Alcidion gears up for IPO to fuel expansion plans
Adelaide-based health informatics firm Alcidion Corporation is looking to move from a project-oriented business to a product-oriented company based on its Miya informatics platform as it awaits the go-ahead of shareholders in reverse listing partner Naracoorte Resources next week.
Alcidion and Naracoorte signed an agreement in August in which the resources company proposed to acquire Alicidion before re-quoting on the stock exchange as the Alcidion Group, divesting itself of its minerals exploration interests and concentrating on the health IT business.
Shareholders are expected to give the go-ahead to the acquisition at a meeting on Monday, after which the company will then re-list on the ASX and seek to raise $2 million as part of an initial public offering (IPO).
According to the share prospectus, the new company will then transition Alcidion from its project-oriented origins into a product-oriented company, with the Miya Platform as the cornerstone product.
It will also seek to commercialise Alcidion's clinical decision support and SmartForms platforms in the Australian and New Zealand markets and develop a sustainable and commercial model with a view to establishing a direct US presence in the medium to long term.
Alcidion currently has 10 customers and its technology is installed in 11 hospitals, but it sees the need for significant sales and marketing expenditure to get its name out into the market, having flown very much under the radar since its establishment in 2000.
It has worked with the Tasmanian Department of Health and Human Services for many years but it is the work it has done with Western Health in Victoria to develop its patient journey technology and the intelligent Cardiovascular Information System (iCVIS) – developed with and now being marketed by Fujifilm – that is best known for.
The Northern Territory Department of Health is now a major customer, recently signing a $1.75m contract to roll out Alicidion's Miya Orders emergency department order sets technology to streamline pathology ordering in the ED. It also uses Alcidion's patient journey technology.
According to the prospectus, Naracoorte has $3.65m in cash and Alcidion has $1.75m, which when combined with the expected $2m from the IPO makes $7.4m in funds available. It plans to spend $1m on R&D, $1.5m on US market expansion, $1m on sales and marketing and $1.75 on business development.
There are risks, the prospectus warns, particularly in terms of gaining market acceptance for its products. However, it has developed a strategy based around entry to the private hospital market by using a single installation in one hospital and rolling it out to 'sister' sites.
Alcidion has commenced an implementation study for such a private hospital chain with many hospitals in Australia and internationally, the prospectus says.
It also hopes to get repeat installations through state-based public hospital networks, a strategy it hopes to repeat in New Zealand.
It is also happy to continue working with OEM partners such as Fujifilm that can then use its huge reach to market the jointly developed products internationally.
While domestic growth is Alcidion's short-term focus, it has also set its sights elsewhere. “The United States market is the primary target market for Alcidion and a concerted effort is planned to prepare the company for US market entry,” the prospectus says.
It lists its competitors in the patient flow management solutions, clinical decision support and SmartForms markets as Allscripts, Cerner, Core Medical Solutions, Epic, GE Healthcare, Health IQ, CSC, McKesson, Orion Health, Philips and Siemens.
Posted in Australian eHealth