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One of the fastest growing, complex, dynamic and most diversified sector with tremendous potential to generate substantial returns for the Australian economy, Australian health care sector currently generates $94 billion in revenue per year, and is expected to grow to $108 billion in the next 5 years.
In the era of digitisation, the Australian healthcare industry is enduring change with firm focus on enhancing the quality of care delivered, improving worker efficiency at the same time minimising human error.
Technology plays a significant role in many industries, and healthcare industry is no different. With the power to transform the healthcare sector, e-health care systems are attracting investors attention. With digital health technologies mounting exponentially largely driven by smartphones and most recently Artificial Intelligence, the healthcare companies are now focused on forming future strategies to implement digitisation. Some digital technologies that will steer a reasonable growth to the healthcare domain in near future include- machine learning, telehealth, electronic health record, internet of medical things, health tracking applications.
The innovative technologies and tools are already starting to make waves across the healthcare system and hold great promise for transforming the delivery of health services soon- enhancing efficiency and bettering patient care.
Lens over some of the healthcare industry challenges are:
- Mounting costs of medical innovations.
- Need of a comprehensive, efficient as well as transparent practices for evaluating health technologies.
- Health Labor Force Supply & Distribution problems.
- Quality & Safety of Health Services Concerns
- Rising Population
- Increased Access to High-Quality Healthcare in demand
- Growing Budgetary Pressures in Healthcare Institutions.
Top inventions in digital health forming the future of e-healthcare.
- Leapfrogging development markets, digital health to take lead in evolving markets
- With FDA catching up digital health invention, health care industry to see a boost and drive the acceptance of new technologies.
- Must-haves for health care providers in future would be machine learning, artificial intelligence, & chatbox technologies.
- Impact on patient care by cyberattacks. As a result, healthcare providers would see major backlash from patients.
- Additionally, the healthcare industry to see growing amalgamation as digital startups, technology giants including executives all race for a powerful spot in the developing healthcare landscape.
With this backdrop, in this article we will discuss two ASX-Listed healthcare players - MedAdvisor Limited (ASX: MDR) and ResApp Health Limited (ASX: RAP) under the radar focusing on their latest ASX updates.
On 11 March 2020, MedAdvisor released investor presentation & 1H 2020 results highlighting demonstrable growth in expanding its footprints both locally as well as globally.
MedAdvisor is a world leading e-health medication management platform with its highly automated and intuitive software system that connects users to tools & education materials from their local pharmacy, thereby offering a simplistic way of managing their medication and enhance adherence. Within Australia, 1 million users are connected through approximately 60% of Australian drugstores including a network of thousands of GPs.
Key Highlights are-
- Revenue from operating business activities increased 14% and was noted at $4.4 million, reflecting underlying growth of 22%
- Cash receipts were up 32.5%, amounted to $4.8 million.
- Core EBITDA also increased from $1.0 million to stand at $1.4 million, soaring 41%.
- MedAdvisor’s health programs are mounting at 33% Y-o-Y basis, with 48 programs running in 1H 2020 in comparison to 32 programs in 1H 2019.
- The company has seen early success in big global markets including 2 health programs with top 10 pharmaceutical companies in the US market, to go live in 2H 2020, entry into UK market, and Asian joint ventures signing new customers through Klinify & Alpro, from Malaysia and Philippines.
- The company has also raised $17 million in an underwritten capital raising with HMS Holdings joining as strategic investor.
- MedAdvisor also strengthened its board and executive team by new appointments of highly qualified professionals with considerable experience in technology companies.
MDR’s Financial Performance
Overall, MedAdvisor is handling the universal problem of non-adherence of medications, as well as poor health knowledge to propel enhanced health outcomes for patients by making medication manageable.
Stock Update: On 12 March 2020, MDR’s stock was trading at $0.370, plummeting down by 11.905% (at AEDT 1:28 PM). With the market capitalisation standing at $103.3 million, with approximately 245.94 million outstanding shares, the 52-week trading range of the stock was noted at a low of $0.273 to high of $0.605. The stock has delivered a positive return of 29.23% in the last three months.
ResApp Health Limited Shares tumbled post US FDA refusal of ResAppDx-US
Leading digital health company, ResApp Health Limited (ASX: RAP) develops smartphone applications based on its machine learning algorithms to diagnose, measure and manage acute respiratory disease without the need for additional hardware. Clinical findings have showed precise diagnosis of the following disorders-
ResApp’s ResAppDx-EU, acute respiratory disease diagnostic test that is based on a smartphone application has earlier received CE Mark certification and TGA approval.
US Food and Drug Administration Declines ResAppDx-US
ResApp recently reported an update on its US Food and Drug Administration De Novo Classification request, on 11 March 2020. It was informed that, USFDA has rejected RAP’s De Novo classification application for ResAppDx-US.
Further, to demonstrate that the possible advantages of ResAppDx-US offset its possible risks, additional information is required.
Seeking to determine the next steps in pursuing regulatory approval in the US, which might include a resubmission, ResApp and Experien Group (its regulatory consultants) would now appeal an in-person meeting with the FDA review team.
Post the announcement, the company’s shares went down 52%.
Management Commentary
CEO and Managing Director of ResApp, Dr Tony Keating stated that the company and its management is justifiably disappointed by this decision, particularly after receiving both the CE Mark and TGA regulatory approvals. The company is expecting either a further discussion or approval of the De as the next stages in the entire process. He further mentioned that ResApp would persist to keep its focus on its Europe and Asia-Pacific commercialisation endeavours.
Stock Update: On 12 March 2020, RAP’s stock was trading at $0.088, rising by 8.642% (at AEDT 1:40 PM). With the market capitalisation standing at $58.81 million, and approximately 726.03 million outstanding shares, the 52-week trading range of the stock was noted at a low of $0.055 to a high of $0.415. The stock has delivered a negative return of 66.94% in the last three months.
