Nearly 60 per cent of ResApp’s share price was wiped in Tuesday morning trade as investors called into question “positive preliminary results” from a long-awaited follow-up trial for its coughing app.
ResApp’s share price (ASX:RAP) collapsed 14 months ago when an earlier trial of the smart phone app — which is designed to diagnose respiratory disease — failed and had to be redone.
At the time ResApp boss Tony Keating told Stockhead he was “very disappointed for my shareholders, who have obviously taken a big hit from this.
“We misjudged the complexities of the US emergency department system and the challenges of running a clinical trial in a US emergency department,” he said.
Today ResApp reported “positive preliminary results” from its SMARTCOUGH-C-2 study “for diagnosis of childhood respiratory disease using cough sounds.
But it wasn’t enough to impress investors, who sent the stock down 60 per cent to an intraday low of 9c.
Results were measured by comparing its diagnoses of seven diseases, including asthma and pneumonia, with those of an independent clinical adjudication committee.
The most successful positive diagnosis was for primary upper respiratory tract disease, with ResApp achieving 77pc positive percent agreement (PPA) — the proportion of patients with the disease that test positive.
The most successful negative percent agreement (NPA) — the proportion of patients without the disease who test negative — was 86pc for asthma and reactive airway disease.
However, figures of below 70pc were achieved for pneumonia and figures testing for croup were delayed until November “because of a technical issue in providing cough audio files to adjudicators for review”.
All figures compared poorly to results from its smaller Breathe Easy paediatric trial, announced in early September, which was conducted in Australia.
ResApp said it would be submitting applications to the US Food and Drug Administration (FDA) for approval for the smartphone app for lower respiratory tract disease, asthma and reactive airway disease and primary upper respiratory tract disease.
Investors on stock trading forum HotCopper had mixed views on ResApp’s announcement this morning. Here are a few comments amid the share price fall:
- “HEADLINE SPEAKS 1000 WORDS POSITIVE!!!! OMG!!!!!! YESSSSSSSSSSSSSSSSSSSSSS……..”
- “this is weird, I’m not sure whether it’s good or bad lol”
- “the results seem to contradict the headline”
- “I thought the results would be closer to the Australian trail. It’s positive but not as good as I hoped they would be.”
- “Sorry peeps, but all spin doctor stuff, results are just not that good, no wonder they took so long to announce it, took that long to put the right spin on it.”
- “>70% is great and is enough to get us FDA approval!!! This is GOOD! Some small, rectifiable issues but overall a positive end to a very angsty week for us RAP holders IMO !!!!”
- “OUCH! These numbers just aren’t scientifically robust enough and the product will sit on the shelf. Medical diagnosis is hard enough without a massive variance like what they are showing. I wonder why so different to the Australian results? Unfortunately another study won’t be worth the effort as damage to our reputation will be too great to come back from here.”
- “Thought it was all good from the headline. Haven’t sold a single share and won’t be. Massive over reaction from the market.. Much better results this time round..”
The trial has a long and tortuous history; back in August last year the company’s share price collapsed 77 per cent when the initial trial failed.
Its shares began slowly recovering after announcing in September last year that it was going to re-run the trial, taking what it had learned and making it stronger, and it kicked off again in January this year.
ResApp has been contacted for comment