Global pharmaceutical giant Pfizer has made a $100 million bid to acquire eight-year-old Australian diagnostic technology company ResApp, as HealthTech continues to attract attention amid the ongoing pandemic.
The Brisbane start-up told investors on Monday it entered a scheme of arrangement with Pfizer, according to reporting by the Nine newspapers.
The acquisition could see the American pharma company acquire the business for 11.5 cents per share. Shares in the business leapt 22% on Monday following the news.
The startup, built upon research into using sound to diagnose respiratory disease, began as a research project at the University of Queensland in 2009 and has since gained funding from both the university and UniQuest, its intellectual property commercialisation arm.
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The company’s key product is a smartphone app it claims can diagnose COVID-19 through the sound of a cough.
It has also developed a range of healthcare solutions aimed at consumers and healthcare providers to diagnose and manage respiratory disease, which is the most common outcome from visiting a doctor.
ResApp says it is creating easy to use, affordable, clinically-validated and regulatory-cleared diagnostic tools that only require a smartphone, designed to be easily integrated into existing telehealth solutions.
The company listed on the Australian Stock Exchange in July 2015.
More recently, ResApp raised $5.5 million in April last year in a fundraising round led by Fidelity International, one of its major shareholders.
The capital raise allowed the company to complete a three-month pilot program with Swiss insurer Medgate, which was investing in technology to increase participation in telemedicine.
The company also inked a second deal with AstraZeneca in Japan in 2021 for use of its technology in medical trials.
ResApp’s chief executive Tony Keating told The Age and The Sydney Morning Herald Pfizer approached the company’s board with an offer as part of its push to expand its digital health capabilities.
“Seeing how quickly they were able to make the [COVID-19] vaccine and prove its effectiveness is really impressive, so if they can apply that into digital health, that’s a massive win for digital health,” Keating said.
“To have someone like Pfizer, which is very thorough in what it does, for them to propose to acquire ResApp just goes to show the confidence in our company and our team,” he said.
The startup will be paid $3 million upfront for the licensing deal and a potential $1 million more in milestone payments.
ResApp’s board has unanimously recommended that shareholders back the agreement. This will require investor approval and ticks from an independent expert and the Australian Competition and Consumer Commission (ACCC).
ResApp was valued at $58 million as of the end of 2021.