The US healthcare system is broken. That’s not even a point of contention. The math isn’t adding up, and the cost of basic care services is a big reason for the failure. Many strategies have been proposed to solve this problem, mostly through government policy shifts. But the private sector may be the answer after all.
To wit: several companies are working to use technology to generate innovative jumps inefficiency to weed out superfluous elements and deliver greater impact to competitive frameworks as a means of driving down costs.
That forms the context for the present analysis, as we look at several stocks geared up to contribute to the answer, including Goodrx Holdings Inc (NASDAQ: GDRX), Progressive Care Inc: (OTCQB: RXMD), and Allscripts Healthcare Solutions Inc (NASDAQ: MDRX).
Goodrx Holdings Inc.: (NASDAQ: GDRX) bills itself as a prescription drug price comparison platform using data from local and mail-order pharmacies in the United States. It also provides pharmacy coupons to customers.
The company offers generic and brand name pricing; alerts clients on manufacturer co-pay cards, pharmacy discounts, and state discount programs; and provides tips on slashing drug prices. It provides prices of drugs in just about every major area of pharmaceutical need.
Goodrx Holdings Inc (NASDAQ: GDRX) priced a 34.6M share IPO at $33/share well above the $24-28 expected range last week. That values the company at ~$13.2B, nearly 18x forward sales or 15x FY21 sales estimates. The stock has climbed substantially since that point.
This deal priced at an already very rich multiple. However, GDRX has a rare combination of high growth (57% revenue CAGR since 2016) and healthy EBITDA margins (~40%). Revenue grew 56% to $388M in 2019. Revenue was up 63% in Q1 and growth slowed to 35% to $123M in Q2 as the pandemic limited healthcare utilization. The company reported $140M in operating income last year — a 36% margin, but it plans to invest in growth going forward, which will weigh on profitability.
GoodRx allows people to find lower prices for prescription drugs. In exchange, GoodRX receives fees from its partners, mostly Pharmacy Benefit Managers (PBMs), when a consumer files a prescription (getting a discount) using GoodRx. 91% of revenue came from those fees in 1H21. The other portion of its business comes from selling a subscription business for even better deals on prescription drugs (direct to consumer and through in a partnership with Kroger’s pharmacies), partnering with biopharma for its branded drugs, and a telehealth business it acquired last year (HeyDoctor). Revenue from the 9% mix of other businesses grew 230% in Q1 and 139% to $13.7M in Q2.
GoodRx is a possible solution for the broken healthcare system in the US. It is the most downloaded healthcare app in the US right now and has 5 million monthly active users. The revenue multiple is already very rich, but the company can point to a massive $800 billion total addressable market given its broad targeting thesis.
Goodrx Holdings Inc (NASDAQ: GDRX) managed to rope in revenues totaling $123.3M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top-line growth of 34.7%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($126.6M against $60M).
Progressive Care Inc (OTCQB: RXMD) is “a personalized healthcare services and technology company”. Growth has been strong over the past year, and the company has moved aggressively and effectively into the telehealth business with a recent key acquisition (CallingDr.com) through its deal for MyApps.
The company is also a recent upstart in the healthcare data analytics space, with the establishment of its ClearMetRx subsidiary, with has begun servicing a growing list of clients and working to expand the company’s booming 340B admin business segment. In addition, it compares favorably in many core aspects to GDRX, but sits a tiny fraction of the recent IPO in terms of valuation. But that flashy IPO process could help to cast RXMD into the spotlight given its recent moves.
Progressive Care Inc (OTCQB: RXMD) just announced its new partnership with DeliverSTAT, a provider of an all-in-one pharmacy delivery logistics solution. Progressive Care will continue to make deliveries through its in-house team of drivers, but the DeliverSTAT platform will provide best-in-class integrated functionality to streamline costs, expand margins, and widen Progressive Care’s industry edge in pharmacy delivery customer satisfaction.
“The new platform will allow PharmcoRx to compete with pharmacy delivery apps such as Capsule, PillPack, and ZipDrug in terms of functionality and technology,” commented Alan Jay Weisberg, interim Chief Executive Officer and Chairman of the Board at Progressive Care. “The platform connects directly with physicians to help manage the prescription delivery process from end to end, reducing overhead, simplifying operations, and improving both patient and physician satisfaction.”
While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action RXMD shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -9% on above-average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities. That said, the stock is still up over 50% since March, suggesting the recent pullback could be of interest, especially given the recent fanfare around GDRX.
Progressive Care Inc (OTCQB: RXMD) pulled in sales of $9.2M in its last reported quarterly financials, representing top line growth of 31.8%. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($2.1M against $9.2M, respectively).
Allscripts Healthcare Solutions Inc (NASDAQ: MDRX) provides information technology solutions and services to healthcare organizations in the United States, Canada, and internationally. The company also just announced a new deal with MSFT that we will cover below.
MDRX offers electronic health records (EHR), connectivity, private cloud hosting, outsourcing, analytics, patient engagement, clinical decision support, and population health management solutions. The company operates in two segments, Clinical and Financial Solutions and Population Health.
Allscripts Healthcare Solutions Inc (NASDAQ: MDRX) recently announced that its ambulatory business has seen increasing momentum with 18 new physician practices selecting it this year for ambulatory and population health solutions to help provide safer patient care, streamline operations and improve revenue for their organizations.
According to the release, Family Medical Associates of Raleigh selected Allscripts® Practice Management, Allscripts Professional EHR™, Allscripts Payerpath and personal health record Allscripts FollowMyHealth® to manage its revenue cycle effectively and help provide high-quality care to its patients. Family Medical Associates of Raleigh provides family medicine to patients of all ages. It has been a Patient-Centered Medical Home (PCMH) since 2010, providing comprehensive and continuous medical care with the goal of improving the health of all patients.
And the stock has been acting well over recent days, up something like 2% in that time. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -10%.
Allscripts Healthcare Solutions Inc (NASDAQ: MDRX) pulled in sales of $406.2M in its last reported quarterly financials, representing top line growth of -8.6%. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($205.2M against $1.1B, respectively).
Contact:
Steve Sandifer
Tel: 214-435-3758
