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OptimizeRx Corp. (OPRX)
Q4 2018 Earnings Conference Call
February 26, 2019 4:30 PM ET
William Febbo – Chief Executive Officer
Doug Baker – Chief Financial Officer
Miriam Paramore – President
Conference Call Participants
Andrew D’Silva – B. Riley FBR
Ryan Daniels – William Blair
Richard Baldry – Roth Capital
Eric Martinuzzi – Lake Street
Previous Statements by OPRX
» OptimizeRx Corp. (OPRX) CEO William Febbo on Q3 2018 Results - Earnings Call Transcript
» OptimizeRx Corp. (OPRX) CEO William Febbo on Q2 2018 Results - Earnings Call Transcript
» OptimizeRx's (OPRX) CEO William Febbo on Q1 2018 Results - Earnings Call Transcript
Now, I’d like to turn the call over to OptimizeRx CEO, William Febbo. Please go ahead, sir.
Thank you, Justin. Good afternoon everyone. Thanks for joining us on the call today. As you all saw from the earnings release, we issued earlier today, we’ve made a lot of progress in growing our digital health messaging platform in 2018. On the call today, I’d like to talk about what went into this record quarter and the foundation we’ve continued to lay in support of our future growth and expansion. We saw continued improvement across the board in Q4 in fact we realized our ninth consecutive quarter-over-quarter revenue growth and our first year of profitability.
Revenue was up 65% from a year ago quarter and up 21% sequentially to a record $6.6 million. These results reflect strong client demand and expanding budgets, which we believe is due to the high return on investment or ROI as you’ll hear today on marketing dollars that we consistently deliver for our clients as well as a mix of messaging solutions we provide.
As the largest digital health network of its kind OptimizeRx provides patient access to savings and adherence directly through the doctor managed electronic health records, EHRs, and electronic prescribing e-prescribing systems. Taking the perspective of the investor, I would pay attention to OPRX for three principle reasons, the size of the market opportunity with a lot of market share yet to capture. We’re at the center of all the stakeholders, Pharma, physicians and patients, and we have a platform which can enable multiple revenue streams, which help all the stakeholders, particularly focused on affordability and adherence to topics we’re hearing about daily.
These days the point of care presence has become increasingly essential given how EHR has now dominate the time and attention of healthcare providers. Most physicians now spend more than five hours a day interacting with patient health records through an EHR interface, whether it’d be viewing test results and documenting physician notes for issuing e-prescriptions.
If 2018 was anything like 2017, more than 2 billion e-prescriptions were transmitted from doctor to pharmacy. This phenomenally high number reflects on 90% of the ambulatory care providers now use the EHRs and that e-prescribing now exceeds 85% of all prescriptions written, according to a 2018 Surescripts report. In fact, most hospital systems now require that all medications to be e-prescribed. The reason for this increasing trend is due to how e-prescribing enhances the safety of patients and the quality of care, since there is no manual writing involved and therefore less probability of prescription errors. E-prescribing also helps with security checks and maintaining the complete historical data for a patient.
According to a market studies published earlier this month, the e-prescribing system market will register a 32.5 CAGR in terms of revenue growth and the global market size will reach 2.1 trillion by 2024, up from 510 million in 2019. Of those two billion e-prescriptions transmitted annually in the U.S., 10% of these transactions involve brands with copay savings programs. This means we have a potential to deliver more than 200 million transactions annually. Given the escalating costs of healthcare and especially the cost of prescriptions being shifted increasingly to patients, the need for copay saving programs is expected to increase. In anticipation, the pharma industry has reportedly set aside more than $8 billion to cover copay programs.
Based on these factors related to e-prescribing, and copays and indications from our clients, agencies and partners, we estimate that the total addressable market for patient savings via copay is worth well north of a $1 billion once the market fully adopts this channel. This TAM, total available market, is augmented by the other types of messages we are developing between pharma and the point-of-care. Sufficed to say, we believe there is ample TAM to grow this business.
We believe we’re still very much in the early days of this opportunity and we enjoy a first mover advantage, certainly as any public company goes, we are truly a pure play in this space. We now have a technology infrastructure in place at the right time for this industry to see change. We are able to connect the pharmaceutical manufacturers and physicians in a seamless, efficient way as we generate high ROI for our clients all while benefiting patients. For certain, we have an amazing direct reach into health care providers through our EHR network. In fact, we have direct access to more than half of all providers. And to say we’ve only just begun our expansion into the hospital market.