IBA has the right medicine for GPs Helen Matterson June 15, 2005 MEDICAL software group IBA Health is offering doctors a 50 per cent stake in a new business that will rival its former takeover target HCN.
IBA's attempt to get a greater share of the GP software market was thwarted in December when Primary Healthcare trumped its scrip bid for HCN with $111 million in cash.
IBA's shares have suffered since missing out on HCN, dropping as low as 41c this month, as the market grows impatient for an alternative.
HCN has 75 per cent of the Australian GP market - compared with IBA's 10 per cent - and adding this to IBA's stronghold in the hospital sector was considered the catalyst that IBA needed to turn it from a minnow to a $250 million company.
However, the company is confident yesterday's launch of Nxthealth will start to turn sentiment around.
"This achieves the same result (as taking over HCN) but is more cost-effective with better prospects for growth and I think the market will wake up to that," IBA executive chairman Gary Cohen said.
Nxthealth, in an unusual step, will offer individual GPs and specialists, practice managers and divisional GP groups 500 million options over shares in the new company which IBA plans to list in three years.
To register for the options is free, but for these to vest, doctors must subscribe to Nxthealth's software package practiX and/or buy other services.
After three years the options can be exercised for 1c each. At a maximum of 30,000 options per doctor, this would mean an outlay of $300 before they realise a stake in Nxthealth when it lists.
Making the offer now is timely, as the federal Government seeks to accelerate the use of an electronic health record and GPs look to upgrade their software.
IBA is targeting Australia's 40,000 GPs with the offer, appealing to them with guarantees it won't on-sell patient data or subject them to advertising from pharmaceutical companies, as has happened with HCN.
Nxthealth has attracted influential health professionals to be directors on its board, including former Australian Medical Association president Kerryn Phelps and industry consultant John Aloizos.
IBA shares shed 1.5c to 44.5c.
IBA Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
