Telehealth Co. Adding Thousands to Large Contract

Reliq Health Technologies Inc. (RHT:TSX.V; RQHTF:OTCQB; A2AJTB:WKN) announced it has signed a contract expansion with a large U.S. health plan, possibly adding as many as 50,000 new patients to its iUGO telehealth platform.

The contract, previously signed last May, is with a health plan that operates Accountable Care Organizations (ACOs) and Health Maintenance Organizations (HMOs) in five states with over 3,000 doctors and more than 1 million patients.

Each new patient on iUGO is expected to bring in average revenue of US$65 per month, the company said.

"We are very pleased that our client has asked to expand their deployments to include multiple locations across Texas," Reliq Chief Executive Officer Chris Shields said. "This client is a large U.S. health plan that takes a proactive approach to patient care in order to improve health outcomes and reduce costs."

Reliq's 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 platform draws on data from fall detection devices, medication tracking, and vital signs. iUGO also flags patients who need additional monitoring at home or in facilities.

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

"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 Catalyst: Big Growth in Market

According to a report by Allied Market Research, an increase in the prevalence of chronic diseases is fueling the expansion of remote patient monitoring like Reliq's.

"The approach has strikingly evolved in the last decade, and it is becoming an increasingly important part of the healthcare infrastructure," the report said.

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 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.

Managed Healthcare Executive reported on a poll of 141 healthcare executives and clinicians in December. Conducted by Sage Growth Partners, software company MD Revolution commissioned the poll.

About 46% said they expected to increase their remote patient management budget in the coming year, another 46% said they expected to maintain their current level of spending, and just 7% said they planned to reduce spending on remote patient monitoring.

"I think that a lot of what these programs bring to the table is a different experience for the patient, which really leads to adherence or early detection," said Kyle Williams, chief executive officer of MD Revolution. "It's more touch points with the patients."

Plan Part of Large National Provider, Co. Says

Under the contract being expanded, Reliq is providing iUGO Care Remote Patient Monitoring, Chronic Care Management, and Behavioral Health Integration solutions, Shields said.

"The health plan is a subsidiary of one of the nation's largest providers of hospital and healthcare services and a Fortune 500 Company," Shields said. "Onboarding with this client in 2023 focused on Hildalgo County in Texas and will expand to Webb, Zapata, and Star counties and San Antonio, Texas, in 2024."

The company's final financial results for fiscal year 2023 have been delayed and are expected soon, the company has said. 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.

Reliq also announced last year it expanded its platform to cover remote monitoring for pediatric patients with diabetes and other conditions.

It 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.

Ownership and Share Structure

About 8% of Reliq's shares are owned by insiders, including former Chief Executive Officer Lisa Crossley, with 1.6% or 3.51 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 0.10% or 0.23 million shares, and Brian Storseth, who owns 0.06% or 0.14 million shares, Reuters said.

The company said 91.7% of the company is retail.

The company has 220.16 million shares outstanding, with about 216 million free-floating. It has a market cap of CA$53.88 million and trades in a 52-week range of CA$0.66 and CA$0.195.

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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