Respiri Surges with 67% Patient Growth and Orb Health Synergies in December Quarter

Record Patient Engagement and Revenue Growth

Respiri Limited (ASX:RSH) has delivered a strong December 2024 quarter, reporting a 67% increase in patient program enrolments to 4,063, a clear signal of accelerating adoption of its respiratory healthcare solutions in the US market. This surge in patient engagement has translated into a 29% increase in invoiced revenues to A$529,000 compared to the previous quarter, underscoring the company’s growing commercial traction.

Importantly, these figures exclude contributions from the recently acquired Orb Health, highlighting organic growth momentum. The company received A$282,000 in cash receipts during the quarter, reflecting solid cash flow generation amid ongoing expansion.

Orb Health Acquisition: Synergies and Scale

The December quarter also marked the completion of Respiri’s acquisition of Orb Health, a US-based connected care organisation. Orb Health contributed approximately US$4.2 million (A$6.7 million) in annual recurring revenues for calendar year 2024 and added around 2,500 patient programs to Respiri’s portfolio. This acquisition not only broadens Respiri’s service offerings with the new UPEC product line but also delivers immediate cost synergies, with annualised savings of A$1.67 million already realised.

These synergies have reduced Respiri’s monthly operating costs by 19%, from A$743,000 to A$605,000, accelerating the company’s path toward monthly break-even, which is now expected in 2025. The integration has also led to executive leadership consolidation in the US and rationalisation of Australian roles, reflecting a strategic shift to focus operations closer to the core market.

Strategic Positioning in the US Healthcare Market

Respiri’s growth is underpinned by favourable shifts in the US healthcare landscape. The company’s remote patient monitoring (RPM) and chronic care management (CCM) programs align closely with the Centers for Medicare and Medicaid Services’ (CMS) push toward accountable care relationships, which now cover over 53% of traditional Medicare beneficiaries. This trend supports Respiri’s risk-share and value-based care commercialisation strategy, positioning it well to capitalise on expanding reimbursement opportunities.

Further endorsement comes from the American Medical Association’s recent recommendations to expand RPM services and adjust reimbursement codes to improve accessibility and efficiency. These changes, expected to take effect in 2026, could enhance Respiri’s clinical operations productivity and margin profile.

Pipeline and Clinical Innovation

Looking ahead, Respiri anticipates closing significant contracts with six major Accountable Care Organisations (ACOs), Independent Physician Associations (IPAs), and other large healthcare organisations in the coming months. While some negotiations have been delayed due to external factors such as the Los Angeles fires, the company remains confident in securing three major fee-for-service and risk-share contracts in the March quarter, which would substantially increase patient volumes and recurring revenues.

On the innovation front, Respiri is progressing a clinical study for its new wearable respiratory monitoring device, with data collection underway and FDA regulatory submission targeted for mid-2025. This device is expected to complement the existing wheezo® platform, enhancing the company’s connected care management offerings and further differentiating its value proposition.

Financial Discipline and Capital Management

Financially, Respiri has demonstrated prudent cost management, with operating cash outflows reduced by 28% quarter-on-quarter to A$1.75 million. Staff costs increased slightly due to redundancy payments linked to the Orb integration, but administration and corporate expenses declined. The company closed the quarter with A$1.25 million in cash and A$2.7 million in finished goods inventory and prepaid materials.

Capital raising efforts were successful, with A$1.6 million secured from a strategic placement involving Merchant Biotech and other investors, alongside A$0.61 million in R&D incentives and proceeds from option exercises. These funds provide a runway to support ongoing operations and growth initiatives.