Transcript Slide 1
Spring 2015
S
afe
H
arbor
S
tatement
This presentation may contain forward-looking statements which are made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Investors are cautioned that statements which are not strictly historical statements, including, without limitation, statements regarding the plans, objectives and future financial performance of ScripsAmerica, constitute forward-looking statements which involve risks and uncertainties. The Company’s actual results may differ materially from those anticipated in these forward-looking statements based upon a number of factors, including anticipated operating losses, uncertainties associated with research, development, testing and related regulatory approvals, unproven markets, future capital needs and uncertainty of additional financing, competition, uncertainties associated with intellectual property, complex manufacturing, high quality requirements, dependence on third-party manufacturers, suppliers and collaborators, lack of sales and marketing experience, loss of key personnel, uncertainties associated with market acceptance and adequacy of reimbursement, technological change, and government regulation. For a more detailed description of the risk factors associated with the Company, please refer to the Company’s periodic reports filed with the U.S. Securities and Exchange Commission from time to time, including its Annual Report on Form 10-K for the year ended December 31, 2013. Undue reliance should not be placed on any forward-looking statements, which speak only as of the date of this presentation. The Company undertakes no obligation to update any forward-looking information contained in this presentation.
Scrips
America,
I
nc.
A leading, vertically integrated provider of a range of specialty prescription and over the counter pharmaceuticals and medical supplies Serving large and growing markets: Specialty Pharmaceuticals & Medical Supplies Rapid Growth, Improving Financial Performance, Projecting Q1 Profits:
2014 (P)
2013 Increase
Q1 15 (P)
(in millions, except EPS)
Revenues
$ 30.00
$ 0.60
$ 29.40
(in millions, except EPS)
Revenues
(3/31/2015)
$ 9.60
Net (Loss)
$ (1.20)
$ (11.30) $ 10.10
Net Income
$ 0.40
EPS
$ (0.01)
$ (0.17) $ 0.16
EPS
$ -
Solid Balance Sheet/Minimal Debt ($4MM LOC w/Triumph Healthcare) Exciting growth opportunities: New Products New Geographies New Distributors/Manufacturers
Trading
Snapshot
Symbol
Exchange Price (4/1/15) Market Capitalization (4/1/15) 52- Week Range Average Daily Volume Shares Outstanding/Authorized Corporate Headquarters
SCRC
OTCBB $0.12 ~ $17 MM $0.08 - $0.22
500,000 139MM/250MM Tysons Corner, Virginia
S
hare
S
tructure
138,829,119 37,000,000 17,000,000 40,000,000
Outstanding Held By Founders Restricted Held By Core Group
Scrips
America
: E
volution
o
f
A H
ealthcare
L
eader
2010 Operations Commence 2010 – 2012 Pharmaceutical distribution services (primarily McKesson) Retail, hospitals, long-term care facilities and government and home care agencies 2013 2013-2014 McKesson squeezes margins, increases chargebacks
Scrips
America Pivots to New Growth Strategy Initial (majority) investment in Main Avenue Pharmacy
New Strategy
o Enter Specialty Pharmacy and Independent Pharmacy distribution markets o Adding other, complementary products
O
ne
P
latform
– M
ultiple
O
pportunities
ScripsAmerica Established Operations Evolving Operations Main Avenue Pharmacy PIMD 2014 Revenues @$29,000,000.00
Q1 2015 Revenues @$912,000.00
Wholesale Rx Evolving Businesses RapiMed
$200,000 Order Pending
Physician Dispensing Diabetic Supplies
750+ Patients Signed
T
he
S
pecialty
P
harmaceuticals
M
arket
Estimated 1% - 5% of population cannot tolerate medications in standard formulas* Specialty pharmacy industry growth drivers: Shortages of mass-produced drugs Increased awareness of compounding pharmacies and pharmaceutical applications Physicians concerned about prescribing narcotic pain medication (e.g.
Oxycontin, Vicodin, Hydrocodone
) and are looking for
alternative delivery systems
Customize Rx to patient needs Compounding industry: $5 billion in Annual Revenues
“A growing number of doctors and patients will likely turn to compounding pharmacies to prepare medications with alternate doses and strengths”*
*source: IBIS Worldwide
Scrips
America’s
S
pecialty
P
harma
B
usiness
Main Avenue Pharmacy acquired Feb. 14, 2014 (100% effective October 2014) Offering a wide variety of specialty pharmaceutical products to treat pain, scars, wounds, vitamin deficiencies among others FDA approved and licensed in 10 states Additional states being added Capacity of hundreds of compounding prescriptions/month No manufacturing
(subject to more restrictive regulations)
P
re-
A
pproval
A
voids
C
ollection
R
isk
Doctor writes prescription and sends to Pharmacy Submitted for payment to Insurance Company/Third party payers No Medicaid, Medicare 2006 Prescription approved for payment, charge set by PBM Order to compound transmitted to Main Avenue Pharmacy Bill generated & sent to Insurer/3 rd Party Payer Prescription sent FedEx to patient - who must sign return receipt Total Payment Cycle Time: 35-40 days
C ase S tudy: J ust O ne o f
Scrips
America’s M any P roducts
More than 100 million Americans suffer from chronic pain
83% reported significant reduction in their pain after using custom-compounded prescription pain creams On average, survey respondents said the creams reduced their pain levels by more than half Five percent of respondents say the creams completely eliminated their pain 38 % reported reducing other oral pain medications while using the creams > 83 % of respondents said their pain had eased since starting their use of the non-opioid prescription creams They reported an average reduction of 57 percent in their pain level after directly applying the creams to the site of their pain, for most recent 24-hour period After 4 weeks, patients reported significant improvement in their physical and emotional quality of life Six percent of the patients reported minor adverse effects - such as rashes.
• The results demonstrate the ability of locally-applied prescription creams to deliver significant pain relief over time to many patients, without the need for patients to rely on opioids and other narcotics. • The FDA, quoted in the New York Times , said prescription drugs account for about three-quarters of all drug overdose deaths in the United States, with the number of deaths from narcotic painkillers, or opioids, quadrupling since 1999. • A 2011 report in the journal
Pain Medicine ,
estimated the total societal cost of prescription opioid abuse at $55.7 billion.
Source: Patient Outcomes Analytics (POA), a research organization, a survey assessing patients' experience with topical prescription pain creams and their impact on the use of other oral pain medications. POA implemented an Institutional Review Board (IRB) approved protocol to survey and assess patient outcomes.
S
pecialty
P
harmaceuticals
G
rowth
S
trategy
Expand Licensing to New States
Add Pharmacies with states not currently serving
Bring on Additional Marketing Partners
Introduce New Products
O
ther
G
rowth
P
latforms
RapiMed – Child Pain & Fever Relief tablets Approval Pending
PIMD International
Physician Dispensing Program
Diabetic Medical Supplies
R
apiMed
O
ral
D
elivery
T
echnology
Rapid Release, Fast Dissolving Fever & Pain Relief Tablets Over The Counter Product Manufactured in United States Regulated dosage (80mg, 160mg) for children 2 – 11 Signed Contract with Distributor in China
$200,000 order pending- $60,000 Cost
(Attractive Margins)
Oral Tablet that dissolves in 25-35 Seconds Fruit Flavors-Wild Cherry, Wild Grape Fast Absorption Into System
P
IMD International, LLC
Problem :
Small chains/individual pharmacies unable to fill prescriptions for controlled substances Product manufacturers impose minimum order quantities far beyond the needs of the smaller operations
Solution :
A DEA and State licensed business that represents independent pharmacies PIMD licensed by DEA and 14 states for wholesale distribution of Prescription drugs and OTC branded products
Off to good start Q1 2015 Revenues $912,000
P
hysician
D
ispensing
P
rogram
Doctor Credentialed by service PIMD Supplies Inventory based on practice history Dr writes Rx Office bills PBM Dr dispenses Rx Patient receives Rx without having to go to pharmacy to pick up medication 3 out of 4 patients prefer to receive their medications during an office visit 3 million adverse drug events are attributed to miscommunication at the pharmacy On average medical practices spend $30,000 annually to handle pharmacy call backs An estimated 30% of all prescriptions go unfilled
Scrips
America’s PDP program facilitates Physician Compliance Actively Being Marketed - In Discussion with Several Doctors Goal = 100 dispensing physicians by 12/31/15
S
trong,
E
xperienced
L
eadership
T
eam
Robert Schneiderman, CEO & Founder
Accomplished entrepreneur with proven track record building businesses and creating value for shareholders CEO of one of Philadelphia’s leading recruitment firms for 32 years
Jeffrey Andrews, CFO
Finance professional with extensive background creating value with public companies CFO - Global Resource Corporation, Judge Information Management Solutions, and The Judge Group Other Key Executives Peter W. Megill, CPA, Corporate Controller Chad Beene, National Sales Manager Adam Brosius, Director Business Development 25 years experience 11 years experience 15 years experience
F
inancial
R
esults
In millions, except EPS
Net Revenues Operating Income Net (Loss) EPS Shares
R ecent R esults o f O perations
S ignificant I mprovement
2014
(P)
$ 30.0
($ 0.01) ( $ 1.2) ($ 0.01)
127.5
2013
$ 0.60
($ 7.4) $(11.3) ($ 0.17) 68.1
Improvement + $ 29.4
+ $ 7.4
+ $ 10.1
+ $ 0.16
(P) Preliminary results, subject to final audit
F irst Q uarter 2015 P rofitable
Revenue Operating Income * Income (loss) from Operations Net Income (loss) **
March 31, 2015
(Projected)
(3 months)
$ 9,600,000 $ 1,001,000 $ 594,000 $ 407,000
March 31, 2014
(Actual)
(3 months)
$ 800,000 $ 612 ($ 214,000) ($1,213,000)
* prior to shares issued for services ** due to NOL, no tax liability recognized
S
trong &
I
mproving
F
inancial
P
osition
December 31, 2014
*
December 31, 2013
*
(000’s omitted)
Cash Receivables Inventory Total Current Assets $ 730 $ 2,679 $ 1,011 $ 4,699 $ 47 $ 1,089 $ - 0 $ 1,490 Total Assets $ 5,659 $ 1,781 Line of Credit Payables & Accruals Purchase Order Financing Deferred Revenue Total Current Liabilities Preferred Stock Total Equity/(Deficit) Total Liabilities & Stockholders Equity * BALANCE SHEET EXCERPTS $ 653 $ 2,268 $ -0 $ 225 $ 3,349 $ 1,043 ($ 0.1) $ 5,659 $ 99 $ 227 $ 1,037 $ -0 $ 3,188 $ 1,043 ($ 3,617) $ 1,781
Working Capital C
apital
S
tructure
12/31/14
$1.350 MM 149 Shareholders of record
12/31/13
($1.698 MM) Preferred Convertible Debt - $1MM-Held by Board Member, Convertible into 6MM shares @ $.175
Term Debt – $233,000, 9% due 9/2016. Holder: Board member Convertible Debt: $616,000 convertible at $.175(3 individuals) Unsecured Debt $300,000 due 12/2015 (2 individuals) A/R Financing of $4,000,000 (Secured) Significant tax loss carryforwards available
Scrips
America – Summary
Scrips
America –
S
trategy
Expand the Compounding Rx Business -Add new Pharmacies, Products and Formulations Launch RapiMeds Launch Physician Dispensing Program Add New Formulations of the Oral Delivery Technology Strategic Acquisitions Eliminate Convertible Notes/Pay Off Unsecured Debt Uplist to Major Exchange
Valuation *
Multiple of
(e)
sales
2014
@0.60X
*as of 3/13/15
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