What happened to the ResApp share price?
Shares of ResApp Health [ASX:RAP] have plummeted 78% in early morning trade today. The company was previously in a trading halt pending an announcement. Today, they came out of the halt, and unfortunately for shareholders the announcement was not good.
What was the announcement?
ResApp have been developing SmartCough®, a product that works with a smartphone to analyse the sound of a patient’s cough and help diagnose any underlying condition.
The idea was thought to have great promise as part of the $100 billion m-Health revolution. Until today, the shares were trading around 32c.
However clinical trial results released today, found many issues with the quality of cough recordings. In a nutshell, the product wasn’t working as expected.
The shares have dropped to 6.5c at time of writing.
What now for ResApp?
The company have responded with the following statement.
‘These are not the results that we expected given our experience in Australia. It is obvious that a large number of tests have been affected by procedural anomalies and we now need to go through each case one by one to fully understand the results. I am confident that we can add another layer of detail to the next set of study protocols to deliver robust results and that we have adequate funding to complete a second US paediatric pivotal clinical study this US winter as well as continue and complete our adult program, including our US adult pivotal study which is also set to begin this US winter,’
Who knows how this will end. But ResApp investors will certainly be hurting this morning. And it underlines the risks of investing in the small-cap sector.
Hopefully for investors, the company can turn this around.
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