UPDATE 2.45pm: Narhex Life Sciences is banking on a smartphone app, which it claims can diagnose respiratory illnesses such as asthma by prospective patients coughing into a mobile phone.
The Perth-based listed shell company will acquire ResApp Diagnostics through an all scrip deal and recapitalise the company through a $750,000 share placement and a $2.5 million prospectus capital raising to commercialise the new technology.
Narhex said the technology was based on a machine learning algorithm that used sound alone to diagnose and measure the severity of a respiratory condition.
It said ResApp held exclusively licensed technologies from the University of Queensland to develop the world's first clinically-tested, regulatory approved smart phone application for respiratory disease diagnosis and management.
ResApp claims the app does not need additional hardware, only the patient's smartphone.
Narhex said clinical proof of concept was established with funds from the Bill and Melinda Gates Foundation in a study conducted by the University on 91 patients.
The study demonstrated 96 per cent accuracy for the diagnosis of pneumonia and 90 per cent accuracy for asthma, Narhex said in a statement.
The company hopes to launch an approved product in 2016, subject to US Food and Drug Administration clinical trial success.
The deal is subject to due diligence, regulatory approvals and final documentation.
Narhex shares were up 0.1 cent, or 14.29 per cent, to 0.8 cents at the close.