Dallas medical technology firm goes public in pursuit of Project Bioshield

A Dallas medical technology firm will begin trading Tuesday on Nasdaq as it seeks to secure a U.S. government burn wound treatment contract that’s expected to be awarded this year.

Spectral AI Ltd. will trade under the ticker symbol MDAI as it goes public through a so-called SPAC deal with New York-based Rosecliff Acquisition Corp I. The company will remove its London Stock Exchange listing, where it first went public in 2021.

Special purpose acquisition companies, known as SPACs, look for fast-growing companies to merge with and take public. SPAC investors buy shares in the new company and later decide whether to keep the shares or get their initial investment back with interest.

Spectral AI, formerly known as Spectral MD Holdings, uses artificial intelligence to provide predictive analytics to doctors making rapid assessments of a wound’s healing potential. It draws from a database containing more than 263 billion clinical data points accumulated over eight years.

The company spun out of research at the University of Texas Southwestern Medical Center in 2009. Its initial focus was to predict pressure ulcers for bed-ridden patients.

Over the last nine years, it has won more than $130 million in contracts from the U.S. Biomedical Advanced Research and Development Authority to investigate using its technology as a surgical-triage tool for burn victims in mass casualties.

BARDA, part of the U.S. Department of Health and Human Services, issued a request for proposals this summer to commercialize what it describes as Project BioShield – a non-invasive imaging device to assist emergency physicians in rapidly assessing burn wounds. Spectral AI submitted a proposal.

“Spectral MD believes there will be a significant U.S. federal procurement contract for the commercialization of DeepView,” the company said in April when it announced the deal with Rosecliff.

Burn patients typically spend eight days in hospitals, a stay that exceeds $24,000 in costs, according to the company. Diagnostic accuracy is now only 50% to 70% to identify non-healing wounds, meaning doctors often must wait 21 days to determine if surgery is needed.

Spectral AI touts its technology as delivering 92% accuracy, which can reduce the length of stays by almost five days and save over $14,600 in costs.

“Spectral AI’s debut on the Nasdaq Global Market is a pivotal moment in our journey to address a large and growing unmet medical need in the area of AI-driven wound healing assessment,” said Spectral AI CEO Wensheng Fan in a statement. Fan is a co-founder of the company, serving as chief technology officer and chief operating officer before becoming CEO in 2020.

Spectral AI’s technology is called DeepView, a system the FDA designated as a breakthrough device in 2017. DeepView combines optical technology with AI to detect what isn’t visible to the eye. That helps clinicians to clearly define healing versus non-healing tissue, the company said.

“Wensheng and his team have created a disruptive, scalable, and difficult-to-duplicate AI-based approach to wound healing assessment with demonstrated efficacy,” said Mike Murphy, CEO of Rosecliff and a newly appointed director of Spectral AI.

The burn wound and diabetic foot ulcers markets are expected to reach nearly $15 billion by 2028, according to Spectral AI. The company said diabetic foot ulcers afflict 5.2 million people a year at a cost of $63,000 a patient.