Echo IQ Faces Cash Burn Risks Despite FDA Milestones and Partnerships

Financial Performance Highlights

Echo IQ Limited (ASX – EIQ), a medical technology company specialising in AI-driven cardiology diagnostics, reported a significant widening of its loss for the year ended 30 June 2025. The company’s loss after tax surged 145.2% to $13.26 million, compared to $5.41 million in the prior year. This increase came despite a 127.9% rise in revenue to $101,409, reflecting early-stage commercial traction but ongoing investment in growth and development.

Net tangible assets per share improved markedly to 2.8 cents from 0.18 cents, supported by two capital raises totaling $24.4 million. These funds are earmarked for advancing US commercialization, clinical trials, and product development.

Regulatory and Commercial Milestones

A key highlight for Echo IQ was securing 510(k) clearance from the US Food & Drug Administration (FDA) for its EchoSolv AS platform, an AI-based decision support tool for detecting severe aortic stenosis. This regulatory milestone enables marketing and clinical use in the US, a critical step for the company’s commercial ambitions.

EchoSolv AS has been integrated with Beth Israel Deaconess Medical Center in Boston, a prestigious Harvard-affiliated hospital. The integration followed a successful trial validating the technology’s accuracy in identifying patients at risk, including those not meeting current clinical guidelines but with comparable mortality risk. This real-world validation underscores the platform’s potential to improve patient outcomes.

Strategic Partnerships and Market Expansion

Echo IQ expanded its US footprint through agreements with ScImage and MedAxiom, enabling deployment of EchoSolv AS across 36 affiliated hospitals and cardiology practices. This integration leverages cloud-native architecture for seamless adoption by clinicians.

Further, a reseller agreement with SARC MedIQ post-balance date aims to broaden uptake via an extensive network, with payments structured on a per-scan basis. The company is actively pursuing a Category III CPT code with the American Medical Association to enhance reimbursement rates, a critical factor for commercial viability.

Advances in Heart Failure Diagnostics

Echo IQ also reported promising clinical results for its EchoSolv HF platform, designed to assist in heart failure detection. Two Australian studies demonstrated the AI’s superior accuracy compared to current clinical detection rates. The company has commenced a validation study in collaboration with the Mayo Clinic Platform, a leading US medical institution, as a precursor to FDA clearance for EchoSolv HF.

Corporate Developments and Outlook

Leadership changes included appointing US-based Dustin Haines as CEO to drive commercial growth, and Ken Nelson as a non-executive director with deep healthcare experience. Echo IQ also listed on the OTCQB market in the US to facilitate investor access.

While the company’s losses have increased substantially, these reflect heavy investment in regulatory approvals, clinical validation, and market expansion. The coming months will be critical as Echo IQ seeks FDA clearance for EchoSolv HF and ramps up commercial adoption in the US healthcare system.