WELL Health is a player in a “multi-billion” dollar space: Beacon Securities

‘Get them while they’re young’ is the message from Beacon Securities analyst Gabriel Leung when it comes to WELL Health Technologies (WELL Health Technologies Stock Quote, Chart, News TSX:WELL), a healthcare tech company in the early stages of taking a bite out of Canada’s multi-billion dollar healthcare sector. In an update to clients on Friday, Leung reiterated his “Buy” rating but upped his target price from $3.50 to $4.25 per share, which represented a potential 12-month return of 18 per cent at the time of the report.

WELL Health has a portfolio of primary healthcare facilities with an initial concentration in BC, a Electronic Medical Records (EMR) business and a virtual medicine platform called VirtualClinic+, with the company’s overall aim being to leverage technology to empower and support patients and doctors.

Vancouver-based WELL announced on Thursday that the McMaster Family Health Team (MFHT) in Hamilton, Ontario, has selected WELL’s VirtualClinic+ as its preferred virtual care platform. MFHT, which is affiliated with the Department of Family Medicine at McMaster University, provides care to over 40,000 patients across three teaching clinics and trains healthcare professionals (medical clerks, residents and others) in providing primary care services.

MFHT has now been using VirutalClinic+ and training clinicians on it for several weeks, where the platform is integrated with MFHT’s OSCAR EMR, a field to which the McMaster Family Health Team has been a contributor for two decades since it was created at the McMaster’s Department of Family Medicine in 2001. MFHT intends to expand its use of VirtualClinic+’s suite of products (including in-clinic online booking,
appointment reminders and mobile check-in) over the coming months.

“Virtual care has quickly emerged as an essential option for care in Canada, and our clinics and patients have been pleased with the care experience using VirtualClinic+,” said Dr. David Price, Chair of the McMaster Department of Family Medicine, in a WELL press release on Thursday. “I have found it to be incredibly simple to use for both myself and my patients, and as a progressive primary care clinic, we are excited to work closely with WELL on continuing innovations that deliver benefit to patients and clinicians across Canada.”

In his update, Leung said the MFHT relationship is a very strategic one for WELL since not only does it provides the company with a chance to introduce its healthcare tech to Canadian physicians early on in their residency, potentially leading to longer-term use but also because, as the analyst wrote, many OSCAR EMR users “continue to follow McMaster’s lead on the technology front,” potentially leading to more OSCAR EMR users to follow suit in adopting WELL’s products.

“Overall, we view this another important step for WELL as it continues its transformation into an omni-channel digital health company, which we believe will be well positioned to capture a meaningful portion of both Canadian healthcare IT spend and clinical payments to physicians (the latter representing ~$27.4 billion in spend),” Leung wrote.

“We are also taking this opportunity to increase our target price from $3.50 to $4.25, which is based on 12x CY21e EV/Sales, which is in-line with comparables Teladoc Health and 1Life Healthcare. Our bullish view reflects our increasing confidence in the company’s ability to leverage its unique platform to capture a meaningful portion of the multi-billion dollar Canadian physician spend market opportunity,” Leung said.

Disclaimer: Nick Waddell and Jayson MacLean own shares of WELL and the company is a sponsor of the site.