Respiri Limited (ASX:RSH) CEO Marjan Mikel presents on the company's sales targets, business model and channels, the market opportunity, indicative timeline, and pathway to commercialisation at FNN's Investor Event.
With close to 350 million people with asthma, it is only third to cardiovascular disease and diabetes as a disease that inflicts the human race. And yet today, unlike the other two disease states, when a patient leaves the care of their doctor, they have absolutely nothing available to them to help monitor how well their aspirin is being controlled in the real world. You've got 24-hour ambulatory glucose measurements, measuring devices. You've got ambulatory blood pressure cuffs. You've got ambulatory EEGs, ECGs, everything else, but in respiratory medicine, particularly in asthma, those 350 million patients across the globe have absolutely nothing available to them today. And unashamedly today, we are reaching a pretty big milestone of the organisations this path, and that is we will be commercially launching Respiri’s Wheezo and it's SaaS app next month. So we're really looking forward to that and I will focus on that today.
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We've spent the last 12 months getting launch ready. When I took over the organization in November last year, we looked at strategy and made a couple of changes to that to make sure that we did two things. One is made the device sale profitable. And the second thing is to really take advantage of where the IP sits and that's in the algorithm that measures and detects wheeze from a recording of breathing that the device takes, that's incorporated in our app. And we have embarked upon a plan to monetise that on a SaaS subscription on a monthly basis. One of the beachhead moments in the organization was our partnership announcement with Cipla, we have a bespoke business model because we're not silly enough as a small organisation to think that we can take on the world and win quickly, so we have partnered with Cipla.
They're 800-pounds pharmaceutical company gorilla, who's located right across the globe in all the jurisdictions where we want to play. So they have first-world refusal to all these other jurisdictions that we'll be entering. And are our very important partners here in Australia. So that is a very big strategic development for the organisation. They have a very strong presence with pharmacy, which is an area focus for us. And topic of pharmacy, we've also locked up a relationship with the Pharmacy Guild to develop online educational programs, to optimise doctors, sorry, a pharmacist's ability to be able to discuss the disease state with their patients when they turn up to the store. And we'll get into the little more detail here, but you need to know that there are 2.7 million Australians with asthma and one million of these Australians turn up to a pharmacy every single month to get some subscriptions for their asthma.
We've launched FDA 510(K), and that's basically a predicate submission, which we'll have as compared to another device that's already approved in the U.S. So we anticipate being able to get the FDA approval before the end of the year. We've spent a lot of time and effort making sure that we've refined the algorithm. And we can say now that the algorithm is highly, highly accurate and is comparable to an experienced doctor when it comes to picking up the changes in wheeze in a person's breathing. We've spent a number of time and efforts in reducing COGS. And we've managed to reduce COGS to, by 85% introducing a gross margin to the organisation of about 40%. We've given guidance for 2021 revenues of somewhere between six and eight million dollars. And I'll get into a little more detail about that in a moment.
We announced today, as a matter of fact, our partnership with Entech Electronics, our new manufacturing partner, our EMS partner, and they have the ability to be able to scale, to manufacture the quantity of the devices that we need to be able to meet our global demands. And we've also done quite a bit to improve the way that we manufacture the device. We've spent the year cost cutting all unnecessary costs, and making sure that shareholders monies really work as hard as they possibly can be and minimising cost... Waste, sorry. CEO and world-class. Well, the world-class team we've pulled together is a team that's second to none, and they're all veterans in healthcare, but in pharmaceutical medical devices and services, and have been working tirelessly this year, even in the wake of the COVID-19 pandemic, they still hit all the timelines that we said we would before all this happened. We do have European and Australian approvals, and we are keeping an eye on the future developments with regards to telehealth provision and how that would impact our device and our ability to interface with customers in this remote setting.
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So we are really set to achieve our guidance for next year. To summarise why we're ready, the device and algorithm are both clinically and market ready. They're ready to be manufactured and ready to be manufactured at scale. And the algorithm is more accurate than it's ever been. And as I said, comparable to experienced physicians in determining wheeze in patients breathing. We've got our international relationship with our pharmaceutical company Cipla, and they are a linchpin in how it is that we will launch in Australia through the pharmacy channel. Today, enabling technologies that are also suitable for us to really deliver on our value proposition, which is providing care beyond the clinic, beyond the care of the doctor. So when the patient leaves the surgery or clinic, they'll be able to measure and monitor their asthma and share that information with their carer teams, doctors, etc, in real time.
So the advent of 4G, 5G and the cloud has really empowered us to be able to take full advantage of the technologies that we have. We've conducted independent research which clearly shows that pharmacists are excited at having the prospect of introducing Wheezo to their patients and customers. And 80% of them say, "It's going to be a pretty easy sell". Equally, three out of four parents or patients are excited about having a Wheezo at their disposal with 80% of them saying that it'll make their lives and the lives of their children easier, because of they're more transparency around how their child's asthma is being controlled and being able to share that information with, as I said, the carer team be that the doctor, pharmacists, parents, teachers, etc. Importantly, as I said previously, there are 2.7 million Australians with asthma. To achieve our guidance, we only need to penetrate one per cent of this market in calendar year 2021 and six to eight million dollars is done and dusted.
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Just to show you the business model or the business channels we'll be taking. There are two fundamental channels we'll be taking in Australia, one and the largest, which is about 85% of that business will be through pharmacy. Currently in Australia, there's about five and a half thousand pharmacies. And Cipla, our partner has accounts with about 4000 of those. 2000 for asthma patients will visit a pharmacy on average every month. And about 400 of those pharmacists will have what we call a white coat discussion. So fundamentally it's a discussion about their disease state with a health care professional. So there is a pent-up demand there and at the moment, the pharmacist has very little to offer that patient beyond what their prescription is. So Wheezo fits the bill here nicely. The way the money works is we sell devices to Cipla, Cipla sell to pharmacy and pharmacy obviously to patients.
Our margins will be roughly 40% because of the COG savings that we've made and the SaaS revenues on the other hand, it's $8 per month and that's retained completely by us. So to give you an example of what we need to do. We need to be targeting those pharmacies that are engaging with their customers and having these white coat discussions. So our target is to secure 800 target pharmacists. And if these target pharmacies sell approximately one Wheezo, one month, we will hit our guidance. The other Avenue for us of course, is online. Now when we sell something online, basically all the device sales and SaaS revenues are retained by Respiri as we don't go through any third party. So that's a very attractive avenue for us. And we announced just recently, a commercial relationship with the Australian Patients Association, where they'll be paid a spotting fee for every one of the 1.1 million patients they represent, come across and buy Wheezo from us.
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As I said, the market is a large market and it has a huge unmet need. As I said, there's almost 350 million patients with asthma across the globe. In this first world country Australia, where we live, 400 people still die from asthma every year, 270,000 E.R, or hospital admissions result from poorly controlled asthma, that results in exacerbations. So one out of 10 patients with asthma either is admitted to hospital or to the E.R. So it is, clearly something's not going right. And we believe that part of that is the inability for the patient and their carer team to be able to monitor how well their asthma is being controlled in the real world. We've got proven technology, as I've said previously, we know we work and we know that we can do what it is that needs to be done to bring all aspects of a patient's asthma management plan that's developed by their physician to the front. Our sole focus this year really is executional excellence, and it's been happening all year. Next year, the rubber really, next month, sorry, the rubber really hits the road and we start selling Wheezo in the commercial setting.
So Wheezo providing care beyond the clinic. So fundamentally there are major efforts to reduce the burden of disease on the economies. For instance, asthma in Australia costs the economy about $24 billion every year in hospitalisations, medical interventions, absenteeism etc. So what, how Wheezo works is basically Wheezo is an electronic stethoscope that measures your wheeze. So fundamentally...
You use the device like so... You place it on your throat and just on the trachea and you measure your wheeze breath for about 30 seconds. That is then Bluetoothed to your phone. And the information captured in the recording is analysed by our algorithm. And then that information is shared right across the board from healthcare professionals, as I said to the parents, to teachers, to wherever that person wants to be able to share the information with in real time.
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So basically, as I said, we record breathing for 30 seconds and that is then analysed for wheeze. The app also captures and tracks other symptoms for asthma, and also things like medication usage and compliance and where the fact is, pollen count, air quality and the like. Basically anything that can result in a patient's asthma being exacerbated is captured in the app, measured in real time and is GO coded. So it is really a little asthma management tool that sits in your hand or your pocket. Importantly, also the asthma management plan that a doctor, that writes for a patient is also loaded onto the app. So it brings the asthma management plan to life, which is really important because many patients who have the asthma management plans aren't engaged with that plan and don't use it as it should be. So really the whole situation is pulled together in one place. And if you will, we'll be sort of like a Fitbit for asthma for patients with asthma.
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This is only to say that we've had a very busy year with it, making a lot of announcements, a lot of changes, but importantly, from my perspective, the team has delivered on everything that we said we would on time and on budget and we continue to do so. And this is in spite of things like COVID and the likes, so it has been a challenging year, but one that we've met head-on and made a very good progress.
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So fundamentally the pathway to commercialisation was really focusing the company's resources, people, etc, on commercialising the Wheezo here in Australia, our own backyard, where we know what we're doing, we know the people there, there are no intermediaries, we manage it all directly. That way we can work out exactly how the business model should be working, work out our relationship with our partners in Cipla and make any necessary adjustments, as we launched the product by mitigating risk, because Australia is not the largest of markets, although it's still be very profitable for us. As I said, we have a bespoke model. We have insourced those mission critical competencies that the organisation needs to run the whole global business that we want to become, but outsourced to partners, those sorts of things that we could not do fast enough, conveniently enough, it would cost us far too much money. Our strategy, as I said, is pharmacy's a major player in this area.
We will be doing work with medicos as well. And we also have the commerce platform that will provide quite a substantial amount of revenue through sales directly to patients online. Patient advocacy is still very important. I mentioned to you previously that the Australian Patient Association is one that we are working closely with and the ability for us to be able to reach out to these patients and converse with them in an online manner and with the backing of these groups is really important. As I said, we do have our eyes on the price of on the future with telehealth and just waiting to see how that develops and how we can actually help push telehealth and the platforms that are being developed in the direction we'd like them to. I spoke about price. The recommended retail price is $299 and a monthly subscription fee of about eight dollars per month.
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I have mentioned Cipla, they are globally recognised. We've already got a minimum order of 2000 units that we'll be delivering next month. They are launching with us in Australia and New Zealand. The term of the agreement is five years, and we are looking as I said to revenues next month. So it's really important time for us. And importantly, from our perspective, Cipla, will become even more important to us as they have an established global infrastructure that we can utilise to expedite the internationalisation of our launch. They are listed they're worth about $10 billion dollars with revenues of close to $4 billion Australian.
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One of the major platforms that we have launched is what we've called out, the Patient Experiential Program. This is fundamentally a real wheel study where we will be recruiting 300 patients, giving them a Wheezo and capturing both soft and hard data to be able to demonstrate the impact that the introduction of Wheezo has on the way the asthma is managed. We've been very happy with the recruitment. The target was 250 patients. We've already got 270 and that's been in the last month, surprisingly enough, half of those come from Victoria. And that's been within the context of the lockdowns down in this state, but also across the country. So we're well on track to be oversubscribed for this. Data will start being collected next month and it is a really important part of what it is we do. And we'll provide physicians and pharmacists with further information about what it is Wheezo can do to help their patients.
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Finally, our latest algorithm delivered development. Fundamentally, we released this data a couple of months ago, and it basically just summarise the data. Basically says we work as well as an experienced doctor, but there is subjectivity between those doctors and this is really important for the following reasons.
The very high sensitivity. So basically with the accuracy that we can now demonstrate with Wheezo. Patients, doctors, pharmacists, parents can have wonderful confidence in what they are getting from Wheezo is as accurate as an experienced doctor. So in the ambulatory setting in the real world, this is really important because it's real time data that's being shared to those different stakeholder groups. So that provides the platform really for what it is that we will be doing moving forward with regards to developing our clinical programs. But fundamentally we know we work, we know the data's correct, and we know that this will be useful information for patients to incorporate into the way they manage their asthma lives.
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So in closing, we're ready to go and we've got everything we need to make Wheezo a great success here in Australia. So here's to October. Thank you very much.