ResApp (ASX:RAP) share price surges 5% on new agreement

The ResApp Health Ltd (ASX: RAP) share price is 5% higher today following a new agreement. We take a closer look at what the company announced.

| More on:
ehealth

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The ResApp Health Ltd (ASX: RAP) share price is racing higher in mid-morning trade. This comes after the company announced a new agreement to accelerate sales in ResAppDx.

At the time of writing, the digital health company's shares are fetching for 5.4 cents apiece, up 5.8%.

New agreement to accelerate ResApp sales

ResApp shares are on the move today as investors are pleased with the company's latest update.

In a statement to the ASX, ResApp advised it has entered into a non-exclusive distribution agreement with Ilara Health.

Founded in 2019, Ilara Health provides affordable diagnostic equipment and services to small clinics and pharmacies across Africa. The company specialises in artificial intelligence medical devices such as portable ultrasound and blood diagnostics for diabetes. The current opportunity represents a market of more than 500 million people who live on the sub-Saharan Africa continent.

The deal will see ResApp provide its software application ResAppDx to Ilara Health for acute respiratory disease diagnosis in Kenya. This follows a successful pilot test undertaken by Ilara Health using ResAppDx at five partner sites in the country.

ResAppDx is a smartphone-based acute respiratory diagnostic test that has been developed to diagnose a range of health issues. These include lower respiratory tract disease, croup, pneumonia, asthma/reactive airway disease exacerbation, COPD exacerbation and bronchiolitis.

At present, Ilara Health has partnerships with over 250 clinics across four of the largest cities in Kenya. In addition, the healthcare provider is seeking to expand into a new African market within the next 12 months. This provides ResApp with a lucrative opportunity should sales meet targets.

The agreement has an initial term of 3 years, with Ilara Health to promote, market and sell ResAppDx in Kenya. Should the collaboration become successful, the deal can be renewed for consecutive 12-months periods by both parties.

Management commentary

Ilara Health CEO and co-founder, Emilian Popa welcomed the partnership, saying:

We have been thrilled with the simplicity, ease of use and confidence that ResAppDx has instilled in clinicians and patients. We see significant benefits that ResAppDx offers our partner clinics across Kenya as a low-cost and accurate respiratory diagnostic test.

ResApp CEO and managing director, Dr Tony Keating went on to add:

We are pleased that Ilara has seen the considerable value that our important diagnostic support provides their customers. Importantly, the pilot evaluation demonstrated the benefits of ResAppDx in a face-to-face, in-clinic setting and in a country with high unmet need for such diagnostics.

We are confident, that with the learnings from this pilot, Ilara Health will be able to bring the value of ResAppDx to a broad range of clinics in Kenya for the benefit of many clinicians and patients.

ResApp share price summary

Despite today's positive announcement, ResApp shares have failed to take off in 2020, down almost 40%. When looking over the past 12 months, the company's shares have fallen close to 70%.

ResApp presides a market capitalisation of roughly $46 million, with approximately 859.1 million shares outstanding.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Healthcare Shares

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Healthcare Shares

Which small cap ASX share is jumping 10% on strong results

Investors have been bidding this stock higher today. But why?

Read more »

Cropped shot of an attractive young female scientist working on her computer in the laboratory.
Healthcare Shares

Why Macquarie forecasts 30-50% upside for these ASX All Ords healthcare stocks

Macquarie updated its target price on these three ASX All Ords healthcare stocks.

Read more »

A woman jumps for joy with a rocket drawn on the wall behind her.
Healthcare Shares

Guess which ASX 200 stock is jumping 10% on big news

This stock is catching the eye with a strong gain on Thursday. But why?

Read more »

a young woman holds her hand to her ear and leans sideways as if to listen to something that's surprising her as her eyes and her mouth are wide open.
Healthcare Shares

Down 15% since January, are Cochlear shares now a buy?

Let's see what analysts are saying about this blue chip.

Read more »

Green arrow with green stock prices symbolising a rising share price.
Healthcare Shares

Guess which popular ASX 200 stock is up nearly 60% in less than 2 months?

Investors who bought this ASX 200 stock in the recent dip have been strongly rewarded.

Read more »

A senior pharmacist talks to a customer at the counter in a shop.
Healthcare Shares

Are Sigma Healthcare shares a good buy now after the merger with Chemist Warehouse?

Sigma Healthcare shares have soared 154% in 12 months. Can this stellar run continue?

Read more »

Doctor doing a telemedicine using laptop at a medical clinic
Healthcare Shares

Up 34% since April, ASX 300 healthcare stock lifts off again today on new milestone

The ASX 300 healthcare stock has been on a tear since hitting one-year lows in April.

Read more »

Shot of a scientist using a computer while conducting research in a laboratory.
Healthcare Shares

Should I buy the dip on CSL shares?

A leading fund manager gives his verdict on the growth prospects for CSL shares.

Read more »