Why the ResApp Health share price rocketed 36% higher today

The ResApp Health Ltd (ASX:RAP) share price has been a big mover on Tuesday. Here's why…

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In morning trade the ResApp Health Ltd (ASX: RAP) share price has zoomed higher following the release of the results of its Australian prospective clinical study.

At the time of writing the digital health company's shares are up a massive 36% to 17 cents.

What happened?

ResApp is a digital health company developing smartphone applications for the diagnosis and management of respiratory diseases.

This morning it announced positive top-line results from its Australian Breathe Easy adult prospective, double-blind clinical study.

According to the release, ResApp's smartphone-based algorithms were found to accurately diagnose all respiratory diseases included in the study. These include lower respiratory tract disease, pneumonia, asthma exacerbations, chronic obstructive pulmonary disease (COPD), and COPD exacerbations.

The performance of the company's algorithms was evaluated using positive percent agreement (PPA) and negative percent agreement (NPA) compared to a clinical diagnosis reached by expert clinicians with full examination and results of investigations.

The release explains that for the identification of lower respiratory tract disease, which is the first critical step in the clinical diagnostic pathway, ResApp's algorithms achieved an 88% PPA and an 89% NPA when compared to clinical diagnosis in patients with acute respiratory symptoms or clinical normalcy.

Similar levels of accuracy were demonstrated for pneumonia, which is the most common illness-related cause of adult hospital admission, with an 86% PPA and an 87% NPA when compared to a clinical diagnosis.

ResApp's algorithms also achieved an 89% PPA and an 84% NPA when compared to a clinical diagnosis for the identification of acute asthma exacerbations. As an estimated 339 million people globally have asthma and the ability to identify it is an important part of effective asthma management plans, management was particularly pleased with this outcome.

Finally, the company's algorithms were able to identify COPD with an 86% PPA and an 85% NPA compared to a clinical diagnosis which was confirmed by lung function testing. And they were able to identify COPD exacerbations with an 83% PPA and a 91% NPA compared with a clinical diagnosis.

The company's CEO and managing director, Tony Keating, appeared to be delighted with the results.

He said: "The breadth of these results is exciting. Not only do we have outstanding results for the diagnosis of acute respiratory disease in adults, we also have compelling data on the identification of exacerbations in patients with asthma and COPD, as well as the ability to screen for COPD in the general population."

Before adding: "These results underpin the commercialisation of a range of smartphone-based acute diagnostic and chronic disease management tools, and we intend to use this data to support CE and TGA regulatory submissions."

Should you invest?

I thought the results of this study were very impressive and I can't say I'm surprised to see its shares rocket higher today.

Whilst it is too soon for me to invest, I'll be keeping a close eye on how things develop. For now, I would stick with fellow healthcare technology shares such as Pro Medicus Limited (ASX: PME) and Volpara Health Technologies Ltd (ASX: VHT).

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Pro Medicus Ltd. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of VOLPARA FPO NZ. The Motley Fool Australia has recommended Pro Medicus Ltd. and VOLPARA FPO NZ. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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