PROXYMED, INC. TO PRESENT AT THE WARBURG DILLON READ GLOBAL HEALTHCARE SERVICE CONFERENCE AT THE PLAZA HOTEL IN NEW YORK CITY ON THURSDAY FEBRUARY 17, 2000 AT 2:15 PM - John Okkerse, PhD Talks about ProxyMed and Its Competitive Landscape -
PR NEWSWIRE - February 16, 2000 18:28
FT. LAUDERDALE, Fla., Feb 16, 2000 /PRNewswire via COMTEX/ -- The following is attributed to John Okkerse, PhD of ProxyMed:
ProxyMed, Inc. (Nasdaq: PILL) -- I joined ProxyMed as CEO on December 1, 1999 after spending 24 years working in the clinical laboratory division of SmithKline Beecham plc (SB), most recently holding the position of President of SmithKline Beecham Clinical Laboratories (SBCL) and Chief Operating Officer of Healthcare Services. In my role as COO of Healthcare Services, I was also responsible for Diversified Pharmaceutical Services (DPS), the country's third largest pharmaceutical benefits management company (PBM). I played an instrumental role in helping SB divest itself of both SBCL and DPS. My education includes a PhD in Cellular and Molecular Biology from the University of Southern California.
When I left SBCL as its president, the Company had just completed a merger with Quest Diagnostics. SBCL was valued at $1.6 billion, had pretax earnings of $160 million and approximately 13,000 employees. I came to ProxyMed because I believe the Company has superior technology coupled with great customer relationships that provide ProxyMed a tremendous opportunity to be one of the significant players in the e-health space. This strong belief in ProxyMed's technology and future prospects comes not only from doing my homework prior to making the decision to join the Company, but also, and more importantly, from a previous five year business relationship with ProxyMed during which ProxyMed was, and still is, an important part of SBCL's healthcare information solution. Most importantly, I believe that ProxyMed has a tremendous opportunity to be one of the important players in the e-health space.
Overview of ProxyMed
ProxyMed's business is separated into two segments: e-health to physicians and business to business transactions for healthcare providers. ProxyMed processes 60 million electronic transactions between physicians and insurance companies, managed care companies, pharmacies, laboratories and other physicians per year. Currently, ProxyMed's customer base includes 2,000 labs, 30,000 pharmacies, 800 insurance companies and approximately 63,000 physicians, who use our software products and our value added networks.
Recently, we announced and launched our physician office Internet portal, proxyMed.com. ProxyMed.com is a comprehensive web site for healthcare professionals that aggregates, organizes and personalizes connectivity, content and e-commerce services. These services include a broad set of physician office focused clinical and financial transaction services. Our task is to migrate our existing physician customer base to our Internet solutions and to propel our growth rate in aggregating physicians through our web portal.
Our business is driven by the Healthcare community's need to more efficiently process information.
The major driver of our business is getting physicians to adopt an electronic solution that improves the quality of patient care while reducing cost. The issue is altering age-old standards of practice within the physician office. We believe this can be accomplished by offering a total solution that touches every piece of the physician's practice. Our efforts will concentrate on innovative design that makes the solutions easy to use and reliable. Our strategic intent is to "Empower Physicians with eSolutions(TM)". The Internet is the key enabler that makes much of this possible. However, more importantly, ProxyMed's significant back-end connectivity is the differentiating factor. ProxyMed is a leader in solving these back-end connections and provides a host of transaction services directly to the physician office.
Network integration and drug-dispensing units to be sold.
Hayes Communications, our network integration division, has been an important building block for ProxyMed. To succeed at our vision of creating a value-added physician network, we required expertise in building and operating VPN networks. Hayes, who built and operates an Internet and Intranet network for several agencies in the State of Florida, provided us with the expertise and learning necessary to advance this vision. With the completion of our network and its Internet interface in November 1999, this business is no longer core to our vision. ProxyCare, our drug dispensing unit, brought additional assets critical to our vision. However, the drug dispensing activity is no longer core to our business. Thus, we plan to divest Hayes and ProxyCare to fund our core businesses with non-dilutive cash. Revenue from the two units is approximately $14 million per year. The divestment of these two units reflects our intention to focus on our core competency: e-health solutions to physicians and B2B transactions.
Connectivity and existing relationships are key strengths.
ProxyMed's advantage lies in two critical areas. First, our existing connectivity to laboratories, pharmacies and insurance companies provides the backbone for our e-health solutions. These connections allow information to reliably move back and forth from the physician's office to the provider (insurance company, laboratory, pharmacy, etc.), enabling diagnosis, treatment and payment. This pipeline is live and working reliably. Many well-known e-health companies in ongoing partnership with ProxyMed use this connectivity. We believe it makes good business sense to deliver these solutions directly to the physician rather than through other intermediaries - hence, our e-health initiative. Our second advantage is our customer relationships. We have over 50,000 physicians using at least one of ProxyMed's existing solutions. Converting these physicians to an electronic web-based solution is the challenge we face. However, we believe the task is made easier by the depth of our existing relationships.
E-health and b2b segments thrive on each other creating a synergistic operating system.
In essence e-health is the front end of our business -- the piece that the physician or their office staff use on a daily basis. These applications are delivered to the physician via the Internet allowing fast and efficient distribution and adoption. Our philosophy is to provide the physician with choice - solutions that meet their needs and help them accomplish their specific objectives. Transaction and Repository Services, our b2b business connects the many providers (e.g. laboratories, pharmacies, insurance companies, etc.) that augment or support the physician's activities. Our goal is to include as many providers as possible in our b2b network and to continually deliver value to those customers beyond delivering transaction data. We believe there is a tremendous business opportunity to deliver information to these providers enabling them to improve the efficiency and ultimately the cost-effectiveness of their operations. Many have asked which piece of our business is more important. In truth they are synergistic and equally important. The e-health business will make the b2b business successful and vice versa. We strongly believe these two core businesses are synergistic and will fuel our growth.
ProxyMed's physician network is large and growing.
Today, we have approximately 20,000 physicians using our five different software applications and 43,000 physicians directly connected to our ProxyNet(R) network through vendor partnerships. Additionally, we provide printer services for 175,000 physicians. We envision all of these physicians as potential opportunities. Clearly the 63,000 physicians who use our services directly represent our best opportunity for our e-health initiative.
Translating physician numbers into transactions, we completed about 60 million transactions in 1999.
ProxyMed has built a comprehensive back-end model which would take competitors years to replicate.
Recently there has been an onslaught of e-health companies going public. ProxyMed was a very early entrant into this healthcare electronic transaction model having developed our back-end connectivity (b2b) model over the last 5 years. We believe that developing our b2b model was complex and represents the longest development time to market. With that phase now complete, we feel there is a real opportunity to take these solutions, enabled by the Internet, directly to the physician space. We are confident we will be successful because we have proven, reliable solutions that offer a full range of services required by the physicians.
Recent financing offers ProxyMed financial flexibility to grow.
At the end of 1999, we wanted to raise equity, not debt, yet we felt there was a significant amount of value in ProxyMed stock that was not, and still isn't being realized by the investment community. One of our financial advisors, JC Bradford & Co., suggested a new structure called CODE, which stands for Company Directed Equity. It is a convertible preferred that is 100% directed by ProxyMed during the next year, so it is yet undetermined at what share price we will convert this equity. As our share price increases to satisfactory levels, we will begin to convert this instrument. The shares are issued at a 7% discount and we pay shareholders a 6% quarterly dividend in stock or cash. We did give shareholders the ability to buy 800,000 common shares at $12.05 each. We raised $15 million with this instrument. The investors were Royal Bank of Canada, Angelo Gordon, Promethean Asset Management and Citadel Investment Group. There have been three deals done with this structure and all three deals are trading higher. JC Bradford completed two of them and DLJ completed the other.
We ended the year with 18.5 million shares outstanding, virtually no debt and about $12 million in the bank. As I said before, we are in the final stages of reorganizing the Company into the two segments, e-health and b2b. Today, this is approximately a $29 million (net of discontinued operations) recurring annual revenue business. Our revenue model is based on two components: physician subscriptions varying by solution requirements and transaction fees or revenue sharing from providers (laboratories, payers, pharmacies etc.) that provide ancillary services. Our challenge continues to be balancing short-term profitability with long-term investment. We will continue to pursue opportunities which improve the financial strength of our company while allowing us to make the investments in innovative solutions necessary to win in the physician space.
We plan to continue building our talent pool.
A key component to the success of our company will be the infusion of talented individuals. ProxyMed is blessed with a core team of talented people who know and understand various aspects of healthcare. In the short-term, I will be working hard to add talent to all aspects of our company.
Untapped Value.
We believe there is a significant amount of unlocked value in ProxyMed. We will be increasing our marketing and advertising in the coming months to create stronger brand name recognition of ProxyMed in the physician office and accelerate our revenue growth. One of our strengths in this area is that our tightly defined target market does not require us to spend indiscriminately on advertising. Instead, we can successfully propel sales growth through focused, targeted marketing campaigns that provide high hit rates per dollar spent. While we have already begun to add strong new salespeople, over the next couple months, we plan to double our sales force from its current size.
When it comes to connectivity with the healthcare community, we already have an extensive network of physicians, labs, pharmacies and payors in place, which we believe provides us with a competitive advantage and a significant lead in back-end connectivity. On the front end, we believe our technology is superior and more in line with the needs of our target market, the physician marketplace, than our larger competitors. Finally, our front and back end technology is already integrated providing our customers with a seamless e-health solution to their healthcare information needs.
Note: This press release contains forward-looking statements that reflect the Company's current expectations regarding future events. While these statements reflect the Company's best current judgment, they are subject to risks and uncertainties. Actual results may differ significantly from projected results due to a number of factors, including, but not limited to assumptions, beliefs and opinions relating to ProxyMed's growth strategy based upon ProxyMed's interpretation and analysis of healthcare industry trends and management's ability to successfully develop, market, sell and implement its e-commerce solutions, clinical and financial e-transaction services and software applications to physicians, pharmacies, laboratories, and payers. These factors and other risk factors are more fully discussed in the Company's filings with the Securities and Exchange Commission. ProxyMed expressly disclaims any intent or obligation to update any forward-looking statements.
More information on ProxyMed is available on its home page at proxymed.com.
SOURCE ProxyMed, Inc.
(C) 2000 PR Newswire. All rights reserved.
-0-
CONTACT: Harold S. Blue, Chairman of ProxyMed, 954-473-1001; Investor Relations - Cheryl Schneider, John Blackwell, Press - David Nugent, Ellen Paz, all of Morgen-Walke Associates, Inc., 212-850-5600, for ProxyMed
KEYWORD: Florida
INDUSTRY KEYWORD: MTC
BIO
URL: proxymed.com
News provided by COMTEX
--------------------------------------------------------------------------------
%fl-proxymed-presents %business %healthcare %prn %public-companies %wall-street %adoption %advertising %bank %biology %business %california %canada %cellular %clinical %colorado %communications %community %conference %debt %dividend %dollar %earnings %ecommerce %education %equity %florida %healthcare %hotel %indiana %insurance %internet %investment %market %marketing %merger %new_york %operating-system %partnership %pharmacy %physicians %pipeline %products %rates %revenue %sales %software %standards %technology %web pill sbh dgx V%COMTEX P%PRN This content is for use with Data Broadcasting Corporation (DBC) products by authorized persons only. Any reference, link, frame, or other use this material without the explicit permission of DBC is prohibited. |
