Healthcare technology developer Respiri (ASX: RSH) has signed an exclusive agreement with global respiratory pharmaceutical firm Cipla for the sales and distribution of Respiri’s wheezo asthma product to its target markets.
The five-year agreement will focus on a minimum order of 2,000 wheezo units in October 2020 for marketing to initial markets of Australia and New Zealand, with further orders possible to meet demand and a first right of refusal for Cipla to distribute into extended territories including the United States, Europe and India.
First delivery is targeted for October with product revenues commencing shortly after.
Gross margins of up to 40% are expected to be generated from the start of 2021 and forecast to improve with increased volumes.
Respiri chief executive officer Marjan Mikel said disease monitoring and management has never been more important in light of the COVID-19 pandemic posing an increased risk for asthma patients worldwide.
“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,” he said.
“We anticipate revenues under this partnership to commence this year, with Respiri receiving a fixed supply price per wheezo unit, while retaining a full annuity revenue stream associated with monthly subscription fees for our digital health platform,” Mr Mikel added.
Headquartered in India, Cipla has sales and marketing infrastructure covering over 80% of the general practitioner and pharmacy market in Australia.
The company has a market cap of $10 billion and in the 2019 financial year, recorded worldwide revenues of $3.15 billion.
Cipla Australia has more than 200 registered formulations with the Australian Therapeutic Goods Administration through its industry partnerships, including over-the-counter, prescription and hospital medicines.
It has accounts with 4,000 Australian pharmacies across Australia and strong networks with all major pharmacy chains.
Mr Mikel said Cipla’s “significant sales and marketing infrastructure” would allow Respiri to better deliver the recently-announced pharmacist asthma education program through the Pharmacy Guild of Australia (PGA).
The two-year agreement with the PGA’s Guild Learning and Development (GuildEd) division was signed last month and will be structured around an online learning course on optimising asthma patient management including the role of devices such as the wheezo device and software-as-a-service app in detecting and monitoring wheeze.