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Thank you for standing by, and welcome to the ResApp Health Quarterly Results Investor Call. [Operator Instructions] I would now like to hand the conference over to Tony Keating, CEO and Managing Director. Please go ahead.
Thank you, operator. Good morning, everybody, and thank you for joining our quarterly results conference call. I'd first like to welcome our shareholders, our employees and members of our Board of Directors who have joined today. The quarter has been a busy time for the ResApp team, and we have begun to lay the foundations for the commercialization of our product portfolio. We believe that these foundations will allow us to scale our business over the coming months and years. After 5 years of research and development, we were pleased to announce in the beginning of the quarter that ResAppDx would be available on 2 leading Australian telehealth platforms, Coviu and Phenix Health. ResAppDx is our acute respiratory diagnostic test primarily targeted for use by clinicians in telehealth settings. For us to access this market, we must work closely with telehealth providers to both integrate ResAppDx into their platforms and to market the test to clinicians who use their platform. The coronavirus pandemic has shown a light on the sector but also caused some challenges, especially in Australia where the government and medical bodies have taken measures to try to accelerate adoption but also maintain high levels of care and manage the economics. During the quarter, we did not see a material number of tests from the Coviu partnership. There is one main reason for this. Coviu saw its GP user base migrate to their free-to-use healthdirect Video Call platform. The healthdirect Video Call platform is powered by Coviu technology and managed by healthdirect Australia. Once the government identified telehealth as a mitigation for the coronavirus pandemic, healthdirect's Video Call platform was made free to Australian GPs to encourage the adoption of video-based telehealth. This allowed GPs to bulk-bill their patients, meaning 0 out-of-pocket cost for patients. While Coviu's telehealth platform powers the healthdirect's Video Call, due to the speed of the healthdirect's response to the pandemic, this initial launch did not include add-ons, which is how ResAppDx is integrated into Coviu's telehealth platform. For the last few months, we have been in advanced discussions with Coviu to offer ResAppDx on the healthdirect platform. We understand that Coviu and healthdirect are negotiating the use for all add-ons on the healthdirect Video Call platform, and they are confident that when ResAppDx is integrated into the platform, we'll see a considerable boost in test numbers. While Coviu provides their software via healthdirect to GPs, Phenix Health has a different model and is set up as a virtual super clinic, employing or contracting directly with doctors. Phenix Health does not have physical practices, and this is now an important factor in the current telehealth landscape. Under current telehealth reimbursement rules in Australia, patients must have had an in-person consultation within the last 12 months to qualify for reimbursement. What this has meant is that patients can access free telehealth, whether by phone or by free solutions such as healthdirect through their regular GP, while Phenix is not able to offer bulk-bill consultations. This has had a massive effect on all commercial telehealth providers who have not -- who have seen a huge reduction in the number of consultations. Social distancing measures have also significantly reduced the rate of respiratory disease in Australia this winter with flu-like illness at a historical low. According to reports, there's been up to a 98% decrease in flu activity this year. As an example, in August 2019, there were 61,000 confirmed influenza cases in Australia. In August 2020, that number was 124. With these 2 factors, Phenix has seen a very low number of acute respiratory consultations that would necessitate the use of ResAppDx during the period. We continue to work closely with Phenix to assist them where possible to drive further growth in testing. We continue to work with Health Hub Doctors Morayfield, a federally funded COVID-19 clinic set up in response to the coronavirus pandemic. Working with those doctors, we are receiving valuable real-world evidence and feedback from the doctors and their patients that can be leveraged for product commercialization and research purposes. Just earlier this week, we were very excited to launch ResAppDx on a select number of Android devices. Bringing ResAppDx to Android considerably broadens the addressable market, with Android having just under 50% market share in Australia and 70% market share in Europe. This has been challenging work for the team, and to have ResAppDx validated on these devices is an important achievement. Android is a very fragmented platform with many makes and models of devices. To validate ResAppDx and ensure it conforms to the required standards, the team had to build new and proprietary audio testing procedures for these devices. ResAppDx is now available in the Samsung Galaxy S9, S10 and S20 phones, some of the most popular phones in Australia and Europe. And we have a number of additional devices in our pipeline for validation. I'm pleased to also provide an update that ResAppDx for Android is now live on the Coviu platform a little ahead of the schedule. We continue to work with Phenix to update their Android app to include ResAppDx. We were pleased in July to announce that SleepCheck is available in 36 countries. Our focus on SleepCheck this quarter has been marketing the app in Australia and in forming partnerships to add value. We are pleased to partner with 2 leading organizations during the quarter, Diabetes Queensland and HealthEngine. With Diabetes Queensland, we've been able to target our marketing to a population that is at high risk of sleep apnea. There are approximately 1.2 million Australians living with diabetes, and there have been a number of studies which have shown very strong links between diabetes and sleep apnea. Between 50% and 80% of people diagnosed with diabetes also experience sleep apnea. And having sleep apnea makes it very difficult for people with type 2 diabetes to manage their blood glucose levels. With Diabetes Queensland, we have launched a dedicated website on SleepCheck, sleep apnea and diabetes and continue to work with them on further marketing initiatives. We're confident this partnership will increase the number of people downloading SleepCheck, and we're also exploring additional partnerships to raise further awareness of sleep apnea and SleepCheck. Last week, we announced a partnership with HealthEngine. This partnership will see us integrate HealthEngine's booking engine into SleepCheck. HealthEngine is Australia's #1 go-to for health care bookings, and it has assisted 7 million patients scheduled over 30 million appointments. By providing HealthEngine's booking engine to SleepCheck users, we give users a simple way to book an appointment with their GP or another health care professional after using the SleepCheck app. HealthEngine has agreed to share referral revenue generated by HealthEngine for each new patient referred. This creates a new revenue stream for ResApp, and we see it as a great example of how adding value to our users can also add additional revenue streams to ResApp. We see many other opportunities to partner with other organizations in a similar way. We've seen pleasing growth in SleepCheck downloads during the quarter with 3,768 downloads during the quarter. We are very pleased to see an increased download rate during the second half of the quarter, a direct result of the launch of our marketing campaign in Australia in August. Our Australian marketing campaign has been across multiple media. We've had some great press coverage of the launch with over 100 pieces of press coverage across TV, radio, print and online, including a segment on 9News that ran nationally. We've -- also have run paid advertising on radio and social media, reaching over 2 million people online. We continue to learn from the marketing campaign and will leverage these learnings as we continue the campaign in Australia and extend the campaign into the U.K. We've already secured some initial press coverage in the U.K. We're confident, with marketing in the U.K. ramping up and additional partnerships, the download rate of SleepCheck will continue to grow. The United States is a large and important market for SleepCheck. And we have submitted a pre-submission package with the FDA to progress the clearance of SleepCheck in the U.S. The meeting has been scheduled for November, and we'll discuss the planned 510(k) regulatory pathway for SleepCheck during the meeting. Last week, we also announced a deal with AstraZeneca Japan. We've been interested in the use of cough frequency to help in the monitoring of disease progression and management for some time and have built a new application specifically designed to do this. The new application uses our patented technology to identify and record the number of coughs from a patient. The measurements are then uploaded in real time with the date and timestamp to allow researchers and health care professionals to monitor the patient. We are excited that Astrazeneca has selected our technology to use to monitor patients in an upcoming lung cancer study. We're also discussing with other large industry partners about using this technology on smartphones and other hardware devices. Financially, we saw a small cash increase during the period due to the proceeds from the exercise of options. Our net cash used in operating activities was $1.44 million, and we are well funded with $5.8 million in cash at the end of the quarter. This leaves us with a runway of over 4 quarters of cash. Cash receipts from customers this quarter was $3,000 due to the normal and expected delay in receiving payments from Apple for SleepCheck downloads. We've achieved a number of key milestones during the quarter and have created a strong foundation for growth. We continue to work with our telehealth partners to explore opportunities that will expedite the uptake of ResAppDx in telehealth settings and continue to explore additional partnerships, both locally and internationally. We've made considerable progress on the international front, and we hope to be able to update shareholders on that shortly. Our national marketing campaign for SleepCheck has resulted in pleasing uptake. Download rates have continued to grow, and we expect accelerating growth as we increase our marketing in the U.K. and elsewhere. Our SleepCheck partners offer great opportunities to increase awareness in consumers, increase the number of downloads and add additional revenue streams. Importantly, we closed the quarter with key achievements made and now look forward to hitting a number of key goals this coming quarter. Operator, I'd like to now open the line for questions.
[Operator Instructions] The first question comes from Iain Wilkie from Morgans Financial.
Scott Power here actually. Just a quick question. Just I wonder if you could just update on some of your recent appointments to the company and how that may help with trying to execute some of these partnership deals that you're talking about.
Well, thanks, Scott. So yes, so we have been actively hiring on the commercial side of the business. We have earlier this year employed Jamie Joint who's based in the U.K. Jamie is leading our European discussions with telehealth providers. And I'm very pleased with the way that those discussions are going and expect -- I expect some progress to be able to be announced over the coming months. We are -- also have engaged a consultant based in the U.S. who is looking at U.S. commercial opportunities for us. And we have a fairly strong business development team based in Brisbane. So I would say that the commercial team that we have today is executing well and continues to grow over the -- will continue to grow over the next few months.
The next question comes from [ Robert ], private investor.
Tony, I just wanted to understand a bit more about the hardware device and what the CE Mark is expected.
Sure. Thanks, [ Robert ]. So I can't really provide much of an update on the hardware device. The development is progressing forward. There's obviously been some delays. Most of those delays are due to coronavirus. There were some challenges in shipping equipment from China to the U.K. due to the current situation both on international shipping as well as in the U.K. Basically, what we're at a point of is finalizing the devices that are going through the testing, through the EMC testing and other regulatory testing and some of that required pieces of equipment effectively shipped from China. There's also some delays due to lockdown in the U.K. But at this point, things are moving back forward, and we're expecting or -- yes, we're expecting that this hardware device will move through the process this quarter.
[Operator Instructions] The next question is from [ Darush ], private investor.
Tony, this is [ Darush ]. I'm just wanting to know what the update is on the FDA submission for ResAppDx in the U.S.
Yes, sure. So the -- for FDA in the U.S., we are still putting together our FDA request, our Q-Sub request. And at this point, we're hoping to have that submitted this quarter. But that's also depending on, I guess, coronavirus and our ability to travel to the U.S. But at this point in time, we are expecting to -- or hoping to submit that Q-Sub request this quarter.
[Operator Instructions] The next question comes from [ Mark Rowley ], private investor.
Tony, I just got a question about Ilara in Africa. How is that progressing? Let's kick off soon. And I was just wondering if the Android integration will be a problem there. I wouldn't have thought they'd have too many high-end Samsung phones. So if you could give us a comment on those 2 issues, that would be good.
Thanks, [ Mark ]. So we updated in the quarterly report that we have started recruitment in the Ilara Health study evaluation. So those patients are now being recruited, and the evaluation has started in 5 medical centers in Kenya. So Ilara Health is not targeting direct-to-consumer. So it's not that important -- Android's not that important in that situation. We're providing phones into those clinics. So we're providing iPhones into that clinic. So Android is not really a material concern with Ilara.
Okay. So is that sort of the thinking of the model going forward, that it won't be B2C initially and more of an in-clinic model?
Yes, that's -- our focus as a company has always been to do an in-clinic model or telehealth model throughout the world. We're working with RB on a direct-to-consumer-facing product. But in somewhere like Africa, there's not a lot of telehealth, so we're talking about in-clinic use primarily.
The next question comes from [ Ben Fitzgibbons ], private investor.
I've got 2 questions. I don't know whether you can ask both in the same time. But first question relates to the Australian market. Is there any more progress -- noting that we've only got at the moment Coviu and Phenix as 2 telehealth providers that we're sort of working through and with, there's a couple of -- we've got the clinic in Brisbane. Can you make a comment about any other progress in the Australian market to further validate the products in Australia to assist in the global expansion?
Sure. So I guess for Australia, we can segment that market into 2, into the telehealth side and the in-clinic side. So on the telehealth side, obviously, from the commentary that we've provided this morning, it's very clear that the majority of GPs in Australia are using the healthdirect platform through Coviu. So we see that as a very important step, is expanding the availability of our add-on in Coviu into the healthdirect platform. Most of the private or commercial telehealth providers, Phenix being one of them, are struggling in the current environment, both from a reimbursement challenge that the government has put up there, as we explained this morning, but also from just a case that there are simply very few respiratory cases presenting to any type of health care at the moment. So for telehealth, our major focus is working with Coviu to get across to the healthdirect platform because that's the main platform that GPs in Australia are using. In the in-clinic, we're investing -- we're talking to -- we have evaluations with a number of clinics across the country that are trying and testing the software on phones. So yes, we're actively talking to a number of clinicians and a number of clinics that are essentially evaluating the software today.
Okay. Great. Do you mind if -- very briefly if I ask you another question?
Sure.
From my perspective, it seems like you do a lot of the work for the company, and you do a great job of that. Do you feel like you are adequately resourced by the team behind you to deliver what is needed and what has been sort of promised and discussed in previous teleconferences and announcements? Just to comment on that, please.
Look, I think it looks like I do a lot of work, but there's a hell of a lot of work done by the team behind me. I think that's because I'm the public-facing part of the company, you often don't see the very hard work that everyone, from our VPs, who are really responsible for different areas, such as regulatory and clinical or cross into technology all the way to our engineers who do a lot of work. So I'd say, look, we are still a small company. There's obviously room to grow the company, and we are looking at those opportunities. And as I pointed out a little bit earlier, commercially, we're probably a little bit lighter than we would like to be. But that's also reflected in our conservative cash burn over the last 5 years. So I'm very happy with the team that we have today. I think they're doing some really great work. We've hit some great key milestones, but we'll also be looking at expanding that team over the next 6 months for sure.
The next question comes from [ Lachlan McDonald ], private investor.
I hope you're well. Look, Tony, look, I've just got, I guess, 2 questions that are kind of related. Tony, obviously, in regards to Europe, obviously, I've been a long term investor, but there was much hype if we had a number of, I guess, institutions very keen on our product. Now that we're kind of at that stage of rolling it out, it does kind of seem that those initial companies aren't really exactly jumping on board as much as or as quickly as what we thought we would. Is it the type of situation that we're just getting outdone by either bigger competitors or that appetite has dried up per se?
Thanks, [ Lachlan ]. I mean that's a really good question. And we've been thinking about this question internally for the last few months and trying to work out how do we accelerate adoption in Europe. And I think we've come to the conclusion really that there are -- there's one primary reason. So we're definitely not being beaten out by competitors or anything like that. We definitely don't see any competitors talking to the same companies that we're talking to. We don't see them even operating in the same space. What we see is conflicting priorities within the telehealth companies themselves. And so with the coronavirus pandemic, we've seen a massive boom in telehealth in Europe. And what -- essentially, the telehealth companies have a choice. That choice is to dedicate their internal resources to scaling their company, so getting more and more patients and more and more doctors on their platform, and doing additional things like adding ResApp to the mix. And what we've found, I guess, as over the last -- since the coronavirus has really started, we have seen them focus on that first part, which is scaling their business. And that's -- honestly, that's a fairly obvious thing for them to do. It's very easy for them to measure the ROI of adding 10 more customers to their business. So to us, that's been -- and I think that's been recognized, is that their focus has been let's grow their business as much as they can. We've always been #2. We've always been the second one behind that. And so I'm very -- I guess I'm pleased to see now as we started to turn the corner, our priority -- their priorities are shifting, and we are seeing us jumping up to that top priority for those companies. And I expect -- I'm confident that we'll see some significant progress this quarter. But yes, fundamentally, it's a decision about them just growing their business with number of customers versus adding something on. And I think those priorities are changing and have been changing and actually have changed in the last couple of months.
The next question comes from [ Ian Jones ], private investor.
Tuned in late, I was busy at work, but a quick question. It seems to me that one of the sticking points in uptake is and will be going forward the quick training or training of doctors to be able to connect up with the app and use the app efficiently so they can move through that process rapidly and turn the patients over, especially in terms of testing for respiratory disease. I hear what you say, there hasn't been much actual respiratory inquiry because of the good weather or the summer or whatever. But have you got any programs in place for training the MDs into getting used to the business of telehealth and using our platform?
Thanks, [ Ian ]. That's a good question. So we -- there's a couple of barriers to ResAppDx being used in Australia. And I'll say that a lot -- some of this is very Australian-specific. The first one, as you point out, is the lack of availability to GPs. So if GPs are using a platform such as healthdirect, which currently does not have our technology on it, it doesn't matter if they want to use it or not. They don't have access to it. They're not going to jump to another completely different telehealth platform just for ResAppDx. So that's the main barrier, and we need to work on bringing that barrier down as soon as we can. The second one is that we are actually talking to someone like Phenix. So Phenix does do training. They're RAC, so the royal college of general practitioners, RACGP-certified to provide telehealth training to clinicians. And we've also been working with one of the universities as well to look at training programs. So we are building that training material and working on that training. But as I said, the first thing is actually getting it in front of the GPs through a telehealth platform that they are using today.
The next question comes from [ Rudy Limantono ], private investor.
It's [ Rudy Limantono ]. Tony, I just want to clarify that -- the dynamic between healthdirect platform and Coviu. So you said that healthdirect is government initiative for a GP to use the platform for free, and healthdirect is powered by Coviu. So -- and then in your report today, you said that Coviu GPs user base migrating to the free-to-use healthdirect video platform. So basically, Coviu itself is also losing the subscription through their GPs because they are now migrating to a free platform, healthdirect. Is that right? So -- and yet they publicly said a few months ago that they have -- they are actually doing 25,000 telehealth consultation on their platform. So I don't -- I can't reconcile which one is which. Are they referring to healthdirect? But how come they're referring to -- but then yet it says on their platform, yet healthdirect is not their platform. It's government platform powered by them.
Yes. So look, I can't comment on those numbers. I don't have insight into exactly what numbers Coviu are doing. All I know is that both platforms are powered by healthdirect's -- by Coviu's technology, and they may be considering both of them as Coviu's platform. I'm not sure. But essentially, as we said, healthdirect is free to use for GPs. Those GPs -- or the healthdirect platform has Coviu underneath it, and that Coviu does not have add-ons, so it does not have ResAppDx. That's what's being currently negotiated. And we're hopeful that once we get ResAppDx on the Coviu version that is inside healthdirect, that we should see significant uptake because those are GPs who are most likely to use our test.
Yes. So just to be clear, so the contract that we signed with Coviu is to make available ResAppDx on Coviu's platform, not on the healthdirect platform, correct?
It's on Coviu's platform.
Okay. Right. Now it's hard to imagine that all Coviu's GP migrated to healthdirect and thus that basically nobody is using ResAppDx or materially using ResAppDx for the last 3 months on Coviu's platform. It's just a bit hard to believe. But anyway, my next question is that if healthdirect is actually a Commonwealth Department of Health initiative, should we then be lobbying them to make available ResAppDx on their platform as in Coviu? At the end of the day, it's not Coviu's platform. It's government's platform. It's government's own platform. It's managed by them. So should we ask them -- lobby the government rather than Coviu?
Rudy, I'm not going to get into the confidential discussions that are happening between Coviu and healthdirect and potentially ourselves. Those are commercial discussions that are ongoing, and Coviu are our partner in that part of the discussions.
I just want to clarify because you said that you are discussing with Coviu to make ResAppDx available on healthdirect. I just don't see the logic in that because as far as I'm concerned, the way I read it is Coviu is only a subcontractor to the government to provide the platform of healthdirect that is owned by the government. So if we want to make our product available to that particular platform, then we have to lobby the government, not Coviu. I just don't understand why you said discussion is ongoing with Coviu rather than with the government.
So what I can say is that the discussions are happening about adding add-ons into healthdirect.
The next question comes from [ Clint Thomas ], private investor.
Tony, yes, I missed the first part of the conference call as well. It's just to do with RB. Is there any more information on how that's progressing? And also the screening for COPD submission. Is there any news on that? That's pretty much the 2 questions I got.
Yes. So with RB, we're progressing forward. We've had multiple meetings with the RB team during the quarter. That's really about as much as I'm allowed to say about that. But we've had multiple members of our team as well as their team discussing and moving forward with discussions and meetings during the quarter. On the COPD screening, we are working through the regulatory process with that product. And we'll update the market, I would say, later this year on the progress there.
The next question comes from [ Jim Baker ], private investor. I think [ Jim ] may have muted his line. I'll hand the conference back to Tony Keating for closing remarks.
Great. Well, thank you, everybody. I'd like to thank our shareholders for their continued support of the company. It's been a journey to get here, and I'm pleased to say that we're now in a great position to begin the next stage. Finally, thanks to the ResApp team who keep achieving the ambitious goals that we set for them out to achieve every quarter. We've achieved many firsts over the years, and it's all thanks to the dedication of our team. So thank you very much, and I look forward to talking to you again at the next quarterly.
Thank you. That does conclude the conference. Thank you for your participating.