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%.
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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.
