The Small Cap To Watch On The Health Tech Front

FYI | Nov 26 2020

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–The below is a company-sponsored announcement–

The technology sector has flourished since the emergence of COVID-19 in March 2020. In particular, the growth of this sector is underscored by increased interest in the Health-Tech industry, with online healthcare services such as telehealth and AI capabilities in high demand.

The accelerated adoption of digital healthcare is predicted to propel further in a post-pandemic world.

Major 2020 healthcare trends include telehealth, wearable health sensors and trackers, AI health intelligence and personalised mobile apps. These trends are set to continue into the new year and beyond, with consumer interest expected to intensify accordingly. 

With consumer interest, comes investor interest and the amount of merger and acquisition activity occurring within this area is significant.

Teladoc’s merger with Livongo Health in an $18.5BN deal that will create a leader in consumer-centred virtual health care is the recent stand-out.

The Teladoc deal is notable, not only for its size but for the trend it is part of on the NASDAQ.

Looking at the NASDAQ, four of the top 7 IPOs in October were in healthcare.

This interest paves the way for other stocks to consider a US listing.

Including ASX stocks.

Certainly, the uptake of health tech services in Australia mirrors the global trend.

Services such as those offered by the $156M capped MyFiziq ((MYQ)), which is in the process of getting all its ducks in order for a NASDAQ listing.

Very few companies have seen growth like MyFiziq, which, in just over six months has seen its share price rise 1100% from 12.5c to a high over $1.50 just last month. MYQ is currently trading at 95c (20/11/2020) and the company has a market capitalisation of $118M.

MYQ has developed and patented a proprietary dimensioning technology that enables its users to check, track and assess their dimensions using a smartphone, providing privacy and accuracy as images and data never leave their phone.

The application measures body fat indirectly through machine learning and body shape analysis.

It also utilises surrogate measures of a person's total body fat mass, such as BMI, waist circumference, waist to hip ratio and waist to height ratio. These surrogate methods have been significantly associated with non-communicable diseases directly correlated with obesity.

The company has seen fast-tracked growth since April through its impressive technology being taken up by multi-enterprise partnerships, affording them diversification across multiple verticals.

In addition to MYQ’s strong technology base and technical capability, the past few months have allowed its executive team to prove its commercialisation skills, as it has attracted multiple international partnerships in numerous verticals.

Indeed, this entrance into multiple industries allows for significant cross-selling opportunities. MyFiziq has operations spanning across the $672 billion health and fitness market, the $84.9 billion corporate wellness market, the $1.3 trillion apparel market, the $289 billion mobile health market and the $9.6 trillion medical and insurance market.

The app is patented in Canada, US, Japan, Australia, China, Singapore and South Korea with their patent-pending in Europe, India, Hong Kong and New Zealand. Patent protection across these regions could open up vast markets.

With these market-moving developments, MYQ is in a promising position for further share price momentum – especially following their upcoming NASDAQ dual listing.

NASDAQ listing imminent

MYQ is moving closer to its mooted NASDAQ listing and has recently hired their lead underwriter – Ladenburg Thalmann & Co. Inc, who will help push MYQ’s proposed NASDAQ listing along.

The company possesses over 135 years of experience on the New York Stock Exchange with vast knowledge across the financing and capital markets, which will prove invaluable as MyFiziq goes through this period of rapid expansion.

A dual NASDAQ listing will open up a huge market segment to this health tech provider, and a much bigger capital market compared to the ASX. This market is also greatly attuned to the tech and biotech industries, with many merger and acquisition transactions among MyFiziq’s peers in the last 12 months being NASDAQ-listed entities.

Reasons for companies entering into dual listings include additional liquidity, differing time zones allowing for shares to trade for longer time periods, and increased access to capital.

Additionally, MYQ recently completed a substantially oversubscribed $5M placement to sophisticated and institutional investors. The placement was priced at $1.20 and included a 1:1 free options for placement participants at a strike price of $1.60 and a 3-year expiry date.

This raise couldn’t have come at a better time, with MyFiziq’s business involving corporate transactions with a multitude of players in the health and wellness sector and the significant investment required for research and development purposes.

The power of partnership

Since April, MyFiziq has announced over 10 partnerships spanning five verticals. Partnering agreements are central to MYQ’s operational expansion and revenue growth.

Such partnership strategies allow for rapid rollout across multiple verticals using their partners balance sheet to fund the often expensive distribution and marketing costs needed for rapid and successful expansion.

Partners use MyFiziq’s technology to assess, assist, and communicate outcomes with their clients in the pursuit of better health, an improved understanding of the risks associated with their physical condition, as well as having the monitoring benefits of tracking the changes they are experiencing through training, dieting, or under medical regimes.

Partners also benefit from the group’s Software-as-a-Service (SAAS) pricing solution as prices reduce with scale.

Nexus deal could be a company-maker

Perhaps the most significant out of their many partnerships this year was the 5 October announcement of a binding term sheet with Nexus-Vita Pte Ltd, a Singapore-based health monitoring and management technology company.

The deal will give MYQ annual recurring revenue of US$3.58M (AU$5M), signifying a company-making milestone in MYQ’s evolution and ability to generate material revenues going forward.

Nexus-Vita has developed a platform that is the bridge between an individual’s medical health and management, striving to improve lifetime health and reduce the health costs for individuals, governments and the healthcare and insurance systems around the world.

The application adopts state of the art record-keeping protocols to allow individuals to track and manage all facets of their health and health records in a singular digital platform.

The pair will collaborate to integrate MyFiziq’s body tracking application into all of Nexus’s verticals; commencing with an initial integration into Nexus’s pre-emptive health platform by January 2021, and a full market-ready integration into the Nexus platform by the first quarter of 2021.

Nexus has undertaken to deliver a minimum of 100,000 active users within the first 12 months of launch, providing MYQ’s shareholders with a significant degree of revenue predictability.

Further milestones

The Nexus deal is only one of a comprehensive list of milestones MYQ has reached this year.

For example, just last week MYQ announced a binding agreement with The Original Fit Factory Ltd, with MYQ’s body tracking technology to be integrated into both offerings; TRUCONNECT  and TV.FIT. Together, these platforms have both B2C and B2B solutions that have a reach of approximately 60 million end users across 71 countries.

A collaboration with Bearn LLC will target over 25 million users with an app available on the Apple App Store and Google Play store.

In recent weeks, MYQ has signed an definitive agreement with MVMNT Inc, the digital delivery arm of FitLab LLC. MyFiziq’s technology will be integrated into MVMNT’s branded digital training experience for subscribers to use and enjoy. 

Further expansion has been succeeded by a partnership with Jayex Healthcare Limited (ASX: JHL), a UK based health communication monitoring and management technology company. This collaboration will grow Jayex Connect, a platform to improve the efficiency and productivity of GPs in the UK.

Keep your eyes peeled

2020 has seen MyFiziq grow from a small health tech stock to a big mover in the industry, and such success has occurred during a period of mass uncertainty and volatility.

Recent price correction and the number of deals presents MyFiziq as potentially good value. Sophisticated investors entering at a placement of $1.20 should be reassured that the current price could indeed mean a buying opportunity for new investors.

With the amount of initiatives and announcements underway, and MYQ also falling within one of the hottest sectors on the market at the moment, 2021 is projected to be a noteworthy year for the company.

Earlier today the corporate announcement above was publicly released. FNArena is acting as a partner in distribution to broaden the reach. No journalists have been involved in the re-publication of this announcement.

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