Dr. Alexander Dobranowski reports
MCI ONEHEALTH THIRD QUARTER FINANCIAL RESULTS
MCI Onehealth Technologies Inc. has released its financial results for the three- and nine-month periods ended Sept. 30, 2022.
"Despite our soft third quarter, which is typical for the business and is usually followed by significant patient services gains in the fourth quarter, we have nonetheless made significant gains in key elements of the business, including achieving a record number of physicians in our roster and a strong increase in per patient revenue," said Dr. Alexander Dobranowski, chief executive officer of MCI Onehealth. "The increase in per patient revenue is a direct result of the technology and data-driven initiatives we've made to optimize patient care pathways by improving access to specialists and the use of data to flag potential gaps in diagnostic and preventative care that still linger from the pandemic backlog. Our successes in using data are attracting additional international customers for our data insights as a service, with our pipeline growing to $6.5-million this quarter and momentum expected to continue into our fourth quarter."
A summary of MCI Onehealth's financial and operational highlights for the quarter is set out herein, and more detailed information is contained in the financial statements and related management's discussion and analysis, which are available on MCI Onehealth's SEDAR page. Financial measures described as adjusted in this news release are non-international financial reporting standard measures and may not be comparable with other similar measures disclosed by other companies.
Third quarter 2022 highlights
Significant financial and operational highlights for MCI Onehealth during the third quarter of 2022 included:
Revenue held steady at $12,587 for the three months ended Sept. 30, 2022, as compared with $12,642 in the same period in 2021, and increased 16 per cent, or $5,540, for the nine-month period ended Sept. 30, 2022, as compared with the same period in 2021. Revenue growth continues to be driven primarily by higher patient volumes from the company's clinics, telehealth services, MCI Connect virtual health care services, and the acquisitions of Khure and Polyclinic.
Smart referral system:
The company continues to make significant progress in utilization of its smart referral system, the first application to leverage the data backbone which the company has developed with a leading data analytic partner, streamlining the flow of patient referrals from general practitioners to specialists within the company's network, optimizing patient care pathways and increasing revenue from existing customers. Specialist revenue is up 9 per cent for Q3 fiscal 2022 compared with Q3 fiscal 2021.
Information and data analytics:
The third quarter saw the introduction of a new revenue stream generated by the company's data insights as a service offering, which is anticipated to grow in significance in the short to medium term. MCI Onehealth currently provides data insights as a service in six categories: rare disease, complex major medical/chronic, patient cohort building, clinical trial recruitment, synthetic health data and bespoke insights. Such services are targeted primarily at pharmaceutical companies, life science companies, precision medicine companies and top-tier university centres. International partnerships with Palantir and MDClone were announced in Q3 and are active components of the company's current data offering.
The company hired 20 new physicians in the third quarter of 2022, reaching a record high roster of physicians of approximately 280, and anticipates that its physician base will have increased by over 20 per cent by the end of 2022.
Health technology and research services: The company's health technology and research services generated revenue of $400,000 in the three-month period ended Sept. 30, 2022, up 19 per cent over the same quarter last year, and year-to-date revenue of $1,718, up 324 per cent over the same period last year. Revenue from health technology and research services has been driven by the company's Khure and Polyclinic acquisitions, which have increased the depth of the company's revenue mix.
Corporate health services: The company added 20 new corporate health customers in the third quarter of 2022, including Meridian, Cowan and Intermac in the insurance sector. Overall revenue from CHS declined during the three-month period ended Sept. 30, 2022, by 58 per cent to $540,000 due to decreased demand for COVID-19 services, but is projected to recover as more customers are on boarded and new services including a digital wellness platform and seniors health sector offering are launched in addition to increased traffic to MCI Onehealth's e-commerce storefront
Net losses for the quarter were $9.1-million, as compared with a loss of $5.4-million in the same quarter in the previous year. The increase in net losses was driven primarily by the writedown of a $3.4-million deferred tax asset and a $200,000 impairment, and revenue and net losses otherwise remained fairly steady quarter over quarter. The company's expenses have generally shifted away from general and administrative expenses and toward research and development spending as the company increases its operational efficiency and focuses more time and attention on research and development projects relating to the launch of the company's data backbone and standing up the company's data lake.
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization):
Adjusted EBITDA for the quarter was negative $2.2-million, as compared with an adjusted EBITDA of negative $1.8-million in the same period last year.
MCI Onehealth expects to continue to accelerate total company revenue growth through the end of fiscal 2022 and into 2023 as it executes its strategic plan on multiple fronts including:
Continued momentum targeting the $300-billion North America data and analytic market segment opportunity, with MCI Onehealth's data insights as a service platform that provides advanced analytics to third parties, activating the continually growing pipeline of engagements, currently valued at $6.5-million;
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 and more cost-efficient physician-recruiting efforts;
Continued organic growth in health services provided to corporate customers as it expands its customer base, increases the number of available service offerings, and ramps up its efforts to service national and Calgary-based customers through the now-launched MCI Connect in Alberta, including medical and cosmetic Botox, mental health services, and the anticipated launch of MCI Wellness Connect in partnership with a world-leading provider of enterprise-level app-based corporate wellness program;
Fully utilizing new technology partnerships and strategic acquisitions to further activate MCI Onehealth's pipeline of interests in health data insights from the company's data lake;
More than 15 clinical trial and screening engagements with global pharma companies actively under way;
Launch of versions of MCI Connect for mobile phones and connected wearables such as Apple iWatch and of the MCI Connect service now active for its Alberta-based patients and nationally to corporate clients;
Acquisitions of specialty clinics and patient-facing partnerships with specialty services, including in the areas of eye health, cardiac health and weight management, to expand its health service offerings and enter new markets by leveraging technology to deliver more services to its large and growing patient and physician base and to gain more patients, fuelling further expansion of its clinical record data lake.
To support the company's growth and its various initiatives, the company is pursuing additional sources of financing while continuing to implement revenue growth and expense reduction strategies. There can be no assurance that the company will be able to secure additional financing or to secure it on terms favourable to the company, or that its revenue growth and expense reduction strategies will be successful.
Conference call details
MCI Onehealth will hold a conference call and webcast to discuss progress on its key strategic initiatives and financial results for the third quarter of 2022 on Nov. 14, 2022, at 5:30 p.m. ET. Please be advised that the process for listening to and participating in MCI Onehealth's quarterly conference call has changed. MCI Onehealth strongly encourages attendees to join by webcast.
Attendees who wish to join by phone must preregister.
Participants are encouraged to join the call or webcast at least 10 minutes prior to start.
About MCI Onehealth Technologies Inc.
MCI Onehealth 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 Onehealth operates one of Canada's leading primary care networks with approximately 280 physicians and specialists, serves more than one million patients annually, and had nearly 300,000 telehealth visits last year, including on-line visits. MCI Onehealth additionally offers an expanding suite of occupational health service offerings that support a growing list of nearly 600 corporate customers. Led by a proven management team of doctors and experienced executives, MCI Onehealth remains focused on executing a strategy centred around acquiring technology and health services that complement the company's current road map.
Notes to tables
(1) and (2) Financial measures described as adjusted in the attached table are non-international financial reporting standard measures and may not be comparable with other similar measures disclosed by other companies.
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