Item 1. Business
Item 1. Business
Overview
OptimizeRx is a digital health technology company
enabling care-focused engagement between life sciences organizations, healthcare providers, and patients at critical junctures throughout
the patient care journey. Connecting over 60% of U.S. healthcare providers and millions of their patients through an intelligent technology
platform embedded within a proprietary point-of-care network, OptimizeRx helps patients start and stay on their medications.
We are a Nevada corporation organized in September
2008. We conduct our operations through our wholly-owned subsidiaries, OptimizeRx Corporation, a Michigan corporation, CareSpeak
Communications, Inc., a New Jersey corporation, CareSpeak Communications, D.O.O, a controlled foreign corporation incorporated in Croatia,
RMDY Health, Inc. a Delaware corporation, and Cyberdiet, a controlled foreign corporation incorporated in Israel.
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2021 Company Highlights
1. Our net revenue increased to a record $61.3 million in 2021, a 42% increase over 2020.
2. Our net revenue increased to a record $20.3 million in Q4 2021, up 24% over Q4 2020.
3. Achieved positive cashflow from operations of $0.7 million for the year ended December 31, 2021.
4. We generated net income of $0.4 million in 2021 as compared to a loss of $2.2 million in 2020.
5. Completed the integration work for our previous acquisitions and paid the last earnout payment related
to the acquisitions.
6. Raised an additional $70.7 million in capital in a public offering in February 2021.
7. Enhanced our leadership team by adding Edward Stelmakh as Chief Operating Officer and Chief Financial
Officer.
8. Expanded our pipeline for our new Real-World Evidence (“RWE”) messaging solution that we launched
in the second quarter of 2021.
9. We announced the launch of our new Therapy
Initiation Workflow , which enables pharmaceutical manufacturers to execute market access strategies, and particularly supports the
fast-growing area of specialty medications.
10. We launched multiple Evidence-Based Physician
Engagement programs and in December, the solution was recognized as one of the most innovative products for life sciences by PM 360 magazine.
11. We were listed as one of the Americas’
Fastest Growing Companies by Deloitte and the Financial Times
12. We were added to the S&P SmallCap 600 Index
in October 2021.
Principal Solutions and Applications
Our principal solutions and applications can be
summarized as follows:
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Financial Messaging – Our integrated financial messaging platform is a revolutionary virtual “Patient Support Center” that allows doctors and staff to access a universe of sample vouchers, co-pay coupons and other patient support options through their EMR and/or e-Prescribe systems. It allows them to search, print or electronically dispense directly to patients and a national network of pharmacies. Our platform eliminates the need for physicians to manage and store physical drug samples by offering a more convenient and efficient way to allocate, administer and track samples and co-pay savings for their patients. Today, nearly 60% of doctor offices ban or limit drug representatives and the samples they offer. While samples are still valuable, our solution addresses the fact that many healthcare systems and doctors are looking for an easier, more effective way to increase affordable access and adherence to their prescribed branded medications.
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Brand and Therapeutic Support Messaging – Our brand messaging services include a variety of brand awareness and therapeutic support messaging services that can be tailored to meet the needs of a brand. These messages can include brand awareness messages, reminder ads, therapeutic support messages and unbranded messages that can be targeted by specialty, diagnostic code and other criteria. Brand messaging is highly complementary to our core financial messaging solution. Historically, we have sold brand messaging based on specific solutions offered by our Electronic Health Record (“EHR”) partners, but we have developed our own proprietary banner messaging system, rolled this solution out in 2017, and expanded it since then. We also developed our own therapeutic support messaging system and launched it with our first partner in late 2018. We believe brand messaging represents a significant growth opportunity for us.
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Brand Support – Our brand support is focused on educating and working with pharmaceutical manufacturers on identifying, formulating, and implementing new eRx media strategies for promoting their solutions. Our services include: 1) Drug File Integration - a service designed to better insure that manufacturers’ drugs are present in every ePrescribing platform available; 2) Sales Force Training – a service to educate the extended field sales force on this new integrated solution and what to look for within their client base to insure maximum exposure of their brands; and 3) Strategy Development – a service that assists pharmaceutical manufacturers in identifying and building a competitive strategy to take advantage of this new digital frontier. Currently, this activity results in less than 10% of our revenue, but represents a significant growth opportunity for us.
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Patient Engagement – Our patient engagement activities arose out of our acquisition of CareSpeak Communications in October 2018, followed by our acquisition of RMDY Health in 2019. Our technology solution provides digital messaging services through our cloud based Mobile Health Messenger (“MHM”) Platform. We provide interactive health messaging for improved medication adherence and care coordination. Our HIPAA-compliant, automated, mobile messaging platform allows pharmaceutical manufactures and related entities to directly engage with patients to improve regimen compliance. We also deliver patient programs with treatment and affordability information, lifestyle and condition trackers, internet device connectivity, forms and surveys, with this all supported by a wide range of communication capabilities delivered via chat, bots, audio and telehealth. We enable this functionality for our customers, with our solutions delivering a variety of intervention mechanisms that help treat chronic conditions, such as diabetes and heart disease.
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Evidence-Based Physician Engagement – Our evidence-based physician engagement solution uses predictive analytics via machine learning methods applied to real-world data (RWD) to assist healthcare providers (HCPs) in identifying patients who may be qualified for specific therapies, raise awareness of patient access pathways, and identify early indicators of non-adherence among patient populations. This real-world evidence (RWE) solution translates into better support for providers as they look to make the best treatment decisions for their patients. This solution has a “patient-first” focus, helping manufacturers identify which HCPs to engage by first identifying if they have patients in need of support, based on where they are in their care journey and disease state. This needs assessment is completed in real time using the AI technology on our Therapy Initiation and Persistence Platform , reducing delay in support delivery caused by traditional applications of RWD in engagement activities.
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Therapy Initiation Workflow – the therapy initiation workflow is a digital solution focused on accelerating patient access to treatments where time-consuming medical documentation is required of HCPs prior to pharmacies dispensing prescribed drugs. The new platform enhancement particularly supports the fast-growing area of specialty medications. In-line with the major digitization paradigm shift across healthcare, this technology enhancement allows life sciences companies to simplify therapy initiation by presenting HCPs with a fully electronic option synchronizing enrollment, benefits verification, prior authorization, and patient support onboarding.
Sales and Marketing Update
Our sales team continues to expand our business
with existing and new clients, strategically focused on the digital connection of care between the pharmaceutical industry, physicians,
and patients. We continue driving awareness of the increased value of our enterprise platform approach, expanding our share of customer
wallet in reflection of the life sciences budget shift to digital solutions. We have increased the depth and breadth of our business across
existing client product portfolios by maximizing the utilization of our network. We are expanding our business by making significant
enhancements to our platform and network to digitize pharmaceutical access solutions in support of major industry paradigm shift towards
improving patient care and adherence through technology. In 2021 we announced the launch of our new Therapy Initiation Workflow ,
a digital solution focused on accelerating patient access to treatments where time-consuming medical documentation is required of HCPs
prior to pharmacies dispensing prescribed drugs. The new platform enhancement particularly supports the fast-growing area of specialty
medications. Our team continues to work on converting current clients from individual solutions to enterprise platform deals with access
to our full set of solutions across our network. These enterprise deals enable us to increase our revenue per customer and give us a more
predictable and consistent revenue stream.
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In 2021, we delivered on our marketing strategy
to focus more heavily on strategic content and expansion beyond specific product marketing efforts with a 10x increase in engagement with
our content, resulting in higher brand visibility through organic, non-paid channels. Our efforts remain focused on cementing our image
as a strategic partner with our buyers, and we have completed a positioning expansion effort to better capture the value of our platform
with our buyers in light of the innovations we have deployed over the last two years. Additionally, we hosted a series of webinars featuring
industry leaders in 2021 to foster collaboration, and we hosted our second annual Innovate4Outcomes event, partnering with patient advocacy
groups to brainstorm actionable solutions to address standards of care and equal access to treatment for patients.
We have continued building marketing strategy
momentum in 2021 with increased industry visibility that we expect to expand in 2022.
Operational Update
In 2021, we continued expansion of our network,
driving a broad mix of HCP specialties in alignment with our commercial customer therapeutic portfolios. The introduction of Real-World
Evidence and expansion into omni-channel engagement brought engagement opportunities beyond the point of prescribe, enabling access to
life saving therapies. Leveraging AI, we engage providers and patients with the right insight at precisely the right time, helping
to drive improved outcomes.
Technology Update
To support our growth and to further improve the
efficiency of our systems, we have moved our core platforms to Amazon Web Services. As a result of our acquisitions in 2018 and 2019,
we now have tech teams based in both Croatia and Israel, in addition to our core team in the U.S., to help develop further applications
throughout the organization.
All application code, libraires, and 3 rd
party services are maintained at high levels, with an ongoing regimen of patches and upgrades and version synchronization to ensure both
forward looking and reverse compatibility.
Systems enhancements in 2021 included upgrades
and full documentation of processes and procedures and security implementation in support of full Enterprise HITRUST Certification in
2022, as well as for ongoing Sarbanes Oxley, HIPAA, customer assessments and other needs.
All systems are fully scalable, automatically
based on various metrics, thresholds, and are live-live in multiple redundant geographically disparate data centers.
Applications introduced are modular and flexible
allowing enhancements and new solutions to flow through the system which results in rapid implementation by our partners that typically
only takes a few weeks to one quarter.
Competition
Our platforms face competition from numerous other
companies, both in attracting users and in generating revenue from advertisers and sponsors. We compete for users with online services
and websites that provide savings on medications and healthcare products, including both commercial sites and not-for-profit sites. We
compete for advertisers and sponsors with health-related web sites, general purpose consumer web sites that offer specialized health sub-channels,
other high-traffic web sites that include both healthcare-related and non-healthcare-related content and services, search engines that
provide specialized health searches, and advertising networks that aggregate traffic from multiple sites.
Our messaging platform competes broadly in the
highly competitive pharmaceutical and life sciences digital marketing industry that is dominated by large well-known companies with established
names, solid market niches, wide arrays of product offerings and marketing networks. Many of our competitors have greater financial, technical,
product development, marketing and other resources than we do. These organizations may be better known than we are and have more customers
or users than we do. Our messaging offerings compete for pharmaceutical budgets with a variety of other forms of advertising and promotion.
Our platform is unique in its ability to reach prescribers directly in their workflow through their EHR. The primary direct competitor
in our financial messaging solution is ConnectiveRx. We generally compete on the basis of several factors, including size of our network,
quality of our service, our ability to target specific customer needs, and to a lesser extent, price. We believe we compete favorably
on these metrics. For more information on risks relating to our competition, see Item 1A. Risk Factors.
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Intellectual Property
We own a number of patents important to our business,
and we expect to continue to file patent applications to protect our research and development investments in new products. As of December 31,
2021 we held 3 patents and several pending patent applications, including foreign counterpart patents and foreign applications. For the
United States, patents may last 20 years from the date of the patent’s filing, depending upon term adjustments made by the patent
office. In addition, we hold numerous trademarks in the United States and other countries. We also have licenses to intellectual property
for the use and sale of certain of our solutions.
OPTIMIZERx, TELAREP, CareSpeak, RMDY Wellness
Layers, Diet Watch, and SampleMD are our licensed trademarks.
We obtain other intellectual property rights and/or
licenses used in connection with our business when practical and appropriate. Historically, we have done so both organically, through
commercial relationships and in connection with acquisitions.
Government Regulation
The healthcare industry and, in particular, our
customers and partners are subject to applicable U.S. federal, state and local laws and regulations, including those governing fraud,
abuse, privacy and security. Many of these laws and regulations are complicated and how they might apply to us, our customers, our partners,
or the specific services and relationships we have with our customers and partners are not always well-defined. Our failure, or perceived
failure, to accurately apply, or comply with, these laws and regulations could subject us to significant fines and liability, result in
reputational harm, and adversely affect our business. See Item 1A. Risk Factors for more information on the impact of Government Regulations
on OptimizeRx.
Employees
As of December 31, 2021, we had 82 full-time employees
in the U.S, as well as 15 full-time international employees, and no part-time employees. None of our employees are represented by a labor
union or collective bargaining agreement with respect to their employment with us. The majority of our employees work remotely and are
geographically distributed across the United States, Israel and Croatia. We supplement our workforce with contractors in the United States
and internationally on an as needed basis. We consider our relationship with our employees to be good and have not experienced any work
stoppages.
We are dedicated
to maintaining an environment where everyone feels valued, and we celebrate both the differences and similarities among our people. We
also believe that diversity in all areas, including cultural background, experience and thought, is essential in making our Company stronger.
In 2021 we introduced a Diversity, Equity & Inclusion Committee, which is actively engaged in improving our culture, hiring
practices and education. In 2021, we committed to the Parity Pledge – pledging to interview and consider at least one qualified
woman and underrepresented minority for every open role, VP or higher.
We prioritize recruiting, retaining, and incentivizing
a highly qualified, diverse workforce and we incentivize selected employees through the granting of stock-based awards for compensation
and performance and cash-based bonus awards for performance.
We have increased our focus on training and development
for our current employees. We offer learning and development opportunities and other resources to support our employees in achieving and
enhancing their development objectives. We equip our managers with the skills and tools to provide
ongoing coaching and feedback so employees can maximize their performance and potential, delivering success for the company and the employee.
Available Information
Our Internet address is www.optimizerx.com. The
information on the website is not and should not be considered part of this Form 10-K and is not incorporated by reference in this Form
10-K. The website is, and is only intended to be, for reference purposes only. We make available free of charge on or through our website
our Annual Report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and amendments to those reports filed
or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as
soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission
(the “SEC”). In addition, we will provide, at no cost, paper or electronic copies of our reports and other filings made with
the SEC. Requests should be directed to: Attention: Secretary, OptimizeRx Corporation, 400 Water Street, Suite 200, Rochester, MI 48307.
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