Vitasora Health Limited (VHL) Earnings Call Transcript & Summary

Thank you very much for joining me this morning. And what we're going to do today is basically provide a couple of things. One is an update on the last few months that we've been operating in the U.S. A lot of things have happened and there's been a lot of progress made. And I want to share that with you. I also want to revisit some of the reasons why we're in the U.S. and importantly, what we have achieved to date, since we launched in the U.S. just over a year ago. So reminding everyone that we launched in the U.S. essentially beginning of last year. And everything that we'll be talking about today happened in just over a month, so sorry a month -- a year, I do apologize. I'll also receive -- I've also received a few questions that I'll answer at the end of the presentation. And as always you've all got my contact details and if there is -- or if there are, sorry, further questions that you'd like to pose to me, please don't hesitate to e-mail or ring me. I can't promise that, I will answer them immediately, but I will answer them, I promise you that. So what I thought I'd do now is just kick off the meeting. And I wanted to preface the whole meeting by saying one thing, and that is what I'm talking to you about today and not aspirations. What I'm talking to you about today is what's actually happening with the all Respiri team and the all Respiri business in the U.S. People are still not on mute. If you can help me out there, please. Thank you. I do apologize. So really, what we're talking about today, is not what we hope to achieve, it's what we have achieved and what we achieved in a very short period of time. And what the Respiri team has achieved with our partners and customers in the United States. So as always, our business is all around providing care to patients, once they leave the care of their physician in the clinics. And today, we're delivering a scalable [Audio Gap] patient monitoring solution that we know from studies that we've done in Australia, and what we've seen in the U.S. improved health outcomes and reduce importantly the cost of health care to the payors and their stakeholders. So that's what's happening today. So what I thought I'd do, is basically provide you with a summary of where we're at with the U.S. business, and we're business ready right now. We are commercializing in the United States right now. This is, again, not what I hoped to achieve, this is what is happening. A reminder, and I apologize to those who know the full story, but I think it's important to reinforce this, because a lot of time and effort and investment has gone into where we are today. I'm going to [indiscernible] perspective. We have FDA approval, okay? Someone's still not on mute. Thanks. We know the device works, and we know it works at least, as well as a doctor with a stethoscope and we know that the platforms and applications that we've got, have a desired impact on what it is to get patients to comply and to get the health outcomes that we want. We have a remote patient monitoring program that's been designed and tested in Australia, which we know. Patients are highly compliant. 83% of patients continue to use wheezo every single day. Now as an [indiscernible] guy, if I still had half the patients swallowing their tablets in 6 months time that they were put on, I'd be a very happy. The compliance rates are very, very difficult in health care. Our compliance rates with the RPM program we've developed, which is a combination of wheezo, systems and people is highly, highly effective in keeping patients compliant. Important to note, unlike Australia, this is a physician-led market. So all the wheezo patients that we have on product at the moment, and those in the future will be prescribed or recommended by a physician. We know, as I said, from the studies that we've done that our program has a desired impact on reducing or improving, I should say. The lead indicators that are likely to result in hospitalizations or exacerbation. We know that we improve those, and we know that that's an important part of any decision-making process for any stakeholder in healthcare. And we know by improving those that we have definite cost benefits to insurers and hospitals, and doctors and hospitals get paid for doing them. Remembering now again, this is not what we hoped, CMS, that is the centers of Medicare and Medicaid Services reinverts the patient monitoring and [indiscernible] of that right now. The services have been paid full. Remembering, it's not how [indiscernible] gets paid for the services, it's the doctor that gets paid for the service or the institution. Now why is that important? Well, apart from the clinical need to be able to provide a remote patient monitoring servers that gives doctors greater transparency around how well their patients are tracking once they leave the surgery. The doctor gets rewarded through providing this important service. It's a really important point to make. Further, doctors and institutions can outsource the entire program to a third-party. They don't have to actually undertake the machinations of remote patient monitoring. And the people that they outsource it to are our RPM marketing and sales departments. So that's all done, that's ready to go. It's important to note also today, as of the last trip, there are now 8 health care organizations that are our clients. We as RPM is being rolled out, as I speak. Patients are being onboarded, as I speak. We have in [indiscernible] deals that have come out of the last few months at work. And it's important to note that the customers that we're dealing with through our partners have a broad specialist type. So it's not just respiratory people. It's primary care, it's cardiology. It's intensivists. So we -- although our target group are the pulmonologists, the appeal of Respiri RPM is much broader than just that specialty. Important to note that it's also not restricted to a particular geographic part of the U.S., but importantly, right across the country. So we're now with the new deals in about 12 states across the U.S.A. We're also working right now, with a number of other additional health care partners, not like Access, but organizations that have got established clients with health care organizations, providing them with services, whether they be Telehealth or [ practice ] management solutions. That want to expand their services to their existing clients to include remote patient monitoring. So we're in a very good position and in very advanced discussions with people like that. Reminder, we make $58 from every device we sell through our partners, and then, we get a fee for service, per patient per month for every patient that's put on wheezo RPM, and that's somewhere between $10 and $20 depending on what's being outsourced to our partners. Our pipeline remains very, very strong. We have a very strong pipeline of new customers. And as I said, a number of those are imminently going to be signed, but there are quite a number of others that are well down the pathway. So it's important that you've also got a team here that's proven to be able to execute these sorts of things. Remote patient monitoring is not a new, something I've done in the past. As you know, my last company, Healthy Sleep Solutions was built on providing remote patient monitoring solutions to patients with sleep apnea, respiratory disorder. And we mainly become Australia's largest provider of those sort of services and the parallels between Respiri in the U.S. and the Healthy Sleep Solutions model are very, very close. We've got patients being onboarded and are onboarded right now. We know the program is working. We know that the reimbursement covers what it is that's been delivered to patients through doctors and being paid. We're scale ready. We're ready for the 30,000 to 40,000 patients right now, through the tests that we've done. You never really know until the 30,000, 40,000 patients. But everything we've done now, leads us to believe that we're very well placed for scale. And important to note today, we've got 20,000 units of wheezo in inventory and componentry for another 12,500 to be able to be built very, very quickly. From order to inventories have been 4 to 6 weeks. And that should more than adequately handle the demand that we're forecasting over the next year to 18 months. So really, as I look at the situation that we find ourselves in, our lots come together to get us where we are at the moment. I have absolutely no problems sleeping at night when it comes to where our new patients are going to come from or with regards to new customers, or how have we got enough product to be able to handle this well. Our sole focus this year, is to scale and accelerate patient onboarding with existing clients onto the RPM program. How do we speed that up? That's the thing that's really taking most of my attention at the moment. How do we speed up the process to make sure that we get patients on both patient monitoring wheezo faster? Now that's not to say we're not getting patients on now, but I'm a very impatient person. And my challenge to your team, that's the Respiri team is how do we accelerate that with our existing clients. But that's just a snapshot of where we're at. Now we've been in the U.S. for the last 2 months. And what I'd like to share with you now is what we've achieved over that period of time. So our report card. We've got a full wheezo RPM program, patient onboarding commencing with Michigan Children's Hospital. A reminder they're part of the New York Stock Exchange listed Tenet Group, ticker code THC. They have over 60 hospitals across the country in more than 120 outpatient clinics. So they are the big group. Michigan kids, basically 8,000 new patients every single year. That's new patients, and they deal with many, many more patients. The full rollout of their program, which has already commenced, but this is the full rollout is in April this year, and it will commence with the hospital clinics, which runs every day out of the hospital there. And in late April, early May, that will move into the outpatient clinics. We had an extensive kickoff meeting with Access and [indiscernible] Michigan, over the last week. And the plans are in place now. The protocols are in place. The onboarding is in place for this to be rolled out, in a week. So that's just reinforcing patients who are all on product in RPM Michigan, but it rolls out in earnest, in a week's time. We've also got 4 wheezo RPM patient wings commencing with Arkansas -- commence with Arkansas and also in the North Carolina Healthcare Organization. So they've got patients on wheezo right now, that we're now rolling to a full-blown rollout of remote patient monitoring for in respiratory patients on wheezo. We've increased our patients on wheezo right now to about 100 and although that may sound modest, it is an increase over the 20 that we had about 3 or 4 weeks ago, and we anticipate this number growing very, very quickly given the points that I discussed prior to that. Last slide was there. We also secured a contract with a major new home & transition care provider in the United -- in another state in the United States. I'm not at liberty to discuss those particular -- those details at the moment because they're in the final throes of negotiating a contract with a major insurance company, in the United States to provide exclusively their remote patient monitoring and transition care activities on an ongoing basis. So that's a really big deal, and I'll be able to share more information with you about that once I get the go ahead when the contract negotiations between the customer and the insurance company are completed. We are very close to finalizing an agreement with a major respiratory clinic group that has over 100 clinics across the United States. And they are a group that is growing through clinic acquisitions and this group is likely to get much larger than it already is. And it's important to note that they specialize in respiratory care. That's what they look at every patient that walks into this clinic has a lung problem. And they have in the vicinity of 1 million patients that they look after on an ongoing basis. And they see about 250,000 lung patients in a patient sense, every single [indiscernible] so if we could stop that, that will be great. It's important to note that we've also got 4 new clinical services companies as potential partners. And with their existing clientele across a number of additional state, note in. So these companies have agreed with in principle have all go together. Now we're just in the process of finalizing contracts. They had existing clients. They want to add remote patient monitoring to their portfolio of services. And as I said, it's an exciting time because it's been broadened the number of patients -- broadens the number of existing clients that our customers or client -- contacts have, at this moment in time. So this isn't about necessarily business developing further, but adding remote patient monitoring in wheezo to the existing monitoring at least 4 major institutions they've got. It will also involve potentially a new School asthma program in Atlanta and surrounding states. One of them is also a Telehealth practice management provider. As I said, it's wanting to expand their business. They have clients they're dealing with right now and doctors they're dealing with right now with Telehealth. The other has an existing nursing home care team of about 150 staff that are currently delivering chronic care to their customers. And adding remote patient monitoring to that is a relatively simple thing to do, and that would be something that would be a very quick win for us when it comes to onboarding. We're in some advanced discussions on remote patient monitoring with 2 private health insurers. One of them is a NASDAQ listed third-party administrator. So they basically work with employer-funded healthcare plans to make sure that they're delivering a cost-effective solution for those organizations. They also have a clinical care nursing support team, whose sole purpose in life is to improve health outcomes and in doing so, reduce costs and improve savings. So they are very interested in adding remote patient monitoring to the customers they can't [indiscernible]. The other is a major national insurer, one of their state officers who are particularly interested as is the NASDAQ listed organization, in introducing and funding remote patient monitoring to minimize cost. And we're also in discussions with the latter about a possible risk-sharing arrangement, where we get paid for the services that we do, but we also share in the spoils of the reduced expenses and costs that they've incurred with a group of patients, who have respiratory disorders on the back of remote the monitoring solution that we would be providing them. So that's big deal for us. These are the first times that we've had entered such as advanced discussions with insurers, and it's an exciting time for us. So we're not in a place where we've got a contract yet, but these discussions are very, very encouraging. And all parties are very excited about being able to support each other in achieving these goals. I'm pleased to be able to announce given the progress we make, when we are there on the ground in the United States, whether that be myself or our Chief Commercial Officer or CEO. We've employed ahead of U.S. operations, and this is the culmination of extensive executive search. The gentleman has extensive remote patient monitoring, Medtech and healthcare institution experience and attract reward in getting things done in the United States. He will be commencing in mid-April, and I will send out more information about the gentleman in due course. And basically, we want to make sure that the momentum that we generate when we're there on the ground working with our customers, our partners and their customers is maintained 24/7. So that's an exciting thing for us. And it's a milestone for us. They'll be our first U.S. employee. So that's really a big step in the right direction to make sure that we maintain [indiscernible]. I thought I'd also just take the opportunity to remind people about the size of the opportunity that we're chasing in the United States. Respiratory disease like every -- is a major health care burden into the U.S. like it is everywhere else in the world. There are 50 million Americans with COPD and asthma, in the United States right now. About 70% of them are difficult to treat. And today, when they leave the care of their doctors, that doctor has got no idea what's happening with them in the real world. And it's in the real world that we experience or they experience the complications of exacerbations that lead to obviously hospitalizations and the high-cost health care provision. So the market is huge. It's twice the size of the total population of Australia and it's under serviced. And today, as I said before wheezo, there was nothing available for us -- for them to be able to use. Important to note it be -- important to note, sorry, I might just give feedback on some. Important to note that the actual situation at the moment isn't being managed as well as it should be. And that COPD and respiratory disorders are a significant financial burden to the system. And back to the point where Medicare, their CMS has imposed binds to more than half of the hospitals in the United States through readmitting too many patients too quickly. And I have spoken to some of you about one of our clients, who basically told us that they were fined $1.3 million through CMS for breaching these readmission rates. It's important to note also that only about -- it's a little high that only of that 3% are actually tapping [indiscernible] soon. And most of them have only done it in a very, very short -- a small number of patients. There is a huge opportunity for us to take a model that we know work, and model that we know delivers and use that as a motivation for institutions to gain the benefits of remote patient monitoring, make money out of it, but also reduce their own costs on the back of that sort of provision of service. So, I just wanted to make sure we understood the size of the market that we are addressing -- sorry, approaching in the United States and why only the U.S.A. matters to us at this moment. Nothing else is a priority for us. All resources and all hands are on deck for the United States and will remain that way. As I said, remote patient monitoring has been reimbursed in the U.S. since 2019. It is moving towards becoming more mainstream but the reality, as I said previously, is there a number of only a few that have really taken it on board. It's important to note, again, the centers of Medicare and Medicaid services, CMS, reimburse RPM across all the U.S. From my discussions and you would have remembered the discussions that we had with you just recently, private health insurers understand the value of preventative medicine, right, because of the impact that it has on moving health care from expensive provision sites such as hospitals, to less expensive sites and much less expensive sites like the home. And again, important to note, doctors get paid for doing this, and they can outsource the entire program to a third party and only be advised by that third party for those patients that are exceptions to the rules and are not being controlled, if you will, in the real world. And that's what we do. That's really important to know. Just a reminder, these are the numbers around what it is that our doctor is utilizing remote patient monitoring can claim back from the -- from CMS. If they add chronic care management to the portfolio of CPT codes, they can make up to $2,500 per patient per year. So you don't need to be a rocket scientist to work at the $2.5 million for 1,000 patients, is a lot of money. And as I said again, I reinforce this, they can outsource the entire program to a third party. So they don't have to invest upfront. They don't need to employ additional people. The people that they've got don't do any more work than what they're currently doing. And unless they get a reimbursable event from us, they don't pay us. So, it really is a derisked situation for institution. And if you add to that, the fact that ACOs and hospitals can get paid under this system, and reduce their CMS fine likelihood, it's pretty much an [indiscernible]. I've gone through this. As I said, RPMs still underutilized. In respiratory there, we are really the only easy-to-use solution that's there. And I have yet to meet a doctor, hospital, insurer that hasn't said that is great. I love the idea, which is part of the problem, because we then need to make sure that, that love translates into patient onboarding, and a process to be put in place to make sure that, that's seamless, integrated into how [indiscernible] I can say that, that just happens over night, it doesn't. So we're getting much better at the [indiscernible]. So, I wish I would say have it or not. It just happens. It doesn't. And we're getting much better at the time it takes for us to from signing contract to getting programs in place. And that will continue to improve. As I said previously, we've got 3 major institutions now that have started patients on wheezo RPM, but are rolling out now and as of next week, full-blown onboarding of RPM patients and wheezo program within the case of Michigan kids. Most of the children they see a potential candidates for this particular service. So it's really exciting times for us. And as I said, we're in a place now where the catch cry at Respiri is how do we scale, and how do we do it quickly, not where are new customers coming from, even though they're coming. So that's really the -- I'm in a very good place understanding that headache that I have. As you know, we've got -- I won't go through this, but there's a turnkey solution here that allows us to deliver what a doctor needs to be able to claim the RPM case. So it's really easy to use. One of the physicians said to me, he used the oxymoron to describe wheezo, I said it was sophisticated simplicity. Sophisticated in the transparency and data that provided him about these patients when they're in the real world, simple, because it's easy to use. And the notion he said to me of the patient taking a spirometer home and using it through remote patient monitoring every single day is laughable. That's me quoting a physician, not just him, but quite a number of physicians. So we're in a really, really good place. The important thing is, it's a low-touch program that we built around wheezo. It's very scalable. It's very doable. What we need to make sure is that we actually work with our customers, partners -- sorry, our partners, customers, sorry, to ensure that they follow our [ pin ] book. We know what it takes to make this work. I know what it takes to make this work from my time in pharmaceuticals and also in Healthy Sleep Solutions. And we need to be able to provide our partners, customers with a rollout plan that's easy, low touch, low involvement, that allows them to focus on what they're good at, and that is looking after patients. And we believe that we've got that [ pin ] book sorted and ready to roll. And the proof will be in the pudding, when it comes to the rollout of the RPM full-blown programs at Michigan and the other 2 institutions that I described previously. I thought I'd see with photographs of your team. The leadership team here has a track record in healthcare, but also in remote patient monitoring execution and Medtech and IT solutions in healthcare. So these people have done it all before. They've been on board for some time now. They understand the business. They understand the customers, they understand the issues. So you're in very, very good hands. I'm in very, very good hands, when I look at the team that I have working with us. So in closing, what I've described to you today is not what we hoped to do. It's what's currently happening. We are ready for business. We're open for business right now. We are delivering. There are patients on wheezo. We have customers who are now rolling RPM out in a full-blown sense. That will lead to increasing patient numbers as we move forward, although modest. We're up to about 100 patients already in a month. And that, I hope, will explode moving forward with what I've described to you today. So, Respiri really is well positioned to continue to take advantage of the opportunities that the U.S. marketplace provides us. We're working closer than ever with our partners to making sure that we deliver a turnkey solution to our customers with a full -- fully underwritten, if you will, solution that leaves all the thinking about remote patient monitoring to us and lets our customers focus on what they do well, which is look after their patients. So that's it from my perspective. I trust it's given you an insight into the great progress we've made over the last few months. The details of some of the stuff that we've achieved will be forthcoming over the coming weeks, as we finalize contracts and as the contracts between our customers and their insurers get finalized, but I have never been in a happier place. And remember, I don't get happy and I'm never satisfied that I am at the moment with where we're at and what the opportunity or the size of the opportunity moving forward. Remember, I don't stay awake at night, wondering where my new clients are coming from. We know that we're going to get those, including insurers. What keeps me up late at night is how do I accelerate the coming -- the current rates of patient onboarding to a level that I'll be happy with, and I'll never be happy, but you know what I'm trying to say. So thank you very much for your time today. And I will speak to some of the questions, that I was sent.

Okay. There was a question from -- a question relating to what are the company's plans to attract new investors, both here and in U.S. that will move share price. Something that I didn't speak to during my presentation is in my first week and last week in the U.S. was spent exclusively talking to institutions, the family offices, investment banks, whilst I was in the U.S. The interest in what it is we're doing is very, very high. I mean, I was even surprised given that in the United States, a company of AUD 50 million market cap, which is what USD 35 million is a penny stock. And many of these institutions mandates don't even want to talk to the organizations like us, but they wanted to talk to us. There is a strong level of interest in remote patient monitoring and what we're trying to do. The size of the marketplace makes us very attractive, as does the fact that we really have no competition when it comes to remote patient monitoring in lungs. We have some very interested parties that have already sent us term sheets about how it is that they would like to support us moving forward, and there are some investment banks on Park Street in New York and -- Park Avenue, I should say, New York. And really, we're already discussing a likely road map to a NASDAQ -- potential NASDAQ listing moving forward, because it seems to us that, that is a natural fit for us as an organization, if we continue to focus on the United States. It's early days yet, but it's certainly something that we are very committed to and it's something that attracts many of the investors in the United States. So suffice to say that I since being back, of course, I've continued with those discussions by Zoom and what have you. And the progress is very, very positive, and I hope you'll be able to make some announcements over the coming weeks as to our progress in that space. What dedicated resources at Board and company level are being allocated into attract new institutional investors and investment base? That's part of my life, I guess, is what I am, what I'm saying. And certainly half of and probably more of Nick's life. So that's our Chairman, Nick Smedley. So I think, I've already answered that. That's certainly something that we are progressing and pursuing with rigor. And another question was, I want to know when Respiri will provide financial projections, including revenue and profit? The CEO mentioned challenges. I'm reading this out, that you guys know me well enough to know that I don't crap around, so this is exactly what's been asked. The CEO mentioned challenges to meet the demand of 30,000 to 40,000 patients. How does that translate into the P&L? I fully expect this to be highly positive. Okay. So first and foremost, we're not going to be putting out any projections as to revenues, until we've gone through the full rollout of the RPM programs with our customers that I've just described. I don't want to be putting out any wet finger in the air projections, until I've got more facts that I can base those around. And then I can use those facts to project what new customers are likely to generate for us, moving forward. I think you'd all appreciate that would be the prudent way to move forward, when it comes to guidance on revenues. 30,000 to 40,000 patients, the number that everybody has got tattooed on foreheads in the Respiri team is 30,000. When we get to 30,000 patients, the recurring revenues make us cash positive. Just the recurring revenues, and that's working at about US 15 on average per patient per month. Now we anticipate that happening in late 2024. But as I said, all have a better understanding when all that happens once I get a clearer understanding of how full rollout of the remote patient monitoring programs in the customers that I described earlier, pans out. So it is an exciting time, 30,000 is our breakeven number at current burn rates. And as I said, I won't be putting out any guidances with regards to financials, until I get a better understanding around some of the facts that are governing how quickly patients are going to be onboarded with the clients that I've currently described in this particular presentation. So they were three of the questions that we received. To avoid any of the issues around the presentation, what I'd like to do is basically thank you all for listening to me today. Reinforce that everything you've heard today is not what we hope to do, it's what is currently happening. We have patients on device right now from many clients, who are generating goals in cents for us, right now. Not enough patients, but right now, and it's a growing number. The opportunity in the U.S. remains as big as it ever has been. The progress that we've made with new potential partners and with insurance company is very, very pleasing. And holds us in very good stead for potential risk-sharing arrangements where, as I said, and we get paid for what it is we do, but we also share in the spoils of the money we save organizations. And we're spending quite a bit of time there in building our team over there to make sure that we have the necessary competencies on the ground to move our business forward, at an accelerated rate and not rely on myself or any of the Australian team to be there, for that to be the case. Now that's not to say that I won't be spending most of my life in the United States. I will be, but we'll have a team of people that will be able to deliver a more scalable solution and supporting our partners in supporting their patients. So ladies and gentlemen, thank you very much for that. I do apologize for meeting, but it was a little difficult with some people's devices not put on mute, so I was hearing stuff left, right and center. I hope that's given you a good understanding of where we're at. And as I said, for anyone who wants any additional information about these exciting developments, feel free to give me a call or send me an e-mail. And as I said, I may not answer straight away, but I promise you, that I will get back to you. So thank you very much, and I hope to hear from you soon. And I hope to give you more updates over the coming weeks. Thank you.