Dear fellow shareholders,
I am writing today to provide an update on the Company’s progress and an overview of our current focus areas.
Firstly, our thoughts are with all the innocent victims affected by the war in the Middle East. The impact on our Israeli team has been significant. Despite the tragedy directly impacting them, the team continues to work harder than ever; to progress the business with an unmatched resolve and intensity. Personally, I have never experienced this level of commitment and focus, even during times of peace. I have an enormous sense of admiration for our Israeli team that HeraMED has continued to operate as business as usual over the last few weeks.
When I was appointed Executive Chairman in July 2023, my remit was to lead the commercialisation of HeraCARE by developing a disciplined sales and marketing strategy. Since July, I have spent a lot of time listening and learning from both internal and external stakeholders to determine how we can improve execution of our commercialisation strategy.
The Company has built strong foundations which can be summarised as follows:
HeraCARE is a market leading platform offering a fully integrated, remote, connected maternity care solution designed to deliver better care at a lower cost, ensure expectant mothers are engaged, informed and well-supported, allowing healthcare professionals to provide the highest quality care and enabling early detection and prevention of potential risks;
Clinical trials published in leading scientific journals have validated the accuracy, interpretability, usability, and acceptability of the in-home foetal and maternal heart rate monitor HeraBEAT when compared to the industry gold standard hospital-based equipment;
Initial customers have provided an evidence base from more than 2,700 pregnancies;
Strong pipeline across all customer verticals in Australia and the US;
Strong interest from leading healthcare institutions to undertake further research and collaborations;
Key sales executives in place in target markets; and
Globally, there is a large and growing unmet medical need for improved maternity care as well as a move towards ‘home as a clinic’ and remote patient monitoring that further support the viability of the HeraCARE solution.
As a result of these strong foundations, the interest in our technology continues to accelerate in our key target markets due to well documented problems facing maternity care only becoming more urgent. We have onboarded several customers during the past 18 months, most significantly Joondalup Health Campus and e’Lōvu Health, both of which have provided strong evidence to the value proposition of HeraCARE. Furthermore, they have also provided key learnings with respect to sales cycles in different customer verticals, onboarding and implementation, ongoing customer support and further refinement to HeraCARE as a solution.
We continue to progress discussions with key leading hospitals (both in Australia and the US) which have the potential to become champions for HeraCARE and are now in the final stages of completion. I will be delighted to update shareholders once these agreements are completed as we start to demonstrate broader commercial traction over the coming weeks.
However, and I like to be direct, we are all disappointed with the sales cycle to date which has proven to be far longer than anticipated and we need to address that. So far on our journey, we have been somewhat exploratory in our approach to commercialisation as we engage with different customer sets.
Each customer onboarded to date, or soon to be onboarded, has had a very innovative, future facing approach to digital health and adoption of new technologies or an urgent need. HeraCARE represents a new mode of care, which has led to a conservative approach to commercial agreements and adoption by prospective healthcare providers even when the urgency is great.
One of our primary objectives in the short term is to focus on strategies to shorten the sales cycle. Over the last 12 months, we have begun to make significant investment at the front end of our business and have continued to build market and customer understanding supported by deepening health economic and reimbursement research. We still have significant work to do on each of these fronts to focus our commercialisation strategy.
Evolving commercialisation strategy
The focus now is on ensuring the Company becomes more flexible and streamlined to roll out HeraCARE. In recent months we have received significant inbound interest in the platform. These inbound enquiries validate the increasing challenges associated with maternity care. We are consistently told by potential customers who have undertaken market screenings that HeraCARE offers the most complete remote solution. How can we better expedite this interest into commercial agreements?
We need to focus our attention on where agreements can be reached and as fast as possible. Large hospitals provide an ability to scale but take time, smaller clinics can integrate HeraCARE faster, but the opportunity is smaller and requires more customer support. Digital platforms allow for access to large audiences of pregnant mums but the sell through management is more complex. We need to determine how we can increase users on the platform in the most expeditious way.
Our priority must be to understand the challenges being faced by the hospital or healthcare provider. Understanding the circumstances of each customer helps us to better scope the opportunity for HeraMED in terms of customer urgency (speed of sales cycle), size of opportunity, clear value proposition of HeraCARE, decision making process of the hospital and any required customization of HeraCARE to ensure it is fit for purpose. A successful sales process requires engagement across all the key stakeholders in the provision of maternity care in the hospital – midwives, clinicians, OBGYN’s and the executive team. Each of these stakeholder groups needs to be engaged directly by HeraMED and be supportive of adopting HeraCARE for a successful adoption to occur.
To address the length of the sales cycle, we have responded with the following priorities:
1. Simplify and Prioritise:
Focus on customers that are in the greatest need for HeraCARE, have the lowest barriers to uptake, and represent the easiest implementation. These are clinics facing the mortality crisis or in the maternal deserts and rural areas where access to care is difficult. Pleasingly we are well progressed with clinician groups facing each of these challenges and expect to enter agreements as we seek to collaborate with rural and regional clinician groups to get a wider reach. We are well progressed with healthcare groups that support this customer set and I look forward to completing pilot agreements in the near-term.
Secondly, we are focusing on markets where state and national governments have already identified remote maternal care as a key priority. Several states including Florida have already taken policy steps with grant funding forming an element of the commercial model for some of our commercial discussions. The Netherlands is another country that has made public policy decisions to assess digital remote medical pregnancy care becoming the national standard. It has already proven the value as evidenced in this Lancet article:
Although still confidential in its nature HeraCARE has been assessed in a clinical trial as part of this strategic initiative with leading universities and research institutions in the Netherlands. Pregnadigit of which HeraMED is a partner, has built a consortium of technology and service providers in the Netherlands and aims to have at least 50% of current physical outpatient and clinical pregnancy care replaced by digital remote care by 2030. It is awaiting the formal go ahead for funding from the Netherlands Health Ministry in December 2023.
I look forward to being able to share the results of these trials as the Netherlands which will hopefully become a significant opportunity for HeraCARE. It is important to note that this is not a distraction to our key markets, nor is it opportunistic, but we have been selected to be part of this Dutch initiative of which Philips is a partner, to transform management of maternal care.
We won’t take our focus off the larger USA organisations such as hospitals, with higher numbers of pregnancies, however we recognize that they have higher barriers to entry due to compliance and administration.
2. Agile pricing models
We acknowledge that different hospitals (for example public vs. private) and clinics have different business models and may require customised product packages.
3. Agile platform
We need to continue to customise and adapt our platform to suit the needs and workflows of our customers including for example reimbursements, frequency of alerts, levels of support for the pregnant women, translations into different languages, ability to integrate new devices such as the glucometer readings. Additionally, we are working to integrate insurer billing based on the relevant billing codes in the US to smooth the process of reimbursement.
We are also assessing ways to expand our existing mental health features and looking to partner with respected mental health institutions.
4. Implementation
To ensure the deployment and integration of HeraCARE is successful implementation support from HeraCARE is critical. Successful implementation is multi-faceted from our tech team working closely with the IT team from the hospital across any customised integrations, to ensuring all local data regulations are adhered to through, to onsite training and education for midwives, clinicians, and managers responsible for HeraCARE within the hospital. The implementation phase with Gold Coast hospital has been a huge undertaking with many learnings allowing for refined processes for other hospitals. A clear learning is onsite support is required to ensure a successful implementation.
5. Collaborate
We need build the number of strategic partners to support all facets of the business.
Adding additional devices to HeraCARE
There is a strong demand amongst clinicians to integrate glucometer readings particularly in the USA, as existing pre-diabetic and diabetic mums require a higher level of monitoring and risk assessment. Obesity and subsequent diabetes are in epidemic proportions in the USA and these patients as well as those that acquire it during pregnancy are at significantly higher risk of developing pre-eclampsia and potentially fatal outcomes. In addition to glucose monitoring, we have also been approached by leading companies in pathology to integrate blood and urine testing into HeraCARE via their home testing solutions.
To this end we are in discussions with a number of global medical companies in order to partner with them for best pricing of their devices, promotion of their brand, research and expanding their market reach in maternal and women’s health. This will definitely improve the value proposition of HeraCARE. Ideally one these companies will be a strategic investor and use its connectivity and large customer base to open doors for us.
Further Research to Commercial Ends
We will also increase partnering with flagship medical institutions allowing us to gain further product champions, continue to deepen knowledge and database, become known to their commercial partners, and develop funding opportunities. Governments, hospitals, large medical corporations, and insurers are convinced by clinical and economic data and results. This will lead to changes in guidelines and position us to be the standard of care for pregnancy. In turn this will lead to accelerated patient data and the identification of early clinical intervention opportunities and reduction of mortality and morbidity. It will also accelerate our “data as an asset” approach and the use of our proprietary AI to assist in analysis and in the future, become integrated into our product.
If we are to continue to be a leader in the space, we have to make this a strength and a key differentiator from competitors in the USA in particular. In Australia, developing the appropriate partnerships which we are presently scoping and discussing, will allow us access to non-dilutive government grant funding and the R&D tax concession of 45% which we can’t immediately access due to the relevant business units being housed overseas. We have also recently applied for a major grant in the EU.
Service Providers
We are also in discussion with groups in the US and Australia about providing on ground support. For the implementation phase this is critical, but we are also assessing solutions HeraMED can offer to particularly support clinics or employers to monitor or be the first line of contact for their mothers on the system ‘navigators’. Offering this service as part of HeraCARE for clinics is seen as a potential pathway to accelerate the onboarding on clinics on HeraCARE.
Advocacy Groups
We are in discussion with various midwifery and perinatal organisations to become organisational champions.
Target Markets
Australia
Gold Coast Hospital
One of the most exciting partnerships currently underway within the business is at the Gold Coast, where there has been excellent progress across all fronts for the upcoming clinical trial of HeraCARE. I have been working closely with HeraMED Executive Vice President, ANZ, Anoushka Gungadin on this partnership and I am so encouraged by the overwhelming level of resourcing that they are applying to not only ensuring a successful pilot but the longer-term success.
The pilot itself, is due to begin in the coming weeks for up to 90 pregnancies for a period of six to nine months; with an objective to evaluate clinical usability, patient satisfaction, value for money and economic analysis. Progress has been made across clinical, technology integration and IT, workflow integration and project management and pregnant women are currently being signed up.
The Gold Coast hospital prides itself on its leadership in digital transformation under their ‘Digital 2024 (D24) strategic plan’ and it is therefore particularly pleasing that they have identified several opportunities to collaborate on the development of innovative products and IP for use in a hospital and health service setting. As part of this, an Innovation Collaboration Deed and Project Agreement has been put in place.
Joondalup Health Campus (JHC)
We continue to assess the best pathway forward. There have been challenges created on both sides. Ramsay Health has made significant administrative and staff changes at Joondalup, and this has significantly impacted newer initiatives that have come up for renewal in which HeraMED is caught. This has led to challenges finding common ground for a longer-term commercial agreement with JHC thus far, but we continue to work towards a solution that will benefit all parties. Importantly HeraCARE continues to be supported by key leadership within the obstetrics department of JHC.
Pipeline
There are a number of commercial, collaborative, or pilot discussions taking place but two are nearing conclusion also in Australia. One is a large digital health platform with a global footprint that works with health care providers including hospital, health service sectors to connect health information, clinicians, and consumers, with clinical and administrative systems, health data analytics, population health solutions, and information exchange platforms to help providers to improve the quality, safety and efficiency of the healthcare they deliver. In the first stage, HeraMED will partner with them to deliver care in new ways through telehealth and connected maternity through their GPs networks, representing about 50% of Australian GPs. The second group leverages clinical, education and technological capabilities to deliver innovative solutions to the primary care system. They work directly with Government, academia, industry, and local health networks. HeraMED is looking at a new user-case in rural remote obstetric-GPs clinics and care starting in SA. Both groups offer access and scale to a large proportion of GPs in the country.
USA
Strengthened commercialisation team in USA gaining traction
I am delighted with the progress being made under the leadership of Keith Koby in USA. While I’m conscious that we haven’t formerly announced any new trials, this in no way reflects the level of activity and I’m delighted with progress across several different opportunities.
Talks are underway with some of the largest and most prestigious hospitals across the country and with the new appointments announced in July, the level of new business activity is excellent and the interest in our platform has grown significantly, in part driven I’m sure, by the heightened awareness around the maternity crisis.
Discussions are progressing with one such hospital on the East Coast, servicing approximately 5,000 pregnancies annually, on the East Coast. In this case, the local Government is funding the trial to reduce the impact of the maternity desert on their local communities.
Furthermore, there are well advanced discussions with leading groups across each customer vertical. Behind the abovementioned hospital others continue to progress but we are also advancing discussions with major digital health platforms, insurers, numerous clinics and world renown universities and research hospitals. The breadth of different organisations interested in HeraCARE continues to provide confidence as to its value proposition. Reinforcing this is the meeting Keith held recently with the CEO of one of the largest global diagnostics companies. There was a small group chosen by the Executive leadership and Keith enjoyed a one-on-one meeting with the CEO. This organisation is evaluating the HeraCARE platform as part of its ‘Direct to Customer’ initiative. A second meeting is currently being planned. Regardless of the outcome, the potential role of HeraMED in to-home and consumer has been validated and reveals the changes occurring in the USA healthcare system that are driven by private and government initiatives.
e-Lōvu
e-Lōvu Health has now signed up six clinics in USA with a total audience of 3,600 pregnancies. 5 of these clinics have been signed since June, with approximately 150 mothers onboarded since July. This progress has demonstrated the faster sales cycle associated with smaller private clinics. Our initial 12-month agreement is reaching its term and we have agreed to extend the current term until year end, but we continue to engage with e-Lōvu on how best to broaden the commercial relationship. e-lōvu have committed to purchase 150 units that are ready for shipment in November. Further updates on these discussions will be provided in due course.
Next six months
In closing we have three core priorities, over the next six months,
Execute on near term pipeline,
Continue to build out what HeraCARE can offer with strategic partners to ensure this is the solution to become the new standard of care in pregnancy, and
Focus on shortening the sales cycle and delivering more deployments of HeraCARE faster
In conclusion, there is a ‘hive’ of activity in both our target geographies, and I am personally taking responsibility for ensuring our sales and marketing is the best it can be.
Since inception, the Company has accumulated an excellent repository of data which is proving to be increasingly to a range of health providers. We are seeking to capitalize on this rich data and will update you the shareholders in due course.
I would like to remind you our shareholders the HeraMED Purpose which is:
We are here to reimagine the way maternity care is delivered and experienced for pregnant people, their support teams, and their care companions worldwide.
And our mission which guides us every day is:
To improve maternal health equity and access to quality perinatal care for expectant moms everywhere.
Investor Webinar
On Monday, 30th October at 9:30am, myself, Anoushka Gungadin and HeraMED’s President of North America Keith Koby will host an Investor Webinar to provide investors with an opportunity to hear more about our progress and to ask questions.
To attend the webinar, please register using the following link:
Thank you for your ongoing support.
Yours sincerely,
Dr Ron Weinberger
Executive Chairman
HeraMED Limited
e. ron@hera-med.com