MedX Health will be a telemedicine winner, says Beacon Securities

The rise in telemedicine in the age of COVID-19 will likely be beneficial to healthcare tech company MedX Health (MedX Health Stock Quote, Chart, News TSXV:MDX), says Beacon Securities analyst Doug Cooper who issued an update on the company on Tuesday where he reaffirmed his “Buy” rating and $0.45 per share target.

Mississauga-based MedX is commercializing its DermSecure telemedicine platform and SIAscopy technology for at-a-distance, detailed and real-time images for the dermatology field as well as therapeutic and dental lasers.

The company on Tuesday announced that the closing of the initial two tranches of a previously-announced private placement to raise up to $3 million in total. At the same time, MedX gave an update on the status of its full-year 2019 financial statements which have been delayed due, the company says, to COVID-19-related reasons. Management said the company is exercising the extension offered in March by the Canadian Securities Administrators (CSA) to companies, giving them another 45 days to file its annual financial statements, with MedX saying their filing with take place “no later than June 12, 2020.”

As to MedX’s place in the growing interest in remote work environments and telehealth, Cooper said telehealth has “always seemed on the cusp of capturing investor attention,” for several years now but that COVID-19 has thrust the topic into the spotlight.

“We have been highlighting the growth potential of ‘remote monitoring’ of some indications to reduce hospital visits for several years,” wrote Cooper.

“However, the vast majority of medical visits continue to be face-to-face with doctors as such billing codes are already well entrenched. Furthermore, the medical community is typically quite conservative and radical change in behaviour comes slowly or needs a specific catalyst to effect such a change. That catalyst may be COVID-19,” he said.

Cooper said a number of telemedicine-related companies have already seen their share price blossom during COVID-19, including US-based names Teladoc Health, Masimo and Canada’s Well Health.

Cooper pointed to a backlog of medical treatments and doctor’s visits that has accumulated as people stay away from their GP’s, for example, during the crisis. The analyst said telehealth alternatives can help alleviate some that pressure, which is prevalent in the dermatology field as well, where face-to-face visits are currently of prime importance, for example, for doctors to check out moles and lesions.

That’s where MedX comes in, Cooper said, as the company is the only one with a regulatory approved front-end scanning technology in SIAscope and an approved telehealth platform in DermSecure through which to send high resolution images securely.

“As Dr. Siegel, a former head of the American Academy of Dermatology said, ‘…tele-dermatology has been slow to catch-on because of its poor image quality, but with MedX…it’s as close to having a patient in front of you as I have seen,’” Cooper related.

The analyst estimates MedX’s fiscal 2020 revenue and EBITDA at $4.4 million and $0.4 million, respectively. As of press time, his $0.45 target represents a projected 12-month return of 233 per cent.