Telehealth Co. Expands Platform To Cover Pediatric Patients

Telehealth company Reliq Health Technologies Inc. (RHT:TSX.V; RQHTF:OTCQB; A2AJTB:WKN) announced it has expanded its platform to cover remote monitoring for pediatric patients with diabetes and other eligible conditions.

The company said it expects to add more than 3,000 pediatric patients to iUGO by Q2 2024 through existing contracts with home health agencies in Texas.

"In Texas, Medicaid covers home telemonitoring (remote patient monitoring) for children with diabetes, hypertension, end-stage solid organ disease, organ transplant or who require mechanical ventilation," said Reliq Chief Executive Officer Lisa Crossley. "These vulnerable young patients can benefit greatly from in-home monitoring of their chronic conditions to identify potential complications, enable early interventions, and prevent hospitalizations."

The iUGO platform helps manage diseases such as chronic obstructive pulmonary disease (COPD), congestive heart failure, diabetes, hypertension, and others. Patients get audible reminders to step on a scale, take their blood pressure, or prick their fingers for glucose monitoring. The information is automatically uploaded to the cloud. 

The company is gathering "continuing momentum," wrote Maxim analyst Allen Klee, who rated the stock a Buy with a CA$1.75 per share target price.

Drawing on data from fall detection devices, medication tracking, and vital signs, iUGO flags patients at home or in facilities who need additional monitoring.

The patients being added through existing Texas contracts will net an average revenue of US$50 per patient per month at 70% gross margin, the company said. Onboarding for those patients will begin next month.

Home care can provide comfort for a child to recover quicker from treatment, experts said.

"Children heal faster in their own home," said Susan Huff, senior director of Johns Hopkins Pediatrics at Home. "They sleep better in their own beds. There is data to show that children recover quicker when they are out of the acute care setting. Home care visits may decrease doctor visits and repeat hospitalizations."

The Catalyst: An 'Inflection Point'

Reliq had its first profitable quarter during the three months ending March 31 with a gain from operations of CA$731,017 YoY. It also has started scoring larger contracts for iUGO, including one with a U.S. health plan that operates in five states with more than 3,000 doctors and 1 million patients.

The telehealth market was valued at US$128.12 billion in 2022 and is projected to grow to US$504.24 billion by 2030, a compound annual growth rate (CAGR) of 19.7%, according to Fortune Business Insights.

The company is gathering "continuing momentum," wrote Maxim analyst Allen Klee, who rated the stock a Buy with a CA$1.75 per share target price.

"We believe the company has hit an inflection point of accelerating revenue and EBITDA profitability," he wrote. "Tailwinds include a significant number of larger contracts that have been won."

The company will not release final financial results for fiscal year 2023, which ended June 30, until October. But Crossley recently told analysts and shareholders that according to estimates, revenues more than doubled from fiscal year 2022.

iUGO is a "compelling offer for practitioners," Klee wrote. "A typical practice can bring in more than US$1 million in Medicare and Medicaid payments implementing it."

Market Getting 'Significant Boom'

The telehealth market was valued at US$128.12 billion in 2022 and is projected to grow to US$504.24 billion by 2030, a compound annual growth rate (CAGR) of 19.7%, according to Fortune Business Insights.

"The market is getting a significant boom with the rising start-up funding and launch of products, especially for virtual consultations," the researchers wrote.

The COVID-19 pandemic brought the world to a standstill and put many burdens on healthcare workers. 

"This has opened new market opportunities for digital health platforms," according to the report. "The demand for virtual consultations increased by many folds amid the crisis,

The company said the platform could have particular benefits for young patients.

"Providing proactive support to pediatric patients through in-home monitoring can have a dramatic impact on patients’ long-term health, helping to prevent nerve damage, cardiovascular disease, organ damage, and other complications that can lead to shortened lifespans and poor quality of life in adulthood," Crossley said.

Reliq also recently announced a post-discharge program for acute hospitals on iUGO. Called iUGO Care, it supports patients being discharged from an acute care hospital to their homes, inpatient rehabilitation, assisted living, or skilled nursing facilities.

Hospitals can be assessed penalties of up to 3% of total Medicare reimbursement for the following year if they don't meet targets reducing readmissions, which could mean millions of dollars in lost revenue, Reliq said.

More than 96% of all hospitals in Florida were assessed financial penalties in 2021 because of the issue. Over 2,300 U.S. hospitals will pay more than US$320 million in such penalties in 2023, according to Kaiser Health News. 

Ownership and Share Structure

About 8% of Reliq's shares are owned by insiders, including Crossley, with 1.6% or 3.22 million shares. About 0.3% of the company is owned by institutional investors, including FNB Wealth Management, with 0.01% or 0.03 million shares, according to Reuters.

Other top investors include Eugene Beukman, who owns 0.11% or 0.23 million shares, and Brian Storseth, who owns 0.07% or 0.14 million shares, Reuters said.

Crossley said 91.7% of the company is retail.

The company has 203 million shares outstanding, with about 200 million free-floating. It has a market cap of CA$91.3 million and trades in a 52-week range of CA$0.76 and CA$0.375.

Important Disclosures:

1. Reliq Health Technologies Inc. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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