Q4 2024 LifeMD Inc Earnings Call
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I said hello. Hello.
Ilya Zubkov,
Speaker Change: 12 flights on hold, we do appreciate your patience and ask that you continue to stand by.
Ilya Zubkov, Steven Dechert, David Larsen, Justin Schreiber, Marc Benathen
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Speaker Change: Good afternoon. Thank you for joining us to discuss LifeMD Inc. 4th quarter and full year 2024 earnings results.
Speaker Change: Joining the call today are Justin Schreiber, Chairman and Chief Executive Officer, and Marc Benathen, Chief Financial Officer. Following management's prepared remarks, we will open the call for a question in the
Speaker Change: These risks and uncertainties are described in the company's 10K and 10Q filings and within other filings that LifeMD may make with the SEC from time to time.
Speaker Change: 4-licking statements made during this call are based on current information available to the company as of today, March 10, 2025. The company assumes no obligation to update or revise any 4-licking statements after today's call, except as required by law.
Speaker Change: Also, please note that management will be discussing certain non-GAAP financial measures that the company believes are important in evaluating LifeMD's performance.
Speaker Change: details on the relationship between these non-gat measures to the most comparable gat measures and reconciliation thereof can be found in the press release issued earlier today.
Speaker Change: Finally, I would like to remind everyone that today's call is being recorded, and will be available for replay in the Investor Relations section of the company's website.
Speaker Change: I'd now like to turn the call over to LifeMDCEO, Justin Schreiber. Please go ahead, sir.
Speaker Change: We expect to expand our existing capabilities as well as extend our reach into new complementary areas designed to further differentiate life M D. As a leading provider of the highest quality and most comprehensive virtual first health care.
We have three strategic priorities for our business in 2025, one solidify and grow our market, leading position and delivering comprehensive weight loss and metabolic cure.
Speaker Change: Including affordable access to prescription G. L. P. One medications.
Speaker Change: To build on the early success of our hormone replacement therapy offering we launched in 2024 on our Rex N D platform.
Speaker Change: Three launch our license plus membership program and several new high value care offerings on our virtual primary care platform.
Speaker Change: And four continue to grow our government and private payer programs as well as our electronic benefit verification and prior authorization infrastructure to drive more affordable access to virtual care and prescription medications.
Speaker Change: We are very proud of the weight loss and metabolic health program that we've built on our virtual primary care platform.
Speaker Change: This program had more than 75000 active patients as of yearend and is well positioned for long term growth, even as market dynamics change <unk>.
Speaker Change: Despite the Fda's recent decision to remove stomach lutite enters appetite from the drug shortage list life and D remains extremely well positioned to benefit long term in the weight management market.
Speaker Change: Our focus has been and remains on providing affordable access to comprehensive obesity care and the ongoing management of clinically appropriate G. L. P. One and other generic drugs that can support our patients on their journey to better metabolic health.
Speaker Change: Importantly over 85% of our weight management revenue is related to the delivery of care.
Speaker Change: Helping patients use private insurance to access weight loss medications has been a fundamental part of our service offering since it launched in 2023.
Speaker Change: While helping patients access branded G. L. P. One therapies was previously difficult due to supply shortages and lower levels of payer coverage. We are seeing several encouraging trends that cause us to be very optimistic.
Speaker Change: Firstly, we are seeing a significant increase in patients getting affordable private insurance coverage for branded G. L. P. One medications, especially for us that bound we believe this is partly due to private payer and employer coverage rates improving and to improvements we have made to our electronic benefits and prior.
Speaker Change: <unk> processes and overall infrastructure at life M D.
Speaker Change: For us that bound we've seen an 18 percentage point increase in the approval rate between October and January was that done prior authorization approval rates approaching 60% over the past several months.
Speaker Change: We recently announced an integration with Lilly director pharmacy partner gift health to make it easier for patients who don't have insurance coverage to purchase where appropriate more affordable cash pay via that bounds.
Speaker Change: Secondly, we have seen the drug manufacturers that control the current G. L. P. One market begin to compete with each other in the self pay market now the supply levels have stabilized in the past several weeks, both Eli Lilly and Novo Nordisk. The manufacturers is that bounded would gobi respectfully announced price.
Speaker Change: Actions to their self pay G O P. One product offerings, bringing the price of some dose levels as low as $3 49 per month.
Speaker Change: It should reduce the price of G. L. P. One medications as a result of novel and possibly more efficacious therapies coming to market.
Speaker Change: And pressure from government agencies, including the FDA they care about broad access to this class of drugs.
Speaker Change: As we've said repeatedly and we'll say again today for emphasis expanded coverage for branded G. L. P. One therapies is a great thing for life and D. Our patients and our shareholders as it results in our programs being more affordable, which enables better compliance patient outcomes and written.
Speaker Change: <unk> rates for our programs.
Speaker Change: Yeah.
Speaker Change: We are also very excited about our fee for service Medicare offerings that we'll be launching next month, we have been working on the compliance and operational infrastructure for this launch for the past two years and believe that it will be a big growth driver not only for our weight management offering but also for our broader virtual primary care offerings.
Speaker Change: There are approximately $24 5 million Medicare beneficiaries enrolled in Standalone prescription drug plans.
Speaker Change: A substantial number have conditions like obesity and type two diabetes that could make them candidates for G. L. P. One receptor agonist medications.
Speaker Change: Although part D coverage for <unk> drugs currently requires certain comorbidities, we are optimistic that Medicare will begin covering these medications for obesity and we aim to make life and D. The easiest and most affordable way for this population to access comprehensive obesity care and these medications once coverage as of.
Speaker Change: <unk>.
Speaker Change: It's important to note that in addition to G. L. P. One therapies life would be also offers exceptionally affordable standalone and combination generic medications that can support patients with weight loss, including the triple therapy, We announced last September.
Speaker Change: As we collect more data we are optimistic on the efficacy profile of these medications and believes that they will play an important part in our weight management offerings in the future.
Speaker Change: Especially if access to personalized versions of G. L. P. One therapy becomes more difficult for patients who do not have insurance coverage.
Speaker Change: Lastly, the G. L. P. One supporting the weight loss market has become highly fragmented with hundreds if not thousands of smaller players providing varying quality offerings, many of which rely exclusively on compounded drugs from less reputable sources and I think only care.
Speaker Change: We believe many if not most of these market participants will struggled to adapt in this changing environment, which has the potential to reduce the acquisition cost and expand the overall market for companies like life M D.
Speaker Change: Now, let's move on to Rex M D.
Speaker Change: Since launching in December 2019, Rexam D has rapidly become one of the leading men's health brands in the country. While this business was almost entirely sexual health driven when it launched today, we have expanded the reach of this brand to include multiple areas of sexual health weight management hair loss insomnia and <unk>.
Speaker Change: Recently hormone replacement therapy or HRT.
Speaker Change: <unk> currently produces over $80 million in annualized revenue and we expect to see 15% to 20% growth in 2025, driven by the continued growth of our leading sexual health offerings and rapid expansion into our newly launched HR T offering.
Speaker Change: Today <unk> has over 175000 active patients subscribers and we expect this number to continue to increase with the growth of our HR T program and other new clinical areas, we expand into.
Speaker Change: Okay.
Speaker Change: Building capabilities and infrastructure that can differentiate life M D pre better experiences and outcomes for our patients and increase the bottom line for our shareholders was a major priority in 2024 and will continue to be a focus in 2025.
Speaker Change: Two of the most important investments, we made which we believe will play a major role in our future success with the launch of our 50 state commercial pharmacy and the investments we made in contracting with private and government payers.
Speaker Change: In late 2024, we announced the launch of our first dedicated his life and <unk> pharmacy.
Speaker Change: I am pleased to announce that as of today. The pharmacy is licensed in 47 States and is shipping approximately 20000 orders per month we.
We remain on track to realize the previously disclosed $5 million of annual economic benefits from the pharmacy by the end of 2026.
Speaker Change: While today, the life and D. Pharmacy is solely focused on prescription shipments for our lifestyle health care business. We are in the process of building out non sterile compounding capabilities that we expect to be operational in the next four to six months.
Speaker Change: This will be a huge advancement for life and D that will enable us to expand our portfolio of personalized and affordable therapies in areas, such as men's and women's HR T sexual health dermatology and more.
Speaker Change: We continue to advance our insurance offerings at a measured pace and today are enrolled with private payers in 20 states.
Speaker Change: As I mentioned, our Medicare program remains on track for launch in April and we expect this will become a significant competitive advantage for life M D across our virtual primary platform.
Speaker Change: This offering will significantly expand the addressable market for life in these primary care metabolic health behavioral health and prescription services.
Speaker Change: At the end of 2025, we anticipate having approximately 150 million lives under coverage.
Speaker Change: As a final topic license do you expect to launch several new service offerings in 2025.
Speaker Change: We recently announced plans to enter the behavioral health space in the second quarter with the hire of Julian Cohen, a highly experienced senior leader.
Speaker Change: This offering is naturally synergistic with our expanded insurance capabilities are rapidly growing therapeutic weight management offering our sizable and growing men's health business and soon to be launched women's health offering.
Speaker Change: Initially we plan to offer Acing first treatment for anxiety and depression and believe there are many large markets within the behavioral health space, where our synchronous virtual primary care platform can support the delivery of much needed behavioral health offerings.
Speaker Change: In the second quarter, we will also be launching an enhanced version of our virtual care membership program, we referred to as life M D plus.
Speaker Change: Our expectation is that overtime life M D plus will be the backbone of everything we offer in life Mtv's virtual care platform.
Speaker Change: Initially priced at $19 per month, it will offer patients. The following benefits. In addition to any specialty care programs. They are subscribed through two.
Speaker Change: 24, seven care by licensees doctors and nurse practitioners.
Speaker Change: This care can be self pay or covered by insurance on demand convenient prescriptions and prescription refills.
Access to beautifully track routine and specialty lab work self pay or covered by insurance and a marketplace for the highest quality OTC health and wellness products.
Speaker Change: Our aim is to leverage our brand equity amazing providers and highly differentiated care platform to create a strong value proposition around lifetime D plus membership.
Speaker Change: We believe that this will have a meaningful positive impact on the experience of patients on our platform there.
Speaker Change: Their compliance with care programs, they purchase from us and their overall health.
Speaker Change: We especially think that life and D plus will play a big role encouraging preventative health care and will make things like annual wellness visits labs, and medication compliance much easier and affordable for patients.
Speaker Change: In addition to behavioral health and license plus we expect to launch a womens health specialty offering in the second half of 2025.
Speaker Change: Plan to provide more details on this on future quarterly conference calls.
Speaker Change: In short life and D is well positioned to continue to expand our role as a leading provider of differentiated virtual care in 2025 and beyond.
With that I will now turn the call over to our CFO, Mark <unk> to discuss fourth quarter and full year 2024 results Mark.
Mark Benathen: Thank you Justin and good afternoon, everyone.
Mark Benathen: <unk> seen very strong fourth quarter performance with consolidated revenue growing 43% versus the year ago period to $64 3 million.
Mark Benathen: Courthouse revenue grew by 60% versus the prior year.
Mark Benathen: <unk> Standalone adjusted EBITDA profitability at $5 9 million, an increase of 396% versus prior year.
Mark Benathen: Subscriber growth remains strong with the number of active subscribers, increasing 27% year over year to over 275000 at quarter end. The number of works simply active subscribers grew by 3% to 164000 importantly works simply is.
Mark Benathen: Performance stabilized in Q4 with average monthly adjusted EBITDA, returning to over $1 million as we previously guided.
Mark Benathen: Gross margin for the fourth quarter was 85, 3% a decline of 280 basis points versus the prior year due to changes in revenue mix them onetime impacts related to the onboarding of a new pharmacy.
Mark Benathen: We fully expect gross margin rates to return to the normalized 88% to 90% in 2025.
Mark Benathen: Gross profit was $54 8 million, an increase of 39% from the year ago period.
Our GAAP net loss attributable to common stockholders for the fourth quarter was 883000 or a loss of <unk> per share. This compares with a GAAP net loss attributable to common stockholders for the fourth quarter of 2023 of $4 5 million or a loss of 12 cents per share.
Mark Benathen: Adjusted EBITDA is a non-GAAP measure, we define as income or loss attributable to common shareholders before various items as outlined in today's earnings news release adjusted.
Mark Benathen: Adjusted EBITDA totaled $9 million for the fourth quarter as compared with four 5 million in the year ago period.
Mark Benathen: Adjusted EBITDA is a non-GAAP measure defined as adjusted EBITDA for only our telehealth business excluding works simply.
Mark Benathen: This measure was $5 9 million for the fourth quarter of 2024 as compared to $1 2 million in the year ago period.
Mark Benathen: We exited the fourth quarter with $35 million in cash now.
Mark Benathen: Now turning to full year of 2024 results for 2024 consolidated revenue was $212 5 million an increase of 39% for 2023.
Mark Benathen: <unk> revenue grew 61% on a standalone basis.
Mark Benathen: Gross margin for the year was 88, 7% an increase of 110 basis points versus 2023.
Mark Benathen: Our GAAP net loss attributable to common stockholders for 2024 was 22 million or a loss of 53 cents per share.
Mark Benathen: This compares with a GAAP net loss attributable to common stockholders for 2023 of $23 7 million or a loss of <unk> 70 cents per share.
Mark Benathen: Adjusted EBITDA totaled $14 4 million for 2024, compared with $11 2 million for 2023.
Mark Benathen: <unk> adjusted EBITDA totaled $7 4 million for the year as compared with a loss of $5 2 million for 2023.
Mark Benathen: Turning to financial guidance today, we are introducing guidance for 2025 consolidated revenue of 265 to 275 million with powerhouse revenue of $205 million to $213 million.
Mark Benathen: We're also introducing consolidated adjusted EBITDA guidance for 2025 of between 30 and $32 million with powerhouse adjusted EBITDA of approximately $20 million.
Justin Schreiber: Perhaps up our financial results I'd now like to turn the call back over to Justin.
Mark Benathen: Yeah.
Justin Schreiber: Thanks, Mark 2024 was an incredible year for life M. D characterized by outsized performance from our telehealth offerings and the notable addition of key new capabilities, including our pharmacy and insurance offerings.
Justin Schreiber: Yes, we made last year, coupled with continued execution against our existing businesses.
Justin Schreiber: And planned new launches will continue to drive our performance in 2025.
Justin Schreiber: I believe we have one of the most comprehensive and differentiated offerings and <unk> that continues to broaden and strengthen our capabilities as we grow.
Justin Schreiber: With that I'd like to open the call to Q&A operator.
Speaker Change: Thank you at this time, if you would like to ask a question. Please press star one on your telephone keypad.
Speaker Change: May remove yourself from the queue at any time by pressing star Q. Once again that is star one to ask a question.
Speaker Change: We will go first to David Larsen with B T I G.
Hi, congratulations on the very good quarter and the guide can.
Speaker Change: Can you talk a little bit about your relationship with Lilly direct how that would work how do you make money how do they make money.
Speaker Change: And then just any thoughts on <unk>.
Speaker Change: Novo's program as well thank you.
Justin Schreiber: Hi, Dave. Thank you this is Justin Schreiber.
Speaker Change: So the the.
Speaker Change: The arrangement.
Speaker Change: It was not with Lilly directly.
Speaker Change: It was a it was a it's a it's a relationship that life and D has with a third party pharmacy that Lilly direct use is to ship cash pay vials of their medications directly to patients.
Speaker Change: Lightroom D will be integrating with that third party pharmacy.
Speaker Change: And really what it will do is enhance the experience of patients that are receiving virtual care through life M D.
Speaker Change: That are not covered by their insurance for our branded therapy.
Speaker Change: And therefore decided to purchase a more affordable.
Speaker Change: Cash pay that bound product directly from Lilly direct.
Speaker Change: Life and people continue to make money, Dave Oh, Okay.
Speaker Change: We don't make any money on that.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: As far as the programs.
Speaker Change: Second question.
Speaker Change: Yeah.
Speaker Change: Please continue.
Speaker Change: Continue to lower prices.
Speaker Change: Just said on the call.
Speaker Change: We think that's a trend that's happening.
Speaker Change: To continue there's still a problem.
Speaker Change: With coverage and affordability of these medications and so.
Speaker Change: We applaud novo Lilly for lowering the prices somewhat or slightly on.
Speaker Change: They're they're vials and or Lilly on their vials for Novo. It's there I believe there are cash pay options are still.
Speaker Change: Are still using an auto injector, we're super encouraged by this we hope. It continues you know obviously, a big part of what we focus on in life and D is helping pay increasing access.
Speaker Change: For patients to affordable versions of these medications along with incredible health care. So very encouraged by it we don't we.
Speaker Change: We don't have any relationship currently with Novo.
Speaker Change: We expect to be able to offer novo's cat, Nevertheless, cash pay products through our platform in the future.
Speaker Change: Yeah.
Speaker Change: Okay. That's very helpful. Thank you and then as these products come off the drug shortage list can you talk about your ability to personalize compounded medications and sort of what goes into that how do you will you be doing that and then how do you sort of measure the personalization aspect like can you talk about the data that you're collecting the EMR.
Speaker Change: What sort of personalization sort of steps matter for each individual.
Speaker Change: His lab work go into that just any any color there would be very helpful.
Justin Schreiber: Thanks, David This is Justin again, I'm not going to get into the legal aspects of <unk>.
Speaker Change: Personalized Medicaid compounded medications for for weight loss or.
Speaker Change: Other conditions I think what I'd like to remind everybody of is that's life in D. As a provider of incredible virtual health care, we work, although we do have our own pharmacy.
Speaker Change: Don't use our own pharmacy for G. L. P. One medications we work with.
Speaker Change: A number of the leading third party pharmacies out there that we vetted to ensure that.
Speaker Change: They're making high quality products.
Speaker Change: We're going to do we're going to do whatever is right David when it comes down to respecting the intellectual property of pharmaceutical companies.
Speaker Change: And also for our patients so whether or not I think it's a little bit I think it's a little bit too early to tell.
Speaker Change: You know exactly what many of the third party pharmacies that we work with will do but I do believe that.
Speaker Change: I do believe that many of them will be offering personalized versions.
Speaker Change: G L P. One medications and if it's something that again is not a violation of.
Speaker Change: The intellectual property of pharmaceutical companies and it makes sense for our patients and increases access these medications.
Speaker Change: Something that will we will be open to.
Speaker Change: Great Congrats on a great quarter I'll hop back in the queue.
Steve Tucker: We'll go next to Steve Tucker with Keybanc.
Hey, guys. Thanks for the question.
Steve Tucker: Have you continued to expand commercial instruments acceptance with additional payers and states.
Speaker Change: How much do you think this is contributing to new telehealth subscriber growth and are you seeing a high level of patient retention.
Speaker Change: As a follow up what kind of traction are you seeing on your non European non guilty weight loss treatment option. Thank you.
Speaker Change: Yeah, Hi, Steve This is Justin Schreiber again.
Speaker Change: On the insurance on the question related to I assume that was related to private payer programs right now we're still very focused on the infrastructure.
Speaker Change: Spending the number of lives that we have under coverage, it's important for us to reach you.
Reach a critical mass there before before this will really enable us to drive like effective conversion rates.
Speaker Change: And CPA so right now that business is still very small, but as we mentioned in the on the call. We are we are very optimistic about where we can get to this year. We think we can we think by the end of the year, we will have around 150 million lives under contract.
Between our private and government programs and we're really excited about how that could drive the growth of the business longer term.
Speaker Change: Okay. Thanks, and then just wanted to ask on the non <unk> weight loss treatment option like what kind of traction you're seeing there.
Speaker Change: So it's something that so right. So we do have we do have a non G. L. P. One weight loss.
Speaker Change: Offering when appropriate for patients.
Speaker Change: We're.
Speaker Change: It's still a small business for US is the best way to answer that but its something that were kind of placing many of our affiliated.
Speaker Change: Providers are placing more emphasis on.
Speaker Change: And look if some of these I think it's fair to say that.
Speaker Change: If G L. P. One medications become more difficult for patients to affordably access I think you'll see that that side of the business grow a lot.
Speaker Change: Thank you.
Speaker Change: Yeah.
Speaker Change: And just a reminder, it was star one if you had a question. We will go next to Brooks O'neil with Lake Street capital markets.
Brooks O'neil: Thank you good afternoon guys.
Brooks O'neil: Just curious maybe mark could talk a little bit about the decline in the gross margin and just help us to be sure. We understand what factors are driving that.
Brooks O'neil: Yeah absolutely.
Brooks O'neil: So essentially we on boarded a new pharmacy most of it than the a weight.
Brooks O'neil: Weight management space, there were some upfront costs associated with that related to shipping some inventory, which we did take our expense for since the intention was to.
Brooks O'neil: Saw it very rapidly so all of that drove a one time increase in expenditures and the cost of goods sold that we booked in the fourth quarter that obviously normalizes going forward and you know from a run rate, but we're actually seeing gross margin returned back to the normal 88% to 90%.
Brooks O'neil: <unk> levels on a consolidated basis. So it was really driven by the onboarding of those pharmacy, bringing inventory in house are front loading a bunch of expense. We also took a fairly conservative accounting approach.
Speaker Change: Great. Thank you very much.
Speaker Change: Maybe somebody can just talk about right now given the success you've had bringing work simply back what's your outlook for the future of that business.
Speaker Change: Yeah, well look I mean, it works simply has done a great job getting back on track I'm, obviously, a lot of their problems last year were self induced a their founder and CEO is really sort of taken the reins there we've seen that business consistently growing consistently producing a circa $1 million a month in EBITDA.
Speaker Change: In some cases, a little bit higher we expect that to continue and you know for the business are not to go back to some of the issues that they had had last year, which again, where dolphin do as poor execution of the marketing that's been behind them they've re platform some of what they do also which has.
Speaker Change: Led to improving conversion rates and I think they are probably in the earlier stages of realizing that so this is essentially a lot of upside for them to grow over the next couple of years. So if we don't get factored in.
Speaker Change: Well.
Speaker Change: Just and you and I have talked a little bit about reimbursement for telehealth services in Medicare maybe you could just give us an update on where you think that stands and what the future holds for <unk>.
Speaker Change: Reimbursement for Telehealth and Medicare.
Brooks O'neil: Hi, Brooks sure I mean I'm.
Brooks O'neil: I'm not I'm not quite sure how valuable in my opinion is on this topic, but.
Brooks O'neil: Oh look I I think you and I think you and I both agree that.
Brooks O'neil: Medicare has to cover these drugs.
Brooks O'neil: And I think it's also pretty likely that.
Brooks O'neil: There are negotiations that have been going on for some time between Medicare.
Brooks O'neil: And Lilly and Novo.
Brooks O'neil: Regarding what the what the price has to be.
Brooks O'neil: For Medicare to cover these medications, so I'm extremely optimistic that I'm extremely optimistic that.
Brooks O'neil: At some point in the near future Medicare is going to cover these drugs and you're already seeing coverage in some indications like in some cardiovascular where there's some and some like for four for some cardiovascular conditions and also and also for instance, the obstructive sleep apnea.
No I think look I think these things take time, what's important for for life. Indeed is that we are ready to go the data there is broad broad coverage for these medications from Medicare.
Brooks O'neil: And our commitment to shareholders and patients is that we're gonna be ready.
Brooks O'neil: And we're going to have the most comprehensive offering out there for Medicare patients that want to access these drugs I mean this is a.
Brooks O'neil: This is a population that should have access to these drugs and needs. These drugs.
Brooks O'neil: As much or more than anybody else out there.
Brooks O'neil: So we're just doing everything we can to make sure that we have.
Brooks O'neil: The REIT compliance and operational infrastructure in place to execute the date of this coverage is put in place, which I think is going to be sometime soon.
Brooks O'neil: Great and then.
Brooks O'neil: The update on Medicare reimbursement for the Telehealth services.
Brooks O'neil: Yes.
Brooks O'neil: The current bill that's working its way through the legislature.
Has included.
Brooks O'neil: Hello.
Brooks O'neil: Extension of Tel Aviv coverage, which I believe its an extension through the fall of this year.
Brooks O'neil: Clearly, there's going to still need to be a more permanent solution, but everybody that we've talked to Brooks as you know on the hill is highly confident.
Brooks O'neil: Youre going to see a permanent extension of.
Brooks O'neil: Medicare coverage for virtual care.
Brooks O'neil: It has bipartisan support and it's just a matter of you know.
Brooks O'neil: It working its way through the legislature.
Brooks O'neil: Sure makes sense, one last question and I appreciate you taking my questions.
Brooks O'neil: I am excited about the opportunity with behavioral health frankly.
Brooks O'neil: Excited about a lot of opportunities you have but behavioral health seems like a no brainer to a combination of telehealth services counselling.
Brooks O'neil: Access to drugs et cetera can you can you just help us be sure we understand the program you envision and how do you think it will work for life M D.
Brooks O'neil: Sure sure members' patients.
Brooks O'neil: Sure Yeah. Thanks Brook for bringing this up because you know this this is something that we're also extremely excited about.
Brooks O'neil: Clearly the behavioral health market is massive I think in order to have a comprehensive primary care platform you have to do a great job in behavioral health you have to offer you know treatment for behavioral health.
Brooks O'neil: So this is something that we've wanted to launch for a while.
Brooks O'neil: We took a very.
Thoughtful.
Brooks O'neil: Careful approach to how we entered this space the big catalysts for US you know entering it now is.
Speaker Change: With finding Julian Cohen, and I would encourage everybody then.
Speaker Change: As <unk> already done this to go look at his background. He has over the last 30 years he's run.
Speaker Change: Some of the largest behavioral health operations in the country for names like Sigma Teladoc Hims, I mean, it's wildly impressive background.
In virtual behavioral health.
Julien: So we found Julien.
Julien: He's working on building some of these programs now on the licensing platform, we're going to start with an async first offering for anxiety and depression.
Julien: And we're gonna be we're already talking with some large talk therapy partners as well because one thing that's very important to us.
Julien: As you know that we're not just offering kind of async treatment for behavioral health that we're also providing patients at the same time like an incredible.
Julien: <unk> therapy solution when that's appropriate.
Julien: And behind that I think I think the sky's the limit right I mean, there's a number of fear.
Julien: Big.
Julien: Virtual behavioral health markets.
Julien: Where there's a large unmet clinical need.
Julien: I think it was.
Julien: Gonna be very good for patients out there in.
Julien: An extremely good for our shareholders.
Speaker Change: Great. Thanks, I'll follow up more later on but I'm excited about that sure.
Brooks O'neil: Sure. Thanks, Thanks for the question Brooks.
Speaker Change: Yeah.
Speaker Change: We'll go next to Stephen <unk> with Mizuho Securities.
Stephen: Great. Thanks, Good afternoon, let me offer my congrats on the results as well really the questions I have.
Stephen: Couple of kind of intertwined really around what's embedded within the 2025 revenue guidance.
Stephen: Especially within the Telehealth segment I think you disclosed previously that over 70% of the weight loss management patients around compounded semi glu titles, you're exiting 'twenty four so I guess what is your 25 revenue guidance imply for <unk>.
Speaker Change: Percentage retention of these patients I'm guessing most of them just based on how strong the guidance is and what should I mean do you have its just assumption in there for what the conversion rates will be whether they.
Speaker Change: Switch the brands did they switch to you or do you think it will stay on the compounded versions because of the personalized dosing that we talked about just curious to get more color on all the assumptions within that.
Speaker Change: The new guidance, Thanks, Yeah sure.
Speaker Change: We've I believe we've said before and it was discussed with some investors young we produced.
Speaker Change: Our planning and our guidance for next year, we took a pretty significant write down on the compounded medications and there we actually basically wrote off or something close to half of it obviously, we assumed a certain percentage of that would go over to branded therapy. There's no.
Speaker Change: The assumptions that the rate of growth and new acquisitions is going to improve as a matter of fact, the actual guidance assumes that it's going to be a little bit lower than what it was last year. It assumes that there'll be some that will try it out we don't give out the exact percentage, but we haven't necessarily put that in publicly and.
Speaker Change: Then we also had.
Speaker Change: I'll some write off related to compounds subscribers. Another goal for us is to get to about 40% to 50%.
Speaker Change: Patients on branded therapy.
Speaker Change: By the end of the year, obviously, we think that there'll be some personalized started and there's some triple therapy as well, but we're not banking on retaining tons of patients within compounds of therapy as a matter of fact, we wrote off.
Speaker Change: A lot of that and assumed a lot of the growth will come in from new patients going on to branded therapy as well as the fact that I mean, let's not forget here that there was an awful lot of competitors out there that all they do is compounded therapy and can't do anything else or their business is set up just to make money off of selling the compound product.
Speaker Change: Whereas our business was set up as a service business that seeks to provide access for.
Speaker Change: For patients. So all of those negative assumptions are already put in to the budget model for next year, where we're seeing improved performance relative to what I think some folks may have thought is on the rec side. We're obviously seeing a strong growth there within the sexual health business THR T was.
Speaker Change: So just a little bit of time to figure out initially, but we're very optimistic there on retention.
Speaker Change: It should be very strong within that business behavioral health was something done until recently wasn't fully on the roadmap. So we expect to get some incremental.
Speaker Change: Benefits.
Speaker Change:
Speaker Change: Next year this year on that and then obviously the relaunch of our primary care and revamped our license plus primary care has a small amount of incremental benefits in there.
Speaker Change: Okay. That's all very helpful. Thank you.
Alex Fuhrman: We'll go next to Alex Fuhrman with Craig Hallum Capital Group.
Alex Fuhrman: Hey, guys. Thanks, very much for taking my question, Justin I'd Love to talk more about the hormone therapy offering that you launched recently for Rex M D.
Alex Fuhrman: Curious if you can share how many patients you currently have taking advantage of that offering and then the guidance for this year, obviously very strong on both the top and bottom line is hormone therapy expect it to be a pretty big contributor this year I imagine that could be a huge opportunity longer term.
Alex Fuhrman: But curious what you have kind of penciled in for this year for that offering.
Alex Fuhrman: Thanks, Alex.
Alex Fuhrman: So I guess first of all we've been very pretty conservative with.
Alex Fuhrman: With our growth estimates for that business for 2025.
Alex Fuhrman: Although I will say that were.
Alex Fuhrman: Incredibly optimistic about the.
Alex Fuhrman: The prospects for the HRT business, both both for men and for women.
Alex Fuhrman: But on the on the Rec side I mean, I think we've talked about this this concept a lot of or some of the past earnings calls but.
Alex Fuhrman: For many of the men that are accessing this program. It's the best health care they've ever received in their life. There are 100% of 100% of people in order to access any of the therapy or go into quest and Labcorp, they're having a lab panel done that would cost you know anywhere between $1500.
Alex Fuhrman: Just because it's so comprehensive theyre, having a call with one of our wellness coordinators in most cases than they're doing a typically a 30 minute video call with a state licensed physician that are specialized in men's health.
Alex Fuhrman: Approximately 70% of men. They go through all of that are then getting put on a therapy. It's not always testosterone sometimes it ends up being a G. L. P. One there yeah. There are multiple therapies that can be appropriate for the patient depending on their lab work in their symptoms, but from a quality of revenue.
Alex Fuhrman: New standpoint, Alex.
Alex Fuhrman: We are just we are so excited about this business right. It's quality of answer is I already did emphasize quality of care is incredible but quality of revenue as well as we think is going to be incredible CPA, so very encouraging.
Alex Fuhrman: We are.
Alex Fuhrman: We're not going to share an exact patient number today, but I will tell you that we've gotten this business to a point where.
Alex Fuhrman: We can we we see a clear pathway to.
Alex Fuhrman: A couple of hundred patients a day.
Alex Fuhrman: And you know if we could do that I mean that means that business could.
Alex Fuhrman: It could be just as big as our as our <unk> business, our entire <unk> business today.
Alex Fuhrman: Yep.
Alex Fuhrman: They clearly like look that's a very bullish statement, but one of the great things about our business is.
Alex Fuhrman: We have you know, it's it's very predictable and we know once we see C P as that.
Alex Fuhrman: We know when we when we get to a kind of a CPA and a conversion rate that is highly scalable and a large market like this and we are extremely confident that this is scalable on the female side Alex for doing some really exciting things in the in the women's health World. This is a no brainer considering that considering that 75% of the patients.
Alex Fuhrman: Our virtual primary care and weight loss programs today are women.
Alex Fuhrman: It's the perfect Cross care program, we know Theres big demand for it there.
Alex Fuhrman: And we're working on standing up that program you know on the.
Alex Fuhrman: Call, we mentioned the second half of the year, it could even be a little bit sooner than that but one other thing I'll mention before I stop talking as we've now gotten our technology license D to the point, where we can we can easily launch.
Alex Fuhrman: These programs that are extremely comprehensive.
Alex Fuhrman: And then scale them and I think you know I think that's a really big milestone for US right. I mean, it was only a couple of years ago. When we had a couple of thousand patients on this platform and we've just really now built the infrastructure through the suite management offering and develop the Tac to a certain point, where we can quickly and efficiently launch.
Alex Fuhrman: These new new care offerings, there that are great cross care offerings as well and so I think I think that's something that we really want investors to understand and look forward to.
Alex Fuhrman: And one thing I'll add I mean as far as our guidance the male hormone business only assumes a few million dollars in revenue this year, which would be a fraction of it.
Alex Fuhrman: The number of new patients per day achieved this year that obviously adjusting them. The team thinks that we can get to them. So I think we took a pretty conservative approach there and if we execute depending upon the level that we execute at which we're very confident then there could definitely be upside of emulation.
Alex Fuhrman: To that.
Speaker Change: Terrific guys that sounds all like like good news appreciate the thorough response from both of you.
Alex Fuhrman: Yeah.
Speaker Change: Well move next to Sarah James with Cantor.
Thank you and congrats on a fantastic quarter.
Speaker Change: To unpack the EBITDA guidance, a little bit about $15 million at the midpoint and we're estimating we're simply now back two 1 million a month.
Speaker Change: Could be Pfizer that and gross margin improvement and another about 1 million, but that's at least 9 million trees now how much that is cramped in your core business versus non repeat of costs like the compliance is standing up insurance or other aspects that could fall into the first.
Speaker Change: The margin line.
Speaker Change: And then do you have any assumption earnings contribution from the new segments.
Speaker Change: Yeah.
Mark Benathen: So this is mark.
Speaker Change: So firstly I mean, the way the guidance breaks down as approximately $20 million from Tahoe 10 to 12 million for more simply.
Speaker Change: Works simply the increase in EBITDA is essentially growth in the business theres not a lot of cost structure, what's that business outside of AD spend in payroll. So most of that is associated with growth on the Tahoe side also the majority of it is associated with growth I mean, the category of.
Speaker Change: Non repeat of the expense I mean, yes. There is some there were some initial costs associated with.
Speaker Change: Pharmacy set off and some compliance and other things, but that's essentially around the million dollars of things that you know kind of go by the wayside because new costs do get introduced.
Certain parts of those segments get larger that didn't previously exist.
Speaker Change: <unk> on an ongoing basis. So a lot of that also comes down to growth gross margin gross profit, we expect to be somewhat similar on a margin rate basis to what it was for the full year of 2024 and the reason for that is I mean, one we're expecting to receive.
Speaker Change: Approximately $2 million of Cogs benefits in relation to the pharmacy that we opened in the fourth quarter, but there are some mix changes in the business also so HR team for example.
Speaker Change: While extremely profitable from a bottom line economic standpoint, because of the retention associated with it which obviously drives a lot of leverage in the ad spend.
Speaker Change: Pure gross profit is the gross margin percentage that is is not as high as some of the other businesses because the underlying cogs are higher so it'll be an upper <unk> mid to upper seventies versus upper eighties, but obviously, it's very accretive to the bottom line of the company. So most of it is going to come.
Speaker Change: Come from growth in the business leveraging yourselves on marketing spend which will grow up obviously a year on year, but it's going to go up by less of a percentage then what the revenue will go up and then obviously leveraging your G&A, which again is all driven by growth in the company and then you know moderate growth in.
Speaker Change: Expenses.
Speaker Change: Great and one more if I could.
Speaker Change: You insured lives that commercial and Medicare what percent of revenue are you assuming from that group in 'twenty, five and where can it go in a couple of years.
Speaker Change: Yes, I mean, its relatively small of what we're assuming in 'twenty five and we're assuming essentially mid single digit percentage of total revenue to come from that in 'twenty five as we've mentioned before this is a big ramp up there.
Speaker Change: You acquire you.
Speaker Change: You can acquire a lot of lives obviously, it's very important that we get to a national presence, which on the private insurance side, it's always going to take until the back half of the year latter part of 2025.
Speaker Change: And you have a lot of people that are essentially paying a small platform fee per month $19 per month.
Speaker Change: Which is where obviously most of the margin comes from that business and then insurance reimbursements, which you know are also at more moderate levels and obviously the cash paid business. So I don't think it's gonna be a huge revenue contributor, but it will get us a lot of scale and where that can go to I mean, it could easily within the next.
Speaker Change: Three to four years being in the range of 30% to 50% of the revenue because you start to get this snowball effect as you acquire a bunch of subscribers and it's particularly relevant to the life from the plus offering which again, we're just launching the revamped version in Q2, and that's going to start to scale from there, which also will take some.
Speaker Change: In time, but it's not a major a driving factor in anything that we have in the guidance in 2025.
Speaker Change: Thank you.
Speaker Change: We'll move next to Anderson shock with B Riley Securities.
Speaker Change: Hi, Congrats on a great quarter and thank you for taking the questions. So first on the waste management business what percentage of your new patients are getting insurance approvals for the branded therapies now following your investment in enhancing your insurance infrastructure.
Speaker Change: Okay.
Justin Schreiber: So the way the numbers. This is Justin speaking by the way so the way the numbers break down as well.
Speaker Change: 10% of patients.
Justin Schreiber: Our receiving coverage for.
Justin Schreiber: For obesity.
Justin Schreiber: Off the bat without without filing a prior authorization.
Justin Schreiber: Approximately 60% of patients that have private insurance or.
Justin Schreiber: Our.
Justin Schreiber: Are required to.
Justin Schreiber: We're getting a response that requires them to file a prior authorization.
Justin Schreiber: And as we said on the call about 60% of that.
Justin Schreiber: About 60% of the prior authorizations that we're filing right now for us that bound for patients that are obese and they are a 30 BMI or higher.
Justin Schreiber: We're getting really affordable coverage for the drug.
Speaker Change: Okay got it and are you seeing existing subscribers, who previously or currently are using the compounded therapies now being able to obtain approval and switch to the branded guilty once.
Speaker Change: We are seeing some of that is something that we do is we we rerun benefits regularly for patients that are on compounded therapies I don't have a number to share with you on that but it is something that we do see on a regular basis and it's a priority for us to continue to run benefits for patients that are on a compounded therapy.
Speaker Change: Okay got it and with the FDA set to crack down on compounding pharmacies and outsourcing facilities in April and May do you plan to continue connecting patients with <unk> until then.
Speaker Change: We plan to continue we plan to fly.
Speaker Change: We plan to continue to follow the guidance of.
Speaker Change: Or kind of outside legal adviser.
Speaker Change: And outside legal advisers as well as the F D a.
Speaker Change: You know our position is the same as it's always been we think there has to be an affordable.
Speaker Change: <unk> to patients access to these medications you know there are many Americans still can't afford it.
Speaker Change: $700 a month for a weight loss medications, so whether that.
Speaker Change: Ends up being a personalized version of a compounded drug that doesn't violate the intellectual property.
Speaker Change: You know one of the manufacturers to me that that may be a viable route but.
Speaker Change: We're committed to doing whatever we can.
Speaker Change: Committed to putting patients first which is which is what we've done since day, one and we continue to believe that.
Speaker Change: The F D. A in the federal government are not going to strip access.
Speaker Change: To these medications from Americans that can't afford them, just because they don't have blue chip insurance coverage. So it's an evolving landscape.
Speaker Change: Again, we've always operated kind of very conservatively in the space.
Speaker Change: And we're going to continue to follow the lead of the F. D. A and I think out of our of our legal advisers and do.
Speaker Change: Do what's what's best for patients.
Speaker Change: Okay got it great.
Speaker Change: Well, thank you for taking our questions.
Speaker Change: Our pleasure.
Speaker Change: We'll go next to you Chen with H C Wainwright.
Eduardo: Hi, Good afternoon. This is eduardo on for you.
Eduardo: I just had one question kind of in a different vein you had mentioned previously some development in the context of monitoring.
Eduardo: Possibly collaborating I was just kind of curious if you had any catalyst in 2025 to look for remote monitoring with wearables or anything like that or any developments in that space. We can expect over the next year.
Eduardo: Yeah.
Eduardo: Thanks for the question.
Eduardo: One of the things that's been on our priority list for a while it's been integrating wearables.
Eduardo: Into the.
Eduardo: The life and D mobile application, we currently have scale.
Eduardo: That we ship out to some of our weight management patients because they have a lot of different kind of metabolic measurements.
Eduardo: Generate and are organized on our platform and shared with patients providers.
Eduardo: As far as.
Eduardo: As far as.
Speaker Change: Life and be doing more in the remote patient monitoring world.
Speaker Change: It's not something that we have on the roadmap for 2025.
Speaker Change: Okay.
Speaker Change: Okay totally understand and and anything in the I know you guys are also working in the space of.
Speaker Change: At home diagnostics, so the any developments in that space.
Sure we're working on a lot in that space I mean, we're we're constantly evaluating a lot of the.
Speaker Change: Collection devices that are out there.
Speaker Change: Hi, there there are two or three that are certainly very interesting to us the amount of blood that you can you can collect with many of those devices as you know.
It's limited so I like to run a.
Speaker Change: Kind of a more comprehensive lab panel for something like our hormone therapy offering you would need multiple devices, which is a really negative experience for patients. We are working with some of the in home phlebotomy companies as well as quest and lab core which both have.
Speaker Change: At home Phlebotomy options to make like blood collection more convenient for our HRP patients.
Speaker Change: But look at this space, we're really excited about I think that.
Speaker Change: Being able to collect sufficient blood remotely from patients to run you know to run.
Speaker Change: <unk> like for instance, the hormone panel.
Speaker Change: It's.
It's a it's really important for our business thriving lab work is important for a lot of it a lot a lot of the care programs and.
Speaker Change: And medication offerings.
Speaker Change: At life from D and so we're really evaluating the space and we think it's a space, where there's going to be a lot of innovation in the near future.
Speaker Change: Yeah.
Speaker Change: Wonderful thanks for the answer to your question.
Speaker Change: Yes.
And with no. Other further questions at this time I will turn the call back over to Mr. Shreiber for any additional or closing remarks.
Speaker Change: Yeah.
Speaker Change: Thank you everyone for your questions and for your interest in life. Indeed, we will look forward to speaking with you once again when we report our first quarter results in May have a great evening.
Speaker Change: Thank you ladies and gentlemen, this will conclude today's program. We thank you for your participation you may disconnect at any time.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Hum.
Speaker Change: Okay.