Mednow Provides Business Strategy and Virtual Pharmacy Growth Update
Operational highlights focus on increased growth in core virtual pharmacy and virtual pharmacy services, along with reduced costs
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Virtual Pharmacy Growth: Strong base developed in the “build phase” and now ready to pursue large partnership launches;
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Annualized monthly revenue for virtual care pharmacy and Medvisit grew
720% from January 2021 to January 2023, from to$500 K on an annualized basis.$4.1M
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Annualized monthly revenue for virtual care pharmacy and Medvisit grew
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User growth has been strong with Mednow app registrations at 17K and pharmacy patients of 8K as of May 2023 (up approximately
700% from 1K pharmacy patients in January 2022); -
Total quarterly overhead costs reduced
45% from fiscal Q4 2022 to fiscal Q2 2023 (excluding London Pharmacare Inc. and Liver Care Canada Inc.); and - Gross margin expansion roadmap includes a focus on higher margin: chronic conditions, virtual clinical services, non-prescription sales and regularly scheduled subscription drug sales, all coupled with high customer retention.
The pharmacy industry is ready for a change to digital pharmacy
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Pharmacy is a large “offline” industry
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Canadian pharmacy market(1), has a relatively small penetration rate online today based on management estimates;$47 billion dollar -
Canada has a favorable competitive environment for virtual pharmacy; and -
The
U.S. already has large virtual pharmacy players (2)
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in annual costs to the Canadian health care system from$4 billion 5% of emergency room and physician visits due to drug non-adherence(3) -
20% of family doctors are anticipated to retire in the next 5 years inToronto (4) - 6.5 million Canadians without a family doctor(5)
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28% of Canadians believe health care is in crisis compared to10% one decade earlier(6) -
48% of Canadians are dissatisfied with health care system(7)
Business-to-Business focus
Driven by a convergence of factors, there has been an increase in demand for virtual pharmacy partnerships from payors and providers, including insurance companies, union groups, employers, and medical service providers. We believe escalating drug costs, which constitute the largest portion of health benefit expenditure (8), have prompted payors to seek cost-containment strategies and greater transparency. Mednow Pharmacy, with its partnerships and positive patient reviews, believes it is positioned to address these needs, considering its differentiated patient and technology experience.
In March 2022, Mednow released its new patient app into the market with a focus on business and doctor clients. In just over a year since its release, Mednow for Business has secured partnerships with groups that service over 500,000 lives, making Mednow the preferred virtual pharmacy for these individuals. With an average patient spend of over
Although business-to-consumer marketing was part of Mednow’s expenses in 2022 while it was building its technology and establishing its brand, since late 2022 and for 2023 Mednow has solely been focused on patient growth from business-to-business partnership development.
Virtual pharmacy services for providers and patients
Medical clinics and providers are increasingly seeking ways to reduce administrative burdens associated with prescription management, including medication reconciliations and refill requests, while moving away from outdated communication methods such as faxes with pharmacies. Mednow's technology-enabled pharmacy focuses on addressing these challenges and aims to empower medical clinics to focus more on patient care.
Mednow aims to supplement the clinical support provided by prescribers to their patients. For example Mednow’s Virtual Diabetes Program in partnership with Dexcom, ensures that allied health care professionals’ diabetic patients have access to the best practices when it comes to medication adherence and disease state education.
Our recent partnership announcement with Medcan, one of
Further, we believe that our services play a vital role in bridging the healthcare gap in
Technology investments and roadmap
Since the launch of our app in the spring of 2022, Mednow has introduced features such as Dependents and Single Sign-On, enhancing the pharmacy experience for our customers. Moving forward, we remain committed to investing in software development. Over the next 12 months, we plan on focusing on the expansion of our over-the-counter product offerings and providing white-labeled storefronts for other businesses to sell their products, with Mednow acting as a trusted fulfillment partner.
As part of our commitment to advanced technology, Mednow currently utilizes artificial intelligence (“AI”) in our fulfillment processes through PAC vision—a machine that employs photo analysis to identify pills in medication packages, helping prevent medication errors and increasing central fill efficiency. Looking ahead, we are exploring the use of AI, both internally developed and through strategic partnerships, in areas such as off-hours non-medical triaging, drug claims analysis, and medication adherence. The inclusion of AI in healthcare represents an exciting frontier, and Mednow's tech-enabled pharmacy platform positions us to efficiently adopt AI solutions.
Lastly, Mednow aims to expand its capabilities by enabling third-party pharmacies to serve as local last-mile fulfillment partners. With already 70+ partnerships in place, Mednow boasts a large pharmacy network to complement its online offering. Mednow believes that this digital-first and robust national fulfillment infrastructure will be competitive as more and more businesses look for virtual pharmacy partners.
Mergers & Acquisitions
While our previous plans for mergers and acquisitions were in place 18 months ago to fuel our growth, the macro-economic environment has shifted. Building upon the progress in our core business, Mednow has made the strategic decision to focus on cost reductions and divestments of non-core assets. The Company believes that this approach will optimize our margin profile, allow us to concentrate our resources more effectively, and set a clear path towards achieving positive cash flow over time. Medvisit, Canada’s doctor home visit company, will continue to complement our core business as it is highly synergistic providing in-home doctor visits for primarily homebound seniors which is the type of client Mednow’s platform was designed to help live healthier lives.
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IBISWorld, Pharmacies & Drug Stores in
Canada , 2020; this figure represents the total amount spent on this industry inCanada in 2019 - https://www.forhims.com/; https://www.capsule.com/; https://alto.com/
- https://add.albertadoctors.org/issues/september-october-2018/sponsored-article-2/
- https://www.cbc.ca/news/canada/toronto/family-doctors-quitting-toronto-survey-shows-1
- https://healthydebate.ca/2023/03/topic/millions-adults-lack-canada-primary-care
- https://policyoptions.irpp.org/magazines/may-2023/canadian-healthcare-system-crisis-survey/.
- https://www.ctvnews.ca/health/less-than-half-of-canadians-are-satisfied-with-provincial-health-care-survey-1.6346995
- https://innovativemedicines.ca/wp-content/uploads/2022/11/2022CostDriversReporFINwithLinks.pdf
- CIHI National Health Expenditure, 2019
About Mednow
Mednow (TSXV: MNOW) (OTCQX: MDNWF) is a healthcare technology company offering virtual access with a high-standard of care. Designed with accessibility and quality of care in mind, Mednow provides virtual pharmacy and telemedicine services as well as doctor home visits through an interdisciplinary approach to healthcare that is focused on the patient experience. Mednow’s services include free at-home delivery of medications, doctor consultations, a user-friendly interface for easy upload, transfer, and refill of prescriptions, access to healthcare professionals through an intuitive chat experience and the specialized PillSmart™ system that packages prescriptions in easy to use daily dose packs, each labeled with the date and time of the next dose.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking Statements:
This news release contains certain statements and information that may constitute forward-looking information within the meaning of applicable Canadian securities laws. All statements in this news release, other than statements of historical facts, including without limitation, statements regarding the Company’s belief that it is ready to pursue large partnerships; that the Company will continue to have high customer retention; that the pharmacy industry is ready to change to a digital model; that
Forward looking information is typically identified by words such as: “believe”, “expect”, “anticipate”, “intend”, “estimate”, “postulate” and similar expressions, or are those, which, by their nature, refer to future events. The Company cautions investors that any forward-looking information provided by the Company is not a guarantee of future results or performance and that such forward-looking information is based upon a number of estimates and assumptions of management in light of management’s experience and perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances, as of the date of this news release including, without limitation, that the Company’s competitive advantages will continue to support high customer retention; that a change in the pharmacy industry to a digital model will benefit the Company as a result of the first mover advantage; that less than
Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and other factors include, among others: the risk that the Company will be unable to secure partnerships as anticipated; the risk that the Company’s customer retention declines; the risk that the Canadian competitive environment is not conducive to a virtual pharmacy model; the risk that the Company will not be able to effectively capitalize on a first mover advantage in the Canadian market; the risk that the Company is unable to adequately address the cost-containment strategies of payors and providers; the risk that an increase in market share would be accompanied by a reduction in average patient spend or that the effect on the Company’s profitability would be insignificant; the risk that the partnerships sought and developed by the Company will be surpassed by industry competitors; the risk that the Company’s platform will not have the effect of increasing access to healthcare in
The forward-looking statements contained in this news release are made as of the date of this news release. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
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Investors:
Lorraine Cardenas
1-855-686-6300
ir@mednow.ca
Source: Mednow Inc.