“We were one of those 12-year overnight successes,” says Jim Joyce, chief executive, and co-founder of HealthBeacon PLC (EURONEXT:HBCN).
A lot of work has gone into getting the business to where it is today, working with drug companies to develop the ideas behind the med-tech business.
For many, an IPO would be the end of the journey; namely, an opportunity to cash out.
But for Joyce, the Euronext Growth Dublin listing, which brought in €25mln of new capital and valued the business at €100mln, is the start of a new voyage.
The journey is about gaining commercial traction for HealthBeacon’s smart tools and software, which have the ability to change lives and save valuable healthcare resources at the same time.
The concept is devilishly simple, as is the solution.
Around 30mln people in Europe and the US are forced to take painful subcutaneous injections for conditions such as severe asthma, multiple sclerosis and growth hormone deficiency (to name just three).
Adherence rates rise
What the stats reveal is that adherence to the regimen drops to 50% over the long haul, causing complications for patients and problems for the prescribing physician.
HealthBeacon’s approach boosts that level up to around 77% using connected technology.
What Joyce and his team have done is turned a sharps bin into an ‘internet-of-things’ device that is at the heart of the system.
Sharps bins are regulated plastic boxes that are created to safely store used syringes and auto-injectors.
However, repurposed by HealthBeacon, their smart sharps bins provide real-time data on when and what medication was used, this can then help power user engagement and education delivered by app. The data also informs clinical decision-making.
Adoption of this patented and US Food & Drug Administration approved new solution has been significant – even at this nascent stage of the commercial cycle.
It currently has around 10,000 users with that base expected to grow to four to five-fold by the end of the year and on to 100,000 in 2023.
Bedrock of original data
The established user base has allowed is for HealthBeacon’s researchers to track over 550,000 individual injections to build a bedrock of data from the bin that informs the software.
It sees three routes to market for its product, for which it charges between US$20 and US$100 per user depending on the channel.
It is working with the drug developers, including companies such as Abbvie (NYSE:ABBV), Amryt, Sanofi and Teva; it also has a direct-to-consumer (DTC) offering, which is being spearheaded by US home appliances group Hamilton Beach; and it is working with payors, such as Laya Healthcare and the UK’s NHS.
All of this creates a software-as-a-service business with a high level of annual recurring revenue.
‘Moated’ technology
Warren Buffett’s notion of moats also comes in here too; protection that will keep out the competition.
In HealthBeacon’s case they are manifold: from strong patent coverage for the devices, regulator sign-off and technological know-how to its data collation and commercial relationships – all of which would take years to build up from scratch.
The target market, meanwhile, is not an insubstantial one. Remember, there are 30mln people in Europe and the US that self-administer injections.
At an average US$30 monthly fee that’s a possible US$10bn of annual recurring revenue.
With such a huge target to aim for, it’s surprising that HealthBeacon didn’t tap the market for more than €25mln it will use to grow the business from here.
It has placed a build order for 35,000 new sharps bins to meet its immediate requirements, while it is also investing the IPO proceeds to build sales, marketing and operational support. Joyce reckons the team could grow to 150 from around 60 now.
R&D focus
R&D will also be a priority with HealthBeacon looking to develop a pipeline of future connected products.
“With the tech stack we have, we can integrate other devices,” says Joyce.
“So, later on in the year, we're going to be introducing other hardware applications to track the outcomes of patients.”
The IPO revealed there was strong appetite for the story; for a local technology, champion joining the Euronext Dublin exchange.
But obviously, the interest went beyond backing a potential new national champ.
“Fundamentally, we're playing for leadership in our category, and they [IPO investors] got that,” says Joyce.
“If you look at what we’ve invested in – tech stack, regulation, client acquisition – they understood and were willing to back that.”