Shares in Echo IQ Ltd (ASX: EIQ) jumped more than 10% after the company said it believed there was a "clear path" to obtaining regulatory approval in the US for its EchoSolv HF technology.
US roadblock not a dead end
Echo IQ shares fell almost 50% last week when the company revealed that the US Food & Drug Administration had issued a Not Substantially Equivalent determination for the company's application for the approval of clinical use of EchoSolv HF.
But the company, having reviewed the situation, said on Thursday that work was underway with regulatory consultants and legal counsel about attaining regulatory approval.
The company said it "believes there is a clear path forward to obtaining FDA clearance for EchoSolv HF and it's progressing this as a priority''.
The company added that the approval could be granted "over the coming quarters''.
Echo IQ said regarding the issue:
Following a review of the FDA's feedback, the Company considers the matters cited to be limited to aspects of statistical analysis supporting the clinical validation. The Company's assessment has not identified concerns relating to the underlying technology or core functionality of the EchoSolv HF device, and Echo IQ remains confident that clearance remains achievable under the 510(k) route. Echo IQ has identified multiple potential pathways to progress EchoSolv HF towards FDA clearance, including an administrative appeal of the NSE determination, seeking review through the FDA Ombudsman, or submitting a new 510(k) application.
The company said the timelines for an administrative appeal were not strictly defined, "and, in certain circumstances, may be shorter than 90 days''.
Echo IQ added:
If the Company were to file an administrative appeal, it may result in the NSE determination being overturned, the FDA reopening its review and potentially providing clearance of EchoSolv HF, or the FDA requesting that the Company resubmit a 510(k) for clearance, providing clarity on the matters Echo IQ must address to resolve the FDA's previously identified concerns and obtain clearance.
EchoSolv HF is software that aims to improve the identification of patients at risk of heart failure.
The company recently said it remained well-funded, with more than $105 million in cash.
Shares bouncing back
Despite falling sharply on the recent news, Echo IQ shares have still appreciated 128% over a 12-month period.
The company's shares were 10.7% higher at 57 cents on Thursday. They have traded as high as $1.87 and as low as 16.5 cents over the past year.
The company is valued at $381.6 million.
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