Investors line up to give Respiri cash as wheezo launches into Australian pharmacies
Health & Biotech
Health & Biotech
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Special Report: Respiri Limited has completed an oversubscribed $12.5 million to fund the launch of its wheezo asthma management device.
Respiri (ASX:RSH) says a $12.5 million capital range will fully fund the Melbourne-based company to a sustainable cash flow breakeven position by the second half of FY22.
The company will issue 62.5 million shares to institutional, professional and sophisticated Australian investors at 20c per share, a 6.5 per cent discount to Respiri’s recent share price.
Respiri executive chairman Nicholas Smedley says he’s “delighted with the outcome of our oversubscribed capital raising”.
The placement will leave Respiri with $14.5 million in cash, leaving it with plenty of funds to pay for the manufacture of its wheezo device.
That’s handy, because today, Cipla Australia began direct pharmacy sales and marketing activities for wheezo under the exclusive sales and marketing deal signed with Respiri in July.
“I am delighted Cipla have commenced sales and marketing activity to the pharmacy channel in Australia, which is ahead of schedule,” Marjan Mikel, CEO and managing director of Respiri said.
“Importantly from Respiri’s perspective, we met our contractual commitments for delivery of 2,000 units of wheezo to support their launch initiatives into the Australian pharmacy channel to be delivered October and the balance in January.”
More launches are expected to follow soon, including in the United States, the UK and Europe.
Chinese manufacturing partner
As previously reported, Respiri has struck a manufacturing partnership where its wheezo devices will be made in China for a fraction of the cost.
Devon Park, South Australia-based Entech Electronics has already begun production preparation activities for delivering 12,000 wheezo devices from February.
The asthma management tools will be made in Entech’s production facilities in Shenzhen, China, which has more than 200 staff.
The partnership will enable Respiri to scale production significantly and quickly to meet forecast global demand, the company says.
Wheezos will be able to be manufactured at less one-sixth of the cost that Respiri was paying before, the company says.
Resiri has clinical trials that back up the wheezo device, which detects “wheeze” and measures its severity.
Tests on 56 patients show the wheezo device detects wheeze at rates closely correlated a physician’s assessment using a stethoscope.
The company also in August inked a deal with the Australian Patients Association to sell the device to its members.
This article was developed in collaboration with Respiri, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.