ResApp Health Ltd (ASX:RAP) has received a double dose of good news this week, with a proposed collaboration with a German private hospital network and a Federal Government cash incentive tax rebate.
The company is a developer of digital health smartphone applications for the diagnosis and management of respiratory disease.
ResApp’s machine learning algorithms use sound to diagnose and measure the severity of respiratory conditions without the need for additional hardware.
Pilot project with German hospital network
The company has just signed off on a letter of intent with a German private hospital network to run a pilot project to test the applicability and integration of its products.
This is the ResAppDx, ResApp’s smartphone application for diagnosing acute respiratory disease.
The partners will work together to design and run a six-month pilot project at one or more of the network’s hospitals in Germany at no-cost to ResApp.
Revenue model and commercialisation prospects
Under the terms of the agreement, ResApp will not receive revenue from the pilot project.
At the completion of the project, ResApp has agreed to grant the network an exclusive, no-cost licence to use ResAppDx in their hospitals in Germany for six months.
ResApp is also offering a non-exclusive, no-cost licence for an additional six months.
Successful completion of the pilot may lead to the network negotiating a commercial licensing agreement for use in their hospitals.
ResApp Health chief executive officer Tony Keating said: “We expect this project to significantly accelerate the commercialisation of ResAppDx in Europe.”
Consequently, while the company’s participation in the pilot program won’t immediately generate revenues, management sees the prospect of forging long-term relationships.
Government coughs up cash rebate
Separately, ResApp has been advised by the Federal Government that it will receive a cash rebate of $689,000 from its research and development tax incentive claim for fiscal 2017.
Keating said: “Whilst well-funded to execute our ongoing clinical strategy, including our US SMARTCOUGH-C-2 study, our Australian prospective studies and our obstructive sleep apnoea program, these additional funds further strengthen our financial position.”
ResApp’s shares have responded well to these recent developments, having increased 10% in the last two trading days.