Respiri developing Next Generation AirSonea device
Last Thursday’s announcement by Respiri (ASX: RSH) regarding the development of a next-generation breath sensor to replace the AirSonea 2013 model triggered a positive response from the market with its shares increasing 10% to an intraday high of 4.3 cents.
Of course it should be noted that share trading patterns should not be used as the basis for an investment as they may or may not be replicated. Those considering this stock should seek independent financial advice.
As a market leader in the development of innovative devices and mobile health apps, which improve the management of chronic and costly respiratory disorders such as asthma and COPD, the development of a new device will assist the company in maintaining a competitive edge in that industry segment.
Consequently, this news could spark positive near to medium-term share price momentum after the company appeared to be sold down in June, largely due to tax loss selling.
Release of market ready device assisted by record of gaining regulatory approvals
Explaining the company’s strategy management said, “Whilst there have been significant technology changes to the 2013 AirSonea breath sensor device that received regulatory approval for sales in Europe, it is imperative that Respiri integrates the latest technology components to maintain our competitive edge in a rapidly evolving technological environment”.
Management stressed the importance of the company’s successful history of regulatory approvals as setting it apart from most companies in the medical technology and biotech industries that are still undergoing various trials.
The development of a market ready device, which is expected to be poised for release in six months, could provide a significant boost to second-half revenues in fiscal 2018.
Partnership negotiations are already in progress, but management said that it was difficult to indicate exactly when agreements were likely to be struck.
However, the company did note that as previously advised, it had received a written commercial-in-confidence proposal to establish a partnership vehicle in China, and subsequent variations have been extended to include global considerations.
Given that the potential deal structure is complex, involving at least six parties and requiring detailed negotiations over an extended period this initiative is likely to take a number of months.
Market data indicates continued demand for asthma and COPD devices
RSH highlighted that market research continued to strongly indicate that there was an unmet need for an over-the-counter, smart symptom monitoring product that supports patient compliance with asthma plans and complement drug delivery products such as prescription smart inhalers.
The over-the-counter breath sensor captures and transmits breath sounds to RSH’s state-of-the-art software technology platform where the group’s clinically proven proprietary technology detects and measures wheeze.
The latest generation app allows users to set preventer medication reminders, log symptoms, allergic triggers and reliever medication doses. This provides a complete digital asthma history securely stored in the cloud.
RSH is in a strong position to fund development of the new product with cash at bank of $2.2 million as at July 14, 2017.
The company’s forecasts cash flow includes research and development tax incentives of $600,000 over the next six months. Depending on the timing of research and development expenditures and incentives, management is forecasting net cash burn of approximately $100,000 per month.
S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of Maven Capital Pty Ltd (AFSL No. 418504). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.
Conflict of Interest Notice
S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.
The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.