CloudMD Software and Services Inc. (DOCRF)

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CloudMD Closes Acquisition of Rxi, Providing an Established Specialty Drug Management and Patient Support Program to the Employer Market.

source
https://finance.yahoo.com/news/cloudmd-closes-acquisition-rxi-providing-113000696.html

Wed, May 12, 2021, 1:30 PM

CloudMD Software & Services Inc. (TSXV: DOC, OTCQB: DOCRF, Frankfurt: 6PH), a healthcare technology company revolutionizing the delivery of care, is excited to announce that it has closed the previously announced acquisition of Rx Infinity Inc., Rxi Pharmacy Inc., and Rxi Health Solutions Inc., enhancing its specialty health services to patients, providers, insurers, and corporations in Canada.

Rxi’s pharmaceutical logistic services include drug distribution, patient navigation assistance, a preferred pharmacy network of over 500 pharmacies and real-time universal disease management software. As a proven solution to the currently siloed healthcare system, Rxi’s combined offerings provide a one-stop solution and centralized platform that breaks down treatment barriers by offering a team-based, real time, longitudinal approach to patient care and disease management. Rxi oversees several national and provincial patient support programs currently specializing in Oncology, Infectious Diseases and Inflammatory Bowel Disease (IBD). Rxi will be expanding its offering, launching a number of additional support programs in the imminent future. The company also provides administrative and drug benefit management services to a large third-party benefits provider, servicing more than 300,000 patients across Canada. Rxi is licensed as a National Wholesaler (GMP-certified) and is approved by Health Canada.

The acquisition of Rxi is synergistic across CloudMD’s platform of healthcare technology solutions and its Enterprise Health Solutions (“EHS”) division. The addition of Rxi expands CloudMD’s pharmacy offering, and distribution and fulfillment channels across Canada. CloudMD has access to Rxi’s network of 500 independent pharmacies to provide better, more localized, access to care. Rxi will be integrated with CloudMD’s electronic medical records (EMR) software, educational resources, healthcare navigation, patient portal and enterprise health services.

CloudMD can now offer employers access to Rxi’s specialty drug and case management platform to better manage the chronic care of employees. These speciality drugs are often very costly and can result in high exposure to employers if not managed correctly. Currently, 50% of new drugs developed are speciality drugs
https://www.claimsecure.com/media/1305/understanding-and-managing-specialty-drugs-brochure-en.pdf
and it is anticipated that this number will continue to grow. Furthermore, 42% of employer drug spend are based on specialty drugs,
https://www.manulife.ca/business/group-benefits/services/drug-management.html
and employers are faced with an increase in employees needing or accessing specialty drugs. Rxi’s patient support and a targeted intervention program help ensure that drugs are effective and are being used appropriately, which results in better employee health outcomes and reduced employer costs.

Rxi is a high growth, profitable business, with annualized revenue for calendar year 2020 of approximately $16.6 million with earnings before interest, taxes, depreciation and amortization (“EBITDA”) of approximately $600,000.
Annualized revenue figures are calculated based on annualizing the available results for the 11-month period ending November 30, 2020, as announced on January 26, 2021.

Rxi generates revenue through:
(1) wholesale and dispensary services,
(2) licensing for its proprietary technology, and
(3) pharmacy partnerships.
Upon closing, the acquisition of Rxi will be immediately accretive to CloudMD with synergies the Company believes will drive further revenue and increased EBITDA margins through cross-selling and integration across its portfolio of healthcare technology solutions.

Terms of Acquisition
In consideration for the purchase of 100% of the outstanding securities of Rxi, CloudMD has paid shareholders of Rxi aggregate consideration of $9.5 million payable as follows: (i) $2.5 million in cash, subject to a working capital adjustment; (ii) $4 million in common shares of the Company; and (iii) a performance-based earnout of $3 million, which is payable in common shares of the Company in equal annual issuances over a period of two years. For full terms, please see the press release dated January 26, 2021.

About CloudMD Software & Services
CloudMD is digitizing the delivery of healthcare by providing a patient-centric approach, with an emphasis on continuity of care. By leveraging healthcare technology, the Company is building one, connected platform that addresses all points of a patient’s healthcare journey and provides better access to care and improved outcomes. Through CloudMD’s proprietary technology, the Company delivers quality healthcare through a holistic offering including hybrid primary care clinics, specialist care, telemedicine, mental health support, educational resources and artificial intelligence (AI).

CloudMD currently services a combined ecosystem of over 7,000 psychiatrists, approximately 4,500 therapists and counsellors, approximately 4,000 psychologists, over 22,000 family physicians, over 34,000 medical specialists, over 1,500 allied health professionals, over 500 clinics, and over 5 million individuals across North America. CloudMD’s Enterprise Health Solutions Division includes one of the top 4 Employee Assistance Programs in Canada and offers a comprehensive, digitally connected platform for corporations, insurers and advisors to better manage the health and wellness of their employees and customers.
For more information visit:
https://investors.cloudmd.ca/

ON BEHALF OF THE BOARD OF DIRECTORS
“Dr. Essam Hamza, MD"
Chief Executive Officer

FOR ADDITIONAL INFORMATION CONTACT:
Julia Becker
VP, Investor Relations
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