Small Caps | Jul 26 2016
– ResAp offers smartphone diagnostic
– No additional hardware needed
– Global addressable market
By Greg Peel
ResApp Health ((RAP)) is developing a smartphone-based diagnostic for respiratory disease. Originally created at the University of Queensland, the system is able to detect from patient breathing and coughs whether or not the patient has respiratory disease, and what kind of disease, with a very high degree of sensitivity and specificity.
The technology is able to work with existing smartphones and requires no additional hardware, making rapid development a fairly straightforward proposition, life science research specialist NDF Research suggests, once approval is granted. A registration study will now follow ahead of a filing for US Federal Drug Administration approval in early 2017.
ResApp conducted a study of in excess of 600 Australian paediatric patients beginning in March last year. The study found that paediatric lower respiratory tract infections cases initially missed by experienced clinicians using a stethoscope could be detected by the ResApp System in 97% of cases. A study of adult patients commenced late last year.
Assuming initial FDA approval is granted, a process will commence whereby the FDA evaluates the system for each individual respiratory condition. NDF Research believes the data from this study and other Australian studies will provide the basis for approvals in Europe and other jurisdictions.
In the US, roughly one in ten doctor visits results in the diagnosis of a respiratory disorder, NDF notes. This translates into 125 million diagnoses annually, and the comparable global figure is believed to be in the order of 700 million, costing, NDF estimates, US6-7 billion per year for the established path of X-rays, CT scans and pathology tests. Much of this existing market is addressable for the ResApp system.
The stock has had a good run since listing in April, initially raising capital at 2c per share before another raise at 20c. The share price peaked at 45c in June and has since retreated modestly. NDF has initiated coverage of ResApp with a Buy (Medium Risk) rating and an 85c twelve-month price target.
NDF anticipates a high value for ResApp’s technology given its apparent cost effectiveness and scalability in an era when digital health can be said to have truly arrived.
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