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Currency in AUD
Last close As at 27/03/2023
AUD0.06
— 0.00 (−1.69%)
Market capitalisation
AUD50m
Research: Healthcare
In a positive development for its US commercial strategy, Respiri has announced receipt of its first reimbursement claims from the Centers for Medicare and Medicaid Services (CMS) for its wheezo remote patient monitoring (RPM) programme (through one of its partners, Access Telehealth), making it the first Australian company to receive RPM reimbursement. As a reminder, a key component of Respiri’s revenue model is a monthly annuity (US$10–20/patient) derived from the CMS reimbursement to prescribing physicians and this announcement marks the first recurring revenue inflows, on top of the revenue from device sales. There are 20 patients on the RPM programme and with onboarding ongoing at multiple locations (500 prospective patients have been identified), we expect the claims quantum to rise in the near term, supporting top-line growth. We await further visibility on commercial progress before revisiting our estimates and for now keep our valuation unchanged at A$0.24/share.
Respiri |
Dollars in the bank with CMS reimbursement |
Reimbursement update |
Healthcare equipment |
7 February 2023 |
Share price performance
Business description
Analysts
Respiri is a research client of Edison Investment Research Limited |
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In a positive development for its US commercial strategy, Respiri has announced receipt of its first reimbursement claims from the Centers for Medicare and Medicaid Services (CMS) for its wheezo remote patient monitoring (RPM) programme (through one of its partners, Access Telehealth), making it the first Australian company to receive RPM reimbursement. As a reminder, a key component of Respiri’s revenue model is a monthly annuity (US$10–20/patient) derived from the CMS reimbursement to prescribing physicians and this announcement marks the first recurring revenue inflows, on top of the revenue from device sales. There are 20 patients on the RPM programme and with onboarding ongoing at multiple locations (500 prospective patients have been identified), we expect the claims quantum to rise in the near term, supporting top-line growth. We await further visibility on commercial progress before revisiting our estimates and for now keep our valuation unchanged at A$0.24/share.
Year end |
Revenue (A$m) |
EBITDA* (A$m) |
PBT* |
EPS* |
P/revenue |
P/E |
06/21 |
1.4 |
(8.4) |
(8.5) |
(1.22) |
24.3 |
N/A |
06/22 |
0.8 |
(6.2) |
(6.3) |
(0.87) |
47.2 |
N/A |
06/23e |
5.0 |
(2.3) |
(2.3) |
(0.29) |
7.9 |
N/A |
06/24e |
8.1 |
0.4 |
0.4 |
0.03 |
4.9 |
144 |
Note: *EBITDA, PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. FY23 and FY24 EPS are adjusted for new shares.
wheezo was launched in the United States in December 2021 to monetise its potential and leverage the RPM reimbursement infrastructure in the country. Respiri’s US revenue model is made up of two distinct revenue streams: device sales (US$50–60 per unit) and monthly service fees (US$10–20 per patient per month, based on the type of RPM services subscribed to; refer to our initiation note for more details). The RPM programme, delivered through its telehealth partner, Access Telehealth, includes the full suite of services (including its patient monitoring platform Remotli). The programme is also eligible for reimbursement under the CMS’s procedural terminology reimbursement codes for RPM (currently mandated for reimbursement by the CMS in 28 of the 50 US states).
To date, the company has signed six commercial deals across six US states, including with the Minnesota Lung Center (a leading private pulmonary practice based in Minneapolis focused on lung diseases, respiratory therapies and diagnostics) and Arkansas Heart Hospital (one of the largest privately held cardiovascular disease focused hospitals in the US). With patient onboarding initiated in at least three centres, the company expects the user base to potentially extend to roughly 500 patients in near term, against the current figure of 20.
The net cash balance at end-December stood at A$0.2m, which should be further supported by the ongoing A$1.5m fund raise through a share purchase plan (anticipated to close on 10 February). At current burn rates, we estimate these funds to support the company’s operations into Q423. However, we expect additional cash inflows from the currently onboarded patients in coming months, which should give support to Respiri's top line as well as its cash position, providing additional operating headroom.
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Research: Industrials
Renewi is a leader in waste and recycling sectors and is well positioned in the emerging circular economy. Following the recently completed private equity acquisition and delisting of Biffa, Renewi is the only publicly listed play in the waste sector in the UK. This uniqueness combined with the growth plans and supported by the latest trading update should promote interest in the shares.
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