The Resapp Health Ltd (ASX: RAP) share price fell 77% to $0.071 this morning after the company released negative results relating to its Smartcough C study.
The company had been suspended from trade for over a week while it processed the information, but today's results were quite clear. Resapp failed to meet the primary endpoint of its trials, and the trials themselves appear to be very low quality. With a failed trial and minimal cash reserves under its belt, Resapp looks to have a long road ahead of it, particularly if large shareholders start selling down their holdings.
In my opinion, there isn't a clear path for Resapp to achieve positive earnings in a reasonable time-frame, which means that shareholders will be on the hook for further capital raisings in the future to fund ongoing investment in the company's diagnostic app. The lack of visibility towards earnings or regulatory approval means that today's plunge is not an opportunity, and I would avoid Resapp completely.
