Respiri details ‘exceptional’ cost savings to wheezo production

Special Report: Respiri Limited (ASX:RSH) expects its gross product margins for its wheezos to be 30 per cent higher than forecast, as the eHealth company has devised less-expensive ways to produce the asthma management device.

Respiri has been working closely with its manufacturing partner, Devon Park, SA-based Entech Electronics, to generate efficiencies to lower input costs for wheezos, which launched in Australia last month.

As a result, gross product margins from the pharmacy channel will improve from 40 per cent to 55 per cent, Respiri said.

Mission-critical competencies and intellectual property are now being developed in-house, rather than by external providers, Respiri said.

“What the Respiri and Entech teams have achieved in such a short period of time has been exceptional,” said Respiri chief executive Marjan Mikel.

“These improvements have been detailed and agreed approximately 12 months ahead of plan, which is testament to our culture of continuous improvement and innovation as a company.

“Our lower COGS (cost of goods sold) and improved product gross margins, not only improves the financial performance of the business as volumes increase over time, it also affords Respiri the flexibility to adjust pricing models, if required, across different jurisdictions to reflect different demographics and capability to pay.

“This will be particularly important in Asian territories over time.

“Having a world class team capable of achieving these remarkable cost savings is a huge asset for Respiri now and moving into the future.”

‘Very enthusiastic and encouraging feedback’

Respiri is working with pharmaceutical supply company Cipla Australia to supply the wheezo devices to pharmacies across Australia and, as Stockhead has reported previously, so far the response has been better than expected.

“Our sales representatives have already received some very enthusiastic and encouraging feedback from pharmacists, with them very eager to have wheezo on their shelves and more importantly in the hands of patients that need it,” Azhar Ibrahim, managing director of Cipla Australia, has said.

Melbourne-based Respiri has partnered with The Pharmacy Guild of Australia to deliver an hour-long online education course to help pharmacists recognise the prevalence and burden of asthma in Australia and identify the role of digital technology in assisting asthma management.

Wheezo is also available to purchase online from https://wheezo.com.

Respiri says there’s currently very little support for asthma patients once they leave the clinic and the wheezo ehealth platform aims to fill that void with an interactive and engaging platform to better manage the plans healthcare professionals outline for their patients.

Last month Respiri filed for another patent on its wheezo algorithm to detect signs of asthma after making improvements to the process over the last six months.

The additional intellectual property relates to a method of processing recordings of a user’s breathing, where the algorithm processes the sound signal and marks periods containing pitch that’s characteristic of wheeze via the trachea while eliminating background noise.

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.