Originally posted by Michaelirish
We have had a very full and divisive series events in the short life of RAP. The US trial has come and gone. The few days before the announcement were wayward. The market trashed the results. SP down 52%. Many posters expressed their dismay and sold.
Management held firm and the vision for RAP has become more illuminated.
RAP was very ambitious in testing for 6 indications.
The testing for LRTI, URTI, and asthma has postioned RAP to hasten the submission for FDA. RAP faced a major challenge in the sense that there is NO GOLD STANDARD for comparison. The whole process is highly subjective. 33% of patients found that the two adjudicators could not agree and required a third opinion for resolution. RAP scored in the 70% PPA . This fact in itself will be crucial in the FDA submission. FDA is charged with deciding is RAP( De Novo) adding benefit to clinicians in deciding on LRTI, URTI, and asthma. The results answer a resounding yes.
And this is where the revenue for RAP is.
Morgan View (1/11/2018)
- RAP released its top-line results from its US SMARTCOUGH study, with positiveresults in the largest market indications for LRTI, URTI and asthma, and expects tolodge its FDA de novo application before year end.
- ■ Clinical diagnosis in the US of respiratory disease proves to be highly variable witha third of tests requiring a third adjudicator to act as a tie-breaker.
- ■ While disappointed that the pneumonia results fell short of the benchmark 70%PPA and NPA, we believe the market has overreacted considering the relativelysmall market size for this indication in the US.
- ■ We have lowered our forecasts to reflect timing of telehealth revenue. The targetprice has been reduced to A$0.24 from A$0.35. Add recommendation maintained.
I was quite sceptical about several aspects of the results and the statements made in the conference:
- The primary income source has been identified by Resapp as LRTI, URTI and asthma only now, after the results are out. Before the results were released Resapp was very strongly focused on pneumonia.
- Getting a third adjudicator to break a tie doesn't make sense. If you're flipping coins and get one head and one tail a third coin flip will give you a majority consensus. A better approach might have been to use two more adjudicators and reject the case (for that condition) as impossible to classify if the second two still don't agree.
- Suddenly, now the results are out, there is no gold standard. There was no discussion about the lack of a gold standard before the results were released.
- Now that the results have been found to be way below expectations it turns out that the adjudication process is highly subjective. But we took steps to ensure that the adjudication wouldn't be subjective. And even worse, instead of addressing the fact that our mitigation steps failed, we're rolling over and saying we have to live with that. Clearly it can be addressed because Australian adjudication isn't subjective and is predictable by the algorithm.
- There has been no disclosure at all of what the next "phase" will be for pneumonia.
The company's statements look to me like a great deal of post hoc justification, and an intention to forge ahead regardless and hope for the best.
(20min delay)