabilitation progress for patients, referral physicians and insurance companies.

ViSafe also uses a wireless sensor technology system that tracks and measures how people move in work situations, in real-time, so companies can assess the way their employees move, so as to create a safer work environment. The ViSafe system consists of wearable motion sensors, software, and sophisticated algorithms that provide an objective, quantitative overview of workplace physical activity. DorsaVi analyses the data and video footage to pinpoint risky areas of repetitive movement, techniques and the demands of certain equipment, which can lead to injuries, and suggests ergonomic and equipment improvements. Workplaces that use manual labour are the prime target. The upshot of the process is to bring in hard data on which to base decisions that reduce workplace injury: with improved safety, workplace productivity can be boosted and an organisation’s OHS costs lessened – which is an increasing organisational imperative globally.

So far, the system has been used in the manufacturing, retail, utilities, healthcare, transportation, hospitality, resources and construction industries. ViSafe technology is used by Crown Resorts, Vinci Construction, Monash Health, Caterpillar, Toyota, Jaguar Land Rover, Heathrow Airport and Transport for London, the operator of the London Underground rail network.

ViPerform tracks how elite athletes move in real time, to give trainers and coaches better data to allow then to evaluate, screen and assess the athletes. The data helps the sporting organisation’s staff to accurately assess and prevent risk of injury, guide training programs, help determine when players are safe to return to play, and help the athletes select the optimal footwear and equipment for their individual movement style.

Sporting organisations that use ViPerform include the Australian cricket team, seven Australian Football League (AFL) clubs, the Australian Olympic team, National Rugby League (NRL) team North Queensland Cowboys, US National Football League (NFL) teams New England Patriots (the 2015 Super Bowl champions), New Orleans Saints and Cleveland Browns, the 2015-16 National Basketball Association (NBA) champion Golden State Warriors, fellow NBA teams Los Angeles Lakers and Houston Rockets, UK Premier League clubs Manchester United and Sunderland, Sao Paulo football team in Brazil, US Major League Soccer (MLS) team Toronto FC, and the US college sports teams of Ohio State University and Marquette University.

The core customers for the ViMove business as it expands into the UK and the US are YourPhysioPlan network in the UK and the Physio chain in the US. Both are rolling out the ViMove product across their network of clinics. DorsaVi is capitalising on results of a clinical study published in May last year, which showed that patients with chronic back pain who were treated using ViMove achieved after 12 months a 73 per cent improvement in function (compared to 9 per cent improvement in the control group) and a 45 per cent reduction in pain (compared to an 8 per cent decrease in the control group). The company is marketing to several other large physiotherapy groups in both markets.

The clear strategy is to link OHS with the physiotherapy markets, which complement one another. A good example is the work that DorsaVi does for Crown Resorts in Australia. Potential Crown Resorts staff are screened by a physiotherapy group that is also a DorsaVi customer: that physio group also treats injured Crown staff using the ViMove technology. This strategy of working with the employers and their existing medical relationships in the model for overseas expansion.

Also, because the insurance companies bear the cost of workplace injuries, they are also going to be big customers. In November 2015 DorsaVi signed a three-way contract with insurance group Allianz and Monash Health (one of the largest healthcare providers in Victoria) to use ViSafe to analyse the physical movements of Monash Health nursing staff, and suggest improved work practices. This relationship can also be expected to be emulated in overseas markets.

DorsaVi had a good first half of the 2015-16 financial year. For the half-year to December 2015, revenue rose 63 per cent to $1.34 million, driven by 110 per cent growth in sales revenue, to $1.29 million. Receipts from customers surged four-fold, to $1.3 million. The net loss improved 22 per cent, to $3.11 million. The December half also included the first major sale into the physiotherapy market, to YourPhysioPlan (YPP): this was just the initial sale in a relationship that is expected to become much more significant.

DorsaVi was established by former physiotherapists (and brothers) Andrew and Daniel Ronchi in 2000, after they secured a series of ¬government research and development grants. The Ronchis later gained funding from venture capitalist firm Starfish, which remained a major investor after the company’s ASX float in 2013. DorsaVi listed in December 2013 at 40 cents a share, and by March 2014 the shares had reached 59 cents. But the shares then subsided to as low as 25.5 cents in September 2015, before a string of solid contract announcements helped them to recover to the present price of 40 cents.

DorsaVi is a very interesting story with a lot of potential in a field where it has three very solid applications in the marketplace, and further, the ability to use its sensor technology in different ways. With work injuries costing the US alone $250 billion a year, the OHS market in particular is very receptive to the DorsaVi story. The company is not yet profitable but it has shown its shareholders a path to profitability: it has world-class technology and largely has first-mover status in the OHS, clinical and sports markets.

Like a lot of tech start-ups, DorsaVi has been cut a lot of slack while it works on the marketing: it is up to the management team to keep signing-up customers, and turn the deals it already has into money-makers. Being back at its listing price, with a vastly stronger business than when it listed, should have DorsaVi seen as a pretty interesting speculative technology play.



View More Articles By James Dunn

James was founding editor of Shares magazine, and oversaw one of the most successful magazine launches in Australia. He has also written for BRW, Personal Investor, The Age and Management Today, and was subsequently personal investment editor at The Australian and editor of financial website, investorweb.com.au



 

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