Having wrapped up the acquisition of Access Managed Services, Respiri (RSH: $0.03) has quickly moved to securing new initial patient monitoring contracts.
Last week, the company announced three new contracts for remote patient monitoring with US health groups. These contracts are expected to generate recurring annual revenues of around $900,000.
Respiri has transitioned from a focus on its Wheezo device for digital asthma management to specialisation in remote patient-monitoring devices aimed to address the management of certain respiratory disorders. The incorporation of Respiri's patented Wheezo product into these monitoring devices assists as a service differentiator.
Contracts Signed
The first deal is with VDO Cardiology, yielding a 90% enrolment success rate so far. A total of 300 patients are expected to be monitored by Respiri, presumably in the home setting. This deal is expected to generate US$300,000 a year. The contract is expected to increase significantly over time, if the initial service generates success.
The second contract is to monitor patients for Angelic Health which is a palliative care organisation. That initial contract is across three states and is expected to involve 150 patients. The contract is valued at US$150,000 a year. Respiri also expects this program to be expanded from the initial patient group. The service includes use of the company's Wheezo product to monitor declining lung function in patients with COPD.
The third deal is with the Minnesota Lung Center (MLC) which is an existing client, using the Wheezo device. The existing arrangement is to expand to 150 patients with Obstructive Sleep Apnea.
Pending agreements
The emphasis for Respiri is to secure agreements with insurers to monitor their customers and to provide healthcare savings, of between 10%-20% a year. Respiri CEO Marjan Mikel said that the company is about one year ahead in its discussions with insurers. This includes two insurers which could initially generate US$2.2 million in revenue for Respiri, with up to a 10-fold expansion over the next year.
Respiri is also in discussions with three Accountable Care Organisations to monitor 2,000 patients each month.
Mikel said that the priority for the company is to ensure it delivers effective patient monitoring services for its customers. Each of the three new contracts would not have been awarded to Respiri had it not acquired Access Managed Services.
Conclusion
Respiri now monitors between 1,000 - 2,000 patients a month. The company needs to increase this to 9,000 patients for it to reach breakeven. The company expects this to occur next year.
Respiri is capitalised at $28 million.
Bioshares recommendation: Speculative Buy Class B
