ResApp share price races 7% higher on Sanofi agreement

The ResApp Health Ltd (ASX:RAP) share price is racing higher on Friday after announcing an agreement with Sanofi…

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The ResApp Health Ltd (ASX: RAP) share price is on course to end the week on a positive note.

At the time of writing the digital health company's shares are up over 7% to 29 cents.

Why is the ResApp share price racing higher?

This morning ResApp announced that it has entered into an agreement with the consumer healthcare business unit of biopharmaceutical giant, Sanofi.

According to the release, the agreement grants Sanofi an exclusive license to use the outcomes generated under its Startup Creasphere incubator program.

Under this program, ResApp and Sanofi are collaborating on building a smartphone application which will leverage ResApp's novel cough-based respiratory disease diagnostic algorithms to provide at-home support to consumers.

The agreement also grants Sanofi the option to negotiate and acquire exclusive rights to develop, manufacture, and commercialise a respiratory disease self-assessment application specifically for consumers.

Sanofi has until March 2020 to exercise this option. If it elects to exercise the option, the two parties will have six months to negotiate the licensing terms. Either company may terminate the option agreement by giving 30 days' notice.

ResApp's CEO and Managing Director, Tony Keating, was pleased with the agreement.

He said: "We are pleased to be working with the global consumer healthcare team on a unique and important standalone product that neatly complements the solutions in our existing portfolio."

What does ResApp do?

ResApp is developing smartphone applications for the diagnosis and management of respiratory disease.

Its machine learning algorithms use sound to diagnose and measure the severity of respiratory conditions without the need for additional hardware.

Pleasingly, clinical studies in Australia and the United States have demonstrated accurate diagnosis of lower respiratory tract disease, upper respiratory tract infections, asthma/reactive airway disease, pneumonia, bronchiolitis, croup, chronic obstructive pulmonary disease and obstructive sleep apnoea.

This appears to have caught the eye of Sanofi, leading to this promising agreement.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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