MedAvail Holdings, Inc. (Nasdaq: MDVL) (“MedAvail”), an innovative
technology-enabled pharmacy company, today announced the execution
of a strategic restructuring and reprioritization of its business
targeted to deliver profitability.
Following an extensive review of the market landscape, growth
strategy and structure of the business, the company is taking
actions and restructuring its organization to focus on its pharmacy
technology business and exit its pharmacy services and SpotRx
business. With respect to the pharmacy services and SpotRx
business, the company has hired a broker and is in active
negotiations regarding the sale of its pharmacy assets.
These actions aim to significantly reduce headcount and cash
burn, which position the company to achieve its goals of delivering
profitable growth and positive cash flow sooner. In connection with
the restructuring, the company is also evaluating multiple
financing options, including with existing investors.
“We believe that the critical steps we are taking to focus on
our pharmacy technology business provide a clear roadmap to
delivering profitable and sustainable growth and to maximizing
value of the Pharmacy Tech business for our shareholders,” said
Mark Doerr, Chief Executive Officer of MedAvail.
Pharmacy Technology
MedAvail’s pharmacy technology business represents a significant
growth opportunity. Through this business, MedAvail offers
customers the ability to purchase the MedCenter and to license
MedAvail’s software in order to provide point of prescription
dispensing solutions under their own brands. This offering
generates a profitable recurring revenue stream and favorable unit
economics, such as a gross margin for 2022 that is expected to be
greater than 45%.
MedAvail’s MedCenter technology platform enables remote
medication dispensing through MedAvail’s proprietary kiosks which
are integrated into the customers’ patient-care information
systems. Patients interacting with these kiosks are able to consult
virtually with a customer-employed pharmacist and to fill their
prescriptions at the point of care through the MedCenter,
eliminating the need to make a separate trip to a pharmacy.
Increasing patient access to prescription medications with expert
services at the point of prescribing contributes to increased
patient satisfaction and addresses key barriers to medication
adherence.
The restructured company will focus on technology and pharmacy
management integrations to support its substantial pipeline for new
partnerships. The pharmacy technology business today addresses a
large opportunity with urgent care sites, expanding patient access
to quality pharmacy care and prescription medications quickly and
efficiently, and the company is focused on broadening its footprint
within this channel. MedAvail will also grow its technology
business with value-based providers by leveraging its proven track
record of adding significant value to value-based care providers
with the former SpotRx business.
Pharmacy Services and SpotRx Details
MedAvail is exiting the pharmacy services and SpotRx business.
While the business has opportunities for growth and the company
demonstrated an ability to significantly scale its retail pharmacy
operations, it is not aligned with the company’s strategy to
shorten its path to profitability.
Based on the renewed focus on pharmacy technology and exit of
pharmacy services, the company is reducing its staff by
approximately 75 percent. The actions that are being undertaken by
MedAvail are expected to result in annualized operating expense
savings of $35 million to $37 million compared to the full year
2022.
The company’s business following the exit from the pharmacy
services business will solely consist of its pharmacy technology
business. Total sales for the pharmacy technology business in 2022
is expected to be in the range of $1.2 million to $1.4 million,
which included a retail segment that will not be part of MedAvail’s
sales channel focus going forward. The company expects pharmacy
technology to support strong growth in 2023 over 2022 with respect
to this business. Further, pharmacy technology has historically
attracted higher margins than the pharmacy services segment.
“We recognize the impact that our actions will have on our
stakeholders, including our team members who have championed our
mission. I want to express my gratitude to our entire team for
their contributions and service to our partners and patients,” said
Mr. Doerr. “Faced with a challenging capital market environment and
need to preserve cash, we felt it was important to refocus the
business on our core value proposition in technology and to
accelerate our path to profitability.”
Mr. Doerr concluded, “We believe that these actions are the
right strategy to position MedAvail for a bright future ahead and
appreciate the support of our board and shareholders in the next
phase of our growth. We look forward to providing an update on our
progress during our fourth quarter earnings call.”
Full Year 2022 Financial
Outlook
MedAvail affirms its previously issued guidance for full year
2022 revenue to be at least $42 million, representing growth of at
least 90% over full year 2021 revenue. The company also affirms its
guidance of 40 new net dispensing deployments for full year
2022.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any securities described herein,
nor shall there be any sale of securities in any state or
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to the registration or qualification under the
securities laws of any such state or jurisdiction.
About MedAvail
MedAvail Holdings, Inc. (NASDAQ: MDVL) is a technology-enabled
pharmacy company, providing turnkey in-clinic pharmacy services
through its proprietary robotic dispensing platform, the MedAvail
MedCenter, and home delivery operations, to Medicare clinics.
MedAvail helps patients to optimize drug adherence, resulting in
better health outcomes. Learn more at www.medavail.com.
Definition of Key Metrics
Net Dispensing Deployments
We define net dispensing deployments as sites that are live,
meaning that such sites have payer network acceptance, pharmacy
board approvals and trained clinical staff or clinical account
managers.
Forward Looking Statements
Certain statements included in this press release that are not
historical facts are forward-looking statements for purposes of the
safe harbor provisions under the Private Securities Litigation
Reform Act of 1995. Forward-looking statements generally are
accompanied by words such as "believe," "may," "will," "estimate,"
"continue," "anticipate," "intend," "expect," "should," "would,"
"plan," "predict," "potential," "seem," "seek," "future,"
"outlook," "project," and similar expressions that predict or
indicate future events or trends or that are not statements of
historical matters. These forward-looking statements include, but
are not limited to, statements regarding MedAvail's business
strategy and market opportunity; financial guidance for 2022 and
preliminary estimates of selected financial results, potential
future revenue and cost savings projections, including
restructuring and reorganization costs, and expectations for sales,
growth and profitability; customer demand and expansion plans;
margin, utilization and cost reduction improvements; customer
partnerships; and the consummation of potential strategic
divestitures and potential financing transactions. These statements
are based on various assumptions, whether or not identified in this
press release, and on the current expectations of MedAvail's
management and are not predictions of actual performance.
Forward-looking statements are subject to a number of risks and
uncertainties that could cause actual results to differ materially
from the forward-looking statements, including but not limited to
risks related to our ability to successfully achieve the benefits
of a pharmacy technology only business and the efficiencies related
to a restructuring and reorganization, and risks relating to our
ability to successfully consummate potential strategic, financing
and restructuring transactions, as well as other risks discussed
under the heading "Risk Factors" in MedAvail’s Annual Report on
Form 10-K for the year ended December 31, 2021, filed with the
Securities and Exchange Commission (“SEC”) on March 29, 2022,
MedAvail’s Quarterly Report on Form 10-Q for the quarter ended
September 30, 2022, filed with the SEC on November 10, 2022, and
other filings MedAvail makes with the SEC in the future. Additional
information is also set forth in MedAvail’s Annual Report on Form
10-K for the year ended December 31, 2021, MedAvail’s Quarterly
Report on Form 10-Q for the quarter ended September 30, 2022, and
other filings MedAvail makes with the SEC in the future. Any
preliminary estimates regarding selected 2022 financial results are
further subject to the completion of management’s and the audit
committee’s final reviews and MedAvail’s other financial closing
procedures and are therefore subject to change. You should not
place undue reliance on such preliminary information and estimates
because they may prove to be materially inaccurate. While we
believe that such preliminary information and estimates are based
on reasonable assumptions, actual results may vary, and such
variations may be material. If any of these risks materialize or
our assumptions prove incorrect, actual results could differ
materially from the results implied by these forward-looking
statements. These forward-looking statements speak only as of the
date hereof and MedAvail specifically disclaims any obligation to
update these forward-looking statements.
Contacts:
Investor Relations
Ji-Yon Yi
Gilmartin Group
ir@medavail.com
SOURCE MedAvail Holdings, Inc.
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