Respiri's biggest deal yet gives it access to the world

Special Report: Respiri’s biggest ever sales agreement will yield significant sales in the first 12 months.

Respiri (ASX:RSH), a company whose respiratory monitoring device has been making waves since the COVID-19 pandemic began, has signed its biggest deal yet, one that is expected to generate significant sales in the first 12 months alone.

The medical device company signed a five year sales and distribution deal with Cipla, a multinational corporation worth $US7bn which has a particular interest in respiratory medicine.

Respiri chief Marjan Mikel says the deal is transformational for his $72m company.

“Cipla gives us access to a global infrastructure of sales people and over 4,000 Australian pharmacies, which are Respiri’s main channel to market,” he told Stockhead.

“They’ve given us easy, affordable and efficient access to the world.”

A “jaw-dropping” deal

Cipla has committed to buying an initial minimum order of 2,000 wheezo devices, which monitor wheezes and helps people keep conditions such as asthma under control, to be delivered from October.

Respiri says gross margins on the sales will be 30-40 per cent from the start of 2021, a figure forecast to improve with higher volume orders, with the company receiving the full revenue stream associated with the monthly per patient subscription fee of approximately $8.

Cipla sells to about 80 per cent of Australia’s physician and pharmacy market.

The initial deal is for Australia and New Zealand, but Cipla has first right of refusal to distribute into extended territories including USA, Europe, India and the rest of the world.

Cipla has a leading respiratory disease franchise in Australia and in all major international markets.

Cipla’s goal is to create a complete respiratory ecosystem for patients and the addition of wheezo helps complete this circle.

There has never been a more important time to ensure patients with respiratory illness are carefully monitored for signs of underlying wheeze to manage their disease more effectively.

COVID-19 is a deathly threat to asthma sufferers

Chronic respiratory conditions tend to be under-managed, as things like asthma plans end up in drawers gathering dust and rarely keep sufferers engaged.

Mikel says wheezo is already changing this for users, as along with wheeze detection via an objective measure of airway limitation, it also employs machine learning to provide personalised feedback and education based on the user’s personal health data.

Respiri’s main channel to market, one it’s already developing in Australia via a professional education tie-up with the Pharmacy Guild, are chemists.

These are the very businesses it now has sales access to via the Cipla deal.

“Every month 1m Australians turn up to a pharmacy to get their medications for asthma,” Mikel said.

“Of those 1m patients, about 20 per cent or 200,000 people undertake a “white coat chat” with a pharmacist. Until wheezo, the pharmacist has had no tools available to recommend to patients round how to better manage their respiratory condition.”

Mikel says they’re offering sufferers a better way to engage with their management plan and a system that can help them avoid the worst — when things go wrong, such as in winter when the flu or even COVID-19 might hit.

“Problems don’t occur when a patient is with their GP or in the pharmacy. They occur when they leave and start living a real life.”

“Respiratory disease monitoring and management has never been more important with the COVID-19 pandemic posing an increased risk for asthmatic patients within Australia and globally.”

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.