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AGM - Questions answered, page-17

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adamoto

213 Posts.

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04/11/16

11:10

Post #: 20369690
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Originally posted by SteadyEddie ↑

Hi guys,
for those that couldn't make it to Sydney yesterday here is some more detail of what was said and not said;

The formal part of the meeting had Tony Keating reading out the letter to shareholders announced by ASX that day. Then there was the long list of resolutions to be passed mainly involving options to various directors and employees. Main objection was from overseas fund manager who was not present - no formal reason given for objections - but conjecture about them not being offered cheap shares at last cap raising....

After formal part of meeting - lots of questions from the floor from investors about next steps:

When will the other 2 US hospitals give Institutional Review Board (IRB) approval? - expected soon – within few weeks. Probably will wait till all 3 on board to start the actual trial at same time. Name of 3^rd hospital hoping to be announced “soon” when IRB approval.

Risk associated with US trial – will it work as well as in Australia? The algorithm has worked in Indonesian population as well as Australian with equal results, adult results also similar – so it works on big people as well as small and across different culture – no reason to doubt it won’t work in USA just as well. The only real difference with this trial is that there is no tweaking of algorithm during the trial – once parameters set – that’s it for duration of trial.

Time lines for US trials: Protocol to be published on public trials protocol website soon, plan is for 1000 paediatric patients to achieve statistical significance for each diagnosis – expected to complete enrollment in 3 months. Short time to analyse results – this time by independent organization in USA. There will be no interim results announced – have to wait for the 1000 cases. Once analyzed – submit to FDA by end first half 2017.

Adult study in USA plans: once Paediatric study running, all 3 hospitals have indicated their wish to run the adult study in parallel – results will follow paediatric study. Expect several submissions to USA as results come to hand.

Commercialization – expected revenues? Tony Keating was very clear that ResApp is not in position to estimate possible revenues at this point in time. First step is to get FDA approval expected by end June 2017. Commence selling product in second half 2017. At this stage in previous announcements, ResApp has indicated that it will receive $10 per test for use of the software in first world countries and less from humanitarian organizations. In the USA main model is to sell through large telehealth organisations – only 3 main players have 90% of market. Cannot predict uptake at this stage – estimated 25,000,000 respiratory consults per year at present – and growing at 50% per year. At same time as FDA submission also apply for CE mark in Europe and market to all countries there and throughout Asia. Have had discussions with TGA in Australia and regulatory bodies in China – submission same as FDA. May be able to give some guidance in 6 months time as to projected revenues / cash flow.

Risks of software being copied? China risks? This was discussed at length – ResApp has IP patents in Australia, USA, Europe, China and Asia. The program on the smartphone has encrypted data – not easy to just copy. Will be cautious about entry into China – will choose large partner to mitigate any risks.

Risk of staff with IP knowledge being headhunted by overseas corporations to copy ResApp? Keating explained that is why options are offered to the founding scientist Dr Abeyratne and key scientific staff. He assured the meeting that all staff are highly motivated, excited and committed to the ResApp story.

Competition? There is one company in UK and another in USA trying to do similar – but are 5 years behind – no clinical data as yet – ResApp so far has data from 1800 patients in trials to date – not easy to replicate.

Update on field trials in Asia by humanitarian organisation ( still un-named ) – feedback very encouraging – but these large organisations move slowly - aiming to do formal trial at some stage.

Next product? We have established an accurate diagnostic tool to differentiate disease, the same software / smartphone combination can be used to assess the severity of disease such as asthma and this could be useful. Also data could be valuable in assessing outbreak of disease such as pneumonia.

Risk of being gobbled up by large corporation – such as happened to Biota? No need to sell to anyone – fully cashed up and funded through to FDA submission. There would be no “exclusive” agreements signed with any telehealth providers. Tony Keating and Brian Leedman both could not rule out any capital raising down the track “never say never” but no need in next 6 months.

Overall – very positive meeting and a few gaps in timelines explained. Shareholders all upbeat about progress. Hoping to get US hospital announcements in next 2 weeks. Then start US trials, then the wait till results. Personally I was very satisfied and look forward to the next few months.......

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That's really good to hear.
I think for me, the only red (a light shade) flag that stands out is the, no tweaking of the algorithm during the trials.

Obviously we are already getting very impressive results in Australia, and in the real world the algorithm will constant be RE-learning..... the risk of rigid non-tweaking clause, hopefully won't reduce the impressive results they've already obtained.

Hopefully, management didn't have their arm twisted when that requirement was put in but are just very confident the current algorithm will be able to bring home the bacon.

Last edited by adamoto: 04/11/16

RAP Price at posting: 44.5¢ Sentiment: Hold Disclosure: Held
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