Signs of life in a challenged local healthcare vendor market emerged this week.
ASX-listed digital health platform provider Alcidion has jumped over 30% in value on the news of securing an NHS supplier deal.
The grouphas been selected as the preferred supplier for a new electronic patient record system being implemented by North Cumbria Integrated Care NHS Foundation Trust (NCIC) in the UK.
All going well – negotiations on the contract are still apparently underway – the deal will be worth as much as $40 million over 10 years for the group, adding a healthy 10% to its top line.
The share price jump takes the group’s price to 50% higher than its lowest point this year, but still a far cry from its value mid-covid when the shares were trading at nearly seven times its current price. The current valuation of the group is $81.6 million.
Most local vendor groups have been experiencing tough market conditions post-covid as access to capital dried up and interest rates spiked.
In the first half of the 2024 reporting year Alcidion reduced its annualised costs by $6.4 million, mostly through reduction in headcount, and reported a loss of $2.9 million against a loss in the same half of 2023 of $1.2 million.
The NCIC deal would use Alcidion’s Miya Precision product suite and associated applications, including the Silverlink Patient Care System solution, which is already live at NCIC.
The Alcidion deal builds on a series of existing contracts the group has with NCIC which includes an eight-year deal for a patient administration system.
Commenting on the deal, managing director Kate Quirke said the company was keen to build on its existing relationship with NCIC.
“We have supplied NCIC with a patient administration system for over eight years and we are now able to offer Miya Precision capabilities alongside our partner applications to deliver full electronic patient records accessible across the organisation,” she said.
“Our integrated, modular EPR suite will allow NCIC to develop its existing digital footprint, protecting its existing investments and allowing it to realise the benefits of additional clinical capabilities through integration with a number of existing systems.
“At a time when the healthcare system is under enormous pressure, we see this increased speed to deliver value as a real opportunity for our customers.”
Noting that the group had extended its forward five-year sold and renewed revenue via another significant NHS contract with South Tees, Quirk said in the half-year report that “our five-year forward revenue now stands at $126 million, noting negligible customer churn, validating the underlying strength of our long-term financial profile”.