MDR- The Investment Case

Afternoon Folks,
As I discussed yesterday I have recently had a discussion with the CEO Rob Read and I am impressed with what we have here and very much looking forward to watching it evolve.
In terms of an investment case what I look for is a few simple indicators.

• Management- Get to know what they have in the way of experience and read the level of passion and vision they have to make it all the way. In the case of MDR I believe this is a big tick and I fully understand the path they are going for which is entirely aligned with my own and what I know works from doing this along time now with many companies.
• Management Performance shares- What I look for here is the performance share criteria set high and not just a low ball grab and run. We are well looked after here and the criteria is set at points which will require the business to have full critical mass momentum in order to exercise, this offcourse significantly raises the prospects of the valuation going up.
• Is the technology disruptive- Answer is yes no doubt and very much has the support of government ,GP’s and pharmacies which is rare to have little resistance in an existing supply chain.
• Does the technology have first mover status- Yes indeed it does not only here in Australia but the world. The crew have put in a lot of effort into monitoring any potential competitors and to date can’t find anything close and surprisingly everything is still SMS based. I believe there is another platform but it’s purely a digital script provider which can’t attract capital to expand and is not a holistic solution to the health industry.
• Does the technology have high barriers to entry- Yes because as discussed above at this stage we are the only ones in this space and once you have taken a market like this that is fragmented it makes it almost impossible for a competitor to enter unless there is a massive point of difference which is almost impossible to do compared to the medavisor platform its very well thought out.
• Does the technology have a money advantage or solve a problem- Absolutely as we all know this has many moving parts to it.

1. Saving doctors time to address more critical appointments- Strain on the health system is at all-time highs both at hospital and clinic level.
2. The cost of non-adherence is a big issue for governments budgets and overall health costings of private health providers.
3. Extra 20% average better adherence with med advisor for drug manufactures- You can only imagine how attractive this will be for some of the world’s largest companies.

Key points from discussion:

1. Road shows potentially as soon as July Sydney,Brisbane,Melbourne and Perth- This is where I believe the company has enough fundamental fire power to release during, just before or after these events. As I mentioned this is a pressure cooker in terms of announcements and valuation increases and the lack of investment is due to the story simply being not out there yet watch this space MDR is seriously under the radar just the way I like it every story I have had success with has been the same in this regard.
2. Medicare rebate- As we all know government budgets worldwide are unstainable particularly in health with no end in sight. One thing that was noted is the speed at which financial structure and the overall blueprint for e-health is being conducted here in Australia with the idea of Medicare integration as soon as possible.  MDR are well advanced in taking note of what is happening in this space and there is no doubt the business they are building now will be the primary platform integrated in to reimbursement programmes with competitor’s way behind if any. In the meantime, monetising the platform in the private space is HUGE even without the Medicare side so by the time the proof of concept is done there Medicare will be a shoe in IMO.
3. International opportunities- This space is being scoped for near term deals at the moment in parallel with a fast scaling up the domestic business being the “proof of concept” for international partners. The right person is in this role and at some stage the toe will be dipped in overseas as interest is high. I love the way they are approaching this one.
4. GP link full release- (very exciting) I get the feeling we are very close to this being completed in full reading between lines. There is mixed opinion on HC around this but the very extensive consumer surveys tell a different story here and I agree with the data. The company is anticipating very good revenue growth and fast (very scalable) uptake of the GP link service. This is made even better by the fact no incumbent part of the supply chain doctors etc have any resistance it’s a win win. The thing which makes me have full conviction here is they have done so much work on the ground floor with a significant amount of doctor’s patients and pharmacies to ensure that this is the right product to take into market. This one is hands down a lot better than some expect ill state that right now. This is also the platform that will be the only platform that can have operational proof of concept for Medicare rebate when that starts being legislated literally any month.  Both Private and Medicare will be a large windfall for the company one in the shorter term and one medium term.
5. One aspect I very pleased about is the fact that the business model is based on market maximum penetration first then secondly you start monetizing the platform. Right now since listing the company is reaching the point where numbers are starting to grow exponentially and the phase of major monetisation is on its way. (The best time to jump on board as an investment).
6. Chemist warehouse have just released their own attempt at pharmaceutical management and like chino420 said its reviews are not that great. Rob and I discussed this one and both agreed what this will do is drive awareness to apps in the space at their expense but like all big companies this will cost a lot for them in advertising and is probably not expected to make big waves a net benefit to medavisor. I also add they are the only ones doing this in house and it is expected to be the only one because it’s not their core business more out of ignorance. Also once the e health component and GP link gets underway soon they cannot enter this market by law and moral obligations therefore impact is very limited on us in fact it’s a positive due to the advertising for app engagement.

In conclusion please consider all the points and I have personally taken advantage of the end of the broker IPO float and started accumulating BIG time.
This is the perfect time IMO right on the limits of exponential numbers growth and just before the major platform monetising and not to mention flying under the radar which is coming to an end.
I will enjoy the story playing out with you guys please make an effort to join in as this is what is good about HC.


Cheers bonkers