TABULA RASA HEALTHCARE, INC. (TRHC) SPO
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|Company Name||TABULA RASA HEALTHCARE, INC.|
|Company Address||228 STRAWBRIDGE DRIVE
MOORESTOWN, NJ 08057
|CEO||Calvin H. Knowlton|
|Employees (as of 12/31/2016)||241|
|State of Inc||DE|
|Fiscal Year End||12/31|
|Shares Over Alloted||0|
|Shareholder Shares Offered||1,650,000|
|Lockup Period (days)||180|
|Quiet Period Expiration||--|
We expect the net proceeds from the sale of the common stock that we are offering will be approximately $43.1 million, based on an assumed offering price of $34.20 per share, the last reported sale price of our common stock on the NASDAQ Global Market on December 1, 2017, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We currently expect that we will use the net proceeds received by us from this offering to repay approximately $35 million of our outstanding indebtedness under our Credit Facility, which was incurred in connection with our acquisition of Sinfonía, to continue to develop new product offerings, to enter into new market segments with our existing solutions, to expand our sales and marketing infrastructure, to fund additional acquisitions of businesses and technologies and for working capital and general corporate purposes. Our Credit Facility matures on September 6, 2020 and bears interest at a rate equal to a prime rate plus an applicable margin. Under the Credit Facility, prime rate is defined to mean the greater of (i) 3.5% or (ii) the prime rate published in the Money Rates section of the Western edition of The Wall Street Journal, or such other rate of interest publicly announced from time to time by Western Alliance Bank as its prime rate. The applicable margin for each month ranges from (0.25%) to 0.25%, depending on our Leverage Ratio, as defined under the Credit Facility. As of December 1, 2017, the applicable margin was 0.0%. We will not receive any of the proceeds from the sale of the shares of our common stock by the selling stockholders (including any shares sold by the selling stockholders pursuant the underwriters' option to purchase additional shares from the selling stockholders). As of the date of this prospectus supplement, we cannot specify with certainty all of the particular uses of the proceeds received by us from this offering. The amounts and timing of our actual expenditures may vary significantly depending on numerous factors. Accordingly, we will retain broad discretion over the use of such proceeds. In addition, our anticipated use of proceeds does not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments that we may make. We have no current understandings, agreements or commitments for any material acquisitions or licenses of any products, businesses or technologies. A $1.00 increase (decrease) in the assumed public offering price of $34.20 per share, which was the closing price of our common stock on the NASDAQ Global Market on December 1, 2017, would increase (decrease) our net proceeds by approximately $1.3 million, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.
We compete with a broad and diverse set of businesses. We believe the competitive landscape is highly fragmented with no single competitor offering similarly expansive capabilities and solution offerings in medication risk management. Our competitive advantage is largely based on our analytical capabilities, healthcare industry expertise, breadth and depth of services, intellectual property, the size and quality of our underlying datasets and benchmarks, ease of use, reputation, innovation, security, price, reliability and client service. Our primary competitive challenge is to demonstrate to our existing and potential clients the value of utilizing our platforms rather than developing or assembling their own alternative capabilities or utilizing providers offering a subset of our services. However, we believe that the combination of our competitive strengths and successful culture of innovation, including our industry-leading analytics, the real-world-tested nature of our platforms and subject matter expertise of our associates, make it time and cost prohibitive for our clients or competitors to replace or replicate all that we offer without facing material risk. Current industry players providing medication risk management and related service offerings include large and small healthcare data analytics and consulting companies, community or long-term care pharmacies, national pharmacy providers, health plans, genomic testing labs and healthcare information technology companies, among others. Many of our competitors' solutions are regulatory-driven, retrospective in nature and offer no intervention at the point of care. The services offered by these organizations may include e-prescribing and EHRs utilizing single drug-to-drug interaction analysis, lab-based genomic evaluation, basic risk stratification solutions and other prevailing approaches to medication therapy management. Many health plans attempt to address non-adherence through outreach efforts, which often require the intervention of in-house or third-party consultants and have low success rates. Some healthcare information technology providers offer risk adjustment and pharmacy cost management services, but lack the comprehensive solutions we provide. Many genomic testing labs lack the ability to apply patient test results in a useful way at the point of care. Post-acute providers typically employ pharmacist consultants to review prescription regimens every 30 days, which is retrospective in nature and generally ineffective in improving patient outcomes. Furthermore, typical prescription fulfillment models are reimbursed on a fee-for-service basis and are incentivized based on prescription dispensing volumes. Our clients partner with us in order to prospectively address ADEs, lower healthcare costs and improve overall health outcomes, which often involves utilizing our software to reduce the number of prescriptions per patient to optimize prescription regimens. While we believe that no competitor provides the breadth of our suite of solutions, we nevertheless compete with other companies with regards to specific products or solutions and markets or care settings. We expect that competition will continue to increase as a result of consolidation in both the information technology and healthcare industries. The anticipated growth in healthcare spending, the shift to a value-based payment model, the rise of consumerism and changes in government regulation may draw increasing attention to healthcare data and analytics, and new competitors, such as management consultants, technology companies and start-ups may enter the market, and we may face increased competition from these sources.
We are a healthcare technology company disrupting the field of medication safety. For over thirty years, traditional pharmacy software systems have offered clinicians a binary view of drug-to-drug interactions, presenting an assessment of one single drug against one single drug. These legacy
systems may be adequate to assess the safety of a medication regimen consisting of only one or two medications. However, the elderly, the chronically ill and those with behavioral health challenges, who are often more likely to be subject to a medication profile of more than two medications, are typically at high risk of an adverse drug event, or ADE. In these cases, patients often take over 10 different medications a day and the current technologies are inadequate to optimize safety and minimize risk. Our novel and proprietary Medication Risk Mitigation Matrix, or MRM Matrix, delivers a simultaneous, multi-drug review which identifies medication-related risks across a variety of safety factors and presents meaningful opportunities to mitigate such risks. We partner with health plans and provider groups in comprehensive medication management and care transitions programs to identify and substantially mitigate the risks associated with ADEs and to promote adherence to personalized medication regimens. By working with us, health plans and provider groups have reduced their pharmacy spend and admissions rates. We are a leader in providing patient-specific, data-driven technology and solutions that enable healthcare organizations to optimize medication regimens to improve patient outcomes, reduce hospitalizations, lower healthcare costs and manage risk. We deliver our solutions through a comprehensive suite of technology-enabled products and services for medication risk management, which includes bundled prescription fulfillment and reminder packaging services for client populations with complex prescription needs. We also provide risk adjustment services and pharmacy cost management services, which help our clients to properly characterize a patient's acuity, or severity of health condition, and optimize the associated payments for care. Our suite of cloud-based software solutions provides prescribers, pharmacists and healthcare organizations with sophisticated and innovative tools to better manage the medication-related needs of their patients. We believe we offer the first prospective clinical approach to medication risk management, which is designed to increase patient safety and promote adherence to a patient's personalized medication regimen. Furthermore, our medication risk management technology helps healthcare organizations lower costs by reducing ADEs, enhancing quality of care and avoiding preventable hospital admissions. Our products and services are built around our novel and proprietary MRM Matrix, which enables optimization of a patient's medication regimen, involving personalizing medication selection, dosage levels, time-of-day administration and reducing the total medication burden by eliminating unnecessary prescriptions. The MRM Matrix analyzes a combination of clinical and pharmacology data, population-based algorithms and extensive patient-specific data, including medical history, lab results, medication lists and individual genomic data, to deliver "precision medicine." We provide software-enabled solutions that can be bundled with prescription fulfillment and reminder packaging services, which are informed by a patient's personalized MRM Matrix to increase adherence to a patient's optimized regimen, through our three prescription fulfillment pharmacies. Our prescription fulfillment pharmacies are strategically located to efficiently distribute medications nationwide for our clients and medications are packaged to promote adherence to their patients' personalized regimens and dosing schedules. Our team of clinical pharmacists, located in five call centers throughout the United States, is available to support prescribers at the point of care through our proprietary technology platform, including real-time secure messaging, with more than 154,000 messages exchanged during September 2017, and support health plan members and prescribers with telephonic outreach and interventions based on drug therapy problems identified through the review of historical claims data. Our technology-driven approach to medication risk management represents an evolution from prevailing non-personalized approaches that primarily rely on single drug-to-drug interaction analysis. At the end of 2016, we were serving 133 healthcare organizations and, as of September 30, 2017, this number had grown to 165 healthcare organizations that focus on populations with complex healthcare needs and extensive medication requirements. We are a Delaware corporation with principal executive offices located at 228 Strawbridge Drive, Suite 100, Moorestown, NJ 08057. Our telephone number is (866) 648-2767. Our website address is www.trhc.com.
|Company Counsel||Morgan, Lewis & Bockius LLP|
|Company Counsel||Morgan, Lewis & Bockius LLP and Duane Morris LLP|
|Lead Underwriter||Citigroup Global Markets Inc|
|Lead Underwriter||Piper Jaffray & Co.|
|Transfer Agent||American Stock Transfer & Trust Company, LLC|
|Underwriter||First Analysis Securities Corp|
|Underwriter||Oppenheimer & Co. Inc.|
|Underwriter||Robert W. Baird & Co. Incorporated|
|Underwriter||William Blair and Co., L.L.C.|
|Underwriter Counsel||Cooley LLP|
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