Q1 2024 Earnings Summary
- Full Pipeline and Expected Growth in Patient Affordability Programs: Management indicates they have a "pretty full pipeline of potential opportunities" and are "stacked with business between now and the end of the year" in patient affordability programs, suggesting strong future growth in this segment.
- Patient Affordability Business Expected to Surpass Plasma Business: When asked if the patient affordability business has the potential to grow bigger than the plasma business, management responded, "Yes, absolutely," and emphasized it's "not a matter of if, it's a matter of when it's going to surpass the plasma".
- Large Total Addressable Market and Diversified Client Base: The company estimates the total addressable market (TAM) for their patient affordability business to be "north of $500 million" , with around "1,500 to 1,600 active co-pay programs" in the market. They are working with "somewhere north of 40" separate pharmaceutical companies across "53 active programs," including multiple programs for larger manufacturers , indicating a diversified and expanding client base.
- The company is unable to provide specific guidance on the number of new patient affordability programs they expect to add this year, indicating uncertainty in their growth projections. Matthew Turner stated, "I don't know that we can give a number quite yet. Maybe as we get into the second quarter, we can probably narrow that down a little bit more."
- The Total Addressable Market (TAM) for the patient affordability business is difficult to quantify, creating uncertainty about the company's future growth potential. Matthew Turner mentioned, "It's very difficult to narrow down what the TAM is because the funds used to pay for this are typically part of the marketing funds."
- The patient affordability market lacks detailed public financial information about competitors, making it challenging to benchmark PAYS's performance and assess competitive pressures. Matthew Turner noted, "There's not really detailed financials out there around this business in the public sector."
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Pharma Revenue Growth
Q: Will pharma revenues surpass plasma revenues?
A: Management confirmed that pharma revenues will indeed surpass plasma revenues, stating it's not a matter of if, but when. They believe there's a much larger Total Addressable Market (TAM) associated with pharma, indicating a significant growth runway ahead. -
Total Addressable Market
Q: What is the TAM for pharma programs?
A: Management estimates the TAM to be north of $500 million, noting there are about 1,500 to 1,600 active co-pay programs in the space. They believe the actual TAM may be higher and are working with consultants to refine this estimate. -
Number of Pharma Clients
Q: How many pharmaceutical companies do you work with?
A: They are working with somewhere north of 40 pharmaceutical companies across 53 active programs. They are running multiple programs for larger manufacturers, such as 9 programs for one and 5 programs for another, expecting to add more. -
Risks of Generics
Q: Is losing exclusivity a risk to programs?
A: While generic competition can impact claim volumes, management notes that volumes don't necessarily cease. They highlight examples like Humira, which maintains top billing despite biosimilars. They focus on assets with longevity to deliver immediate volume while building a long-term pipeline. -
Pipeline Strength
Q: Do you have a full pipeline of opportunities?
A: Management confirms they are "stacked with business" between now and the end of the year, indicating a robust pipeline of potential opportunities. -
Competitors
Q: Are there public competitors in this space?
A: Most competitors are divisions of larger firms or private companies. Publicly traded companies like McKesson's CoverMyMeds and AmerisourceBergen's Lash Group offer co-pay assistance, but it's a small part of their overall business. PAYS is unique in focusing solely on patient affordability. -
New Programs Added
Q: How many new patient affordability programs this year?
A: Management couldn't provide a specific number yet but may narrow it down in the second quarter. They prefer not to release a number too soon. -
Program Structure
Q: Is each pharma program an individual drug?
A: Not necessarily. Programs can include multiple drugs or offers for a single drug. A program can have several drugs or encompass several programs within it. They typically look at SOW-based business when discussing programs.