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Currency in AUD
Last close As at 01/06/2023
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Market capitalisation
AUD32m
Research: Healthcare
Respiri released its Q323 activity report, updating investors on key highlights during the quarter. The period was marked by continued expansion of the company’s commercial footprint in the US, which included the signing of three additional contracts (taking the total client count to nine) and the appointment of a US-domiciled chief commercial officer to spearhead its growth strategy for the country. In addition, Respiri disclosed that it is in ongoing negotiations with two large insurers and four to six healthcare organisations, indicating a strong sales funnel. With the company recognising its first Centers for Medicare & Medicaid Services (CMS) reimbursement claims during the quarter and an increasing number of patients onboarded (including at Michigan Children’s Hospital and an undisclosed North Carolina-based healthcare organisation in Q123), we see initial validation for the company’s wheezo remote patient monitoring (RPM) model with subsequent traction likely with early patient responses. The period-end cash balance stood at A$0.9m, highlighting the need to raise capital in the near term, pending any material sales-related inflows.
Respiri |
Commercialisation milestones at the forefront |
Quarterly update |
Healthcare equipment |
28 April 2023 |
Share price performance
Business description
Analysts
Respiri is a research client of Edison Investment Research Limited |
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Respiri released its Q323 activity report, updating investors on key highlights during the quarter. The period was marked by continued expansion of the company’s commercial footprint in the US, which included the signing of three additional contracts (taking the total client count to nine) and the appointment of a US-domiciled chief commercial officer to spearhead its growth strategy for the country. In addition, Respiri disclosed that it is in ongoing negotiations with two large insurers and four to six healthcare organisations, indicating a strong sales funnel. With the company recognising its first Centers for Medicare & Medicaid Services (CMS) reimbursement claims during the quarter and an increasing number of patients onboarded (including at Michigan Children’s Hospital and an undisclosed North Carolina-based healthcare organisation in Q123), we see initial validation for the company’s wheezo remote patient monitoring (RPM) model with subsequent traction likely with early patient responses. The period-end cash balance stood at A$0.9m, highlighting the need to raise capital in the near term, pending any material sales-related inflows.
Year |
Revenue |
EBITDA* |
PBT* |
EPS* |
P/revenue |
P/E |
06/21 |
1.4 |
(8.4) |
(8.5) |
(1.22) |
22.9 |
N/A |
06/22 |
0.8 |
(6.2) |
(6.3) |
(0.87) |
44.3 |
N/A |
06/23e |
1.7 |
(4.2) |
(4.2) |
(0.51) |
22.6 |
N/A |
06/24e |
5.9 |
(1.1) |
(1.1) |
(0.13) |
6.7 |
N/A |
Note: *EBITDA, PBT and EPS are normalised, excluding amortization of acquired intangibles, exceptional items and share-based payments. FY23 and FY24 EPS are adjusted for new shares.
A key highlight of the quarter was Respiri’s discussions with two large US health insurers about a potential risk-sharing revenue model. The agreement, if it materialises, could open the door for a high volume of patient enrolments, generating a significant opportunity for recurring revenues each month (reimbursement would be based on quality of care rather than the number of healthcare services as is the case with the Current Procedural Terminology-CPT codes). For insurers, the collaboration might help in reducing costs related to unplanned hospital emergency room visits. In addition, Respiri disclosed that the sales funnel remains strong, with advanced discussions ongoing with at least two potential clients (including a large national healthcare provider) and another four to six opportunities being explored. We see these as encouraging signs for top-line growth in the near to medium term.
In addition to three existing sites (Minnesota Lung Center, Arkansas Heart Hospital and Medical Centre of Conyers), patient onboarding commenced at a further two sites during the quarter – Michigan Children’s Hospital and an undisclosed North Carolina-based healthcare organisation – expanding the wheezo user base. As per the latest available information, c 100 patients have been onboarded to the wheezo RPM programme. Management is targeting 30,000–40,000 patients by 2024.
End-March net cash was A$0.9m, which at the current quarterly operating cash burn rate of A$1.2m would require the company to raise capital imminently, pending material cash inflows from CMS reimbursement and/or device sales.
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Research: TMT
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