Q1 2024 PaySign Inc Earnings Call

Kevin: Good afternoon. My name is Kevin, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Paysign, Inc. First Quarter 2024 Earnings Conference Call. After the speaker's remarks, there will be a question and answer session. If you would like to be placed in the question queue, please press star 1 on your telephone keypad.

Good afternoon, My name is Kevin and I'll be your conference operator today at this time I'd like to welcome everyone to the PE Fund, Inc. First quarter 2024 earnings Conference call.

Kevin: After the Speakers' remarks, there'll be a question answer session, if you'd like to be placed into the question queue. Please press star one on your telephone keypad.

Kevin: As a reminder, this conference is being recorded. The comments on today's call regarding Paysign's financial results will be on a gap basis unless otherwise noted. Paysign's earnings release was disseminated to the SEC earlier today and can be found in the Investor Relations section of our website, Paysign.com, which includes reconciliations of non-GAAP measures to GAAP-reported amounts. Additionally, as I set forth in more detail in our earnings release, I'd like to remind everyone that today's poll will include forward-looking statements regarding Paysign's future performance. However, actual performance could differ materially from these forward-looking statements.

Kevin: As a reminder, this conference is being recorded.

Kevin: Comments on today's call regarding piece has financial results will be on a GAAP basis, unless otherwise noted.

Kevin: Piecewise earnings release was disseminated to the SEC earlier today and can be found on the Investor Relations section of our website pay signed dot com, which includes reconciliations of non-GAAP measures to GAAP reported amounts.

Kevin: Additionally, as set forth in more detail in our earnings release I'd like to remind everyone that today's call will include forward looking statements.

Kevin: Regarding piece kind of future performance actual performance could differ materially from these forward looking statements.

Kevin: Information about the factors that could affect future performance is summarized at the end of Paysign's earnings release and in our recent SEC filing. Lastly, a replay of this call will be available until August 7, 2024; please see Paysign's first quarter earnings call announcement for details on how to access the replay. It's now my pleasure to turn the call over to Mr. Mark Newcomer, CEO. Please go ahead.

Kevin: Information about the factors that could affect future performance is summarized at the other piece is earnings release.

Mark R. Newcomer: Recent SEC filings and lastly, a replay of this call be available until August seven 2024.

Mark R. Newcomer: Please see page science first quarter earnings call in downstream.

Mark R. Newcomer: For details on how to access the replay.

Kevin: It's now my pleasure to turn the call over to Mr. Mark Newcomer CEO. Please go ahead.

Mark R. Newcomer: Thank you, Kevin. Good afternoon, everyone, and welcome to our first quarter earnings call. I'm Mark Newcomer, President and Chief Executive Officer. Joining me today is Jeff Baker, our Chief Financial Officer. Also available for Q&A are Matt Turner, our President of Patient Affordability, and Matt Lanford, our Chief Payments Officer. Earlier today, we released our financial results for the first quarter of 2024. I'm delighted to report that we have seen substantial growth on both our top and bottom lines.

Mark R. Newcomer: Thank you, Kevin and good afternoon, everyone and welcome to our first quarter earnings call.

Mark R. Newcomer: I'm, Mark newcomer President and Chief Executive Officer, joining me today is Jeff Baker, our Chief Financial Officer.

Mark R. Newcomer: Also available for Q&A session are Matt Turner, our president of patient affordability, and Matt Lanford, our chief payments Officer.

Mark R. Newcomer: Our first quarter revenue reached $13.2 million, marking a robust 30% increase year-over-year. Most impressively, our adjusted EBITDA increased by 135% to $1.7 million, or $0.03 per fully diluted share, up from $720,000, or $0.01 per fully diluted share in the previous year.

Mark R. Newcomer: Earlier today, we released our financial results for the first quarter of 2024 I'm delighted to report that we have seen substantial growth in both our top and bottom lines. Our first quarter revenue reached $13 2 million, marking a robust 30% increase year over year.

Mark R. Newcomer: Most impressively, our adjusted EBITDA increased by 135% to $1 7 million or <unk> per fully diluted share up from 720000 or one cent per fully diluted share in the previous year. We also observed significant improvements across other key performance indicators, including a 13% rise in gross.

Mark R. Newcomer: We also observed significant improvements across other key performance indicators, including a 13% rise in gross dollar load volume and an 11% increase in gross spend volume. In our previous earnings call, we highlighted the patient affordability business as a key growth driver for the company. I am pleased to affirm that its growth trajectory has not only continued but accelerated, exhibiting a remarkable 305% revenue increase from the same period last year. From $590,000 in Q1 2023 to roughly $2.4 million in Q1 2024.

Mark R. Newcomer: Load volume and an 11% increase in gross spend volume in our previous earnings call. We highlighted the patient affordability business as a key growth driver for the company.

Mark R. Newcomer: I am pleased to affirm that its growth trajectory has not only continued but accelerated exhibiting a remarkable 305% revenue increase from the same period last year.

Mark R. Newcomer: 590000 in Q1 2023, two roughly 2.4 million in Q1 2020 for this segment contributed 59% of our total year over year revenue growth.

Mark R. Newcomer: This segment contributed 59% of our total year-over-year revenue growth. During the quarter, we added a net total of 10 patient affordability programs, concluding with 53 active programs. Many of the new programs were well-established ones that transitioned from another provider, delivering claims immediately upon onboarding.

Mark R. Newcomer: During the quarter, we added a net total of 10 patient affordability programs, concluding with 53 active programs.

Mark R. Newcomer: Many of the new programs were well established ones that transitioned from another provider delivering claims immediately upon onboarding as we continued to demonstrate the value of our solutions to pharmaceutical manufacturers and the specialty drug space. We have successfully expanded into the retail drug programs, which typically have higher claims volumes.

Mark R. Newcomer: As we continue to demonstrate the value of our solutions to pharmaceutical manufacturers in the specialty drug space, we have successfully expanded into retail drug programs, which typically have higher claims volumes. This expansion led to the addition of four retail programs in Q1, and we expect further launches throughout the year. Our claims process in the first quarter increased by 235% compared to Q1 2023, a trend we expect to continue. Our sales cycle remains steady at 90 to 120 days, and our pipeline remains exceptionally robust, further enriched by our recent participation in the Assembly Summit held annually in late April to early May here in Las Vegas.

Mark R. Newcomer: This expansion led to the addition of four retail programs in Q1, and we expect further launches throughout the year.

Mark R. Newcomer: Our claims process in the first quarter increased by 235% compared to Q1 2023, a trend we expect to continue our sales cycle remains steady at 90 to 120 days and our pipeline remains exceptionally robust further enriched by our recent participation in the S. M. B a summit held annually in late April.

Mark R. Newcomer: Early may here in Las Vegas.

Mark R. Newcomer: This event has proven to be crucial for our marketing, sales, and client management efforts, and this year's summit was our most productive yet. We engaged in over 50 targeted meetings, addressing specific potential client concerns with overwhelming positive feedback.

Mark R. Newcomer: This event has proven to be crucial for our marketing sales and client management efforts and this year's summit was our most productive yet we engaged in over 50 targeted meetings addressing specific potential client concerns with overwhelming positive feedback we are highly optimistic that the interactions from this year's SMB of summit will lead to many long term.

Mark R. Newcomer: We are highly optimistic that the interactions from this year's Assembly Summit will lead to many long-term wins and further relationships with major pharmaceutical companies. Based on our current sales pipelines and the response from the summit, we expect patient affordability revenue will increase sequentially throughout the remainder of the year. Our plasma donor compensation business also continued its growth trajectory, with revenue increasing to 10.4 million, up 11% from last year's first quarter. As typical of the first quarter, we experienced some seasonality due to the effects of donors receiving their tax refunds when many donors take a break from donating.

Mark R. Newcomer: Wins and further relationships with major pharmaceutical companies based on our current sales pipelines and the response from the summit, we expect patient affordability revenue will increase sequentially throughout the remainder of the year.

Mark R. Newcomer: Plasma donor compensation business also continued its growth trajectory with revenue increasing to $10.4 million up 11% from last year's first quarter.

Mark R. Newcomer: That's typical of the first quarter, we experienced some seasonality due to the effects of donors receiving their tax refunds when many donors take a break from donating Nevertheless revenue per center grew by 5% from $7066 in Q1 2023 to $7414 in Q1 'twenty 'twenty four.

Mark R. Newcomer: Nevertheless, revenue per center grew by 5% from $7,066 in Q1 2023 to $7,414 in Q1 2024. During the quarter, we added six new centers, one center was closed, and we ended the quarter servicing 469 centers.

Mark R. Newcomer: We anticipate adding 15 to 25 new centers throughout 2024. Additionally, we expect moderate but stable growth in our plasma compensation business as the plasma collection industry stabilizes after a period of rapid expansion. In summary, Q1 2024 has been another quarter of outstanding growth, particularly for our patient affordability business. We remain committed to our mission to bring innovative fintech solutions to the forefront of the patient affordability and healthcare ecosystem. Our team has developed what we believe to be a truly disruptive product portfolio that continues to attract significant interest from major pharmaceutical companies.

Mark R. Newcomer: During the quarter, we added six new centers, one center was closed and we ended the quarter servicing 469 centers, we anticipate adding 15 to 25 new centers throughout 2024, we expect moderate but stable growth in our plasma compensation businesses. The plasma collection industry stabilizes after a period of rapid expansion.

Mark R. Newcomer: In summary, Q1, 2024 has been another quarter of outstanding growth, particularly for our patient affordability business. We remain committed to our mission to bring innovative fintech solutions to the forefront of the patient affordability in health care ecosystems. Our team has developed what we believe to be a truly disruptive product portfolio that continues to attract.

Mark R. Newcomer: Interest from major pharmaceutical companies.

Mark R. Newcomer: Our Plasma business continues to grow steadily, and we remain optimistic about its future. We are also actively exploring other markets to enter and are investing in our people and systems to meet the rapidly growing demand for our products and services. This positions us well to capitalize on numerous opportunities ahead and deliver long-term value to our shareholders. Jeff will now provide more insight into our financial performance for the quarter.

Mark R. Newcomer: Our plasma business continues to grow steadily and we remain optimistic about its future. We are also actively exploring other markets to enter and are investing in our people and systems to meet the rapidly growing demand for our products and services.

Jeff: This positions us well to capitalize on numerous opportunities ahead and deliver long term value to our shareholders.

Mark R. Newcomer: Jeff will now provide more insight to our financial performance for the quarter.

Jeffery B. Baker: Thank you, Mark. Good afternoon, everyone.

Jeff: Thank you Mark good afternoon, everyone as Mark said, we started off 2024 with a solid start fueled by continued growth across all of our businesses plasma donor compensation revenue increased $1 million or 11% to $10 $4 million driven by more plasma centers 469 versus 430.

Jeffery B. Baker: As Mark said, we started off 2024 with a solid start fueled by continued growth across all of our businesses. Plasma donor compensation revenue increased $1 million, or 11% to $10.4 million, driven by more plasma centers, 469 versus 439 at the end of the period, an increase in the average monthly revenue per plasma center of $7,414 versus $7,066, a 13% increase in gross dollar card loads, and an 11% increase in gross dollar spend volume, all while the average load amounts remained fairly steady.

Jeffery B. Baker: Nine at the end of the period, an increase in the average monthly revenue per plasma center of $7414 versus $7066.

Jeffery B. Baker: 13% increase in gross dollar card loads and an 11% increase in gross dollar spend volume all halt the average loan amount remained fairly steady.

Jeffery B. Baker: Pharma patient affordability revenue increased $1.8 million or 305% to $2.4 million, primarily driven by the addition of 27 net new pharma patient affordability programs launched over the past 12 months. Pharma patient affordability revenue equated to 18% of total revenue during the quarter versus 6% during the same period last year. We exited the quarter with 53 active pharma patient affordability programs, an increase of 10 programs since the end of 2023. Other revenue increased $240,000, or 124%, due to the growth in our payroll, retail, and other corporate incentive businesses.

Jeffery B. Baker: Pharma patient affordability revenue increased $1.8 million or 305% to $2.4 million, primarily driven by the addition of 27 net new farm of patient affordability programs launched over the past 12 months.

Jeffery B. Baker: Pharma patient affordability revenue equated to 18% of total revenue during the quarter versus 6%. During the same period last year, we exited the quarter with 53 active pharma patient affordability programs, an increase of 10 program since the end of 2023.

Jeffery B. Baker: Other revenue increased $240000 or 124% due to the growth in our payroll retail and other corporate incentive businesses.

Jeffery B. Baker: As in previous calls, with all of the details we provided in the press release and that will be available in our 10-Q filing tomorrow morning, I will simply hit the financial highlights for the first quarter of 2024 versus the same period last year.

Speaker Change: As in previous calls with all of the details we provided in the press release and that will be available in our 10-Q filing tomorrow morning, I will simply hit the financial highlights for the first quarter of 'twenty 'twenty four versus the same period last year.

Jeffery B. Baker: First quarter 2024 total revenues of $13.2 million, an increase of $3 million or 30% versus the same period last year. Gross profit margin for the quarter was 52.6% vs. 49.8% during the same period last year, an improvement of 280 basis points. SG&A for the quarter increased 19.5% to $5.9 million, with total operating expenses increasing 24.3% to $7.2 million. We continue to make significant investments in IT and personnel to support the continued growth of our business.

Jeffery B. Baker: First quarter 'twenty 'twenty, four total revenues of $13 $2 million increased $3 million or 30% versus the same period last year gross profit margin for the quarter was 52, 6% versus 49, 8%. During the same period last year, an improvement of 280 basis points.

Jeffery B. Baker: SG&A for the quarter increased 19, 5% to $5 $9 million with total operating expenses, increasing 24.3% to $7.2 million. We continue to make significant investments in I T and personnel to support the continued growth of our businesses. We exited this quarter with 132.

Jeffery B. Baker: We exited this quarter with 132 employees versus 112 during the same period last year. For the quarter, we posted a net income of $309,000, or one cent per fully diluted share, versus a net loss of $160,000, or just under break-even per share for the same period last year. We recorded a tax expense of $164,000 during the quarter for an effective tax rate of 34.7%. We expect the effective tax rate for the remaining quarters to be 25.65%.

Jeffery B. Baker: Please versus 112 during the same period last year.

Jeffery B. Baker: For the quarter, we posted a net income of $309000 or one cent per fully diluted share versus a net loss of $160000 or just under breakeven per share for the same period last year.

Jeffery B. Baker: We recorded a tax expense of $164000 during the quarter for an effective tax rate of 34, 7%. We expect our effective tax rate for the remaining quarters to be $25 six 5%.

Jeffery B. Baker: For the first quarter, adjusted EBITDA, which is a non-gap measure that adds back stock compensation to EBITDA, was $1.7 million or 3 cents per diluted share versus $720,000 or 1 cent per diluted share for the same period last year. This equates to 135% year-over-year growth in our adjusted EBITDA. The fully diluted share count for the quarter used in calculating the per-share amount was 54.8 million shares, which reflects additional in-the-money options that were previously out of the money.

Jeffery B. Baker: For the first quarter, adjusted EBITDA, which is a non-GAAP measure that adds back stock compensation to EBITDA was $1.7 million or three cents per diluted share versus $720000 or one cent per diluted share for the same period last year. This equates to 135% year over year growth.

Jeffery B. Baker: And our adjusted EBITDA.

Jeffery B. Baker: Diluted share count for the quarter used in calculating the per share amount was $54 8 million shares which reflects additional in the money options that were previously out of the money.

Jeffery B. Baker: The adjusted EBITDA margin was 12.8% vs. 7.1% during the same period last year. Regarding the health of our company, we exited the quarter with $7 million in unrestricted cash and zero debt. This was a $10 million decline from the end of 2023, primarily due to the timing of accounts receivable and accounts payable payments related to our patient affordability business of $9.6 million. As discussed in the past, patient affordability customers are invoiced at the end of the period to reimburse funds used to cover related copay amounts for monthly patient affordability claims. The changes in these balances do not equate to the revenue per claim we charge the pharmaceutical companies for paying such claim amounts.

Jeffery B. Baker: The adjusted EBITA margin was 12, 8% versus seven 1% during the same period last year.

Jeffery B. Baker: Regarding the health of our company, we exited the quarter with $7 million in unrestricted cash and zero debt. This was a $10 million decline from the end of 2023 primarily due to the timing of accounts receivable and accounts payable payments related to our patient affordability business of $9.6 million.

Jeffery B. Baker: As discussed in the past patient affordability customers are invoiced at the end of the period to reimbursed funds used to cover related co pay amounts for monthly patient affordability claims the changes in these balances do not equate to the revenue per claim we charged the pharmaceutical companies for paying such claim amounts.

Jeffery B. Baker: We expect that as the business grows, so will the fluctuations in AR, AP, and unrestricted cash. Restricted cash increased $16 million to $108.3 million from December 31, 2023, primarily due to increases in funds on cards of $2.7 million and customer deposits for our plasma and pharma customers of $13.2 million. Restricted cash or funds used for customer card funding and pharmaceutical claims with corresponding offset under current liability. As we did not complete any share repurchases during the first quarter, $3.9 million remains outstanding under our share repurchase program.

Jeffery B. Baker: We expect that as the business grows so will the fluctuations in a R. A P and unrestricted cash.

Jeffery B. Baker: Restricted cash increased $16 million to $108 $3 million from the December 31st 2023, primarily due to increases in funds on cards of $2 $7 million and customer deposits for plasma and pharma customers up $13.2 million restricted cash of fun.

Jeffery B. Baker: Jews for customer card funding and pharmaceutical claims corresponding offset under current liabilities.

Jeffery B. Baker: As we did not complete any share repurchases during the first quarter $3 $9 million remains outstanding under our share repurchase program.

Jeffery B. Baker: Now turning your attention to our second quarter 2024 guidance. We expect total revenues to increase by approximately 27.5% over the second quarter of 2023, with pharma revenue accounting for approximately 18% of the total. We expect adjusted EBITDA to increase 65% to 70% from the second quarter of 2023, with an adjusted EBITDA margin in the range of 13.5% to 14%. With that, I would like to turn the call back over to Kevin for question and answer.

Jeffery B. Baker: Now turning your attention to our second quarter 2020 for guidance.

Jeffery B. Baker: We expect total revenues to increase by approximately 27, 5% over the second quarter of 2023 with pharma revenue accounting for approximately 18% of the total we expect adjusted EBITDA to increase 65% to 70% from the second quarter of 2023 with an adjusted EBITDA margin.

Jeffery B. Baker: The range of 13, 5% to 14% with that I would like to turn the call back over to Kevin for question and answers.

Kevin: Thank you. We will now be conducting a question and answer session. If you would like to be placed in the question queue, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. Once again, that's star one if you place your question into Q. Our first question today is coming from Gary Prestopino from Barrington Research. Rewind is now live. Hi.

Kevin: That you will now be conducting a question and answer session if you'd like to be placed in the question queue. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to have a question from the queue. Once again Thats star one to be placed into question.

Kevin: No.

Gary Frank Prestopino: Our first question today is coming from Gary a press the P&L from Barrington Research. Your line is now live.

Gary Frank Prestopino: Hi, good afternoon, Mark and Jeff. Hey, you gave us some idea of how many plasma centers you're going to add this year, which is great. Can you give us Are you willing to give us a range of how many new patient affordability programs you think you're going to add this year? Or is that something you can't really share with us?

Gary Frank Prestopino: Hi, good afternoon.

Gary Frank Prestopino: Hey.

Gary Frank Prestopino: You gave us some idea of how many plasma centers, you're going to add this year, which is great.

Gary Frank Prestopino: Can you give us.

Gary Frank Prestopino: Or are you willing to give us a range of how many new patient affordability programs.

Gary Frank Prestopino: Do you think you're going to add this year or is that something you can't really share with us at this point.

Matthew Turner: I think this is Matt Turner, by the way. I don't know that we can give a number quite yet, you know; maybe as we get into the second quarter, we can probably narrow that down a little bit more, but just, you know, a lot of business in flight right now, so we don't want to put out a number.

Gary Frank Prestopino: I think this is Matt turnover by the way.

Matthew Turner: I don't know that we can give a number quite yet.

Speaker Change: Okay, maybe as we get into the second quarter, we can probably narrow that down a little bit more but.

Matthew Turner: But just a lot of business right now we don't want to.

Matthew Turner: Put out a number too soon.

Matthew Turner: Okay, but is it safe to say you've got a pretty full pipeline of potential opportunities? Yeah, we're stacked.

Speaker Change: Okay, but is it safe to say, you're you've got a pretty full pipeline of potential opportunities.

Matthew Turner: Yeah, we're stacked with business between now and the end.

Matthew Turner: Yes.

Matthew Turner: Taxes business between now and then.

Matthew Turner: Okay.

Matthew Turner:

Matthew Turner: And then just, if you as you look at this business right now, it's about just this quarter, it is about 25% of your total farmer revenues are the plasma revenues that you generate. Does this business have the potential, over time, to grow to be bigger than the actual plasma business that you have? So the income statement would flip-flop, where you get more farmer revenue every quarter than plasma.

Matthew Turner: And then just.

Matthew Turner: If you as you look at this business right now its about just on this quarter. It was about a 25% of your total.

Matthew Turner: The pharma revenues out of the plasma revenues that you generate.

Matthew Turner: Does this business have the potential over time to grow to be.

Matthew Turner: A bigger bigger than the actual plasma business that you have.

Matthew Turner:

Matthew Turner: So the income statement would flip flop, where you'd get more pharma revenue every quarter that plasma.

Matthew Turner: Yeah, absolutely.

Speaker Change: Yes, absolutely.

Matthew Turner: So there's a huge runway out there for what you guys are doing, right?

Matthew Turner: Okay.

Matthew Turner: So there's there's a huge runway out there.

Matthew Turner: For what you guys are doing right.

Matthew Turner: Yeah, I would say, I mean, you know, we have a much larger TAM associated with it, and, basically, from my view, and we've been looking at this for a number of years, it's not it's not a matter of if it's a matter of when it's going to surpass the plasma. So I do feel that it's coming.

Speaker Change: Yes, I would say I mean.

Matthew Turner: You'd have a much larger tam associated.

Matthew Turner: And what is the TAM?

Matthew Turner:

Matthew Turner: Basically you know from my view and and we've been looking at this for a number of years, it's not it's not.

Matthew Turner: A matter of if it's a matter of when it's going to surpass the plasma side do you feel thats coming.

Matthew Turner: And what what is the Tam.

Matthew Turner: So that's a really great question that I think everybody asks us at almost every meeting. It's very difficult to narrow down what the TAM is because the funds used to pay for this are typically part of marketing funds. So, you know, if a pharma company allocates, you know, $500 million in marketing for a specific drug, we don't really necessarily know what percentage comes to us. You know, we think right now there are around 1,500 active – 1,500 to 1,600 active copay programs in the space right now.

Speaker Change: So that's a really great question, but I think everybody is asking for almost every meeting.

Matthew Turner: It's very difficult to narrow down what the Tam is because the funds used to pay for this are typically part of marketing funds so far.

Matthew Turner: Pharma company allocates $500 million of marketing for specific drug we don't really necessarily know what percentage comes to us.

Matthew Turner: Right now there is around 1500 active $50 to 600 active co pay programs.

Matthew Turner: And, you know, kind of just backing into a guesstimate of the number of claims and things like that, we certainly feel like the TAM is north of $500 million. We certainly think that number is probably higher, and we're kind of working with some different consultants right now to see if we can zero in on that, but right now, we think the TAM is certainly north of 5.

Matthew Turner: In the space right now.

Matthew Turner: Kind of just backing into a guesstimate of number of claims and things like that we certainly feel like the Tam is is north of 500 million.

Matthew Turner: You know, we certainly think that number is probably higher and we're kind of working with some different consultants right now to see if we could zero in on that but right. Now we think the Tam is certainly north of 500 million.

Matthew Turner: Okay, and then just the last question. Could you please tell me if there are some public competitors out there that do this? Or is it mostly done by private firms or divisions of larger firms?

Speaker Change: Okay, and then just the last question.

Matthew Turner: Could you or are there some public competitors out there.

Matthew Turner: Let's do this or is it mostly done by private firms or divisions of larger firms.

Matthew Turner: Yeah, so there's a lot of divisions of larger firms that do this. We're, I'll kind of talk about us for just one second, then I'll kind of talk to you about some other people in the space.

Matthew Turner: Yes.

Matthew Turner: There's a lot of divisions of larger firms that do this.

Matthew Turner: I'll kind of I'll talk about us for just one second and then I'll kind of talk to you about some other people in the space. So.

Matthew Turner: So, we're one of the only companies out there that only does patient affordability. We don't try to do a whole bunch of the other add-on services that really require entirely different Subset of Specialty Knowledge. Those would be like hub service companies. So, you know, there may be, you know, there may be one or two other very small companies out there. When I say very small, I mean, you know, like employees in the numbers of tens that are out there doing this in conjunction with some other stuff.

Matthew Turner: One of the only companies out there that only does patient affordability.

Matthew Turner: Don't try to do a whole bunch of the other add on services that really requires entirely different.

Matthew Turner: Subset specialty knowledge.

Matthew Turner: Those would be like hub service companies.

Matthew Turner: There may be there may be one or two other very small companies out there and when I say very small.

Matthew Turner: Employees in the numbers that are out there doing this in conjunction with some other stuff.

Matthew Turner: But if you want to look at companies that offer, you know, co-pay assistance as part of their overall offerings, you know, McKesson has a subsidiary called Cover My Meds, which was formerly Rx Crossroads. You have Mercallis, which until recently was named Trial Card.

Matthew Turner: If you want to look at companies that offer.

Matthew Turner: Co pay assistance as part of their overall offerings.

Matthew Turner: Mckesson has a subsidiary called cover my Meds, which was formerly Rx crossroads.

Matthew Turner: You have ConnectiveRx, which is owned by... they're private equity held. And Eversana, which is I think a VC or PE backed company. So, you know, really only one, then you've got Lash that's owned by AmerisourceBergen. So you've got two people that are publicly traded and have very, you know, but I mean, for McKesson, it's cover my bets is a rounding error, you know, with the amount of money that McKesson makes. So, you know, there's not really any detailed financials out there around. Okay, thank you.

Matthew Turner: Do you have more callous, which until recently was named trial card.

Matthew Turner: Connective Rx, which is owned by a private equity health.

Matthew Turner: <unk> ever Sona, which is good.

Matthew Turner: VC or PE backed companies. So you know really only well then you've got last itself at Amerisourcebergen.

Matthew Turner: <unk> got people that are publicly traded and have very you know, but I mean for.

Matthew Turner: For for Mckesson.

Matthew Turner: Cover my Meds.

Matthew Turner: Rounding error.

Matthew Turner: With the amount of money that Mckesson makes so theres not really detailed financials out there around this business and the public sector.

Speaker Change: Okay. Thank you.

Matthew Turner: Okay.

Kevin: Thank you. As a reminder, that's star number one to be placed in the question queue. Our next question is coming from John Eckman from Lattinburg, Palma, and your line is now live.

Matthew Turner: Thank you guys are a reminder, that star one to be placed in the question queue. Our next question is coming from Jon Hickman from Ladenburg Thalmann. Your line is that right.

Jon Robert Hickman: Uh huh.

Jon Robert Hickman: Oh, sorry.

Kevin:

Jon Robert Hickman: Sorry. I had a quick question. So each pharma program is an individual drug. Is that true, right?

Jon Robert Hickman: I had a quick question so each far pharma programs.

Jon Robert Hickman: Graham is that individual drug.

Jon Robert Hickman: That's true right.

Unknown Executive: Not necessarily. We have programs that contemplate multiple drugs. We have programs that contemplate multiple offers for a single drug. It's not quite as simple as a drug is a program. You can have a program that has several drugs in it, and you can have a program that technically has several programs. You know, we typically look at SOW-based business when we're talking about the program.

Jon Robert Hickman: No not not necessarily we have programs that contemplate multiple drugs we have.

Unknown Executive: Programs that contemplate multiple draws are multiple offers for a single drug. So you can it's not.

Unknown Executive: Not quite as simple as a drug as a program you can have a program that has several thousand limit.

Unknown Executive: And you can have a program that has technically like several programs within it.

Unknown Executive: We typically look at SFW based business when we're talking about.

Unknown Executive: So could you tell us how many separate pharmaceutical companies you work for?

Unknown Executive: Programs.

Speaker Change: So could you tell us how many separate pharmaceutical companies you're working born.

Unknown Executive: I don't I don't have the number in front of me right now, but out of 53 active programs, at least. Yeah, at least, you know, somewhere north of. And then we have larger manufacturers now that came on during the first quarter that, you know, we're running for one of them, we're running nine programs now, another one, we're running five. So, you know, we've got some, I don't want to say repeat business, but we're getting multiple programs now from larger manufacturers that have very large portfolios of business. So when I say we're getting nine, you know we have nine programs out of one manufacturer. That's just the start for them. Actually, we're going to get

Speaker Change: I know I don't have the number in front of me right now.

Unknown Executive: 53.

Unknown Executive: Active programs at least cover at least.

Unknown Executive: Somewhere north of 40.

Unknown Executive: And now we have.

Unknown Executive: Larger manufacturers now that came on during the first quarter.

Unknown Executive: Well, we're running for one of them were running non programs now another one we're running five so yes, we've got.

Unknown Executive: We've got some.

Unknown Executive: With that I'll, just say repeat business, we're getting multiple programs now from larger manufacturers that have very large portfolios of business. So when I say, we're getting now we have nine programs that have one manufacturer.

Unknown Executive: That's just the start for that actually we're going to get more programs.

Unknown Executive: So, the risk for you is that a program... others that a drug goes generic, and the growth is new drugs coming on, getting approved out of the FDA. [inaudible] Yeah, so there's, the growth potential is one in new business. You know, we're if you look at our, You know, our track record over the last, well, I mean, the last five years, right?

Unknown Executive: So the risk for you is that a program like this.

Unknown Executive: That a drug goes generic and the growth is new drugs coming on.

Unknown Executive: Getting approved out of the F D a.

Speaker Change: That's cool.

Unknown Executive: Yes, so there is well the growth potential is one.

Unknown Executive: New business.

Unknown Executive: If you look at our.

Unknown Executive: Our track record over the last well in the last five years right.

Unknown Executive: We are predominantly focused on transition business, and that's because it delivers immediate claim volumes. Now, we've got plenty of new-to-market drugs as well, especially in the oncology space. But those program numbers tend to be, or the patient counts tend to be a lot lower, which means the claim counts are... So our, you know, our goal, right, is to kind of diversify the types of clients that we're bringing on, whether we do retail or specialty, and whether they are transitional or new.

Unknown Executive: Predominantly focused on transition business and it's because it delivers immediate claim volumes now we've got plenty of new go to market drugs as well.

Unknown Executive: Especially in the oncology space.

Unknown Executive: Those program numbers tend to be for the patient count tend to be a lot lower which means the claim counts are going to be lower so are our our goal is to kind of diversify the types of clients that we're bringing on to whether we do retailers specialty and whether they are transitioned or new.

Unknown Executive: You know, if we have a transition product and it's been out there for five years, hey, maybe we have three years left where we're going to have really high volumes, and then you'll see them slide back off. But just because a drug goes generic doesn't mean that the claim volumes cease to exist. Pharmacompanions did an amazing job in contracting, of keeping that drug on Tier 1 formulary, above generic. So, you know, even though, especially in the retail space, when a drug goes generic, it doesn't necessarily mean the end of co-pay.

Unknown Executive: A transition product and it's been out there for five years, Hey, maybe we have three years left where we're going to have really high volumes and then youll see them slide back off but just because the drug goes generic does it mean that the claim volume cease to exist. If you go back to the days of Crestor Lipitor Plavix right, but those drugs came out when Crestor went.

Unknown Executive: Hello.

Unknown Executive: Our loss of exclusivity.

Unknown Executive: Pharma companies did an amazing job.

Unknown Executive: Contracting of keeping that drug on tier one formulary.

Unknown Executive: Bulk generics, so even though especially the retail space when a drug goes generic it doesn't necessarily mean the end of <unk> you look at all the Humira Biosimilars that are out there now look at formulary coverage for Humira.

Unknown Executive: You look at all the Humira biosimilars that are out there now, and look at formulary coverage for Humira. There are like nine or ten generics or biosimilars, I don't want to call them generics, but there are nine or ten biosimilars available, and Humira still has top billing in that space for a lot of plans.

Unknown Executive: Like nine or 10, generics or Biosimilars and don't want to call generics, but theres nine or 10 Biosimilars available Humira is still has.

Unknown Executive: Bill.

Unknown Executive: That space for a lot of plans so you know well.

Unknown Executive: So, you know, we don't want a bunch of assets coming on that are, you know, going to lose exclusivity in six or twelve months, right, so we like stuff that's got some tail left to it to deliver some immediate volume now while we continue to build the overall long-term. Okay, thank you. That was very helpful. And nice quarter.

Unknown Executive: We don't want a bunch of assets coming on that are going to lose exclusivity in six or 12 months right. So we like stuff Thats got some tail left to it.

Unknown Executive: There were some immediate volume now while we continue to build the overall long term multiyear pipeline.

Speaker Change: Okay. Thank you that was very helpful and nice quarter.

Unknown Executive: Yeah.

Speaker Change: Thank you.

Mark R. Newcomer: Thank you. We have reached the end of our question and answer session. I'd like to turn the floor back over to you for any further closing comments.

Speaker Change: Thank you we reached end of our question and answer session I'd like to turn the floor back over for any further or closing comments.

Mark R. Newcomer: I'd like to thank everybody for joining us today. A special thank you goes out to all of our employees and our board for their continued hard work and support. 2024 has started off very excitingly, and I believe the rest of the year will be equally promising. We're looking forward to updating you on the next call. Thank you all very much for joining us, and have a great day.

Speaker Change: I'd like to thank everybody for joining us today, a special thanks goes out to all of our employees and our board for their continued hard work and support two.

Mark R. Newcomer: 2024 has started off very excitingly and I believe the rest of the year will be equally promising.

Mark R. Newcomer: We're looking forward to updating you on our next call. Thank you all very much for joining and have a great day.

Kevin: Thank you, that does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.

Speaker Change: Thank you that does conclude today's teleconference and webcast you may disconnect. Your line at this time and have a wonderful day, we thank you for your participation today.

Kevin: Yeah.