The majority of shareholders of a small digital health company in Brisbane have approved the $180 million (US$121 million) takeover bid from global pharmaceutical giant Pfizer.
During a virtual scheme meeting on Sept. 7, nearly 83 percent of ResApp’s shares were voted in favour of the takeover, which exceeded the 75 percent supermajority required.
While the company still needs court approval, the deal is expected to progress to completion on Sept. 23.
Pfizer will pay 20.8 cents for each share, which is a 131.1 percent premium to ResApp’s closing price on April 8, when the pharmaceutical giant first announced its intention to acquire the Australian company.
Back in July, chief executive Tony Keating said in comments obtained by AAP that Pfizer’s interest was a “huge validation” for both ResApp and the Australian biotech and digital health sector.
ResApp was founded in 2014 to commercialise a technology developed at the University of Queensland with funding from the university, the Bill and Melinda Gates Foundation, and UniQuest.
The main product of the 20-person company is ResAppDx, a smartphone app used to diagnose respiratory diseases.
It acts like a remote stethoscope that provides diagnoses through a machine learning algorithm when patients cough into their phone’s microphone.
Regulators in Australia and Europe have approved the app to be used by clinicians to diagnose respiratory diseases, pneumonia or asthma in telehealth sessions.
The company is now developing an app to diagnose COVID-19 based on cough noises. However, recent testing shows that further improvements are needed.
Meanwhile, The Australian reported that shareholders’ approval of the acquisition brought relief to ResApp directors and executives, given the current situation of the company.
While there initially had been many opposing voices to the takeover, a number of investors changed their stance after it was revealed that the company was constantly losing money.
According to ResApp’s financial report, the company incurred a loss of $7.1 million in the 2022 financial year, up from $6.7 million in 2021.
“I was relieved that Pfizer saw the value of wanting to put the offer up,” ResApp executive director Brian Leedman said, as reported by The Australian.
“There would be a level of embarrassment if the transaction failed because they’re buying a public company that’s immaterial from an acquisitional point of view.”