Respiri - Focus on cost optimisation

To support an optimal roll-out of its US commercialisation strategy for its wheezo device, Respiri recently announced several cost-saving initiatives, the latest being a reduction in the CEO’s and executive chairman’s FY23 cash compensation by a combined A$180k. In exchange, the company will offer bonus/milestone payments, contingent on achieving certain patient recruitment targets (elucidated below). This announcement follows management’s recent establishment of a Centre of Digital Innovation Excellence in the Philippines to drive efficiencies with a lower cost footprint (estimated to reduce IT costs by c A$700k, along with a 30% improvement in productivity). All cost savings will be redirected towards onboarding patients in the US. We also note that Respiri recently raised A$1.6m through share placements to support its US roll-out plans (40m shares to be issued on 7 October versus 23 September previously). Our valuation remains unchanged at A$0.24 per share.