William Blair hosted LFMD at its virtual 'Innovators in Healthcare' conference today (4/29/21) -- (SEE BULLET POINT 2 IN "OTHER THINGS TO NOTE. "SAW MEANINGFUL REDUCTIONS IN COSTS TO ACQUIRE NEW CUSTOMERS IN Q1)
LFMD was the only public company invited
Overall not much was said that was new or that wasn't already said on the BTIG or B. Riley calls last week. But I did want to let everyone know this happened because it was sort of under the radar and not publicized. I do think it's a very positive sign to see management engaging in three different investor calls over the last couple weeks, plus William Blair has a very large and reputable sell-side research business so this is great exposure to more of the institutional side of the investment community.
Few highlights:
Q: Can you talk about the competitive landscape a bit? You certainly have a handful of others in the space that you're competing with, Hims & Hers as one example, what makes you unique?
A: (Justin, and this is paraphrased) Given the size of the TAM, you're obviously going to have a lot of competition, you have a lot of smaller companies just now starting to come in and then speculation as to what Amazon's offering is going to be. But the biggest differentiator for us is the direct response nature of our business. The way I like to put it for people is our business is 80% direct response marketing and 20% branding. A lot of our peers are 80% branding and 20% direct response marketing. We like to think we have a very special and unique skillset that enables us to acquire patients at a better cost than our peers. We also continue to focus on in-licensing patented products and will continue to do this with new products that have strong intellectual property around them. We also continue to think our concierge care platform is unique, a lot of our comps are not investing to build out a virtual primary/concierge care product quite like ours.
Q: You're seeing incredible growth in the business right now, what are the headwinds to the model that could slow down this growth?
A: (Justin, paraphrased) With this type of business acquisition costs and advertising costs are always top of mind. So it's really just the overall CAC that is the major headwind to maintaining our growth numbers. As an example, sometimes we have to slow down a little bit on marketing if ad costs rise significantly at any point, but we're really in control of our growth.
Q: Are there other areas you're planning on moving into, or other future offerings?
A: (Justin, paraphrased) We're going to add more OTC products as cross sells and up sells, not really primary product launches like Rex and Shapiro but we're looking at several other markets where it's similar to ED, for example, where there are big, other conditions where people really want treatment but don't really want to go see a doctor in person for it. We have two big priorities this year. First, fully launching our concierge/primary care offering, and second, continuing to diversify the portfolio. We want to demonstrate to the market that this is a platform, and it is relevant across the entire healthcare world. Once we've done what we're doing with Rex and Shapiro with a couple other indications, that's when I feel like more people are really going to take notice that we are a platform and as a company we are more than just one single product.
Q: Is there anything else that we haven't asked that you may want to highlight for investors?
A: (Justin, paraphrased) As I've mentioned, I just want to drive home that we are a platform. We have three brands right now, with most of the telemedicine revenue coming from two (Nava only just released), but we're likely to grow into a couple hundred million dollar business from our portfolio within the next couple years. We are going to continue adding more indications to our portfolio, and with our virtual primary/concierge care offering -- this whole business model is going to change the US healthcare system for the better. It's the reason you want to be long this group of companies that are early movers and that have platforms that can make healthcare more accessible to all Americans. So many people like to say 'they are an ED company,' or 'they are a hairloss company,' but that's not what excites us. Don't get me wrong we love everything about our current business, but what really excites us here is how we are positioned to disrupt healthcare beyond just the initial indications we have in the portfolio right now. So that's what I encourage investors to think about.
Other things to note:
They're building out a mobile platform for members to navigate the entire virtual primary/concierge care service (I didn't realize they were building out a whole mobile platform as well, but maybe some of you did know that already)
Quotes from Marc reaffirming some financials: "LTV to CAC is 2x within the first 12 months, we earn back initial marketing spend in first 3 months, projected LTV to CAC exceeds 3x over 3-year period." | "Saw meaningful reductions in cost to acquire new customers in Q1, more updates will come on the Q1 earnings call in May." | "Our outlook for 2021 remains strong, we are still guiding between $85-95 million in full year revenue, or 150% annual growth, which we view as conservative."
