MedAdvisor Limited (ASX:MDR) CEO, Robert Read provides an update on the company's platform, including patient and pharmacy numbers, strategy and FY19 outlook.
Jessica Amir: Thanks for tuning into the Finance News Network. Today I am with MedAdvisor (ASX:MDR) CEO Robert Read. Hi Robert and welcome to the network.
Robert Read: Thanks Jess. Nice to be here.
Jessica Amir: Thanks for coming. So for those who aren't familiar just give us a quick introduction to MedAdvisor (ASX:MDR).
Robert Read: MedAdvisor (ASX:MDR) was founded in 2012 by someone who was really frustrated with the paper based health system and the dependency that created on other people within the health system. And so his mom was battling many different conditions and was trying to work out scripts and how to manage scripts, how to order her meds when it all ran out and he just thought ‘this is ridiculous’. In a time where we can do mobile banking and everything is in the palm of our hands why can't we do that with health? So MedAdvisor (ASX:MDR) was born.
What MedAdvisor (ASX:MDR) does is seamlessly connects a patient with their pharmacy and that means they get an automated medication list whenever they need it. So if they need to go to a GP, see a new doctor, go to hospital, they have a history of their medication in the palm of their hand. It also allows them to order their medications from over half of Australia's pharmacies and that's a really big convenience proposition. The combination of having control of your medications and the ability to have convenience is a really strong value proposition. And, we've seen that take a lot of market share and be able to grow the pharmacy market to over 50 per cent.
Jessica Amir: What are the problems, Rob, if people don't take their medications as prescribed? And why do you think these problems are occurring?
Robert Read: Some medications that you take every day if you're not adherent to at least 75 per cent, you can increase your risk of stroke, or a heart attack or even death by up to four times. The World Health Organisation estimates that about 50 per cent of the pills that are prescribed are actually taken. So doctors suggest you take a medication and people are compliant with that about half the time. In Australia we've studied about 1.3 million Aussies and we see that number to be about 54 per cent for chronic medications. And these are patients who are not on MedAdvisor (ASX:MDR).
Jessica Amir: So, speaking about MedAdvisor (ASX:MDR), your platform, who are the users?
Robert Read: The most common demographic is 40 to 70 years old. More females than males on the platform but because we have carer mode we can extend to patients that are less than 10 and patients who are over 90. So you can care for your mom, or your husband, or even your grandparents and your kids all on the one account. And that makes it really easy for people who are looking after others.
Jessica Amir: And Rob what are the key features of your platform?
Robert Read: It can work in mobile apps and certainly consumer web. We also have SMS reminders and landline reminders for those that prefer those methods of communication. So really it's available to anyone who is on medication. The interesting thing in Australia is 50 per cent of Australians have a chronic disease so that's 12 million people. So really there's a very wide audience for people who are taking regular medications. Then when you are taking the regular medications you also have the ability to have a medication list that's up to date and constantly updated and that happens because we integrate with all the dispense systems in the market.
We also have the ability to order your meds so you don't have to wait when you go to the pharmacy. Or indeed if you want to skip the queue at the GP, and it's a regular medication that the GP's happy to prescribe without you being in attendance, you can do that through the app as well. We really enable that convenience, that control and that information to come back into the hands of the user.
Jessica Amir: Thanks Rob. Now tell us about your financials.
Robert Read: Our revenue has been growing very strongly. We were up 51 per cent last year and we turned over about AUD$7.4 million dollars. We have high and expanding gross margins so they are now tracking in the high eighties percent. And as a core business we are now profitable when we're looking at excluding the growth investments that we're making in our platform. So we are investing heavily in growth and that's an area that we report separately.
Jessica Amir: So, you mentioned how big the market is but can you quantify that? What's the size of the opportunity and what's your strategy?
Robert Read: The size of the opportunity is significant because at the moment we see about two hundred and sixty million dollars worth of scripts ordered through the platform every year. There are about ten billion dollars worth of scripts ordered in Australia or taken every year in Australia. So it's a very big pool of medication. We're just scratching the surface of that. We see an opportunity to grow to a larger proportion of the 12 million chronic patients in Australia. We are averaging about AUD$7 revenue per patient per year through the platform through all our revenue sources. We'd like to maintain this as we grow into those sorts of numbers.
Jessica Amir: Thanks Rob. So obviously you are investing for growth but is the company fully funded?
Robert Read: Yes, we were very fortunate in that we received AUD$9.5 million dollars last year from the large healthcare company, EBOS (ASX:EBO), to really accelerate our growth. They invested at 5.75 cents per share. As a result of that we are fully funded. We have AUD$8.7 million dollars worth of cash in the bank to go and pursue these growth initiatives over the next 12 to 18 months.
Jessica Amir: And just lastly, Rob, you've talked a lot about opportunity and growth but where would you like to see the company in 12 months from now?
Robert Read: We want to really grow out pharmacy engagement. We have a great platform that's really deeply ingrained and integrated in the pharmacy workflow now and we want to extend those opportunities to reach more patients and to run more programs and services for the eight million patients that are at our pharmacies. And building significant opportunity around that to take out product globally.
Jessica Amir: Wonderful. Robert Read, thank you so much for your time.
Robert Read: Absolute pleasure. Thanks for having me, Jess.