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Business Model

The RespiraSense™ business model consists of several components that together create a complete delivery that generates attractive gross margins and recurring revenues. A sale of RespiraSense™ rarely consists of a single system, but of a starter pack consisting of six RespiraSense™ Lobes with an associated charging station, a pre-configured tablet and a batch of sensor patches sufficient for around three months use. A starter pack can also include RespiraSense™ Air Hubs to ensure wireless coverage within the entire ward at the hospital.

In Ireland, a ward in a hospital that uses RespiraSense™ generates revenue for PMD as follows:

  • Non-recurring revenue for the lobe including the charging station
  • Non-recurring revenue per department for Air Hubs
  • Recurring revenue for the sensor patches and they are sold in packages of 6 patches
  • Recurring annual license fee for the software that depends on the size of the system installed.

The pricing of a starter pack is fixed below the EU thresholds for special budget processes for hospitals to be able to purchase the system. During the initial launch of RespiraSense™ in a new setting, non-recurring revenues from system sales (i.e., lobes and Air Hubs) account for a significant share of total revenue. As the installed base of RespiraSense™ increases over time; however, recurring sales of sensor patches are expected to account for most of the Company’s revenue. In addition, recurring license revenues will be generated from the software. PMD estimates that the consumption of sensor patches amounts to about 72 patches per hospital bed per year. As hospitals become increasingly aware of the benefits of RespiraSense™, PMD believes that there is potential for the average use to be even higher.

Another revenue opportunity for PMD is to provide third-party products from suppliers of pulse oximeters and temperature sensors that can be configured with RespiraSense™.