ResApp share price frozen as $180m Pfizer takeover bid hangs in the balance

The value of Pfizer’s takeover bid may soon come to light.

| More on:
a medical person in full protective clothing holds a tray of Covid-19 vaccinations amid a haze caused by cold and ice.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The ResApp share price is frozen at 17.5 cents ahead of the release of results from the company's COVID-19 data confirmation study
  • If the results are satisfactory, Pfizer will offer ResApp shareholders 20.7 cents per share
  • However, if the outcome doesn't impress the healthcare giant, it will offer 14.6 cents per share to takeover the ASX company

The ResApp Health Ltd (ASX: RAP) share price has been put in the freezer as the company prepares to announce significantly consequential study results.

The healthcare technology company is currently the subject of a $180 million takeover proposed by Pfizer Inc (NYSE: PFE)’s Australian arm.

However, if its COVID-19 data confirmation study’s results are deemed unsatisfactory, Pfizer’s bid will drop to $127 million.

Right now, ResApp shares are halted at their previous closing price of 17.5 cents each.

Let’s take a closer look at what’s going on with ResApp on Monday.

The ResApp share price is in the freezer on Monday

The ResApp share price has been halted on Monday as the market awaits results from a clinical validation study.

The study will determine if the company’s technology can detect COVID-19 by analysing audio of a patient’s cough as accurately as previous studies have found.

A previous pilot study found the technology – dubbed COVID Algorithm – performs with 92% sensitivity and 80% specificity.

Pfizer will offer ResApp shareholders 20.7 cents for each share they hold if the soon-to-drop results find the COVID Algorithm performs with a sensitivity of at least 86% and specificity of at least 71%.

Pfizer has also ordered the results be confirmed by an independent statistician.

If the study fails to meet the above criteria, Pfizer will offer shareholders just 14.6 cents per share.

The 20.7 cent per share bid represents a 130% premium on ResApp’s close as of 8 April. The 14.6 cent per share bid represents a premium of 62.2% on the same close.

The ResApp share price is expected to remain frozen until the results’ release or Wednesday’s open, whichever comes first.

The company noted it’s expecting to return to trade on the announcement of the results.

The ResApp share price has gained 169% over 2022 so far. It’s also 280% higher than it was this time last year.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Healthcare Shares

Five healthcare workers standing together and smiling.
Healthcare Shares

Medibank share price dips despite dividend boost

The healthcare insurer will pay its biggest final dividend since 2019.

Read more »

Three medical staffers sit at a table and chat happily wearing hospital scrubs
Earnings Results

Pro Medicus share price fails to fly on 44% profit leap

Here's how Pro Medicus dialled up the profits in FY22.

Read more »

A CSL scientist looking through a telescope in a lab
Earnings Results

Telix share price slides despite 726% revenue boost

Investors may be thinking the pharmaceutical company's valuation has peaked after the stock price doubled over the past three months.

Read more »

Broker looking at the share price on her laptop with green and red points in the background.
Broker Notes

Broker gives its verdict on the CSL share price post-FY22 results

Here's what this broker is saying about the CSL share price...

Read more »

An older woman tries to listen by cupping her ear.
Healthcare Shares

Guess which ASX biotech share is soaring 32% on a ‘landmark’ FDA ruling

What a day it has become for this small-cap healthcare company.

Read more »

Two happy scientists analysing test results.
Dividend Investing

Everything you need to know about the latest CSL dividend

Own CSL shares? Here's the details regarding its latest dividend.

Read more »

A businesswoman exhales a deep sigh after receiving bad news, and gets on with it.
Healthcare Shares

CSL share price drops despite expectations of growth in FY23

Investors are punishing CSL. What's going on?

Read more »

ventilator mask
Healthcare Shares

Why ‘the outlook is very bullish’ for the Resmed share price: Tribeca

ResMed has been rated as a buy by Tribeca.

Read more »