Resapp share (ASX:RAP) price climbs 5% on Chinese patent news

Key points

• Investors are responding positively to an update from Resapp today
• The company was awarded a patent in China
• UBS says the Chinese telehealth market is expected to reach US$54 billion by 2025
• In the last year, the Resapp share price has climbed 20% into the green

Shares in digital health company Resapp Health Ltd (ASX: RAP) are walking higher today following a company announcement.

At the time of writing the Resapp share price has spiked 5% from the open and is now fetching 7.9 cents apiece after rallying as high as 13% in early trading.

Investors are responding positively to an update regarding a cough analysis patent that was awarded in China, piling into the company on a volume of 193% of its 4-week average volume.

Resapp has cough analysis patent granted in China

Resapp touts itself as a “leading digital health company developing smartphone applications for the diagnosis and management of respiratory disease”.

The company integrates machine learning algorithms that use sound to diagnose and measure the severity of respiratory conditions.

It has two flagship products in the field, called ResAppDx – a smartphone app for respiratory diagnostics and telehealth; and SleepCheck, another app that assesses sleep apnoea.

As such, the company had applied for a patent in China under the title “A method and apparatus for processing patient sounds”, according to the release.

Today the company advised that the China National Intellectual Property Administration has accepted for grant the company’s patent application.

The patent covers the use of a “cough sound-based audio processing pipeline for diagnosing respiratory disease”, Resapp says, and is owned by The University of Queensland. It will be licensed exclusively to ResApp for the lifetime of the patent.

Resapp says this “pivotal patent family” has also been granted in Australia, Japan, Korea and the US, and is currently pending approval in Europe.

Management commentary

Speaking on the announcement, Resapp CEO and Managing Director, Dr Tony Keating said:

Receiving this patent grant for our core technology is a key step in our market entry plans for China. China presents multiple large market opportunities for ResApp’s products. According to UBS, the Chinese telehealth market is expected to reach US$54B by 2025, and there is a critical need for triage tools in China’s overburdened hospitals. China also has over 45 million people with asthma and 100 million people with COPD, which brings large opportunities in chronic disease management. Our team has discussions underway regarding pathways to enter the Chinese market and realise the value of these opportunities.

Resapp share price snapshot

The chart below shows Resapp’s underperformance relative to the S&P/ASX 200 Index (ASX: XJO) and the S&P/ASX Small Ordinaries Index (ASX: XSO) over the last 12 months.

Note the wide-reaching volatility Resapp shareholders have had to endure in this time, meaning that the stock’s risk-adjusted performance might be called into question.

Even still, with a breakout of 21% since January 1, shares are now back in line with the broad market once more. In the last year, the Resapp share price has climbed 20% into the green.

The post Resapp share (ASX:RAP) price climbs 5% on Chinese patent news appeared first on The Motley Fool Australia.

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Motley Fool contributor Zach Bristow 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 Bruce Jackson.

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