The Resapp Health Ltd (ASX: RAP) share price stormed higher today following the announcement of a new partnership.
During afternoon trade, shares in the digital health company reached as high as 9.4 cents, but later pulled back slightly. The ResApp share price closed out the day at 9.1 cents, up 5.8%.
Let's take a look at what ResApp updated the market with.
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Integration of ResAppDx
According to the release, Resapp advised that it has entered a six-month joint development and pilot agreement with Medgate. The new deal will see Medgate use Resapp's smartphone-based acute respiratory diagnostic test, ResAppDx, in its telemedicine services.
Founded in 1999, Medgate is a provider of telehealth services, bringing physicians to where patients are needed via digital health bookings. The company operates Europe's largest telemedical centre in Switzerland, employing over 500 people worldwide. Medgate has presence in Germany, the Philippines, the United Arab Emirates, and India.
Under the agreement, Medgate and Resapp will work together to build and pilot an integration of ResAppDx in Medgate's services. The integration phase of the project is expected to take around two months. Thereafter, a three-month pilot will commence in early 2021, evaluating the performance of the new program.
During the initial stages, both companies will assess the impact that ResAppDx has on Medigate's telehealth service. A number of key metrics will be applied as a benchmark to test its success.
Negotiations on the cost model of the integration will be finalised during the pilot period.
Resapp advised it will not see material revenue from the project. Either party may terminate the contract by providing 30 days notice.
What did management say?
Resapp CEO and managing director Mr Tony Keating commented on the partnership:
We are very pleased to have entered into this pilot agreement with such a high calibre partner. Medgate is a well-known and respected organisation and we look forward to working with them to deliver our ResAppDx product to their customers.
This partnership is ongoing validation of our offering and will potentially allow the company to pursue a large market opportunity in Europe, as well as in Asia and the Middle East where Medgate also has operations. I look forward to updating shareholders on the integration and commencement of the pilot initiative in the coming months.
Resapp share price summary
The Resapp share price has taken a hit over the last few weeks since revealing its quarterly earnings scorecard. Shares in the company fell to a 7-month low of 8.2 cents, but have since slightly recovered.
No doubt, today's announcement has had a positive effect on the Resapp share price, however it still has some way to go to hit its former highs of 50 cents, reached back in September 2016.
