One of the biggest movers on the market on Monday has been the Resapp Health Ltd (ASX: RAP) share price.
In morning trade the shares of the developer of smartphone applications for the diagnosis and management of respiratory disease are up 43% to 10.2 cents.
What happened?
This morning ResApp announced further positive results from its Australian adult clinical study.
According to the release, the results demonstrated accurate differential diagnosis of pneumonia and acute asthma in a real-world intended use population of adult patients with a board range of respiratory illnesses.
The results showed a 90-91% positive percent agreement and 88% negative percent agreement with clinical diagnosis.
Furthermore, the results demonstrated accurate identification of chronic obstructive pulmonary disease (COPD) and chronic asthma in patients referred for lung function testing, as well as the ability to identify infective exacerbations in COPD patients.
This news will come as a relief to long-term shareholders who have watched on in horror as its share price crumbled in 2017.
The catalyst for this was negative results relating to its Smartcough C study in August. Its shares fell over 80% in a single day after it failed to meet the primary endpoint of its trials.
Despite this promising news and the strong gain it has made, its shares are still down 74% from their 52-week high of 39 cents. It appears the market is still a touch sceptical about the company's ability to deliver on its promises.
What now?
Whilst I think ResApp's technology is exciting, I would suggest investors resist making an investment at this stage.
Even if future trials yield positive results, there is still a long road ahead before the company can even consider generating revenue.
Instead, I think investors would be better served with investments in medical device companies like Nanosonics Ltd. (ASX: NAN) or Pro Medicus Limited (ASX: PME).
