PainChek Limited (PCK) Earnings Call Transcript & Summary

Hello, everyone, and welcome to the Lynx Discovery Series: Health Innovation. I'm David Tasker, and I'll be moderating today's session. Today, we'll hear from 3 ASX-listed companies entering an important phase of commercial growth. PainChek, Swift Networks and Memphasys. Each company will present, followed by a short Q&A. So if you do have any questions, please submit them using the Q&A function on your screen. Today's discussion is general information only and does not constitute financial advice. I should also disclose that I am Chair of Memphasys. We will begin with Joe Durak from Lynx advisers who will briefly introduce Link and explain why it has brought today's webinar together. Joe, over to you.

Thanks, Dave. Appreciate it. Good afternoon, everyone, and thanks very much for joining us for this first Lynx Discovery webinar series, where we cover health innovation companies. For those who don't know much about Lynx, we're a boutique corporate and investment advisory firm based -- sorry, focused on the Australian micro and small cap market. We work closely with selective ASX-listed companies, we believe, have unique and scalable technologies and have global potential. And of course, it's important that they're run by proven management. We see a lot of opportunities, but we're very selective. PainChek, Mem and Swift TV, 3 businesses, we know really well. Currently, we act as corporate advisers to Swift and Mem and we've been invested in PainChek and supported it for many years. We believe each of these companies has world-class technology, blue-chip customers and growing revenue. and now it's just a matter of scaling those revenues globally. That's really the thinking behind today. We wanted to bring together 3 companies. We've got a high degree of conviction in and give investors the opportunity here directly from the people running these companies. This is the first time, as I said, that we're running in this format and we're looking forward to doing many more of these in the future. So thanks very much for joining us, and I'll hand back over to you, Dave.

Thanks, Joe. Let's get into it. As I said, if you've got any questions, save them up, put them in the Q&A box, and we will get to them at the end of each presentation. We will now begin with PainChek, an established health care technology company focused on accelerating international commercial growth. So keep that in mind as you listen to this presentation. Joining us are Chair, Lil Bianchi; and CEO, Karen Holzberger. Lil and Karen, welcome, and over to you.

Thanks, David, and many thanks to everyone who has come in to the webinar. Some clear facts about PainChek. Firstly, it works. It's been proven regulatory approval around U.S., U.K., Europe, Australia. And customers are using it, and they're using it to support improved patient care and also to support the financial benefits, the efficiency of strong care teams Retention levels are very high. We're over 85%, over 90-odd percent in Australia. So customers are not just using it, they're loving it. We've got a high penetration in Australia, a over 30% of aged and dementia residential market, over 10% and growing in the U.K. So we're on that trajectory. And we are now established in U.S. and Canada, and we have a U.S.-based CEO, Karen and we've secured some really important key customers there. So the next slide, tell you a little bit more about who pincher. We are a product company that automates pain assessments. It's a high-quality consistent level of pain assessment. It's useful across the board, but particularly where self-reporting is difficult to run rely on particularly dementia, also very young children, also people at that moment to are enabled report. So it's got clear benefits for the patient, but also have very clear benefits forecast. The insights we provide support intervention, so prevention and pain management. So if we're looking at how much pain is a patient in. How do we prevent 4 walls in the elderly and in people dementia? What's the right level of pain management so we are not under or over medicating. And behind that, it provides a lot of enhanced clinical governance. So that's the background. I'll now hand over to Karen to tell us. She's only been here a few weeks, but she's already a strong story to be able to tell where we are and where we're heading.

Maybe you wanted to go to the next slide, please. Thank you. Really, I'm coming in as a commercial CEO who has launched products globally in health care for the past 20-plus years. And really, we're thinking about from market in and client in and what is so important. And that is about clinical adoption is what's driving the recurring revenue streams for us. We're really thinking about account-based strategies within the U.S. and Canada, leveraging what we've learned in the United Kingdom and Australia and New Zealand to really win at the enterprise level really go when the hearts and minds of the clinical care team for the elders that they're caring for, really reducing the burden finding financial outcomes for them about a reduction in pain medication reduction in readmission to hospital from the care facility that the residents are in because of better management around the falling of the elders. Again, how do we continue to activate those subscriptions through just the lightful engagement with the long-term care homes, whether it's memory care or the assisted living as Lil said, driving north of 85% of recurring and renewals for our current installed base, being able to drive that even higher as we enter into the U.S. and Canada. And really how do we take some of the lighthouse clients that we have today with our -- 1 example is Sabra, which is 1 of our master agreements that we have where they're managing many of the care facilities in the United States to be able to really retain and expand as they grow to actually having more long-term care facilities for that. And then from there, driving to profitability, really looking at where we can leverage the ROI that we're creating, the value creation for those long-term health care facilities and those long-term care homes, where we can actually show them those ROIs around what does it mean for a 10% reduction in falls of the elders, their residents what is the percentage of reduction look like in the budget for their medication really show that for them and then ultimately for us and up we're doing value for. If you want to go to the next slide, please, David. This is how we're measuring ourselves and Lil, please do step in. Like we've seen 5 -- almost 6% quarter-over-quarter growth in our implemented annual recurring revenue. We look at the number of licenses that we're selling into our key markets, whether it's the United Kingdom, north of 10%, lots of market left to go. Our entry point to the U.S. and Canada, we're really early days, but really 1 of the largest health care markets and long-term care facility markets in the globe. The work that we've done as our foundation in the Australian and New Zealand market. Looking at just customer revenue coming in, our receipts up 27% quarter-over-quarter. Again, proof points here that we have a product that is just delightful, that our clients love to use and find real clinical value. And that just continues to happen for us about -- I'm sorry, Lil, why don't you go on.

I was going to say the next slide kind of goes on to the point you were just going to say that this is a trajectory. It's not just a snapshot. So on the next slide, you will see the 7 quarters of commercial momentum. David, I think we're a little bit out of sync on the slide, the 1 before, please. Yes, that's it. Great. So these 7 quarters, this is a growing set of figures that Karen talked through. And what's very pleasing is that the trajectory is an up wedge movement that it's not just steady state.

And I think what's important is that these are growing markets for us with a lot of market share left to go. If you think about not just the total addressable markets of our key markets, whether it's the United Kingdom, Australia and the U.S. and Canada is they're early days for us. And so there's so much more market share for us to go after. And this is really why our story is about commercialization and scaling the company. Do you want to go to the next slide? I think this is just to continue to drive. And again, so we talked about the last 7 quarters of just the growth trajectory that we're seeing. But even since July 1st to date, where we're seeing sales momentum in all our geographies, we've had over 10 deals closed. The United Kingdom, where we're at just north of 10% continues to bring in record sales for us, very exciting for what our leadership is doing there. And then our newest market being the United States and Canada since we had our FDA clearance is building the deep relationships in the SABRA network. This is a real estate REIT, as they say, in the U.S. where we've got our first 2 facilities engaged, but we have the opportunity to close 83 different facilities through this relationship. Very excited who we're working with and the momentum that continues to happen. We have 2 paid pilots and these paid pilots are where these are large enterprise long-term care facilities in the United States, aged care, a national facilities across the U.S. and Silverado, where they actually have contracted to purchase for their first facility. And if things are successful over the first year, they're using some of their lighthouse sites within that they try new solutions, really look at value that they'll have agreements to continue to roll out across the enterprise there. So great early signals around the momentum that we're seeing in the U.S. and Canada. And that's not it for us. We've been talking about elders who can't advocate for themselves around pain assessments. We let our visualization tools and our AI do that through quantitative results. But on the other side of that, are infants. And so 1 of our innovations is working with the pharmacists in Australia right now where they are actually advocating to work with parents and guardians of infants where they need maybe pain medication and how do you use tools that we can bring to market to be able to give a better assessment in conjunction, another tool for the pharmacists to be able to counsel that parent or guardian coming in when that infant is either getting an immunization has a toothache or what's going on around that trial. So we're very excited with the work that we're doing there and this new innovation coming in a pilot phase today. I don't know, Lil, if you want to add anything?

No, no. And David, I think the next slide will just sort of put up and move on because I am going to talk a bit later about the investment case. And let's keep moving on what we're doing next.

Super. If we talk a little bit further about just the U.S. market and why I've come in and why I'm so excited is really just the where we create value for doing the pain assessments. We really, the proof was first going through the FDA as a Class II medical device, having the enterprise access that through our SABRA agreement to start to deploy around 20,000 beds as potential licenses for us. The first 2 being converted into under installation and onboarding now. I feel very bullish about the ones that are going to come over the next 90 to 100 days. And like I said, the 2 really initial pilots around 2 other very large enterprise United States sites here. And from there, the commercial proof really is around commercial expansion and really taking how we've developed our return on our investment case, the value creation and really starting to position that across the opportunity of over 1 million beds to us in the long-term care facilities in the United States. And so it's just very exciting of this were the initial days of what we're doing to be able to scale in the U.S. market. Next slide, please.

Thank you. Talking about financially where we are. The great news is that Karen has set our plan she set up how it will make a deference that on proven pathways in Australia rolling their mutine geographies. And the good news is we have a runway that can allow us to execute on that plan allow us to make that difference, which is great. And that certainly is something that most small med tech can quite often strive to have at this stage in their growth. But did we hit all the targets we need to do in 2026? And the answer is no. Did we provide a great foundation for 2027? The answer is yes. With FDA approvals with entry into U.S. and Canada and with growing penetration in Australia and in the U.K. And do we have a plan to make a day in France. And the answer certainly is yes. And I hope you've got a bit of a sense of that from Karen today. So one of the key components of the plan, it's to have a laser-sharp focus on sales, customer retention and customer satisfaction. We have a lot of rigor around costs, both to be good stewards of shareholders' investments but also to make good decisions on where we invest. And the third leg, I would say, and it's something I certainly have been trying to do so was appointed a couple of months ago, and that is we will have more engagement with shareholders. We want you to hear our story and understand what we are doing. So next slide, please, David. You've met Karen and I, today, we have some of the great depth in our team. Andy Hoggan, who is our CEO; David Allsop, who has led the charge in Canada and North America. And I'm sure you'll be hearing more from them and other people in our team during 2027. The next slide really is a bit of a summary. This is what we are going to hold ourselves accounting over the next 12 months. Absolutely, growth in U.S., in particular, and in Canada, customers expansion across the board. Very clear evidence of that trajectory that's been going up over the last 7 quarters, that gathering pace. And I think we have given investors a good sense of what we are measuring ourselves and what we expect you to measure ourselves on. So the next slide which really is our final slide. So the investment summary. Back to where we started, we're very much an established business. We have great products. We have a customer base that votes with their feet and their wallet, high retention Karen has gone through the levers that we have to pull in all our geographies and particularly in the U.S., that there the foundation of our plan and we have measurable delivery. Delivery execution is the buy words for 2027. So thank you very much. Over to you -- back over to you, David.

Thanks, Lil. Thanks, Karen. A number of questions have come through. So we'll jump straight into it, as I said, we've got about 5 or so minutes to get through as many as we can and where they do look obvious, I'll try and group them together. There's a question here about sort of a statement, feedback from someone who's engaged in the aged care industry, the device is great. But in some cases, they're sitting in covers to your lack of training, how are you going to address this? Great to sell? How do you make sure you activate?

So that's a terrific question. Maybe, Lil. I'll take it, and you can add for me. Is that okay?

Yes.