WELL Health Technologies can mobilize telehealth, Stifel Canada says

Electronic medical records and health clinic company WELL Health on Monday launched a telehealth service for Canadians called VirtualClinic+, which connects patients to physicians through video, phone and secure messaging.

WELL said VirtualClinic+ supports longitudinal care with family practice visits as well as operates as a potential platform for the 4.8-million Canadians currently without a family physician.

On the platform, WELL’s chief medical officer Dr. Michael Frankel said in a press release, “As a physician with experience working with various telehealth platforms over the past several years, I believe VirtualClinic+ is the most comprehensive telemedicine program in Canada due to its coverage of a number of different use cases and scenarios including virtual walk-in and due to its empowerment of family practice clinics to support existing attached patients.”

WELL indicated the ramp-up of the platform and yesterday’s announcement on VirtualClinic+ are related to the recent COVID-19 outbreak and the associated need for telehealth services, as BC residents can now use VirtualClinic+, with the company getting public reimbursement.

“Patients can now schedule an appointment online and connect directly with a physician on their phone, tablet, or computer without the need to download or configure an app. BC residents with a valid BC MSP4 health card can use the service for no cost. Patients in other provinces will receive a receipt that may be reimbursed through a health spending account or other private insurance plans,” read the press release.

Keywood called the program launch a move consistent with his thesis envisioning WELL to be creating “a unique platform offering of healthcare and technology services in an effort to modernize the primary care clinic experience.”

The analyst noted Canada has lagged behind the United States when it comes to the adoption of telehealth services, leaving WELL in a good spot within the modernization of Canada’s healthcare system.

“VirtualClinic+ positions WELL to capture incremental growth. More broadly, we see WELL as executing on an aggressive but disciplined M&A plan to expand what is evolving to a platform offering where high recurring and reoccurring revenue growth warrants higher valuation, in our view,” Keywood wrote.

On the M&A front, Keywood said he recently spoke to members of WELL’s team and came away feeling that the company will continue to acquire valuable assets, where WELL is currently evaluating over 100 assets with about ten in late stages.

The company has acquired ten assets since 2018.

“WELL’s business model is unique with ~20 family doctor clinics and a ~15 per cent EMR market share, along with other strategic investments that provide for a solid foundational platform to leverage new growth. Over 600,000 patient visits per year provides a testing ground as well to develop new technologies that is a competitive advantage,” Keywood wrote.

The analyst’s $2.60 target is based on a 6x multiple of his 2021 sales estimate and represented at press time a projected return of 48 per cent.

Disclaimer: Nick Waddell and Jayson MacLean own shares of WELL Health Technologies.