Adds $16.6 million in revenue and increases CloudMD’s current annualized run-rate to over $60 million
- Rxi’s pharmaceutical logistic services include drug distribution, patient navigation assistance, a preferred network of over 500 pharmacies and real-time universal disease management software.
- Rxi oversees several national and provincial patient support programs and provides administrative and drug benefit management services to a large third-party benefits provider.
- Proprietary Customer Relationship Management (CRM) technology that is sector agnostic and that can be white-labelled.
- CloudMD’s acquisition of Rxi supports two key objectives: 1) Enhances specialty health services to patients, providers, payers and manufacturers and 2) expands both the suite of offering for enterprise clients and the potential to cross sell existing services to new enterprise clients.
VANCOUVER, British Columbia, Jan. 26, 2021 (GLOBE NEWSWIRE) -- CloudMD Software & Services Inc. (TSXV: DOC, OTCQB: DOCRF, Frankfurt: 6PH) (the “ Company ” or “ CloudMD ”), a telehealth company revolutionizing the delivery of healthcare to patients, is excited to announce that it has signed a binding term sheet (“ Term Sheet ”) to acquire Rx Infinity Inc., Rxi Pharmacy Inc., and Rxi Health Solutions Inc., (collectively “Rxi ”), enhancing its specialty health services to patients, providers, payers and manufacturers 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. Historically, patient support programs have been geared towards improving product access and outcomes rather than holistic disease management and linkage to care and clinical interventions that ensure proper medication adherence and better overall health outcomes. 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, specializing in Oncology, Infectious Diseases and Inflammatory Bowel Disease (IBD). 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 also licensed as a National Wholesaler (GMP certified) , approved by Health Canada.
Speciality drugs are defined as high-cost prescription medications used to treat complex, chronic conditions. In Canada, less than 1% of claimants accounted for 30% of total eligible costs in 2019 and specialty drugs are forecast to account for almost 46% of the average monthly certificate cost by 2025 (1) . Often times these drugs are very costly, difficult to access and challenging to navigate for patients, physicians, and pharmaceutical companies, leading to suboptimal outcomes across all therapeutic areas. Rxi’s platform focuses on user experience and personalizes patients' complete healthcare journeys.
The acquisition of Rxi will be synergistic across CloudMD’s platform of healthcare technology solutions and will be integrated with its electronic medical records (“ EMR ”) software, educational resources, healthcare navigation and enterprise health services. The addition of Rxi will expand CloudMD’s pharmacy offering and distribution and fulfillment channel across Canada. CloudMD will have access to Rxi’s network of 500 independent pharmacies to provide better, more localized, access to care.
Rxi was founded by CEO, Christian Marcoux, who has over 20 years’ experience within the specialty drug industry and has effectively launched and managed dozens of national patient support programs across Canada in various therapeutic areas. Previous to starting Rxi, Christian spent almost 13 years at Shoppers Drug Mart as part of the senior management team leading the Speciality Health Network.
Rxi's annualized revenue for calendar year 2020 is approximately $16.6 million with earnings before interest, taxes, depreciation and amortization (“ EBITDA ”) of approximately $600,000 (2) . 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.
Dr. Essam Hamza, CEO of CloudMD commented, “ The acquisition of Rxi is transformational for CloudMD and aligns with our vision and focus of providing holistic, patient focused care. It will be immediately accretive to our top line while adding new revenue streams and driving value and growth across many verticals of our business. Their revolutionary disease management software can be integrated into many of our healthtech solutions including our EMR platforms, IMD’s patient education platform, enterprise health services and pharmacy and clinic networks. It also provides a comprehensive platform to better care for complex and chronic care patients and gives us the ability to distribute and fulfill prescription drugs nationally. We welcome Christian and his team to the CloudMD family and look forward to working with them to continue unlocking value.”
Christian Marcoux, Chief Executive Officer of Rxi commented, “ CloudMD’s acquisition of Rxi represents a transformational shift in the evolution and delivery of highly specialized patient support programs. Rxi will be able to optimize and cross-sell into CloudMD’s current client network by offering manufacturers and payers more comprehensive solutions and real-time visibility into the patient journey, something that has been lacking in our industry for well over a decade. CloudMD’s telemedicine expertise combined with Rxi’s universal disease management experience and customizable software will significantly improve communication and transparency across multi-disciplinary stakeholder groups; thus, enabling quicker access to treatments and improved clinical treatment outcomes.”
Terms of Acquisition
In consideration for the purchase of 100% of the outstanding securities of Rxi, CloudMD has agreed to pay 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. All common shares issued pursuant to the acquisition will be issued at a deemed price of $2.39 per common share and are priced by calculating the 10-day volume-weighted average trading price of the Company's common shares for the 10 trading days prior to the execution of the binding term sheet. The common shares will be subject to certain contractual restrictions on trading for a period of 20 months from the date of issuance.
The acquisition is subject to customary closing conditions, including the execution of a definitive acquisition agreement and receipt of TSX Venture Exchange approval.
(2) Annualized revenue figures are calculated based on annualizing the available results for the 11-month period ending Nov. 30, 2020.
About CloudMD Software & Services
CloudMD is digitizing the delivery of healthcare by providing a patient centric approach, with an emphasis on continuity of care. The Company offers SAAS based health technology solutions to healthcare providers across North America and has developed proprietary technology that 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 500 clinics, almost 4000 licensed practitioners and 8 million patient charts across North America. For more information visit: investors.cloudmd.ca
Rxi is a Canadian based specialty drug wholesaler, pharmacy and technology/patient support program administrator. The company develops customized programs for a variety of clients that offer end-to-end solutions to optimize holistic disease management and clinical treatment outcomes for patients requiring complex and expensive pharmaceutical treatments. For more information visit: www.rxinfinity.ca
ON BEHALF OF THE BOARD OF DIRECTORS
“Dr. Essam Hamza, MD"
Chief Executive Officer
FOR ADDITIONAL INFORMATION CONTACT:
VP, Investor Relations
Forward Looking Statements
This news release contains forward-looking statements, including statements regarding projected revenue, completion of the Rxi acquisition, future business synergies and cost savings. Such forward-looking statements are based on CloudMD’s expectations, estimates and projections regarding its business and the economic environment in which it operates, including the expectations regarding closing of the Rxi acquisition and the ability of the Company to carry out 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.