Resapp Health Ltd

ASX:RAP

Earnings Call Transcript 2022-Q2

[Operator]

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 Mr. Tony Keating, CEO and Managing Director. Please go ahead.

[Anthony James Keating, CEO, MD & Director]

Thank you, operator. Good morning, everybody, and thank you for joining our quarterly results conference call. I'll start by welcoming our shareholders, our employees and members of the Board of Directors. I'll first talk to our cash receipts for the quarter. We were very pleased this morning to announce that our cash receipts were $124,000, up from $7,000 last quarter. While we're starting from a small base, we are confident that we are beginning to see the results of our efforts in building a solid commercial pipeline. We've seen growth and progress in our pipeline, which will continue to grow cash receipts moving forward. As the world's health systems begin to emerge from COVID-19, we have seen a real change in the market in recent months with greater engagement and enthusiasm for our technology. We're at a very exciting time as we now start to see our products being used at scale globally. During the quarter, we focused on 2 important telehealth launches, Alodokter and Doctors on Demand. Alodokter delivers telehealth at real scale. Their platform connects over 50,000 doctors and 1,500 hospitals and clinics with millions of Indonesian patients. As ResAppDx only requires a smartphone, we offer the only practical diagnostic solution to deliver health care at that sort of scale. During the quarter, we worked closely with the Alodokter team to integrate the ResApp SDK into Alodokter's Android and iOS apps, and we are excited to announce the go-live with Alodokter's upgraded app in January. Doctors on Demand are a leading telehealth provider of telehealth solutions here in Australia. They are particularly active in corporate health, providing telehealth services to many of Australia's leading corporates. In addition to driving use of ResAppDx in the Australian private payer market, our partnership with Doctors on Demand will help us gather important real-world use data to secure reimbursement, which will unlock considerable further revenue in Australia and other similar markets. Combining this with Medgate, we now have ResAppDx being used by leading telehealth providers in Europe, Asia and Australia. And there are still significant growth opportunities in their markets, and we've got active discussions with a number of telehealth providers, which will see us greatly increase our footprint there. The U.S. telehealth market continues to grow at a very rapid pace, an important market for ResApp, and we continue to engage with the U.S. FDA to obtain clearance there. Early last year, we filed a pre-submission meeting request with the FDA for a version of ResAppDx that detected lower respiratory tract illness in children and adults. We were pleased to hold the pre-submission meeting with the FDA this morning, and we received excellent feedback from the FDA on potential approval pathways and other requirements. We're very confident we can achieve FDA clearance for this product, and we will continue to engage with the FDA in the coming months.In November, we signed a landmark agreement with Janssen for them to use ResAppDx in an RSV clinical trial. I discussed this deal at our Annual General Meeting, but I wanted to reiterate the importance of this deal today. Janssen is one of the Janssen Pharmaceutical Companies of Johnson & Johnson, the largest pharmaceutical company in the world. Janssen is a global health care leader, which focuses on infectious diseases and vaccines, pulmonary hypertension, cardiovascular and metabolism, immunology, neuroscience and oncology. But what this deal really means is that eminent clinician-researchers from leading institutions across the U.S., Europe, South America and Asia Pacific will get hands-on experience of using ResAppDx. And it also provides strong validation of our technology by one of the world's leading pharmaceutical companies. We also secured a distribution agreement with Sanrai during the quarter. Our strategy here is to expand the reach of our commercial team. Sanrai has offices and existing customer relationships in more than 50 emerging market countries, including India. This week, we attended Arab Health, the largest regional health care conference, to support Sanrai's launch with their partners across the Middle East, Africa and Asia. This deal greatly expands our accessible market opportunity, and we know that ResAppDx provides a compelling clinical value proposition in many of these emerging markets. In these emerging markets, there simply is a major lack of access to high-quality health care, and that's a major issue, and we see significant growth opportunities in these regions in the coming quarters. I'll next move to our SleepCheck product. An important part of our SleepCheck product is U.S. market entry. The U.S. offers a huge market opportunity with an estimated 42 million Americans suffering from sleep apnea and a significant portion of those being undiagnosed. In October last year, we submitted a 510(k) file to the FDA. And in December, we received a request from the FDA for additional information. This is a very common request to receive during the 510(k) process. In fact, it's quite unusual to not receive this request. And we held a meeting with the FDA in January to clarify their request, and the meeting was very positive, with great engagement with the FDA, and we felt a very positive outcome. We now plan to submit our response to the FDA's request this quarter, and we'll expect the decision from the FDA shortly thereafter. Our commercial focus on SleepCheck remains on partnering. During the quarter, we held a number of very promising discussions with companies from a broad range of sectors, including life insurance, health insurance, health and wellness and the sleep apnea therapy device companies. And these are companies across Europe, Australia and Asia. We strongly believe that it's a great opportunity to significantly expand SleepCheck's market penetration through B2B partnerships such as these. COVID-19 remains a major global challenge. While vaccines and newer variants of the virus such as Omicron have changed the situation, we still see the world's health care system struggling under the burden of the virus. In talking to members of our COVID-19 Scientific Advisory Board, it's clear that while Omicron looks on the surface to cause milder disease, the sheer numbers of cases infected by Omicron means there are still large number of severe cases requiring hospitalization, including ICU admissions, and overwhelming the system. And Delta is still here. Just a few weeks ago, the WHO said that Delta was still the dominant strain globally. In that same briefing, the WHO also said that 109 countries have missed their targeted 70% vaccination by July. And new variants are clearly making vaccination less effective. So what this means is that screening, contact tracing, isolation are still playing and will continue to play a key role in health systems managing the virus. And look at the demand that we've seen for rapid antigen tests in Australia and elsewhere recently. It skyrocketed. And physical manufacturing and the shipping of these tests just can't keep up. Even in the best-case scenario, if or when COVID-19 becomes endemic, identifying the virus in unwell patients and helping their carriers better manage their condition will be an important part of practicing acute care medicine. The global market for COVID-19 diagnostics is forecast to grow to $105 billion by 2027, and patient management tools may further increase this. The COVID-19 pandemic has also normalized viral testing at home. I'm sure many Australians will now have a COVID-19 rapid antigen test in a cupboard or a fridge. And in other countries, they are being sold in vending machines. Like it has accelerated telehealth use, the pandemic will accelerate the adoption of in-home testing. We have a unique opportunity to be part of this change and make the diagnosis of respiratory disease via cough sounds using a smartphone a common part of a patient and clinician experience. We've seen a number of studies that indicate the cough contains a signature that is unique to COVID-19. ResApp are world leaders in capturing and analyzing these signatures. We are the only team that has taken audio-based algorithms for disease diagnosis from research to a regulatory-approved product, and it's now being used across 4 continents. If we can deliver an instant, highly scalable and low-cost COVID test that only uses just a smartphone, then we have in front of us a tremendous commercial opportunity. During the last 6 months, we have gathered the key data needed to achieve that goal. We have recruited hundreds of patients in India and the United States, collected their cough sounds as well as their PCR-confirmed COVID-19 status. This is a fantastically rich data set, gold standard labeling by PCR confirmation, 2 distinct patient groups across 2 continents, collected at home, at testing clinics and in mild hospitalized patients, a variety of asymptomatic and symptomatic patients and across the time line that includes both the Delta and Omicron variants of COVID-19. We also have another invaluable data set, a large library of pre-pandemic cough sounds from patients with other lower respiratory tract infections. This means that we can ensure our algorithms are truly specific to COVID-19 and don't falsely identify other lower respiratory tract infections as COVID-19. This data set is unique and nearly impossible to replicate. We know that many shareholders are impatiently waiting for this data. We share this impatience, and our team has and will continue to work incredibly hard to deliver this data and these algorithms as quickly as we can while maintaining the high standards that regulators and clinicians trust us for. While we're still in the discovery phase, we are very excited about the progress that our algorithm development team has made in a relatively short amount of time. It's exciting to watch and reminds me greatly of the early days of development when Professor Abeyratne at the University of Queensland built and tested the original pneumonia and other respiratory disease diagnostic algorithms, algorithms which are now regulatory approved and in the hands of clinicians in Europe, Asia and Australia. I'm very much looking forward to sharing the results with you in the very near future. Thank you for listening to the call this morning. I'd now like to open the line for questions.

[Operator]

[Operator Instructions] We are currently showing no questions. I'll now hand back to Mr. Keating for closing remarks.

[Anthony James Keating, CEO, MD & Director]

Thank you, operator. So I'd like to close by thanking our shareholders and our staff for their continued support. I, my team and the Board are feeling very positive about the potential of our technology and the opportunity to build momentum for ResApp Health and our shareholders this year. Thank you very much.

[Operator]

Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may now disconnect your lines. Thank you.