CloudMD Software & Services Inc. (TSXV: DOC, OTCQB: DOCRF,
Frankfurt: 6PH) (the “
Company” or
“
CloudMD”), a healthcare technology company
revolutionizing the delivery of care, is excited to announce that
it has closed the previously announced acquisition of Rx Infinity
Inc., Rxi Pharmacy Inc., and Rxi Health Solutions Inc.
(collectively
“Rxi”), enhancing its specialty
health services to patients, providers, insurers, and corporations
in Canada.
Rxi’s pharmaceutical logistic
services include drug distribution, patient navigation
assistance, a preferred pharmacy network of over 500 pharmacies and
real-time universal disease management software. As a proven
solution to the currently siloed healthcare system, Rxi’s combined
offerings provide a one-stop solution and centralized platform that
breaks down treatment barriers by offering a team-based, real time,
longitudinal approach to patient care and disease management. Rxi
oversees several national and provincial patient support programs
currently specializing in Oncology, Infectious Diseases and
Inflammatory Bowel Disease (IBD). Rxi will be expanding its
offering, launching a number of additional support programs in the
imminent future. The company also provides administrative and drug
benefit management services to a large third-party benefits
provider, servicing more than 300,000 patients across Canada. Rxi
is licensed as a National Wholesaler (GMP-certified) and is
approved by Health Canada.
The acquisition of Rxi is synergistic across
CloudMD’s platform of healthcare technology solutions and its
Enterprise Health Solutions (“EHS”) division. The
addition of Rxi expands CloudMD’s pharmacy offering, and
distribution and fulfillment channels across Canada. CloudMD has
access to Rxi’s network of 500 independent pharmacies to provide
better, more localized, access to care. Rxi will be integrated with
CloudMD’s electronic medical records (EMR) software, educational
resources, healthcare navigation, patient portal and enterprise
health services.
CloudMD can now offer employers access to Rxi’s
specialty drug and case management platform to better manage the
chronic care of employees. These speciality drugs are often very
costly and can result in high exposure to employers if not managed
correctly. Currently, 50% of new drugs developed are speciality
drugs(1) and it is anticipated that this number will continue to
grow. Furthermore, 42% of employer drug spend are based on
specialty drugs(2), and employers are faced with an increase in
employees needing or accessing specialty drugs. Rxi’s patient
support and a targeted intervention program help ensure that drugs
are effective and are being used appropriately, which results in
better employee health outcomes and reduced employer costs.
Rxi is a high growth, profitable business, with
annualized revenue for calendar year 2020 of approximately $16.6
million with earnings before interest, taxes, depreciation and
amortization (“EBITDA”) of approximately
$600,000(3). Rxi generates revenue through: (1) wholesale and
dispensary services, (2) licensing for its proprietary technology,
and (3) pharmacy partnerships. Upon closing, the acquisition of Rxi
will be immediately accretive to CloudMD with synergies the Company
believes will drive further revenue and increased EBITDA margins
through cross-selling and integration across its portfolio of
healthcare technology solutions.
Terms of Acquisition
In consideration for the purchase of 100% of the
outstanding securities of Rxi, CloudMD has paid shareholders of Rxi
aggregate consideration of $9.5 million payable as follows: (i)
$2.5 million in cash, subject to a working capital adjustment; (ii)
$4 million in common shares of the Company; and (iii) a
performance-based earnout of $3 million, which is payable in common
shares of the Company in equal annual issuances over a period of
two years. For full terms, please see the press release dated
January 26, 2021.
About CloudMD Software & Services
CloudMD is digitizing the delivery of healthcare
by providing a patient-centric approach, with an emphasis on
continuity of care. By leveraging healthcare technology, the
Company is building one, connected platform that addresses all
points of a patient’s healthcare journey and provides better access
to care and improved outcomes. Through CloudMD’s proprietary
technology, the Company delivers quality healthcare through a
holistic offering including hybrid primary care clinics, specialist
care, telemedicine, mental health support, educational resources
and artificial intelligence (AI).
CloudMD currently services a combined ecosystem
of over 7,000 psychiatrists, approximately 4,500 therapists and
counsellors, approximately 4,000 psychologists, over 22,000 family
physicians, over 34,000 medical specialists, over 1,500 allied
health professionals, over 500 clinics, and over 5 million
individuals across North America. CloudMD’s Enterprise Health
Solutions Division includes one of the top 4 Employee Assistance
Programs in Canada and offers a comprehensive, digitally connected
platform for corporations, insurers and advisors to better manage
the health and wellness of their employees and customers. For more
information visit: https://investors.cloudmd.ca.
ON BEHALF OF THE BOARD OF DIRECTORS
“Dr. Essam Hamza, MD"Chief Executive Officer
FOR ADDITIONAL INFORMATION CONTACT:
Julia Becker VP, Investor
Relationsjulia@cloudmd.ca(604)785-0850
Forward Looking Statements
This news release contains forward-looking
statements that are based on CloudMD’s expectations, estimates and
projections regarding its business and the economic environment in
which it operates, including the expectations with respect to its
business plans. Although CloudMD believes the expectations
expressed in such forward-looking statements are based on
reasonable assumptions, such statements are not guarantees of
future performance and involve risks and uncertainties that are
difficult to control or predict. Therefore, actual outcomes and
results, including revenue projections, may differ materially from
those expressed in these forward-looking statements and readers
should not place undue reliance on such statements. These
forward-looking statements speak only as of the date on which they
are made, and CloudMD undertakes no obligation to update them
publicly to reflect new information or the occurrence of future
events or circumstances, unless otherwise required to do so by
law.
Non-GAAP and Non-IFRS Measures
This press release refers to “EBITDA” and
“EBITDA margins” which are non-GAAP and non-IFRS financial measures
that do not have a standardized meaning prescribed by GAAP or IFRS.
The Company’s presentation of these financial measures may not be
comparable to similarly titled measures used by other companies.
These financial measures are intended to provide additional
information to investors concerning the Company’s and Rxi’s
performance. EBITDA is defined as earnings before interest, taxes,
depreciation and amortization and EBITDA margins is defined as
EBITDA as a percent of total revenue. EBITDA and EBITDA margins are
Non-IFRS measures the Company uses as an indicator of financial
health and excludes several items which may be useful in the
consideration of the financial condition of the Company and Rxi, as
applicable, including interest expense, income taxes, depreciation
and amortization.
The TSX Venture Exchange does not accept
responsibility for the adequacy or accuracy of this release.
(1) https://www.claimsecure.com/media/1305/understanding-and-managing-specialty-drugs-brochure-en.pdf(2) https://www.manulife.ca/business/group-benefits/services/drug-management.html(3)
Annualized revenue figures are calculated based on annualizing the
available results for the 11-month period ending November 30, 2020,
as announced on January 26, 2021.
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