HealthBeacon PLC HealthBeacon - HBCN - 2022 Preliminary Results
31/03/2023 07:00
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RNS Number : 8588U HealthBeacon PLC 31 March 2023
HealthBeacon plc
Preliminary Statement of Results for the year ended 31 December 2022
HealthBeacon grows deployments, builds out sales and operations infrastructure
Dublin, 31 March 2023: HealthBeacon plc ("HealthBeacon" or "the Company"), a
leader in devices and software to manage critical and chronic medications
together with its subsidiary undertakings (together the "Group") announces its
full year results for the year ended 31 December 2022.
2022 HIGHLIGHTS
Financial
· Technology deployments of 14,756 (13,224 Units +30% v 2021
(10,187); 1,532 patients on the Patient Safety Hub).
· Revenue growth of 2% to €2.25 million (2021: €2.21 million).
· Gross profit margin excluding Direct-to-Consumer ("DTC") of 41%
(2021: 65%) due to increased supply chain costs in 2022, expected to reverse
in 2023.
· Net cash position at 31 December 2022 of €12.16 million (2021:
€26.61 million), sufficient capacity to fund growth over the coming
quarters.
· Outlook for significant revenue growth in the near term with the
launch of speciality pharmacy distribution in Q2 2023 gaining momentum by
quarter into Q1 2024.
Year ended 31 December 2022 2021 Growth
€'000 €'000 %
Revenue 2,250 2,214 2%
Gross Profit 153 301 (49%)
Gross Profit Margin (Group) 7% 14%
Gross Profit Margin (ex. DTC sell-in) 41% 65%
Adjusted EBITDA* (10,345) (5,225)
Net cash 12,168 26,613
Technology Deployments** 14,756 10,187 45%
*Adjusted EBITDA is a non-accounting term which the Company has defined as:
Excluding Share Based Compensation, Expected Credit Losses, Fx Gains/Losses,
Warranty Expenses and non-recurring IPO Costs
**Technology Deployments reflect total patients served by HealthBeacon
technology including units and patients on the Patient Safety Hub (PSH).
Operational and Strategic Highlights
· Continued expansion of client base to 30 currently, from 23 in
2022 and 18 in 2021.
· Increased Speciality Pharmacy customer base with 2 contracted
and a further three at contracting stage.
o These five specialty pharmacy organisations represent more than 60% of the
specialty pharmacy sector a $191 Billion market of which approximately $40
Billion is injectables with a patient population of over 9 million and a
forecasted 8% CAGR to 2028 in this market space. This will be a key growth
engine for HealthBeacon in 2023 and into 2024.
· Considerable progress on Direct Reimbursement (RTM) channel
developed in US.
o Medicare directly reimburses remote therapeutic monitoring devices with a
focus on respiratory and rheumatology conditions.
o One large clinic group signed to date and contracting with 3 more groups.
These four groups represent approximately 600 prescribers.
· The Company successfully developed new products in 2022 in
partnership with clients:
o The Patient Safety Hub, a new proprietary software platform to help cancer
patients take the medication more safely was developed and launched
delivering revenue of €0.35M in 2022 and an exit ARR of €0.8M with 13
active customers across multiple countries supporting one drug.
o The HB Wave, the Company's Pill Management Solution was showcased at the
HB Vision Events in Ireland and the US in late 2022. There is already one
contracted customer for this product and it is expected to launch in Q1 2024.
· 2022 saw the global chip shortage and global energy crisis saw an
impact on lead times, transport and component costs which had an impact on
gross margin. The company expects to hit the anticipated run rate margin in
excess of 60% with the launch of specialty pharmacy volumes in 2023.
Outlook
HealthBeacon's focus on the specialty pharmacy and RTM markets combined with a
continued focus on value adding innovation sees it well placed to deliver its
growth aspirations in 2023 and into 2024.
· The Specialty Pharmacy channel launch in Q2 with Accredo of 2023
with further launches into Q3, Q4 as well as the first quarter of next year.
This will be complemented by the development and growth of other channels such
as Direct Reimbursement (RTM).
· Group 2023 exit ARR of mid-teens with Q1 2024 ARR exit rate of
€25M and 100,000 deployments by end of Q2 2024.
· The patient safety hub continues to grow with 13 existing clients
on one drug. An additional drug is being added to the platform in H2 2023
which is expected to result in 2023 exit ARR of at least €1.0M.
· Supply chain cost increases experienced in 2022 have subsided
with gross margin expected to improve through 2023.
· With the IPO proceeds and its commercial relationships, the
Company has sufficient funding in place to deliver on the significant growth
opportunity ahead.
Jim Joyce, HealthBeacon plc Chief Executive Officer said:
"The evolution of Speciality Pharmacy as the influential route to market for
injectable medicines has presented a clearly realisable opportunity for Health
Beacon in the US. We have signed two major Speciality Pharmacy clients
including Accredo, with a further 3 currently at contracting stage. We will be
launching the ICMS system with our initial client in Q2 and will follow with
subsequent client rollouts through to Q1 2024.
"We have confronted several challenges in building out our delivery
infrastructure in the US. However, I'm pleased to report that we will soon be
in a position to deploy our highly effective medical adherence tool at scale
to exploit the Speciality Pharmacy opportunity we have worked so hard to
engineer. Following a challenging 2022, my colleagues and I look forward with
confidence to the next 12 months."
Analyst presentation
A presentation for investors and analysts will be held by conference call at
10:00am, today, 31 March 2022. To register for the call please e-mail
investor.relations@healthbeacon.com
Enquiries:
HealthBeacon: Investor.Relations@HealthBeacon (mailto:Investor.Relations@HealthBeacon) .com
Jim Joyce
Lar Malone
Goodbody (Euronext Growth Adviser and Broker): +353 (1) 667 0420
David Kearney
Stephen Kane
Drury (Public Relations):
Billy Murphy +353 (0) 87 231 3085
Cathal Barry +353 (0) 87 227 9281
About HealthBeacon
Headquartered in Dublin, HealthBeacon is an Irish digital therapeutics company
that develops products for managing injectable medications for patients in the
home. The Company operates in 17 countries primarily across Europe, North
America and the United Kingdom employs more than 60 people and has obtained
more than 30 design and utility patents. HealthBeacon's mission is to become
the world's leading digital therapeutics platform for injectable medications.
Cautionary statement
This announcement contains certain projections and other forward-looking
statements with respect to the financial condition, results of operations,
businesses and prospects of HealthBeacon plc. These statements are based on
current expectations and involve risk and uncertainty because they relate to
events and depend upon circumstances that may or may not occur in the future.
There are a number of factors which could cause actual results or developments
to differ materially from those expressed or implied by these projections and
forward-looking statements. Any of the assumptions underlying these
projections and forward-looking statements could prove inaccurate or incorrect
and therefore any results contemplated in the projections and forward-looking
statements may not actually be achieved. Recipients are cautioned not to place
undue reliance on any projections and forward-looking statements contained
herein. Except as required by law or by any appropriate regulatory authority,
HealthBeacon plc undertakes no obligation to update or revise (publicly or
otherwise) any projection or forward-looking statement, whether as a result of
new information, future events or other circumstances.
Overview
2022 saw HealthBeacon further build the base for growth through the
establishment of the Orlando operations to support the roll out of the ICMS
into Specialty Pharmacy and RTM markets. HealthBeacon continued to build its
customer base and increased the number of specialty pharmacy customers it is
engaging with, two have signed contracts and a further three are at the
contracting stage. These five Specialty Pharmacy organisations represent just
over 60% of the total Specialty pharmacy market of $191 billion. In addition
the Company focused on developing other channels such as the Direct
Reimbursement (RTM) market culminating in the signing of one clinic group in
Q1 2023 with a further three at contracting stage representing a combined 600
prescribers across the US.
The Company delivered further new product innovations and launches with the
Patient Safety Hub (€0.35M Revenue in 2022; 2022 exit ARR of €0.8M) and
the HB Wave (Pill Management Solution).
Technology deployments increased to 14,756 +45% 13,224 Units +30% v 2021
(10,187); 1,532 patients on the Patient Safety Hub). The Company shipped its
first units to Japan as part of the roll out with Takeda in the Japanese
market. The Patient Safety Hub launched in 2022 delivering revenues of
€0.35M across 13 customers including Teva, Viatris and Clonmel Healthcare.
The company listed on the OTC market in August 2022 in order to provide access
to US investors to invest in the HealthBeacon stock. This provides another
investment platform to increase liquidity in the stock.
Supply Chain costs and lead times saw significant increases in 2022 and had a
negative impact on margins in the year, which are expected to reverse through
2023.
Financial Review
Revenue for 2023 was €2.25M +2% v 2021. Total technology deployments were
14,756 [units 13,224; 1,532 patients using the Patient Safety Hub]. The
Revenue comprised of €1.29 million from Patient Support Programmes ("PSP")
and €0.96M from Direct to Consumer ("DTC"). The Patient Safety Hub was
launched in 2022 delivering revenues of €0.35M.
PSP price per unit is in line with management expectations. The launch and
subsequent roll out of the ICMS into Specialty Pharmacy from Q2 2023 gaining
momentum into Q1 2024 is expected to deliver a better than anticipated PSP
price per unit.
Reported Gross Margin for the company was 7% (2021 14%). The Gross Profit
Margin excluding the DTC channel was 41% (2021 65%). The DTC channel has been
slower than anticipated to deliver on the subscription-based margin share
model. The Company expects margins to hit the anticipated run rate margin in
excess of 60% with the launch of specialty pharmacy volumes in 2023 coupled
with the full year impact and growth of the Patient Safety Hub.
The Company recorded a loss from operating activities of €13.2M (2021: loss
of €7.3M). Average headcount increased to 67 employees (2021: 47 employees.
Most of the increased headcount was in the US with the build out and scaling
of the company operations in Orlando across two locations. The Company
recorded a Share Based expense of €1.58M (2021: €0.23M). Opex of €3.0M
on payroll and infrastructure in 2022 in building the commercial and delivery
infrastructure in Orlando.
The Company has a net finance expense of €0.15M (2021: €0.91M) the main
component of which was a financing charge from a supplier on unit build and
also negative interest on deposits of IPO funds raised. The significant
reduction relates to the conversion of the convertible loan note in December
2021 resulting in of €0.9M of related interest expense in 2021 falling to
zero.
The Company had a net cash position of €12.16 million at 31 December 2022
(2021: €26.61 million). The reduction in cash is attributable to Opex as
part of establishing the Orlando base, investment in new product development
and the commencement of delivery of the 35k order in October 2022.
Current trading and outlook
HealthBeacon has built the technology, operations and commercial
infrastructure to deliver the ramp up of deployments in the US Specialty
Pharmacy market from Q2 2023 into Q1 2024. This will see the company
significantly grow deployments and deliver a 2023 exit ARR of mid teen €M.
Coupled with the ramp up of volumes in the US market the Patient Safety Hub
continues to grow and the addition of a further drug to the platform in H2
2023 will see 2023 Exit ARR grow to at least €1.0M.
Principal Risks and Uncertainties
The Company has a risk management structure in place, which is designed to
identify, manage and mitigate business risk. Risk assessment and evaluation is
an essential part of the Company's internal control system. It is designed to
enable the Company to meet its business objectives by appropriately managing,
rather than eliminating, these risks.
Strategic, Operational and Financial Risks
Global Macro-Environment: The Company's business is influenced by economic
conditions in Ireland, North America, European and by global economic
conditions. Levels of healthcare spending and spending on pharmaceutical
products and medical devices have been and could be adversely affected by
decreases in people holding health insurance policies, disposable income
decreases, tax increases, unemployment increases, or the spending patterns of
customers changing to reflecting increased uncertainty or apprehension
regarding economic conditions or cessation of reimbursement schemes. Any of
these factors could have an adverse effect on the Company's ability to deliver
results.
Partnerships: The success of our business depends on achieving our strategic
objectives, including through entering into strategic partnerships with
pharmaceutical, specialty pharmacy and retail partners where we may have a
lesser degree of control over the business operations, which may expose us to
additional operational, financial, legal or compliance risks.
Product Adoption: There is early-stage uncertainty around the rate or level of
patient and medical professional adoption of the Company's Injection Care
Management System and the reliance on reimbursement schemes remains a primary
risk in achieving the Company's strategy. The Company's strategy depends on
the continued growth of the remote healthcare market in the United States,
Europe, and elsewhere. These trends which are unrelated to the performance of
the Company may have a material adverse effect on the performance of the
Company itself.
Intellectual Property: Our intellectual property portfolio may not prevent
competitors from independently developing products and services similar to or
duplicative to ours, and the value of our intellectual property may be
negatively impacted by external dependencies. If we are not able to protect
our intellectual property, the value of our brand and other intangible assets
may be diminished, and our business may be adversely affected. The Company
invests in R&D in order to protect and expand its current IP suite and
offer new solutions to patients for managing their medications, there is no
guarantee that R&D investment may result in new product development or
protect the Company against technological changes
Supply Chain: Significant material shortages, supplier capacity constraints,
supplier production disruptions, supplier quality and sourcing issues or price
increases could increase our operating costs and adversely impact the
competitive positions of our products. Our reliance on third-party suppliers,
contract manufacturers and service providers, and third parties to secure
materials, parts and components used in our products exposes us to volatility
in the prices and availability of these materials, parts, components and
services. A disruption to these providers could have an adverse effect on our
ability to meet our commitments to customers or increase our operating costs.
Quality, capability and sourcing issues experienced by third-party providers
can also adversely affect our costs, margin rates and the quality and
effectiveness of our products and services and result in liability and
reputational harm.
Growth Management: With continuous execution on growth initiatives, strategies
and operating plans, the Company anticipates expansion of its service
offerings to new therapeutic areas as well as future expansion into select
international markets. Any failures to effectively execute on growth
initiatives, business strategies, or operating plans will adversely affect the
Company's operations. If the Company is unable to attract new clients or
expand members with existing clients, revenue growth may take longer than
expected. Any inability to offer high-quality member support to patients could
also adversely affect the Company's relationships with future and prospective
payers, members, and subsequently adversely impact the Company's future
operations and financial condition.
Licenses & Regulatory: The Company is dependent to a significant degree
on certain licences and regulatory approvals to conduct its business. The
Company is also subject to domestic, European and foreign laws and regulations
including but not limited to with respect to healthcare, consumer protection,
privacy and data protection, employment, accounting, customs, tax, antitrust
and competition matters. A failure to obtain, maintain, or comply with the
terms of such licences, applicable laws and regulations could have an adverse
impact on the Company.
Treasury & Foreign Currency: The Company is exposed to liquidity, interest
rate and credit risks. The Company's reporting currency is Euro. Exposure to
foreign currency is present in the normal course of business, together with
the Company operating in jurisdictions outside of the Eurozone.
For the financial year ended 31 December 2022
31-Dec 31-Dec
2022 2021
€'000 €'000
Income
Lease Revenue 417 572
Revenue from Contracts with Customers 1,833 1,642
Total Revenues 2,250 2,214
Cost of Sales (2,096) (1,938)
Gross Profit 154 301
Operating Income / (Expenses)
Impairment of Property and Equipment - (0)
Impairment losses on Financial Assets 7 (44)
Other Operating Expenses (13,496) (7,769)
Other Operating Income 163 214
Loss from Operating Activities (13,172) (7,298)
Finance Costs
Finance Income - -
Finance Expense (150) (911)
Net Finance Costs (150) (911)
Loss before Taxation (13,322) (8,209)
Tax Expense - -
Loss from Continuing Operations (13,322) (8,209)
Total Comprehensive (Loss) for the year (13,322) (8,209)
All amounts are attributable to the owners of the parent
Basic Earnings per Ordinary Share (0.79) (0.79)
Diluted Earnings per Ordinary Share (0.79) (0.79)
Consolidated Statement of Financial Position
As at 31 December 2022
31-Dec 31-Dec
2022 2021
€'000 €'000
Non-Current Assets
Intangible Assets 3,299 2,651
Property & Equipment 4,136 1,203
7,435 3,854
Current Assets
Inventories 2,038 127
Trade and Other Receivables 3,283 2,348
Cash and Cash Equivalents 12,168 26,613
17,488 29,088
Total Assets 24,923 32,942
Equity
Share Capital 42 42
Share Premium 29,926 29,926
Other Reserves 1,788 231
Accumulated Deficit (14,256) (934)
Total Equity 17,501 29,265
Non-Current Liabilities
Trade and Other Payables 485 112
485 112
Current Liabilities
Trade and Other Payables 6,937 3,565
6,937 3,565
Total Liabilities 7,422 3,677
Total Equity and Liabilities 24,923 32,942
Consolidated Statement of Changes in Equity
For the financial year ended 31 December 2022
Share Other Share Accumulated Total
Capital Reserves Premium Deficit Equity
€'000 €'000 €'000 €'000 €'000
As at 1 January 2021 6 0 18,072 (11,006) 7,072
Loss for the financial year - - - (8,209) (8,209)
Long term incentive plan - 231 - - 231
Share re-organisation 19 (18,300) 18,281 -
Share Issuances 17 30,154 30,171
As at 31 December 2021 42 231 29,926 (934) 29,265
As at 1 January 2022 42 - 29,926 (934) 29,265
Loss for the financial year - - - (13.322) (8,209)
Long term incentive plan - 1,557 - - 231
As at 31 December 2022 42 1,788 29,926 (14,256) 17,501
Consolidated Statement of Cash Flows
For the financial year ended 31 December 2022
31-Dec 31-Dec
2022 2021
€ €
Loss Before Tax (13,322) (8,209)
Adjustments for:
Depreciation of Property & Equipment 602 487
Amortisation of Intangible Assets 621 499
Impairment of Property & Equipment - -
Credit Impairment Charge (7) 44
Interest Expense 188 894
Share Based Payments 1,557 231
Warranty Expense 16 26
Foreign exchange loss / (gain) (45) 16
(10,390) (6,012)
(Increase) / Decrease in Receivables (928) (1,927)
(Increase) in Inventory (1,910) (114)
Increase in Payables 3,611 2,071
Net Cash used in Operating Activities (9,616) (5,982)
Investing Activities
Additions to Property and Equipment (3,532) (192)
Additions to Intangible Assets (1,269) (577)
Net Cash used in Investing Activities (4,620) (769)
Financing Activities
Proceeds from the issuance of share capital - 28,849
Options exercised 0 440
Lease liability payments (207) (160)
Net Cash generated from Financing Activities (207) 29,129
Net increase in cash and cash equivalents (14,444) 22,378
Cash and cash equivalents at the beginning of the period 26,613 4,235
Cash and cash equivalents at the end of the period 12,168 26,613
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