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HealthBeacon SHA
Earnings Release • Mar 30, 2022
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Earnings Release
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National Storage Mechanism | Additional information 
RNS Number : 4714G
HealthBeacon PLC
30 March 2022
HealthBeacon plc
Preliminary Statement of Results for the year ended 31 December 2021
HealthBeacon plc ("HealthBeacon" or the "Company") and together with its subsidiary undertakings (together the "Group"), the leading Irish digital therapeutics company, announces its full year results for the year ended 31 December 2021.
HIGHLIGHTS
Financial
· Strong full year results, with total deployed units increasing 122% to 10,187 (2020: 4,585)
· Significant revenue growth of 84% to €2.21 million (2020: €1.21 million)
· Gross profit margin excluding Direct-to-Consumer ("DTC") sell-in revenue of 65% (2020: 55%)
· Net cash position at 31 December 2021 of €26.61 million (2020: €4.24 million)
· Positive outlook with continued growth in units, revenue and gross margin over the medium term
| Year ended 31 December | 2021 | 2020 | Growth |
| €'000 | €'000 | % | |
| Revenue | 2,214 | 1,205 | 84% |
| Gross Profit | 301 | 667 | (55%) |
| Gross Profit Margin (Group) | 14% | 55% | |
| Gross Profit Margin (ex. DTC sell-in) Adjusted EBITDA* |
65% (5,225) |
55% (2,654) |
|
| Net cash | 26,613 | 4,235 | |
| Units Deployed (units '000) | 10.2 | 4.6 | 122% |
*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
Operational and Strategic
· Accelerating leadership in providing a proven adherence solution to an increasing universe of the largest pharma, health system and reimbursement platforms
· Continued expansion of client base to 23 currently, from 18 in 2021 and 14 in 2020
· Signed and launched the Company's Direct-to-Consumer offering in North America with its partner Hamilton Beach Brands Inc. (NYSE: HBB) 7,350 units deployed in Q4 2021 and early 2022
· Product now available to purchase on smartsharpsbin.com and amazon.com following DTC launch in the U.S., with further rollout out to large retail distribution through Q2
· On track to deliver up to 15,000 units during 2022 through transformational contract signed in March 2022 with a top-5 US Specialty Pharmacy and Insurance group for initial deployment through its U.S. specialty pharmacy and pharmacy benefits manager arm
· Signed inaugural NHSx programme making our technology available in the U.K.
· Build order for 35,000 units placed to meet anticipated demand from pharmaceutical clients, specialty pharmacy and DTC channel
· Peer reviewed evidence recently published demonstrates an up to 26% improvement in medication adherence by patients using HealthBeacon's technology
· Approval received from the Environmental Protection Agency ("EPA") for its Green Labs to enable sustainable processing of sharps bins and injection waste; Launched Novartis sustainable waste management service
· Successfully completed Euronext Growth Dublin IPO in December 2021, raising gross proceeds of approximately €25 million to fund 10x growth to the end of 2023
Outlook
· Significant traction further underpinning the target of 100,000 units deployed by the end of 2023
· Forecasting run rate revenues of at least €25 million at the end of 2023
· Expecting c.4 - 5x growth in units deployed by the end of 2022 (H2 weighting given the timing of the current unit build)
HealthBeacon's ongoing engagement with new and prospective customers, together with the increasingly supportive reimbursement and healthcare system backdrop, underpins the current ten-fold growth expectations to the end of next year and the very significant potential of the business beyond 2023.
Jim Joyce, HealthBeacon plc Chief Executive Officer said:
"HealthBeacon's vision is to become the world's leading digital therapeutics platform for injectable medications. In 2021 and early 2022 we have generated significant momentum, doubling our business, adding important new clients, and expanding our routes to market and capabilities. The build order we placed for 35,000 units of our smart sharps bin also demonstrates strong momentum towards what we anticipate will be a ten-fold increase in the number of patients using our technology by the end of next year. The progress we have made to date alongside the listing of the business late last year has set the foundation for us to become leaders in our key markets. Furthermore, recently published peer reviewed evidence demonstrating a 26% improvement in medication adherence further validates our injection care management system as major pharmaceutical companies and health systems continue to adopt our leading technology."
Analyst presentation
A presentation for investors and analysts will be hold by conference call at 8:30am, today, 30 March 2022. To register for the call please visit here.
| Enquiries: | ||
| HealthBeacon: Laurence Flavin |
[email protected] | |
| Goodbody (Euronext Growth Adviser and Broker): David Kearney |
+353 (1) 667 0420 | |
| 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
2021 was a pivotal year for HealthBeacon in its mission is to become the world's leading digital therapeutics platform for injectable medications. Having successfully completed our Euronext Growth Dublin listing in December the Company is now well positioned to support our ambitious growth strategy and continue to execute at an accelerating pace.
In addition to the IPO the Company achieved a number of significant milestones throughout the year including; signing and launching the Company's DTC offering in North America with its partner Hamilton Beach, signing a number of significant contracts, expanding its already impressive suite of clients to 23 (March 2022) and its largest unit build to date of 7,350.
During the period we grew our deployed units by 122% to 10,187, demonstrating demand across our existing customer base, our ability to acquire new customers and commencing the DTC channel entry in 2021 in North America. The Company continues to focus on scale distribution platforms and in relation to the DTC channel, the HealthBeacon Injection Care Management System ("ICMS") is now available to purchase on the Company's DTC website (smartsharpsbin.com) and amazon.com following DTC launch in the U.S. The roll-out to physical retail stores is expected in H2 2022
The Company continues to actively look to acquire new customers and during 2021 the Company increased its client base from 14 to 18 customers. In February 2022, the Company announced that it had added a further five pharmaceutical and national healthcare systems to its client base including the UK's National Health Service (NHS) and the Irish Health Service Executive (HSE). These additions further strengthen the Company's customer base which includes companies such as Amryt, Novartis, NHS, HSE, Sanofi, Accord Healthcare, Clonmel Healthcare, Teva, Viatris, and AbbVie.
In March 2022, the Company signed a transformational contract with a top-5 US Specialty Pharmacy and Insurance group. This provides HealthBeacon with streamlined and integrated access to pharma manufacturers and access to a group with over 100 million patients which further underpins the path to 100,000 units. Management estimate that this contract will deploy up to 15,000 units in 2022.
Despite operating in a challenging inflationary environment with significant pressures on supply chains we have delivered on our supply requirements during the period meeting the fulfilment demands from our customers as the Company ramped up unit production in 2021.
The Company has placed a build order for 35,000 Smart Sharps Bin units to meet anticipated demand during 2022 from pharmaceutical clients, specialty pharmacy and its newly launched DTC website.
The Company received approval from the EPA for its Green Labs initiative. The first lab has been fully built for certain waste management process and provides sustainable processing of sharps bins and injection waste management services.
As announced in February 2022, the results of HealthBeacon's latest study, published in the prestigious International Journal of Clinical Pharmacy, proves the significant impact the Company's ICMS can have on medication adherence for patients across a range chronic, autoimmune conditions. The new peer reviewed evidence demonstrates a 26% improvement in medication adherence by patients using the Company's ICMS. This Medication Adherence study represents the Company's 6th peer reviewed study of Injection Care Management and Adherence. HealthBeacon's previous publications include studies on Medication Persistence, Medication Adherence Prediction, Digital Health Technology Adoption, Adherence to Injectable Growth Hormone and Virtual Injection Training.
Financial Review
Revenues of €2.21 million were up 84% on 2020. The revenue number is comprised of revenue from Patient Support Programmes ("PSP") of €1.27 million and Direct to Consumer ("DTC") of €0.95 million. Expansion of the customer base and the introduction of the DTC offering in North America are key contributors to the growth in revenue.
PSP price per unit is in line with management expectations. Commercial signing and implementation with a top-5 US Specialty Pharmacy and Insurance group of our smart sharps bin will build significant momentum for the Company in the latter half of the year and into 2023.
The Company shipped an additional 1,938 units in early 2022 to Hamilton Beach. The DTC website has been built and launched in Q1 2022.
Reported gross profit margin for the Company was 14%. The gross profit margin excluding the DTC channel was 65% (2020: 55%). Given the initial DTC sale to Hamilton Beach was completed in December 2021 the Company generated revenue on the initial unit sale to Hamilton Beach and did not generate revenue from the sell through to the end user by the year ended 31 December 2021. As the 2022 DTC units are sold from Hamilton Beach to the end user the Company will recognise revenue from our share of the mark-up of the unit and the monthly subscription recurring revenue which is paid by the end user. The Company continues to expect run rate gross margins in excess of 60% as outlined at the time of the IPO.
The Company recorded a loss from operating activities of €7.30 million (2020: loss €3.42 million). Costs relating to the IPO and increase in wages and salaries were contributors to the increase in the operating loss for 2021. Average headcount increased to 47 employees (2020: 34 employees) as operations scale to meet the expected growth and demand.
The Company recorded a net finance expense of €0.91 million (2020: €0.01 million). The increase in this expense is largely related to the convertible loan note the Company entered into during the period. The total principal received from the convertible loan note was €5.65 million and was converted at IPO in December 2021 to ordinary shares.
The Company had a net cash position of €26.61 million at 31 December 2021 (2020: €4.24 million). The significant increase in cash is attributable to the €25 million capital raise in December 2021.
Current trading and outlook
HealthBeacon operates in a large market of injectable medications with strong underlying dynamics at play in the digital health market. Growth in the global digital health market and wider industry is underpinned by positive macro and adoption trends, meaning that HealthBeacon is positioned to capitalise on future growth.
The Company has seen encouraging signs of DTC unit adoption in 2022 thus far. In addition to the online DTC offering through smartsharpsbin.com, the DTC offering will also be available in selected retail outlets in 2022, further driving awareness and sales of the product. In March 2022, the Company signed a transformational contract with a top-5 US Specialty Pharmacy and Insurance group. This contract is anticipated to deliver up to 15,000 units in 2022 and further enhances the quality of our customer base.
Given the continued momentum in the HealthBeacon offering, the Company is forecasting c.4 - 5x growth in 2022 and is tracking to achieve 100,000 units by 2023.
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.
| Consolidated Statement of Profit or Loss and Other Comprehensive Income | |||||||
| For the financial year ended 31 December 2021 | |||||||
| 31-Dec | 31-Dec | ||||||
| 2021 | 2020 | ||||||
| €'000 | €'000 | ||||||
| Income | |||||||
| Lease Revenue | 572 | 674 | |||||
| Revenue from Contracts with Customers | 1,642 | 531 | |||||
| Total Revenues | 2,214 | 1,205 | |||||
| Cost of Sales | (1,913) | (538) | |||||
| Gross Profit | 301 | 667 | |||||
| Operating Income / (Expenses) | |||||||
| Impairment of Property and Equipment | - | (110) | |||||
| Impairment losses on Financial Assets | (44) | (27) | |||||
| Other Operating Expenses | (7,769) | (4,339) | |||||
| Other Operating Income | 214 | 387 | |||||
| Loss from Operating Activities | (7,298) | (3,422) | |||||
| Finance Costs | |||||||
| Finance Income | - | 1 | |||||
| Finance Expense | (911) | (10) | |||||
| Net Finance Costs | (911) | (9) | |||||
| Loss before Taxation | (8,209) | (3,431) | |||||
| Tax Expense | - | - | |||||
| Loss from Continuing Operations | (8,209) | (3,431) | |||||
| Total Comprehensive (Loss) for the year | (8,209) | (3,431) | |||||
| All amounts are attributable to the owners of the parent | |||||||
| Basic Earnings per Ordinary Share | (0.79) | (0.34) | |||||
| Diluted Earnings per Ordinary Share | (0.79) | (0.34) | |||||
| Consolidated Statement of Financial Position | ||||
| As at 31 December 2021 | ||||
| 31-Dec | 31-Dec | |||
| 2021 | 2020 | |||
| €'000 | €'000 | |||
| Non-Current Assets | ||||
| Intangible Assets | 2,651 | 2,574 | ||
| Property & Equipment | 1,203 | 1,239 | ||
| 3,854 | 3,813 | |||
| Current Assets | ||||
| Inventories | 127 | 13 | ||
| Trade and Other Receivables | 2,348 | 465 | ||
| Cash and Cash Equivalents | 26,613 | 4,235 | ||
| 29,088 | 4,713 | |||
| Total Assets | 32,942 | 8,526 | ||
| Equity | ||||
| Share Capital | 42 | 6 | ||
| Other Reserves | 231 | - | ||
| Share Premium | 29,926 | 18,072 | ||
| Accumulated Deficit | (934) | (11,006) | ||
| Total Equity | 29,265 | 7,072 | ||
| Non-Current Liabilities | ||||
| Trade and Other Payables | 112 | 47 | ||
| 112 | 47 | |||
| Current Liabilities | ||||
| Trade and Other Payables | 3,565 | 1,407 | ||
| 3,565 | 1,407 | |||
| Total Liabilities | 3,677 | 1,454 | ||
| Total Equity and Liabilities | 32,942 | 8,526 |
| Consolidated Statement of Changes in Equity |
| For the financial year ended 31 December 2021 |
| Share | Other | Share | Accumulated | Total | |||||
| Capital | Reserves | Premium | Deficit | Equity | |||||
| €'000 | €'000 | €'000 | €'000 | €'000 | |||||
| As at 1 January 2020 | 5 | - | 13,034 | (7,575) | 5,464 | ||||
| Loss for the financial year | - | - | - | (3,431) | (3,431) | ||||
| Shares issuance | 1 | - | 5,038 | - | 5,039 | ||||
| As at 31 December 2020 | 6 | - | 18,072 | (11,006) | 7,072 | ||||
| As at 1 January 2021 | 6 | - | 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 | - | ||||
| Shares issuances | 17 | - | 30,154 | - | 30,171 | ||||
| As at 31 December 2021 | 42 | 231 | 29,926 | (934) | 29,265 |
| Consolidated Statement of Cash Flows | ||||
| For the financial year ended 31 December 2021 | ||||
| 31-Dec | 31-Dec | |||
| 2021 | 2020 | |||
| € | € | |||
| Loss Before Tax | (8,209) | (3,431) | ||
| Adjustments for: | ||||
| Depreciation of Property & Equipment | 487 | 480 | ||
| Amortisation of Intangible Assets | 499 | 262 | ||
| Impairment of Property & Equipment | - | 110 | ||
| Credit Impairment Charge | 44 | 27 | ||
| Interest Expense | 894 | 10 | ||
| Share Based Payments | 231 | - | ||
| Warranty Expense | 26 | - | ||
| Foreign exchange loss / (gain) | 16 | (1) | ||
| (6,012) | (2,543) | |||
| (Increase) / Decrease in Receivables | (1,927) | 132 | ||
| (Increase) in Inventory | (114) | (13) | ||
| Increase in Payables | 2,071 | 462 | ||
| Net Cash used in Operating Activities | (5,982) | (1,962) | ||
| Investing Activities | ||||
| Additions to Property and Equipment | (192) | (85) | ||
| Additions to Intangible Assets | (577) | (803) | ||
| Disposals of Intangible Assets | - | 30 | ||
| Net Cash used in Investing Activities | (769) | (858) | ||
| Financing Activities | ||||
| Proceeds from the issuance of share capital | 28,849 | 5,039 | ||
| Options exercised | 440 | - | ||
| Lease liability payments | (160) | (141) | ||
| Net Cash generated from Financing Activities | 29,129 | 4,898 | ||
| Net increase in cash and cash equivalents | 22,378 | 2,078 | ||
| Cash and cash equivalents at the beginning of the period | 4,235 | 2,157 | ||
| Cash and cash equivalents at the end of the period | 26,613 | 4,235 |
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