Mednow, a Toronto-based on-demand virtual pharmacy, has agreed to acquire US-based Infusicare’s specialty pharmacy affiliate in London, Ontario. The purchase price is about C$1.85 million. Mednow, which last year raised a C$6.5 million seed financing led by Gravitas Securities, said the deal will boost its biologic drug capabilities.
TORONTO–(BUSINESS WIRE)–Mednow Inc. (“Mednow” or the “Company”) (TSXV:MNOW), Canada’s on-demand virtual pharmacy, is pleased to announce the Company has entered into a share purchase agreement (the “Share Purchase Agreement”) on November 18th, 2021 with Infusicare Canada Inc. (“Infusicare”) and the shareholders of Infusicare, pursuant to which the Company shall acquire all of the issued and outstanding shares (the “Shares”) of Infusicare, in consideration for an aggregate cash payment of approximately C$1.85M.
This proposed acquisition is expected to bolster Mednow’s expertise in biologic drugs, the fastest-growing class of drugs in the pharmaceutical industry1. It also is expected to provide the ability for Mednow to offer same-day delivery in London, Ontario, and the surrounding areas. Mednow currently offers same-day delivery to three major Canadian cities (Toronto, Vancouver and Halifax), and anticipates further expansion.
In its last fiscal year, Infusicare generated approximately C$9.3M in revenue and C$400,000 in gross profit from selling prescription medications and support services to its patients. The Infusicare acquisition follows our acquisition of 2716725 Ontario Inc. dba Medvisit (“Medvisit”) on August 6, 2021, which had approximately C$3M in revenue and C$790,000 in gross profit in its last fiscal year. The combination of Infusicare and Medvisit’s aggregate revenue in their last fiscal years was approximately C$13M and C$1.2M in total gross profit.
“The share purchase agreement with Infusicare is right in our wheelhouse, and is expected to leverage Mednow’s expertise in pharmacy. Upon the expected closing and integration of Infusicare’s operations, the Arva Clinic’s patient base is expected to benefit from Mednow’s digital customer service infrastructure. Mednow is also expecting to acquire a company with a proven source of revenue, anticipated to give Mednow a strong foundation for profitability, additional specialty pharmacy services, and expand its logistical infrastructure in Southwestern Ontario for its wide range of digital healthcare services,” said Karim Nassar, Chief Executive Officer of Mednow.
Infusicare’s wholly-owned subsidiary is a specialty pharmacy based in London, Ontario, operating out of the Arva Clinic. The Arva Clinic offers comprehensive support for patients receiving biologic drugs for rheumatoid arthritis and other specialty medications, in addition to regular pharmacy services. The Arva Clinic team is comprised of a group of well-respected healthcare professionals, including board-certified specialist physicians, advanced practice allied health professionals, specialty trained nurses, and pharmacists.
Rheumatoid Arthritis (“RA”) and Biologic Drugs
About one out of every 100 adults in Canada has RA, or approximately 300,000 Canadians2. While there is no cure for RA, early treatment through biologic drugs can avoid pain and damage to their joints.
Biologic drugs are genetically engineered proteins that target specific parts of the immune system that fuel inflammation. Presently, biologic drugs are one of the fastest growing pharmaceutical product segments in Canada. The high cost of biologic drugs, with treatment costs ranging from thousands to tens of thousands of dollars per year per patient, as well as their continued growth in usage, have contributed to a significant increase in pharmaceutical expenditure.3
There has been a significant shift in pharmaceutical sales towards biologic drugs over the last decade. Whereas only one biologic drug made the list of the ten top-selling patented pharmaceutical products in 2006, biologic drugs accounted for seven products on this list in 2017 representing 42% of patented medicine sales in Canada.4
Amir Ali Reyany-Bozorg and Felipe Campusano are directors of the Company. Each are also shareholders of Infusicare, the transaction contemplated under the Share Purchase Agreement (the “Transaction”), a related party transaction under Multilateral Instrument 61-101 – Protection of Minority Securityholders in Special Transactions (“MI 61-101”). The Company is exempt from the formal valuation and minority shareholder approval requirements imposed by MI 616-101 pursuant to the exemptions in section 5.5(a) and 5.7(a) of MI 61-101, as neither the fair market value of the Shares, nor the consideration paid therefor, exceeds 25% of the Company’s market capitalization.
The Transaction is subject to corporate and regulatory approvals, including TSX Venture Exchange approval.
About Mednow Inc.
Mednow is a healthcare technology company offering virtual access with exceptional care. Designed with access and quality care in mind, Mednow.ca provides virtual pharmacy and telemedicine services, as well as doctor home visits, with convenience and through an interdisciplinary approach to healthcare that is focused on the patient experience. Mednow’s services include free at-home delivery of medications, a user-friendly interface for easy upload, transfer and refill of prescriptions, access to healthcare professionals through an intuitive chat experience, a specialized PillSmart™ system that packages prescriptions and vitamins by date and time, and doctor consultations.
To learn more, follow Mednow on Facebook, Twitter, LinkedIn and Instagram, as well as visit www.mednow.ca/.