A couple of regulatory approvals have sent the stock prices of two ASX healthcare small caps soaring in today’s trading.

Resonance Health (ASX: RHT) has jumped by 10 per cent to 21.5c, while Palla Pharma (ASX:PAL) bolted up by 28 per cent to 72c.

Resonance Health

Resonance today received Therapeutic Goods Administration approval for its flagship automated software that assesses liver fat for people with non-alcoholic fatty liver disease (NAFLD).

The approval will now allow the company to distribute the HepaFat-AI software throughout Australia. It already secured approval from the US Food and Drug Administration back in December.

Resonance says that HepaFat AI is the only approved imaging technology capable of measuring a patient’s liver fat in a way that’s “substantially equivalent” to a specialist’s assessment from a liver biopsy.

There’s a strong tailwind blowing for Resonance’s product, as non-alcoholic fatty liver disease – which is correlated to obesity – is reported the leading cause of liver disease, affecting an estimated 2.3 billion people globally. It’s believed that over the next 10 years healthcare costs associated with the disease will exceed US$1 trillion in the US and €334 billion in Europe.

HepaFat-AI has already been validated and standardised for all the major MRI scanner makes and models.

Resonance revenue has grown 15 per cent each year over three years, and its share price has increased 13 per cent over the past 12 months.


Palla Pharma

The company said that its request to move the manufacturing site for its Co-Codamol painkilling tablets and caplets to Norway has been granted by the UK medicines regulator (MHRA).

This approval also includes the previously delayed approval of the Patient Information Leaflets and packaging of the products.

With today’s approval, initial batches of the drugs will be distributed for immediate packaging and sale – with production being ramped up to meet potential demand over the coming months.

The approved Co-Codamol products are painkillers used to treat pains like headaches, muscular pain, migraines and toothache. The drug is a 30mg Codeine Phosphate/500mg Paracetamol tablet-caplet combination.

The company expects revenues to start flowing in from Q1 FY21, but is still expecting a negative EBITDA performance for FY20. It will present an update on the sales and full-year results on 26 February.

The Palla share price is down by 18 per cent over the last 12 months.