Mednow Inc. (
TSX-V.MNOW,
OTCMKTS: MDNWF,
Forum) is a healthcare technology company offering virtual access with exceptional care. It provides virtual care with convenience and through an interdisciplinary approach to healthcare that is focused on the patient experience. Its pharmacy services include free at-home delivery of medications, a user-friendly interface for easy upload, transfer and refill of prescriptions, access to healthcare professionals through an intuitive chat experience.
Stockhouse Media’s Dave Jackson was recently joined by Karim Nassar, CEO of Mednow Inc., to get our investor audience up-to-date on this cutting-edge biopharma company.
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TRANSCRIPT BELOW:
SH: To start off with, for our investor audience who may not be familiar with Mednow until now, can you tell us a little bit about yourself and the history of the company?
KN: Mednow believes all people of Canada should have access to amazing care to help them live their healthiest lives. That's principally the mission that Mednow started off with and continues to build on we're a health company that's anchored in digital pharmacy and our approach is really to create this holistic offering that includes not just pharmacy, but telemedicine, genetic testing to health assessments, nutritionist, and even specialty pharmacy. We believe that's a differentiated approach and one that's prime for going after what is a very attractive digital pharmacy sector that is also ripe for disruption. Just to give our viewers a bit of sense of the size of the opportunity the pharmacy market on its own is worth almost 50 billion and the ePharmacy market, the one that we're targeting is predicted to grow at almost at 19% year over year, starting this year, all the way to 2028. Now, it's no doubt that COVID has supported a lot of these digital healthcare growth stories. In fact, just even as recently as 2020 there's been a 64% increase year over year for virtual care. The future of healthcare is virtual. It is digital and that's really why we're really excited to be in that segment of the market.
SH: Can you update our investor audience and your Mednow shareholders on any new company developments?
KN: Absolutely. It's my pleasure to say really that I'm very proud of all of our accomplishments that we've done in the last nine months since we've IPO-ed. We started this journey just a over a year and a half ago with our first funding event in June of 2020. This IPO really brought us for full circle to being able to really roll out this concept of a national pharmacy, today we're live in Ontario, BC and in Nova Scotia And with that, we actually can service almost half of the Canadian population. Our plan is to be completely national by the end of the first half of the calendar year 2022. On the revenue front, we've grown our revenue to $14 million from only being about $414,000 in the last fiscal year. This has been through a very aggressive MNA strategy along with our organic growth.
Our focus really has been about setting ourselves up for scale. So maturing our management team our digital product and really tuning our patient acquisition engine so that we continue to grow our user base and of course our revenue. We've even taken a direction which I'm also really excited about, which is Mednow for business. That particular business is going to go after insurance companies, brokers, employers that are focusing on preventative measure and holistic offerings for their employees with the benefit of Mednow being able to really acquire users on mass and in, in, in groups rather than one at a time as we've been doing in our B2C approach to the market. So all engines are rolling to help us scale quite rapidly in this digital health care market.
SH: Simply put, what makes a digital pharmacy more effective than the traditional brick & mortar store?
KN: Great question and again, this is a central part of our mission and for of our strategy. There's many, many different reasons why it is in fact a better form and a more effective form of pharmacy. It starts off with accessibility and convenience. You can access our pharmacy through an app. There's no walking down to the stores, no lining up. There's no calling and being on hold. That facility means that more people are going to likely want to just make the choice to communicate with the pharmacy or even use it and over the last year, we've been really focusing our talent and effort building out this digital and fulfillment infrastructure and not to mention also the logistics that glue everything together to allow us to service the markets where we're present. Today as an example, our clients can access us through our website, our app, or even our national call center. So many different ways to get to our pharmacy and all of them really can be done from the convenience of your own home.
I just wanted to kind of fill on to really kind of explain why this is valuable. Pharmacy isn't one of those things where your ones and done there is a need to continually interact with your pharmacy. That's why convenience of an app and convenience of a phone call away is something we emphasize. Think of for example, somebody taking multiple medications on a regular basis. Today they'd have to remember to do the refill. They'd have to call the pharmacy and alert them that the refill is coming up and then it gets filled and then they have to go pick it up versus in our model where we've got set up for automatic refills, as long as we're authorized to do it and it gets deliberate automatically your home before you even have to make the call to tell us you need these medications.
Lastly, our model of pharmacy is different than brick and mortar because we use a centralized filling method. So we have one pharmacy per province. That means all of our service protocols and really, this is kind of the reason why people notice this, are consistent regardless of where you're calling us or accessing us in the province. So there isn't this idea of if you go to the pharmacy on the east side of the road, you're going to get a better service than if you go to the west side of the road, it's all one place that's servicing all of our customers allows us to really perfect what is best practice in pharmacy and maintain very high levels of predictable service and good service that that really is what we're most proud of and happy to have being a digital pharmacy.
SH: Karim, genetic testing has become very popular over the last few years, can you touch on Tru-Diagnostic?
KN: Yeah. This is a really innovative technology that we now have exclusive rights to distribute in Canada. Just to kind of back out a bit from the technology, really what this is looking to solve for is aging and the aging happens to be not one of the number one risk factors for most chronic diseases and eventually the idea of managing your conditions whether it's something that's genetically imposed or lifestyle imposed, the more information you have the better. So true diagnostic gives us that ability by running what is a epigenetic test and it has to be specific that allows a user or a patient to know what their true biological age is what are their risk factors and with that information, our pharmacy staff can consider what are all the aspects of how we can support you better and even manage your risk factor so that we can be preventative in our approach of care to try to get you support before you get that ancestor disease that sort of is sitting in your genes, waiting to be activated if you make certain lifestyle choices.
So it's a very exciting mechanism of continuing to round out are offering, making it more holistic. Again, we believe that is really a true differentiator for a pharmacy. In this case, it makes a lot of sense for a digital pharmacy to also have that.
SH: Karim, you’ve also recently entered into an agreement to acquire Infusi-Care Canada Inc. This may be news to many investors. Can you unpack the benefits of it?
KN: Yeah, this is a major win for Mednow. It marks our entry into the specialty pharmacy market and for those who don't really know what that market is, I'm going to take a minute just to kind give everyone a bit of background. It happens to be one of the fastest growing segments of our pharmacy market, just to put things into perspective, a lot of specialty medications are biologic and over the last 10 years in 2006, as an example, there was only one biologic drug on the top 10 selling patent medicines in Canada. Today out of thre 10, seven products are biologics and they represent almost 42% of patent medicine sales in Canada. So that's the kind of growth that this segment has been experiencing. Not to mention it is a very valuable segment. These are very expensive drugs that are treating very complex diseases so it's where the future pharmacies is heading as now thanks to the effort of a lot of these pharmaceutical companies.
We've mostly managed all of our, I call blockbuster diseases, whether that's hypertension, cholesterol, or diabetes in some ways, even there, there's still innovation happening but these medications are now going after even more diseases that we haven't had a solution for and now we're able to do things like make cancer a chronic disease rather than a terminal one because of the benefit of these drugs. So with Infuse-Care, a company that today generates $9.3 million in revenue and with our management expertise, we were able to acquire that entity for $1.85 million in cash, this pharmacy because of the nature of medications that it sells, happens to have some very advanced capabilities around customized patient care, advanced adherence strategies to go after these complex therapies and really the objective of improving health outcomes because you need to manage patients a lot more when they're on specialty meds.
The focus for this particular pharmacy is in rheumatoid arthritis. Again is just the perspective on size of that market. One out of a hundred adults in Canada have rheumatoid arthritis. So it's a significant part of the population that is going to suffer from this mostly debilitating disease. So with that acquisition, we get access to a lucrative pharmacy market, an important therapeutic area, $9.3 million for $1.85 million cash and really bolstered our very first entry into specialty with many more developments in that market, both for us and for the general market itself.
SH: Can you tell us more about why you invested in Doko Medical, etcetera...why did you choose to make this investment…and why now?
KN: So the US market is one of the most attractive markets of healthcare. It is highly privatized. The opportunity there is in you can think about it 10 times everything we've said in the Canadian market is happening there. We didn't want to sit North of the border and observe this market from afar. The investment of $500,000 in Doko as a prudent one because it gives us a toehold in the US market, both the telemedicine and pharmacy market at that and acts as a platform for us to understand the key dynamics to that market, how we can one day transition the capabilities that we've built up in the Canadian market for the US market where there is going to be potential for upside, even in just the investment we've made, but also in the ability for Mednow to enter this very lucrative market Doko itself is an entity that focuses on virtual healthcare and the principal sense they're in 38 states and are African national, as well.
They have access to a hundred physicians and healthcare workers that are all supporting patients in under service markets around urgent care, mental health, and erectile dysfunction. The Doko medical patients have access to pharmacies through the platform that allows these pharmacies to in the same way. Mednow does today ship medications directly to their homes, hassle free and at quite lucrative prices, which is again, a very significant differentiator in the US market. All in all just to give you a sense of the Doko is sitting on top of a 64 billion telemedicine market today, that's expected to grow 18% year over year. So a lot of benefits to an entity like ours to have access to that us market, especially through an entity like Doko.
SH: Back in September, you launched a proprietary platform to provide telemedicine services to Mednow clients. Can you expand on this initiative for our investors?
KN: Yeah. Telemedicine for us has always been an extension of our holistic digital pharmacy offering. In fact, a lot of our customers would come in looking for a doctor. They recognize that they would need prescription to care for themselves and there's a medication that they're after. So they need a doctor for it. So from there, it was a very organic decision to decide to have our own proprietary platform in telemedicine, with the emphasis on being there for our customers, regardless of their need, whether it's in pharmacy or doctors. So today we establish Mednow care in Ontario and we're looking to roll it out in the rest of the province. What's really intriguing about how we set this up is we also contemplated the limitations of telemedicine. So today telemedicine can on average treat about 60 to 70% of cases because it is all in video and on in person.
So we are acquired Medvisit back in August of this year, which happens to be Canada's largest and longest standing doctor home visit provider. As an example of their success, they've had to visit 30,000 patients last year alone and have almost 400,000 patients in their database. That entity was acquired for 1.3 million and their top line revenues around three. So not only is it greater from a revenue and financial point of view but it also puts us in a place where we really have the entire set of telemedicine and when telemedicine is limited in the greater Toronto area specifically today, where Medvisit is present, we can compliment it with the Medvisit offering to fill in that gap of what can't be treated and in person, our goals is to definitely take this to a national scale because it is a needed service wherever telemedicine is provided. So we're really excited about that, as well.
SH: The Company looks set for strong growth moving forward into 2022. How are you positioned to expand operations to meet demand?
KN: We get that question all the time and it's one of the questions that I love to answer because it really helps me tell the investors of how committed and dedicated, we are to this idea of being able to scale in an efficient way as quickly as possible. So in 2021, we've been very busy building out an infrastructure. We call it a bit of an ignition or launch stage for Mednow. So things like acquiring the pharmacy licenses that we have establishing them, as I said, in Ontario, BC, and in Nova Scotia with the goals again, to being national by mid next year, that as well as the digital pharmacy platform that we're building and the tuning of our marketing and user acquisition platforms so that we can get better at acquiring users.
These all have been and what literally we've been head down doing in 2021. I'm feeling really good about 2022 because well now we're going to go into this growth stage. We've tuned a lot of these things around patient acquisition. I've talked to you about Mednow for business and the value that that's going to bring from now being able to acquire groups of customers rather than one at a time, therefore doing all kinds of wonders for our cost of acquiring these users and really creating a strong organic revenue growth story for us, which is something that we're also very cognizant the market is looking. The player on M&A is another strong object for us in the year 2022. So we've already demonstrated our ability to make some very good investments and to strategically allocate capital towards growing our revenue and towards creating a more holistic offering that includes great markets like specialty pharmacy in Canada. So we are going to continue to also build on that and, and create an environment for healthy, organic, and inorganic growth of our revenue in the year 2022.
SH: What separates Mednow from the competition and makes your business model so unique?
KN: We think that Mednow and believe really in Mednow's mission and vision is being a holistic provider of care being a truly differentiating factor. If you just pause for a minute to think about how we make decision around which pharmacy we go to a massive aspect of that is the patient experience. The Canadian healthcare landscape because it is a socially oriented healthcare system, it is mostly funded by a public payer. Most customers perceive pharmacy as a commodity business, as in, regardless of which pharmacy I go to, I'm always going to get the same medication and I'm relatively around the same price. So the customers are price agnostic. This is why we've made the focus of patient experience a real tenement of our goal because we do think that's the reason people pick a pharmacy and the reason people stay at a pharmacy.
So that for us has been a real differentiator and it's evident in making investments like true diagnostic, where now you've got DNA testing at a pharmacy, which is a very rare offering, mental health, and nutrition. So we're really extending it beyond simply the act of dispensing meds, thinking about building a relationship with our customers. So they keep coming back to us for the refills and especially for patients that have multiple medications and need all the extra technology and service that we provide to help them be adherent and remain engaged in their therapy. Collectively that's why, again, patient experience is very important now that we've built a lot of this basis. We feel we've built a high barrier of entry, especially given our experience management team that has and other businesses already built a significant revenue of pharmacy that and is in the hundreds and millions of revenue.
So there's really already a very proven management team one that knows how to grow pharmacy revenue and now is transforming all of that knowledge into the Canadian industry of pharmacy to being that digitally done pharmacy. There is not a lot of players that are doing what we're doing. There's definitely a ton of brick and mortar pharmacies out there but in the form of digital pharmacy that we're doing, we stand unique in the form of a publicly traded entity that does digital pharmacy and the quality and the range of Protestant services that we provide is going to be the reason that we feel not only do we have a first mover advantage in that sense but we have a reason to be growing quite exceptionally fast and we're going to continue to work on a recipe. That's gotten us the five-star rating on Google today which is again, holistic care provider at the highest service possible. As competitors come in and they will because this is again a very attractive market, we're going to continue to be differentiating ourselves and continuing to build all of these aspects of holistic care. That'll keep us apart from them.
SH: I have to mention your stock has been on a bit of a roller coaster ride this past year. What can you tell our investor audience regarding the current valuation of your stock and why you think it’s a good buy right now?
KN: So the market has been a bit harsh on our valuation and that's just even based on some of the Canadian comparables in the last couple of years. Medtech had a very strong interest in the valuations followed deep in the COVID era and we did capitalize on that as we listed on TSX venture. Now we're also on the US OTCQB in the form of the funding. We're able to raise our ability to continue to build out on this full stack healthcare offering and a largely untapped business of pharmacy that barely uses any technology is the reason why we're still very confident that the market will see the valuation but just to give you a sense of how that off base this is, our stock price today is actually creating below cash value.
We have 28 and a half million dollars in the bank and our market cap is a 22.5 with no debt. So really the downward trend that we've experienced is very similar to what all of our peers have experienced. The Medtech, we’ll call it bubble kind of burst as COVID eased off but I don't think the digital pharmacy market or trend is anything like a fad. It is definitely going to be around. I explained to you all the reasons why digital pharmacy is better than a brick-and-mortar pharmacy in some ways. So where we just look at the pandemic really as a catalyst for that becoming more main place, digital pharmacy, it is here to stay and while the offering that we're building, we're going to continue to disrupt this very lucrative market and in the form of acquiring customers and keeping them for the long term, which will translate into revenue. We feel that the market and the street will recognize that in in terms of the valuation.
SH: And finally, what’s the long-term strategy for the company and what should investors be focusing on in the coming year?
KN: So with this ignition stage behind us, we're all very excited about the growth that we're looking to experience in the year 2022. I've spoken to you about our pharmacy build out and how we're looking to we're getting closer and closer to that national rollout, our digital infrastructure that's getting tuned and improved by the day as it pertains to our app and all of our digital assets and of course, that all leads into better acquisition of users and patients which again is one of the key goals and KPIs for us for our growth. Our goals for the first quarter of 2022 are again, focusing on making sure we make Mednow for business, a very successful offering. We do see the value in being able to acquire customers on mass. So that's going to be out the gate, one of our big goals, and as more pharmacies get established, and as our digital and patient acquisition infrastructure gets really optimized.
It's all going to kind of come together by the second quarter of 20 22 as now, we would be able to service any employer or any insurance company or any broker in the Canadian market. In addition to continuing to build our B2C off frame, as I had said earlier, that's sort of our mainstay for now. So all in all you know, 2022 is going to be the benefactor of what we built in 2021 which for every, every good reason around the funding that we experienced the IPO and the amazing team that we built was absolutely a pivotal year for us and we're really excited to be able to reap the rewards of that.
For regular updates, visit
mednow.ca.
FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.