AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
Doing Business Under Coronavirus, a roundtable has been cancelled by the Council on Foreign Relations out of the fears of the spread of the coronavirus. Amid fears that public gatherings could spread the deadly virus, several other corporate events, conferences and festivals have also been cancelled.
The novel coronavirus outbreak is resulting in a damaging impact on businesses and economies, while several indices are being pummelled around the globe.
Amidst this scenario, there are few sectors that are experiencing lesser impact from the adversity caused by coronavirus and healthcare is one such sector, as cash flow of several healthcare entities is driven by inelastic demands for some of the essential products and services.
Let’s discuss three healthcare stocks, covering their business, key activities or opportunities and stock performance.
MedAdvisor Progressing Well with International and Domestic Expansion
MedAdvisor Limited (ASX: MDR) is a leading digital medication management company of Australia. MDR standouts in providing patients with a platform for ordering & medication management. The Company, which has a driving factor in enhancing health literacy and adherence, conducts several health programs and provides MedAdvisor App & Messaging and SaaS platform: PlusOne.
The Company has made significant progress towards the US market entry strategy layered in three phases.
- Phase 1 is to launch health programs: MedAdvisor, in partnership with its US strategic partner, Adheris Health LLC, has already signed two agreements of the five medicines programs targeted towards top 10 global pharmaceutical companies.
- All the five programs would go live in the second half of 2020.
- The estimated revenue from a 12-month health program is around $0.8 million, which represents 80 percent of total MDR’s reported FY2019 health program revenue.
- MDR aims to establish a pharmacy network in the US.
- Phase 2 is to integrate with pharmacies and expand programs to other payors
- Phase 3 is to build SaaS model with pharmacies
Some of the other activities undertaken by MedAdvisor to embark an early success in large global markets are -
- On 10 March 2020, MDR mentioned that it has been endorsed by the National Pharmacy Association, UK, as a recommended supplier to their members for Digital Adherence Programs and pharmacy digital app solutions.
- UK entry with first customer in Day Lewis Pharmacy Group
- Equal Joint Venture with Zuellig Pharma to have presence in the Philippines (MedExpress) and Malaysia (Klinify and Alpro). The estimated launch of the product is in the fourth quarter of FY2020.
- The Company raised $17 million in an underwritten capital raising including $11 million invested by HMS Holdings as a strategic investor. As an outcome, HMS secured ~13 percent stake of ownership and position in MDR Board.
On 27 February 2020, MDR released its first half results for the period ended 31 December 2019, registering continued growth in core Australian business with momentum building in larger international markets.
On 23 January 2020, MDR’s share price touched all time high of $0.59 in the past 5 years. The stock was trading at $0.370 on 12 March 2020 (AEDT 03:29 PM), with a market cap of $103.3 million. The year-to-date return of the stock stands at 16.67%, while in the last three months, the stock delivered 29.23% in returns.
Strong Performance for M7T in H1; First Cloud-Based Deployment Completed
Mach7 Technologies Limited (ASX: M7T) develops medical imaging data management solutions for healthcare providers. These solutions give a complete and clear view of the patient to reduce care delivery delays and costs, inform diagnosis and improve patient outcomes.
Sentara Healthcare PACS Project Goes Live
The most recent activity of the Company includes the completion of a Picture Archiving and Communication System (PACS) modernisation project for Sentara Healthcare, marking the first cloud-based deployment of the complete M7T solution.
The PACS project live now is powered by Mach7’s Diagnostic Studio and Enterprise Imaging Platform (VNA) in combination with Client Outlook’s eUnity diagnostic viewer.
This go-live milestone initiates a new subscription licence for Mach7 software, which would generate recurring subscription revenue of $850,000 per annum for M7T. Out of which, nearly 50 percent is conversion of a previous annual support and maintenance agreement and ~50 percent is additional revenue.
M7T Delivers First Positive EBITDA and NPAT H1 Result
On 21 February 2020, the Company released its first half results for the period ended 31 December 2019.
- Revenue grew by 158 percent or $5.6 million on pcp to $9.1 million.
- A remarkable increase of 176 percent to $2.3 million in EBITDA was recorded.
- Bottom line stood at $0.7 million, an increase of 115 percent or $5.1 million on prior year.
- Robust growth was led by continued growth in contracted annual recurring revenue (CARR) and new customer contracts.
Outlook: M7T plans to continue progressing with a prime focus in the following key areas:
- In terms of profitability, M7T would continue growing its EBITDA and deliver free cash flow positive results.
- Sales Focus: To remain focused on the Company’s core regions to capitalise on success to date.
- Growth Acceleration: To assess the landscape for complementary technologies for possible acquisitions while investing in marketing and strengthening sales team in parallel.
M7T was trading at $0.550 on 12 March 2020 (AEDT 03:35 PM), down 11.29% from its previous close, with a market cap of $113.35 million. The stock has delivered a negative return of 9.49 percent in the year-to-date period.
PCK Expanding with New Patents and Funding Support
Pain assessment technology developer, PainChek® Ltd (ASX: PCK) aims to transform the pain management by using artificial intelligence, facial recognition software clubbed with smartphone technology.
PainChek app is highly useful to people who cannot speak about their pain. In this process, AI basically gauges the micro-expressions of the face signalling the presence of pain. The Australian Federal Government has funded $5 million for the national trial of PainChek® in Australian residential aged care.
Japan Patent - Recently, the Company received a patent for its smartphone monitoring and pain assessment technology in Japan. PCK’s CEO Philip Daffas mentioned that Japan has a huge population with aging demographic and according to recent estimates, at least one in four residents in the Asian country are aged 65 years or above. Thus, Japan has an immense opportunity for PainChek.
US Market Status- Other than Japan, the Company has a patent in the US for its assessment pain application. Additionally, PCK is in the process to get the United States FDA regulatory clearance (DeNovo), enabling the Company to start marketing its invention in the United States and classify new medical devices.
UK License - Moreover, the Company has already secured its first order in the United Kingdom. It has signed an annual license for 1k beds in 2019.
Meanwhile, in early February 2020, the Company announced the receipt of $798,000 for Research & Development Tax incentive for the period FY2019.
For the half year of FY20 (period ended 31 December 2019):
- Total revenue increased by 71 percent on pcp. Revenue from continuing operations grew by 52 percent to $0.18 million.
- R&D grant and government grant also registered strong growth during the concerned period.
- Net loss was noted at $9.8 million.
- Contracted aged care beds and contracted RAC facilities increased to 32,023 and 380 in the period, respectively.
On 12 March 2020 (AEDT 03:37 PM), the stock was trading at $0.089, down 1.111% from its previous close, with a market cap of $93.2 million. In the last three months, the stock has delivered a negative return of 48.57%.
