In a previous post I wrote the following, "Compounding revenues will only grow if SCRC increases MAV's staff & facility or expands the number of pharmacies filling prescriptions". Then I read in Friday's PR that Mr. Schneiderman plans to acquire equity interest in two additional pharmacies. This is a brilliant strategy to protect a revenue stream which could feel the impact of insurance regulations affecting reimbursements. One thing I know for sure, compounding is here to stay. Physician will continue to write these scripts and patients like the benefits of this mode of therapy. This is a $5.6B market which is not monopolized by any one company. Let's say MAV's revenues realize a loss of 10-30% (just a guess), and SCRC averaged $4M each month. Monthly revenues would now be $2.8M - $3.6M, if SCRC acquires interest in two additional pharmacies generating the same volume, total monthly revenues could top $6M each month. Could you imagine the monthly revenue number if Mr. Schneiderman continues to add pharmacies?
We have to remember, MAV is not the revenue stream. Compounding pharmacy is. I see future PRs stating "SCRC's monthly revenues for compounding were $6M" versus "MAV reported x-amount of revenues".
Mr. Schneiderman also highlighted the importance of a diversified product line with "PIMD, the Diabetic Medical Supplies line, additional pharmacies, and, prospectively, a Physician dispensing program", all of which will impact profitability. We already saw the impact PIMD ($554K) and Diabetes ($103K) in this week's PRs. Notice too, he mentions additional pharmacies. In reference to what I wrote in the above paragraph, this guy knows what he's doing. I am excited to hear more about the physician dispensing program. Being in the pharma industry for over 37 years, I can tell you, this has enormous potential.
Do I like the decision from one insurance carrier to not reimburse – NO, absolutely not! Do I like what Mr. Schneiderman is doing to maintain and grow the revenue stream – YES, definitely! Plus, let’s not forget about RapiMeds. I know it’s a sore subject for some, but as long as Mr. Schneiderman believes RapiMeds will be a reality, so do I.
My bottom line - SCRC is stronger now as a company then ever before.
