Progressive Care Inc. (OTCMKTS:RXMD) shares have been bouncing around in a range over the past 6 months. Right now, the stock is testing the key support zone in that range, offering prospective investors a chance to take a fresh look at the company at what may turn out to be a bargain basement level, both technically and fundamentally.
One reason this may be especially true at the moment has to with the company’s statements late last year and earlier this year about a core strategic agenda it has been pursuing: the development and deployment of a sophisticated telemedicine platform. Importantly, it has been aggressively working toward this objective since well before the relatively recent pandemic outbreak of the COVID-19 epidemic in the US and around the world.
This is important because it suggests the company is likely far ahead of potential competitors in the pharmacy space in terms of a viable telemedicine solution just as the federal government starts to make ready billions of dollars and a clear messaging agenda promoting the need for quick action on the telehealth front by the private sector.
The Telehealth Call to Action
The COVID-19 pandemic threatens to topple the global economy to its knees. It’s important to understand why this is the case.
It’s not because the novel coronavirus that causes it is all that deadly – the total case fatality rate (CFR) is now thought to be somewhere under the 1% level, and possibly as low as 0.5% according to recent research from multiple sources. And it’s not because it spreads very rapidly, though it certainly does.
The back breaker is the combination of that aggressive infection rate and the relatively high rate of unavoidable hospitalization, which may between 10-15% across the broad sample of cases. Drastic measures to slow down the spread of the disease have become unavoidable despite their severe economic implications because, without them, we risk watching in horror as our healthcare system is overrun by patients in need of intensive care, resulting in countless unnecessary deaths.
Another major factor in this equation is the fact that healthcare workers are constantly going to be in the line of fire throughout the crisis. As more and more providers and caretakers are exposed to the pathogen, reducing their numbers in the field through quarantining and treatment, the problem multiplies because we end up losing caretakers and gaining patients in the same breath.
Telehealth offers a compelling solution. The more instances where healthcare can be delivered without placing healthcare workers in contact with potentially contagious carriers of the virus, the better off we will all be. Patients can avoid exposure to infection at medical facilities and healthcare providers can avoid exposure to potentially contagious patients.
As a result, over recent days, the White House has introduced a number of key regulatory changes that open the door for companies like Progressive Care to step up the plate faster and on a wider basis in the telemedicine marketplace, including:
- the expansion of telehealth services covered by Medicare
- a lowering of the strict HIPAA bar for clinical interactions with patients over digital platforms
- the dismantling of interstate barriers – healthcare providers no longer need to be licensed in the patient’s state
These changes can be seen as doubly important for a company, like RXMD, that has been developing a telemedicine solution for the past 6 months: they imply a higher ROI on that development investment on a per unit basis, and they signal a desperate level of demand waiting upon launch. We would also anticipate the potential for federal and state financial aid, subsidization, and non-dilutive grant funding allowing companies at the head of this pack to expand faster and with less balance sheet risk for their shareholders.
Progressive Care is Ready to Answer
The company has been posting exceptional growth data in recent months and has announced plans for expansion and a likely uplisting of shares onto the Nasdaq or NYSE later this year. But more to the point, the growth case that stands to excite investors at the next level is its transformation into a scalable next-generation telemedicine leader.
In a recent letter to shareholders, the company’s CEO, S. Parikh Mars, noted that, “Above and beyond these goals, my vision for the future will require an evolution into a new and more scalable kind of healthcare company. We have been seeking a platform upon which we can build a unique telemedicine product. We are currently in discussions related to achieving this goal and we strongly feel such a product will play a key role for us in the future.”
That was out in January.
Prior to that, after a stellar Q3 2019, Mars said, ““Get ready for a transformation. We are extremely excited about the opportunity to monetize telemedicine in a manner that will truly change the game as it is currently played. We look forward to introducing current and prospective shareholders to this vision in the months ahead. 2019 has been a breakout year. But the core message that we have right now for our shareholders is this: expect a transformative evolutionary leap to a vastly more scalable, diversified, and higher margin Progressive Care in 2020 and beyond.”
That was November of last year.
According to company materials, we would expect movement toward some sort of platform in the marketplace in the very near future. The COVID-19 pandemic has reshaped the investment landscape in many ways. We have seen a rush into shares of equipment suppliers, vaccine and therapeutics names, testing kit distributors, and workplace virtualization and remote meeting technology plays.
We would anticipate the next speculative bonanza to be in the telehealth plays following President Trump’s comments earlier this week. At that point, the race will be on to find the names that stand to gain from the opportunity that the narrative implies.
Don’t be surprised to see Progressive Care Inc. (OTCMKTS:RXMD) shares respond to the call as that process takes hold.
