Dr. Alexander Dobranowski reports
MCI ONEHEALTH REPORTS FISCAL 2021 FINANCIAL RESULTS
MCI Onehealth Technologies Inc. has released its financial results for the three months and year ended Dec. 31, 2021.
"We are continuing to deliver on the strategy that we laid out for investors during our initial public offering," said Dr. Alexander Dobranowski, chief executive officer of MCI. "We are making excellent progress towards achieving our vision of empowering patients and doctors with advanced technologies to increase access to and improve the quality of health care while reducing health care costs. The early success of our first major acquisitions, Khure and Polyclinic, and the significant growth in MCI Corporate Health Solutions, with its rapidly expanding customer base, are key examples. Corporate health revenue is now 400 per cent of what it was in 2019. We've also taken great strides in the implementation of our data-driven, precision medicine road map, including the launch of MCI Connect and a number of key strategic investments and commercial partnerships."
A summary of MCI's financial and operational highlights for the quarter and year are set out below, and more detailed information is contained in the financial statements and related management discussion and analysis, which are available on MCI's SEDAR page. Financial measures described as adjusted in this news release are non-IFRS (international financial reporting standards) financial measures and may not be comparable with other similar measures disclosed by other companies.
Fiscal 2021 annual highlights
Significant financial and operational highlights for MCI during the year ended Dec. 31, 2021, included:
Revenue growth year on year:
Revenue for the year ended Dec. 31, 2021, increased 24 per cent over the same period in 2020, driven by the continuing recovery of publicly insured health services, continuing growth from corporate health services and revenue contributed by recently acquired businesses. Total revenue for 2021 was $47.8-million, compared with total revenue of $38.6-million in 2020. Revenue contributions from 2021 acquisitions of Khure and Polyclinic accounted for approximately 42 per cent of the growth, and their contributions are expected to continue to increase as the businesses continue to be integrated into MCI's operations and revenue synergy opportunities continue to develop.
Increased patient volumes:
Patient volumes grew approximately 12 per cent, year on year, excluding increases from acquired businesses in 2021, and 15 per cent if acquisitions are included. Patient volumes continued to improve despite continuing COVID-19 restrictions as patients and physicians become more comfortable with virtual channels and pent-up demand for health services continues to grow.
- Growth in corporate customers:
The company added 87 new corporate health customers in 2021, with the company now serving more than 500 corporate health customers. Notable corporate customers include Gerdau Ameristeel, Durham Region Police Services, Destination Toronto, Metrolinx, Canadian Broadcast Corporation, Intact Insurance, Coca Cola Ltd. and MHI Aerospace. The numerous protocols established around COVID-19 greatly increased the need for efficient and reliable testing processes, which MCI Corporate Health Solutions was able to facilitate and manage for a growing number of clients.
Acquisition of Polyclinic:
On July 30, 2021, MCI acquired an 80-per-cent interest in Polyclinic for total consideration of $7.1-million. Polyclinic comprises The Quit Clinic Inc., Executive Medical Concierge Canada Ltd. and Canadian Phase Onward Inc. Polyclinic provides on-site integrated health services, including primary care, specialist care, concierge medicine, lab services and an in-house clinical research organization. Executive Medical Concierge Canada, one of the acquired companies, experienced a record year in 2021, with year-over-year revenue growth in excess of 80 per cent.
Acquisition of Khure:
On April 26, 2021, MCI acquired 100 per cent of the outstanding common shares of Khure for aggregate consideration of up to $12.6-million. Khure's technology platform harnesses clinical data, enabling physicians to rapidly screen and identify patients with rare diseases and facilitate more personalized treatment. Khure experienced a record year in 2021, with year-over-year revenue growth in excess of 70 per cent. Khure has successfully secured strategic partnership agreements with two of the top four electronic medical record companies in English-speaking Canada, has deployed AI-enabled (artificial intelligence) algorithms to screen more than 80 rare diseases and has completed more than five million patient screenings.
Strategic investments and commercial partnerships:
MCI completed a number of strategic investments throughout 2021 with existing and potential future commercial partners, including: Regen Scientific Inc., a personalized, preventative, and regenerative health provider in Canada; Ariel Precision Medicine Inc., the business of which focuses on precision diagnosis and targeted therapeutics; Acorn Biolabs Inc., a health care technology company with a focus on regenerative medicine, which offers a non-invasive live cell collection, analysis and cryopreservation service; and ORO Health Inc., a dermatologically focused, specialized telemedicine and virtual health care provider, and the developer of the DermaGo platform.
- Financing and liquidity:
On Jan. 6, 2021, the company completed its initial public offering, raising net proceeds of $27.6-million. Following a series of significant acquisitions and investments, and a year of expenses relating to the company's transformation into a public company, cash remained at $7.1-million at the end of 2021, compared with $900,000 at the end of 2020.
- Telehealth and virtual care:
On Feb. 17, 2021, the company announced the launch of MCI Connect, its first-of-its-kind telemedicine service in Ontario, offering patients Ontario Health Insurance Plan covered appointments through an intuitive and easy-to-use platform. The company set a record year for telehealth sessions in 2021, with nearly 300,000 patients accessing MCI's high performance health care network via telephone consults and MCI Connect, up from 200,000 in 2020.
Net losses for the year were $15.5-million, as compared with net losses of $1.0-million in the previous year, heavily driven by investments in resources supporting data-driven technology efforts and reflecting increased expenses relating to expansion of personnel, share-based compensation and transaction-related expenses as the company continues to focus on rapid growth and expansion.
- Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization):
Adjusted EBITDA (1) for the year was negative $4.6-million, as compared with an adjusted EBITDA of positive $2.3-million in the previous year.
Fourth quarter 2021 highlights
Significant financial and operational highlights for MCI during the fourth quarter of 2021 included:
- Revenue growth year on year:
Revenue for the fourth quarter of 2021 increased 27 per cent over the same period in 2020, driven by the continuing recovery of publicly insured health services, continuing growth from corporate health services and revenue contributed by recently acquired businesses. Total revenue for the three months ended Dec. 31, 2021, was $13.9-million, compared with total revenue of $11.0-million in the comparable period in 2020.
- Data-driven initiatives:
The company has entered into a three-year agreement with a global leader in data science and security to enable a data backbone that will facilitate access to the health information over which the company has custody, including its fast-growing database of more than 2.5 million health records, and provide the foundation for the company's smart referral system to dramatically shorten the time between primary care visits and specialist referral visits for patients. The partnership will significantly accelerate MCI's data strategy in disease screening, novel referral optimization, and other custom data and precision medicine initiatives.
In the fourth quarter of 2021, Khure reached its first earnout milestone related to its acquisition by the company, while having a record year for revenue.
- Growth in corporate customers:
The company added 31 new corporate health customers in the three months ended Dec. 31, 2021, and began offering corporate health services through its five Calgary clinics.
- Net losses:
Net losses for the quarter were $4.8-million, as compared with net losses of $2.1-million for the same quarter in the previous year.
- Adjusted EBITDA:
Adjusted EBITDA (1) for the quarter was negative $1.5-million, as compared with an adjusted EBITDA of negative $1.8-million in the same period last year.
MCI expects to accelerate total company revenue growth in fiscal 2022 as it executes its strategic plan on multiple fronts, including:
- Organic growth of government insured health services from its omnichannel network of clinics, telehealth, the MCI Connect virtual platform and a substantial increase in its physician base from new physician recruiting efforts;
Continued organic growth in health services provided to corporate customers, as the company expands its customer base, increases the number of available service offerings, and ramps up its efforts to service national and Calgary-based customers;
New technology partnerships and strategic acquisitions to accelerate its technology road map;
Technology revenue is expected to increase, without the need for any material additional investment. The company has more than 15 clinical trial and screening engagements with global pharma companies actively under way, as the company continues momentum targeting the $300-billion North America data and analytics market segment opportunity, with its AI-enabled SaaS (software-as-a-service) platform that provides advanced analytics to third parties. Concrete opportunities are being explored with top pharmaceutical companies, pharmaceutical marketing companies, precision medicine companies and top-tier university centres;
The company is further scaling development of its data analytics platform, BrightOS, which is expected to become broadly available to the company's physicians as a tool to aid in their daily operations as well to external customers later in 2022. Versions of MCI Connect for mobile phones and connected wearables, such as Apple iWatch, are expected to launch in early 2022;
Acquisitions of specialty clinics to expand the company's health service offerings and enter new markets by leveraging technology to deliver more services to its large and growing patient and physician base;
Exploration of commercial relationships that leverage expressed interest in Khure's AI-driven clinical evidence around rare diseases to accelerate patient recruitment for clinical trials, accelerate patient access to treatment, support regulatory decision making through the application of real-world evidence and set the foundations for new AI technologies, and the launch of Khure's cloud-based version.
Conference call details
MCI will hold a conference call to discuss progress on its key strategic initiatives and financial results for fiscal 2021 on March 31, 2022, at 5 p.m. ET. Participants are encouraged to access the call at least 10 minutes prior to start.
Date: Thursday, March 31, 2022
Time: 5 p.m. ET
Duration: 60 minutes
Dial-in number for Canada and the United States: 833-540-1153 (toll-free)
International dial-in number: 918-922-6528
Conference call ID No.: 5633887
Webcast: A webcast will be available.
(1) A non-IFRS financial measure.
About MCI Onehealth Technologies Inc.
MCI is a health care technology company focused on empowering patients and doctors with advanced technologies to increase access, improve quality and reduce health care costs. As part of the health care community for over 30 years, MCI operates one of Canada's leading primary care networks with 25 clinics, serves over one million patients annually and had nearly 300,000 telehealth visits last year. MCI additionally offers an expanding suite of occupational health service offerings that support a growing list of over 550 corporate customers. Led by a proven management team of doctors and experienced executives, MCI is executing a strategy centreed on acquiring technology and health services that complement MCI's current road map.
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