Status Update

Mar 22, 2021

Slides

Thank you for standing by, and welcome to the Raspberry investor webinar and q and a today. All participants are in a listen only mode. There'll be a short speech starting in a moment followed by q and a based on questions that have been submitted via email as well as using the q and a panel below. Appearing on behalf of Respiri today, we have the CEO, Marianne Mikkel. Initial presentation will last for approximately twenty minute to ten minutes, and we'll allow for as many questions as possible thereafter with a view to ending the session after thirty minutes in total. I will now hand over to Marianne. Please go ahead. Thanks very much, and good morning, ladies and gentlemen, and thank you for joining us on this momentous occasion for the organization. And, I will be going through the details around our successful FDA approval and how that will impact the business and transform Risperi moving forward. The sorry. This slide's not moving. Sorry. As I said, with the with the FDA approval, we now have the opportunity to provide improved asthma management care to about twenty five million US citizens, and, that's a huge opportunity for us to continue our journey towards reading the world of the challenges of asthma. So we're very excited about this, and it's a huge opportunity which I will go through in more detail with this presentation. Okay. It's I might go out of this mode. It's not doing what I wanted to. Sorry, ladies and gentlemen. Reminding us all what Wezo is. This is what we quickly submitted as part of the present sorry, part of the approval process. As you know, we have wheeze detection with Wezo, where our the breath recordings are are interrogated by our algorithms, and a wheeze rate is calculated based on that. And we know from the data of studies that we've undertaken that wheezing is at least as good as a physician with the stethoscope in determining wheeze. We also allow for continuous monitoring, so where there's an ability for us to capture other events that might be, leading to exacerbations, things like weather, pollen count, medication usage, other symptoms, air quality, etcetera. Importantly, also, the app also contains the asthma action plan that was developed by the patient's doctor. So it's a sync one stop repository for a patient and their asthma plan. Importantly, the data's captured and can be shared with the patient, obviously, in real time, but importantly shared with the patient's treating physician, pharmacist, and carer team. It's also very important to note that the indicated patient population for Wezo and the app is for all children above the age of two and all other adult populations. So we're not restricted in any shape or form in anyone that's over the age of two years of age. I'm pleased to be able to announce that we achieved the OTC over the counter class two FDA approval for Wezo. Now this is a big win for us because this allows Risperi to target more channels in The US. And these include things like the fact that it's a class two medical device opens up reimbursement possibilities. I've spoken in the past about the CPT reimbursement codes for remote patient monitoring, which we are currently investigating and pursuing. The OTC class two FDA approval also allows us to provide channels with Wezo without prescription. So pharmacy and retail and also online Amazon. So it gives us an a great level of flexibility and options to target in The US marketplace, which a lot of medical devices don't have. The other really great thing is that the sorry. The approval was indication agnostic. And that but and and although we remain focused on asthma, that wasn't restricted to asthma as a disease state. And as I said, the indication approval was also for children of two years or or older and all other adult populations. So this is a this opens up a much broader marketplace for us, and I'll go into what the opportunity there is. The US market opportunity. There are approximately three point three million children with persistent and severe asthma and a total of about twelve and a half million patients with persistent severe asthma that are adults and children. So the opportunity is is huge. Important to note, we know that asthma is still not optimally managed in most places around the world. In The US, almost ten million physician visits per annum are attributed to patients turning up to discuss asthma. There are one point six million emergency department visits per annum because of asthma. And as I said, there's a huge population of patients with persistent and severe asthma who are our target market. Work that we've done to date, suggests that we can command a product as a service fee, monthly fee from the physicians of between 30 and 40 US dollars per month. So that makes the the total addressable market now, if we focus on children alone, somewhere between 1.2 and 1,600,000,000.0 US dollars. And the broader opportunity, including the patients that are adults, somewhere between 4 and a half and $6,000,000,000. Now this is a huge marketplace and dwarfs any other market in in the world and certainly dwarfs the opportunity here in Australia. So that's why this is so important for us as an organization. And as I said, the indication is one that allows us to target many different channels, both prescription for CPT reimbursement and nonprescription for things like online pharmacy, etcetera. The pharmacy opportunity is still a larger. There are 88,000 plus pharmacies in The US. Twenty Two Thousand of those are independent pharmacies, and 66,000 are parts of large pharmacy chains. The total pharmacy market in The US is worth about $320,000,000,000 per annum and growing at about 3.3%. Interesting to note that 30% of volumes and value of sales are online with pharmacy players. Major players include people like Walmart, Walgreens, and Costco. So, they are the major players in that area that would be significant customers for us and our partner. Reminding everyone that Ciplit is our current partner in Australia and does have first rider refusals in other marketplaces and does have a presence in The US. But as I said, that's first rider refusal. Should we find other pharma or medical device companies that have a better reach and a better deal for Risperi, we're certainly going to entertain the idea of working with them as a potential alternative to Cipla. The reimbursement opportunity. It's important to note here that a US patient will generate up to five times the annual revenue of an Australian patient. Important to note also that unlike Australia, there is little or no out of pocket expense for The US patient because of reimbursement the system systems put in place. You'll see on the left hand side, there are a number of different CPT codes that that the the doctor can claim for setting up a patient on Wezo. There's a one off bill for, setting up the patient on the platform and system, another one for setting or capturing and recording data, which we do in the form of our portal, and that's a monthly fee. And then another for the data being sent in real time to clinical staff to review the remote patient monitoring data and interact with the patient. If you add up all of that, the, the physician's billable amount per patient per year is in excess of 1,350 US dollars. Our product as a service fee billed to the patient will be somewhere between 360 US to 480 US per annum, which, as I said, is significantly more than what we find in Australia with our SaaS, that is software as a service monthly fees. The new channel is the one that we're currently pursuing and certainly, in discussions with various partners. These partners are disease management providers. As I said, that's under negotiation. As mentioned, if we take those other numbers and turn them into Australian dollars, you can see that The US marketplace is significantly more attractive to us per patient than Australia. And as I said, we will be charging the patient, the the doctor per patient per device per month. And that's a significant, significant amount of revenues for Respiri and certainly a lot more than we would when we charge in Australia. The other channels are existing and are still options for us in The US, and we're actively pursuing those as I speak at the moment. So those those don't change too much, but they do offer us options in The USA. Commercialization timelines. By quarter three this year, we will have developed and tested a physician driven model that here in Australia that we will be rolling out in The US as a as a model for the CPT codes, and we will determine our qualification for the CPT codes that I've just outlined. By quarter one next year, calendar year, we will commence our key hires. We'll have our key hires for the Respiratory US. We will have a new disease management provider, commercial production put in place. Pharmacy distributions agreed and finalized depending on what we decided we wanna do there. And commence our inventory build for the expected demand that we will experience in The US with our launch. We will also explore opportunities in the hospital environment and, that being moving care to a low cost care at home as opposed to the high cost institutional cares from secondary health care delivery. So we hope to get all that done by calendar year sorry. Quarter one calendar year 2022. Second quarter of '20 '20 '2, our partners will be trained and ready to rock and roll with regards to the promotion, to promote Wezo to both the CMOs, so things like Medicare and Medicaid, which is the first step, and then to the various HMOs, which are the private health insurers to to ensure that people understand that we qualify for the CPT codes that are available today. And we will start stocking the various channels that, we will undertake promotions in, be that pharmacy and certainly the disease management partners. With the view of launching, as we've said from day dot, in quarter three twenty twenty two. So it's a very exciting time for us. It's been a long time coming. We've delivered the whether we I take the credit for something I have very little to do, but our team has delivered on time again with regards to the FDA approvals. Those FDA approvals are very broad and cover all children above the age of two and all adults. They are indication agnostic. Even though as I've said previously, we will remain doggedly focused on asthma. And the OTC allows us to pursue more than simply the CPT code reimbursement models, which opens up a whole new set of the channels for us in The US that some of our competitors don't have. So with that, that was a whirlwind presentation about something that's very exciting for the organization. And what I might do now is, throw over to yourselves and, see if we have any questions that I need to answer. Thank you, Mary. We'll now move on to the q and a session as you've suggested. As mentioned earlier, these are based on questions submitted both via email already. But as a reminder, if you want to submit one now, use the q and a panel at the bottom of your screen. So the first question, Marianne, is with US and Europe launches imminent, how do you see the competitive landscape in those markets in terms of competing devices slash apps, and how will Wezo compare on price? Yep. Couple. First and foremost, the what Wezo does is very unique as a device. In The US, for instance, the product as a service fees that are charged to doctors are relatively standard. So with with the 30 to $40 that, I mentioned previously, the sort of numbers that other providers of medical equipment that doctors use for remote patient monitoring would check that would be charged. So we're at no competitive disadvantage there. But as I said, with regards to what Wezo does, there is no other device that monitors, breathing and changes in wheeze rate the way that we do. So it is a marketing challenge. We need to change behaviors, and we need doctors to recommend wheezing to their patients from a CPT code perspective. And we're very comfortable and confident that we will do that, particularly given the work that we're doing, with the patient experiential program here in Australia, which we hope will demonstrate the improvement in the way that asthma patients are managed from the real world, and we'll be able to use that from a promotional setting with with physicians in The US and also in The UK. We're currently under discussions and negotiations with quite a number of universities in The UK that want to work with us in a real world setting and set up, a technology based real world trial to demonstrate how well Weza can improve patients' management of their asthma from the real world. So from a competitive perspective, there is nothing like Weezo. From a pricing perspective, particularly in The US, in in fact, The UK, we are cheaper than some other devices there when it comes to the actual device price. We are competitive. And the challenge for us, as is the challenge everywhere in the world when you will relaunch an innovation, you need to change behavior, and that takes time. And we need the right partners to be able to do that, and we believe that we are in discussions with those right partners and will be ready to launch when we say that we're ready to launch, as per our time lines. Thanks, Marianne. I'm gonna roll a couple of questions into one here because they're related. Can you please update the market on Wezo sales? And related to that is, what is the average number of months that customers have remained as subscribers of the app after purchasing Wezo, and what's your expectation for that number in the future? Yeah. Yeah. Thank you for that. It's rather difficult to give you a a quantification of a number of months that a patient will stay on the app with Wezo given that we've just recently launched. So I really don't have any data to be able to share with you in in that regard. And remembering that the software as a service model is not relevant for a large proportion of the opportunity in the reimbursed market in The US. The software as a service model here in Australia is out of pocket. The product as a service is we charge the physician for that, and the patient has little, if any, out of pocket expense. So it's not really apples and apples that we're comparing. The models that we built for the Australian marketplace assumed a three year lifespan for a patient on Wezo and the app with a and that translates to an 11% churn rate with the patients in Australia. That was what the models are. It's too early to say whether they're correct, but we certainly are keeping a very close eye on those things. Thank you. Next question is, does the FDA approval change the outlook on current cash burn over the next twelve months as you move into The US market? At the moment, what the last raise of 12 and a half million dollars was what we needed to get to cash positive as an organization. Now there may be opportunities for us to accelerate our launch into The US marketplace given wonderful addition of the FDA approval and the broad indications that we've been given and the OTC indications. We will investigate what we need to do to get to market quickly and effectively. And at this moment in time, looking at at what that what, if anything, that would cost us to move forward in an accelerated mode. But at this stage, there is no additional cash burn that we, anticipate. For those of you that remember, the part of the funds that we raised in the $12,500,000, about a million dollars put aside for us to get ready for the launch of Wezo in The US in the coming twelve to eighteen months. So, really, at this moment, we don't anticipate any greater cash burn unless, of course, we see an opportunity to accelerate our US launch. Thanks for that. Next question is, will The US HMOs need to see more study slash trial data to gain confidence in the quality of Wezo's physiological measure? No. Because because you the answer to that is no. Because the CPT code is for patient monitoring. Weaso doesn't need to get a separate CPT code per se. What we need to demonstrate is that, we measure a physiological parameter, and that's a yes, no. That's not that's not how effectively you do it, although we know we're very effective in doing it. That's basically saying, is what Wezo measures considered a physiological parameter? So there is no need for any further trials there. The trials that we did last year and the additional work which we hope to get published and reported at the ERS, that's the European Respiratory Society meeting later in the year, were done to provide the additional data that was required to get the FDA approval based on more specialists review of the data that we had. So that that's all the that's already in the FDA package and was used as part of our submission. So in short, we do not need to do any further trials to justify our physiological parameters. It's a yes, no. In saying that, it is obviously beneficial to the organization for us to be able to demonstrate a material improvement in patients' health outcomes when Wezo is added into their treatment oh, sorry, management guidelines. And that's certainly what we've been working on since October, and we'll continue to do so with the with the likes of the patient experiential program and the work we hope to undertake in The UK soon. Thanks, Marianne. Next question is you stated that severe asthmatic children are the initial focus, Do you expect this to expand to adults over time? We do. I mean, we do. Kids in the frail are an obvious sweet spot for for Weezo for obvious reasons that we discussed many times. It's very difficult to get spirometric readings from them. It's very difficult to understand their symptomology, remembering that doctors don't measure a physiological parameter when it comes to determining asthma severity. They basically use a questionnaire and rely on patient recall and patient self assessment. Kids are hopeless at it. In fact, everyone's hopeless at it. The kids in particular and the elderly are are hopeless at it. So that's our sweet spot. Now but in saying that, I've mentioned this in the past. If you look at the demographics of the asthma patients that enrolled in the patient experiential program, more than fifty percent of the patients are in the adult population. So there is an appeal for this particular service that's that Wezo provides beyond children and parents, and there is a sizable proportion of adults that appear to like to include wheezing as part of their asthma management plan for everything that it does. Not just measuring its wheeze, which is very important, but also sharing that information with their physicians in real time and also capturing all the other potential triggers for exacerbations. So, you know, we'll watch this space, but we're getting more and more information of the types of people that are that are using Weezo as we progress with our launch. Thanks. The next question is what are the steps involved in terms of integrating with the disease management service platform? The first thing is to negotiate a deal with people who have infrastructure set up in The in selling these sorts of services to physicians. And that's what we're currently under undertaking in The US. It would be wrong to say there are advanced discussions, but there's certainly discussions that have commenced. And the interest in what it is that Wezo does and how it can impact the portfolio of these companies, there's a high level of interest there. So the first step is to get the the partner on board. The second step, of course, is or concurrently getting a qual getting notification that we qualify for the CPTKs as a physiological measure for remote patient monitoring, and we're currently in the process of finalizing NAAT as well. And then it's basically utilizing the footprint and and established relationships that the providers have to go out there and promote Wezo and what it does to the doctors who will be prescribing it to their patients as remote patient monitoring tool. And then we will use the established infrastructure, IT infrastructure these people have got to build these doctors in the appropriate manner. So it's not a complicated process. It's a it's an evolved process, and we're well underway to moving that along to ensure that we've got everything in place for our launch in the second half of calendar year 2022. Thanks for that. The next question is what does indication agnostic mean? Basically, they they the FDA gave us a broad indication, which went along the lines of it isn't disease state specific. So they don't single out asthma or COPD or anything else like that. Basically, what they've said is any respiratory disorder where wheeze is a symptom and a problem, then Wheezo qualifies for use in that in that disease state. So The US, for those of you that don't know, a lot more stringent about what you can and can't do and what you can and can't say, promotionally, than Australia. So fundamentally, with that broad with that broad indication, it opens up a a plethora of opportunities moving forward that we we might investigate at some point in the future. But from our perspective, we remain doubtedly focused on asthma and those kids, those 3,300,000 kids, that 1 and a half billion dollar opportunity that the, US market presents to us right now. Thank you. Question is, may I know any institutions buying into Raspberry yet? It there were there were four institution investors that jumped on board when we had our capital raise in October. And to be honest, that was very pleasing. And prior to that, really, as we were getting our house in order, the the the stock really wasn't institutional grade, but we believe now that it is, And the proofs of the pudding people have jumped on board. We will be undertaking a, roadshow next week to, go and spruik the wares of Risperi and also the recent developments with FDA. And, we hope to be able to announce that there will be more institutional investors putting their hands in their pockets and investing in this huge opportunity. Thank you. The next question is, are there any technical considerations around IT architecture? Not my area of expertise, but we are building a portal that'll act as a platform for more than just what Wezo captures. Our and our objective is to create a platform that will act as a central repository for many of the other parameters that we need to that a patient needs or a doctor needs to capture about patients with respiratory disorders, asthma in particular, and have that as a one stop shop for everyone. That to us is competitive advantage. And what we hope to do is own that space because today, nobody does. Nobody owns that particular space in respiratory medicine. And our objective is to build an organization, that is more than a one trick pony and, provides options for patients and doctors to objectively measure from the real world how well patients' asthma is being managed. We do that with wheeze now and breathing. There are many other parameters that we are looking at at the moment. And, you know, r and d doesn't stop just because we're selling a product in the marketplace now. We are a med tech company. Our bread and butter is research and development, and we will continue to do that and bring to market Wezo next generation and and the like. Another one is, is the doctor incentivization offered via reimbursement codes in The US available in other markets such as UK, Europe for remote monitoring? It's not. The the reimbursement markets in, say, The UK, the NHS reimburses the provider of a technical service like we would for every patient that takes it on board. So there's the only incentive a doctor has in The UK, for instance, is for the consultation fee. They get to seeing the patient. Germany Germany Germany in particular is a huge opportunity, but, again, they provide reimbursement to the provider of the service, not the doctor. But the beauty of the German marketplace is they have a really generous reimbursement system that basically allows you to try before you buy. So you would get a reimbursement upfront once you've agreed to certain health outcomes that your service would provide. Should you provide those outcomes in in a measurable format, the reimbursement continues after twelve months. If you don't, then it's either renegotiation of the reimbursement level or you lose reimbursement. But The US is one of the few markets in the world that we've got registration for where doctors are incentivated by remote patient monitoring reimbursement codes. And to my knowledge, the Japanese market's a little similar, but we're not even looking at that market at this particular juncture. The US and The and Europe, UK are our sole focus is moving forward for the foreseeable future. There's enough work to be done there, and there's certainly enough patience and market opportunity. Mariam, what do you see I'm sorry. Where do you see the company in the next one to two years is the next question? I see the company as a company that has a business model that works with the world building on the world class team we currently have, expanding our footprint internationally, and building the necessary bespoke models with partners, particularly in The US and Europe, to take advantage of the huge market opportunities that those two markets provide the company. So my vision for the organization is to continue what we've been doing, to be quite honest, you know, make make a commitment to the shareholders in the marketplace of what it is we're going to do and then basically deliver on that commitment. And continue to do that, is a formula for success for me. And having a business model that we can demonstrate is a sustainable business model moving forward is also very, very important. And as I said, our goal is not to be a one trick pony. We do we do need we do see an opportunity for an organization to take hold of the eHealth MedTech mantle in respiratory medicine because nobody owns that at the moment. And, we believe that we're extremely well placed to take advantage of that and own that petite piece of investor real estate. So that's basically it. Good team, deliver on what we say we're gonna do, have a viable business model with an international footprint in The U in in The EU, UK, and The US, And a series of product options that provide patients with an opportunity and doctors with an opportunity to better objectively measure how well patients are being managed from the real world. Thanks, Marianne. We'll wind up the q and a there, but, I'm conscious that there has been a huge number of questions come in. So any that have been unanswered, we have those on record, and, someone from the team will come back separately. But, Marianne, I'll hand back to you for final comments before we close off. Fantastic. Once again once again, ladies and gentlemen, thank you very much for joining us on this watershed moment for Risperi. As I said, The US marketplace is easily the largest health care marketplace in the world. We have the opportunity now to provide a very valuable service and medical device to almost twenty five million US patients with asthma. We do believe that we'll have a material impact on how well their asthma is being managed from the real world. And importantly, if we're success sorry. If when we're successful in doing that, every patient in The US is worth five times what a patient is worth here in Australia. So it is a very lucrative market. Although our initial opportunity, children with persistent and severe asthma, there's three point three million of those, reminding you that that marketplace is worth one point 1 and a half billion US dollars. The opportunity with adults is almost 12 and a half million patients, much larger, up to 6,000,000,000 in in value. And remembering, we've been very successful in securing an OTC over the counter class two medical device indication with a patient population of children above two and all adults. And what this does is it opens up both prescription and nonprescription channels for Risperi and Wezo, luxuries that other medical device manufacturers don't necessarily have. We're well on the way of preparing ourselves for the launch of The US. We've delivered on everything we said we would do in the past, and the same team is gonna continue to do that moving forward. So it's, with great excitement that I look forward to the future, and it's with greater excitement that I look forward to keeping you all abreast of our progress, not just in The US, but here in Australia as well where we have some milestones that we need to continue to hit and our work to expand into UK and Europe. So thank you very much, and, that's it for me. Thanks, Mario. That does conclude the session for today. Thanks to everyone to everyone for participating, and you can now disconnect.