Dr Boreham’s Crucible: Alcidion

Small Caps | Dec 13 2022

Tim Boreham highlights opportunities for SaaS company Alcidion, which tracks patients through the medical system.

By Tim Boreham

ASX code: ((ALC))

Share price: 16 cents

Market cap: $202.9 million

Shares on issue: 1,268,069,053

Financials (September quarter 2022): receipts $12 million, cash burn $483,000, cash $16.2 million, quarters of available funding 33.

Year to June 30, 2022: revenue $33.4 million (up 33%), underlying profit $900,000 (up 80%), net loss $3.53 million (previous deficit $2.24 million), cash $17.3 million (down 31%)

Chief executive officer: Kate Quirke (a.k.a. Katrina Elizabeth Doyle)

Board*: Rebecca Wilson (chair), Ms Quirke, Victoria Weekes, Daniel Sharp, Simon Chamberlain

* Co-founder Prof Malcolm Pradhan retired on November 30 2022

Identifiable major shareholders: Prof Pradhan 10.6%, Ray Blight 7.3%, Australian Super 8.75%, Isle of Wight Pty Ltd (Colin MacKinnon) 5.6%, Kate Quirke 3.8%

As Great Britain strives to restore the ‘great’ bit with a fiscal austerity drive, Alcidion chief Kate Quirke is confident the nation’s beloved National Health Service (NHS) will be spared the brunt of the inevitable cuts under Prime Minister Who is it This Week?

“The NHS is the most loved institution in the UK - you decimate it at your peril,” Quirke says.

There’s much at stake for Alcidion, which has chosen the UK health market - specifically NHS system hospitals - for its ambitious rollout plans.

Alcidion seeks to transform healthcare delivery, by using data to manage patient flows and provide more usable patient information to doctors and nurses. Their systems track patients from admission, through triage, diagnosis, treatment and follow-up to discharge, as well as out of hospital tracking.

Last year the company derived 47 percent of its revenue from the UK, with the remainder predominantly from Australia and New Zealand.

Following two acquisitions in the Old Dart in 2021, this mix increasingly will be skewed to the UK.

Alcidion already has had significant growth in Britain over the last two years as the NHS invests in modernization - notably the GBP2 billion NHS Frontline Digitisation Program.

Ms Quirke likens the company to a bank that monitors customers’ suspicious transactions.

“We identify possible areas of risk and alert clinicians to that risk, so that we can impact or prevent those things from occurring.”

Moulded by acquisitions

Alcidion had its modest beginnings in Adelaide, on the back of its foundation product Miya.

The company was the brainchild of director Ray Blight, the erstwhile head of the South Australian Health Commission and Prof Malcolm Pradhan, a general practitioner and health informatics buff.

Alcidion back-door listed in February 2016, having raised $2 million at 3.1 cents a share.

The company has been molded by acquisitions.

In 2018, Alcidion bought the private MKM Health for around $12 million. MKM owned Patientrack, which ensures that doctors and nurses have the full patient information from different departments.

MKM also brought Ms Quirke to the table and she became Alcidion CEO in mid-2018. Then chairman and executive director Mr Blight became non-executive director, before quitting in June 2021.

Prof Pradhan retired on November 30, 2022, in what chair Rebecca Wilson dubbed a “natural evolution and a well-established succession plan adopted by the board several years ago”.

In April 2021, Alcidion acquired UK mob Extramed, which manages the flow of patients from the emergency department to outpatient services.

Extramed had a 19 percent share of the NHS trust system (the bodies that own the various hospitals). This opened the way for Alcidion to sell its products to additional hospital sites.

Before the ink had barely dried on that one, the company acquired Silverlink Software, “one of the largest and few remaining specialist patient administration systems in the UK NHS market”.

The $55 million purchase was funded by a capital raising (via a placement and rights issue) of the same quantum.

The Silverlink deal enabled the company to provide a “full end-to-end solution” to UK healthcare providers, in relation to electronic patient records.

Sweet product suite

In essence, Ms Quirke says, the company consolidates all available digital data available and, in some cases, enables paper to be converted to digital records.

“The data can be used to improve decision-making and efficiency and safety of healthcare delivery,” she says.

The flagship product, Miya Precision, is an interoperable platform that augments a customer’s existing information technology (IT) system.

Sitting beneath Miya Precision, 16 Miya modules cover functions including patient flow and bed management, vital signs recording and - of course - patient records.

Now known as Miya Assessments and Observations, Patientrack is all about nursing care at the bedside. Silverlink PCS offers non-clinical patient administration, while Extramed is all about patient flow management in the UK.

Hooray for the UK

In the UK, the NHS Frontline Digitisation Program aims to have 90 percent of the NHS trusts on electronic patient records (EPRs) by December 2023, with the remainder converted by March 2025.

The company is also eyeing the amalgamation of trusts into ‘regional integrated care systems’ which in non-health-administrator-speak means that the various hospitals combine and share data.

One benefit is that the administrators know where beds are available across the whole region, rather than one hospital.

Ms Quirke says the company ended 2022 with sales in 39 NHS trusts - 27 per cent of the total. But all these trusts use only one product, so there’s potential for cross selling.

Last week, the company said it had signed up University Hospital Southampton, an NHS trust, to use Miya Precision. The deal is worth $2.8 million over three years.

Earlier wins included the Herefordshire and Worcestershire Health and Care NHS, which signed a five-year deal to use the Miya Flow patient monitoring product (the first community NHS trust to do so).

“Around 90 [NHS trusts] are seriously in play between now and [the end of] 2023,” Ms Quirke says.

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