MedAvail Holdings, Inc.

Hello and a warm welcome to the Medieval 2022 First Quarter Earnings Conference Call. My name's Louise and I'll be your operator today. If you'd like to ask the management team a question, you'll have an opportunity to do so at the Q&A portion. Please press star followed by one on your telephone keypad if you wish to ask a question. And I have the pleasure of handing over to your host today, Caroline Paul, Investor Relations to begin. Caroline, please go ahead.

Thank you. And thank you all for participating in today's call. Joining me are Mark Doerr, Chief Executive Officer, and Ramona Sebas, Chief Financial Officer. Earlier today, Medavail Holdings, and referred to as Medavail or the company, released financial results for the first quarter ended March 31, 2021. A copy of the press release is available on the company's website. Before we begin, I'd like to remind you that management will make statements during this call including statements or responses in addressing your questions that include forward-looking statements within the meaning of federal security laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call or in response to your questions that relate to expectations or predictions of future events, results, or performance or similar statements are forward-looking statements. All forward-looking statements including, without limitation, those relating to our operating trends and future financial performance, the impact of COVID-19, the ongoing military action launched by Russian forces in Ukraine, or the impact of other global economic conditions, including any economic effects stemming from adverse geopolitical events and economic downturn and inflation or interest rates on our business and prospects for recovery, expense management, expectations for hiring, growth in our organization and reimbursement, market opportunity and expansion, and guidance for revenue growth margin and operating expenses in 2022 are based upon our current estimates and various assumptions. Any forward-looking statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements and do not guarantee future performance. Accordingly, you should not place undue reliance on these statements and should not rely on them in making an investment decision without considering the risks associated with such statements. For a list and description of the risks and uncertainties associated with our business, please refer to the risk factors section in our most recent periodic reports, including our annual report on Form 10-K and our quarterly report on Form 10-Q filed with the Securities and Exchange Commission. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, May 12, 2022. Medivale disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. And with that, I'll turn the call over to Mark.

Thank you, Caroline. Good afternoon, everyone, and thank you for joining us. Following four months as CEO of Medavail, I am more confident than ever by the tremendous opportunity we have ahead to deliver cost-effective pharmacy prescription dispensing and prescription counseling at the point of care and directly address the gaps in appropriate medication utilization faced by value-based providers. During this call, I'll start with a review of our first quarter performance and then turn to our business objectives. Ramona will then provide more details on our financial results. In the first quarter, we continued to focus on execution and were pleased by the strong momentum that we delivered across our businesses. Net revenue in the first quarter was $9.1 million, representing 126% growth year over year. Retail pharmacy services generated $8.8 million in revenue for the first quarter of 2022, representing 159% growth over the same period in 2021, while pharmacy technology revenues declined 130% year-over-year in the first quarter of 2022 to approximately $265,000. Pharmacy technology revenue can be variable from quarter to quarter due in large part to customer purchasing patterns associated with enterprise-level capital sales. Pharmacy technology represents a significant growth opportunity for Medivale and is a key component of our path towards profitability. As a reminder, we sell our hardware and, importantly, license our software and systems and provide maintenance to our platform, which creates highly predictable and profitable recurring revenue. In the first quarter, we achieved a milestone with the completion of our integration with Epic Willow and availability of our MedCenter platform in the Epic App Orchard Gallery. The App Orchard program enables developers to integrate their healthcare IT solutions with the Epic EHR and allows healthcare providers who use Epic Willow, Epic's outpatient pharmacy management system, to access the MedCenter platform. As a result, we expect to expedite deployments with Epic Health System customers and drive adoption across enterprise partners using Epic Willow. Notably, we are currently working with our first Epic Willow partner to complete our full integration, which we are targeting to be completed later this year. Currently, there are approximately 350 integrated delivery networks using the Epic Willow pharmacy software in the United States. Additionally, our technology team recently completed a rewrite of our MedDispense software that is intended to enable greater flexibility and faster deployments of our med centers. We believe that this new version of our software will enable an easier user interface to facilitate faster enhancements of our technology program for patients and providers. Finally, we welcome industry veteran Matthew Broom, who joined our team to lead the initiatives in pharmacy technology. Matt will be instrumental in implementing and optimizing our strategies to accelerate the growth of this segment. As a former customer, Matt understands the strong value proposition that we offer with our MedCenter platform to improve provider satisfaction, reduce costs, and positively impact patient medication access and outcomes. Returning to retail pharmacy services and SpotRx, our highly scalable hub and spoke pharmacy model, we ended the first quarter with 88 dispensing units, representing a 29% increase from 68 at December 31, 2021. Net cumulative deployment at the end of Q1 2022 was 92 units. We continue to drive our corporate strategy to leverage our expansion with current clinic partners and broaden our footprint as they continue to build their networks. For example, our partnership with Oak Street continues to grow. In the first quarter, we contracted to add four de novo sites in Arizona, one of our key target markets, which will utilize both of our existing Arizona Hub pharmacies in Phoenix and Tucson. Oak Street entered Arizona in 2022 with value-based primary care centers located in Phoenix and Tucson for adults on Medicare. Importantly, Oak Street has agreed to deploy SpotRx in all of their clinics in Arizona in line with our past installation practices, and we are excited to continue to build our partnership and become Oak Street's pharmacy partner of choice. Oak Street Health operates more than 100 comprehensive primary care centers across 19 states for senior adults. Another example is our partnership with the IMA Medical Group and our growth alongside their network expansion. We previously highlighted that in the first quarter, we deployed and began installations for 11 SpotRx locations at IMA sites in Central Florida to enable SpotRx access to patients across the IMA network of 21 medical centers, leveraging our pharmacy hub in Orlando. We are pleased to announce that we have plans to open five additional sites with IMA in Orlando and Tampa. The majority of these sites will be de novo clinics and continue the partnership expansion with IMA to embed these medical centers directly into all IMA medical centers. With the SpotRx model, IMA patients will receive immediate access to prescriptions at the IMA medical centers, free contactless next-day home delivery for all prescriptions and over-the-counter medications, follow-up care calls from a local SpotRx pharmacist after receiving the prescription, refill reminder calls on all chronic medications to schedule free delivery or in-clinic pickup, and instant access to SpotRx pharmacists via kiosk or phone. As a reminder, IMA serves patients in medical centers across Central Florida with over 70 physicians and nurse practitioners servicing over 40,000 Medicare patients. We are encouraged by this continued momentum with each of our partners that leverages our current hub pharmacy infrastructure We anticipate most of these sites will be dispensing by late this year. Expectantly, ramping of revenue is anticipated to be longer in de novo sites as our partner clinics are building their patient panels and scaling the sites. Importantly, we believe we are effectively positioned to realize our large market opportunity, and we are currently focused on three key objectives, one, increasing dispensing med centers and optimizing utilization to drive profitable growth. Two, expanding pharmacy technology, leveraging Epic Willow and McKesson Enterprise RX integrations. And three, reducing costs across the enterprise. As part of our focus on driving profitable growth, Recall we previously laid out our objectives to achieve improved margins. Driving prescription volumes, optimizing our prescription mix, reducing cost of goods sold, and improving reimbursement. Part of our strategy is to standardize processes and reduce inefficiencies such as our reliance on ineffective vendors with respect to our patient contact center to drive efficiencies, cost savings, and better patient care. We have also highlighted a procurement strategy for sourcing pharmaceuticals at optimal cost to drive utilization and the appropriate mix of medications. As an example, most recently, we benefited from the inclusion of hepatitis C antivirals as part of our efforts to add in high-value specialty medications. Patients often face barriers to access these specialty medications, such as obtaining prior authorization. Our team is leveraging our embedded pharmacy model powered by our MedCenter technology to directly address patient access to these medications in collaboration with providers while delivering any counseling needs at the point of care. While dispensing specialty medications can fluctuate quarter to quarter because of the high cost and relatively low volume, we are excited for the opportunity to use our data for purposes of determining the most effective medication mix to deliver better patient care. Overall, we delivered growth and expansion in the first quarter and made meaningful progress in pharmacy technology with the Epic Willow integration. As we march into the remainder of 2022, we continue to be focused on driving efficiencies and refining our operational strategies in order to deliver long-term profitable growth and maximize value for our shareholders. With that, I'll now turn the call over to Ramona to provide a review of our first quarter financial results.