eResearch | Earlier this month, Loblaw Companies (TSX: L), through its subsidiary Shoppers Drug Mart, announced a C$75 million minority stake investment in Maple, a Canadian telemedicine company. The acquisition is expected to expand Shoppers’ virtual healthcare services across Canada.
In the press release, Jeff Leger, President of Shoppers, said
“The COVID-19 pandemic has proven that Canadians need new ways, particularly virtual ways, to get access to care. We know that the future of healthcare is digitally enabled. We believe that our store network and infrastructure, combined with Maple‘s technology can help better connect Canadians to the healthcare support they need, whenever and wherever they are.”
Loblaw’s stock is currently trading at C$69.63 per share, a 1.4% increase since announcing the investment in Maple, and a 7% decrease in the past twelve months. Loblaw has a market capitalization of C$25 billion.
Shoppers and Maple’s Existing Partnership
Shoppers, a Canadian retail pharmacy chain with almost 1,300 storefronts, already had an existing relationship with Maple prior to the transaction.
In March, to support the high demand of patients due to the COVID-19 pandemic, Shoppers announced a partnership with Maple to provide virtual healthcare services across Canada. Patients accessed the virtual service through www.shoppersdrugmart.ca.
The partnership with Maple allowed patients to meet physicians over video conferencing to receive screening, diagnosis, and prescriptions. Shoppers provided free consultations to patients who were living in provinces where virtual care was not funded by the government.
Shoppers and Maple then launched in-store virtual care services across 12 Shoppers retail locations in B.C. The in-store virtual care services enabled patients to come into select Shoppers locations to meet physicians online, covered by B.C.’s Medical Services Plan.
Shoppers has now launched in-store virtual care services in over 160 locations in B.C. In less than a month, Maple delivered nearly 20,000 virtual care visits through its partnership with Shoppers.
Maple
Maple is a telemedicine company with a platform that connects patients to healthcare professionals through digital channels in less than two minutes.
The platform has quickly grown to include a network of over 400 doctors and a customer base of over 400,000 Canadians. Last year, Maple reported a record year, increasing revenue by six times.
IMAGE 1: Maple Platform – Online Assessment, Diagnosis, and Prescription
Maple launched its telemedicine platform in 2017, making it Canada’s first 24/7 online platform with the ability to connect patients to licensed physicians within minutes. Maple is currently focused on expanding its platform through partnerships with employers, insurers, governments, and hospitals.
Maple recently received a one-year contract with Health PEI to launch Canada’s first virtual inpatient program, after completing a successful six-month pilot with over 2000 virtual consultations. In the first three months of the pilot, 92% of inpatients connected with a “virtual” doctor.
In 2019, Victor Canada, formally ENCON Group, partnered with Maple to become the first Canadian insurance provider to include virtual healthcare services into group benefits plans.
In addition, Maple partnered with GlaxoSmithKline (NYSE: GSK), a leading pharmaceutical company, to include Maple’s virtual healthcare services into GSK’s employee benefits program.
Last year, Maple raised a total of C$14.5 million, which included an oversubscribed funding led by Acton Capital, in addition to an investment from Royal Bank of Canada (TSX: RY).
Shoppers Telemedicine Acquisitions and Partnerships
Shoppers is currently focused on expanding telemedicine and telehealth services by acquiring and partnering with health technology companies.
In 2016, Shoppers announced a C$170 million acquisition of QHR Technologies, a Canadian telehealth company. QHR has over 10 years of experience in offering electronic medical record (“EMR”) services across Canada.
QHR also provides a suite of tools for virtual healthcare, including secure online and video communication. In addition, QHR offers innovative tools that support clinics manage scheduling, billing, and patient management.
Shoppers recently launched a pilot for a managed medical clinic in Toronto, Ontario, the first of three it expects to open over the next year. The clinics are expected to provide virtual care options and EMR solutions through QHR.
Shoppers also recently partnered with Canada Health Infoway, a developer of an e-prescribing service called PrescribeIT, which enables digital prescriptions integrated with EMR. Shoppers is expected to integrate PrescribeIT across its pharmacies while continuing to operate its existing e-prescribing platform called FreedomRx.
Telemedicine Market
This past year, the COVID-19 pandemic accelerated the adoption of telemedicine, which includes technologies that support healthcare specialists to communicate with patients digitally. As the pandemic enters a second wave in multiple countries, more remote-based technologies are expected to be used in the healthcare industry.
In a report called “Telehealth: A quarter-trillion-dollar post-COVID-19 reality?”, McKinsey stated that approximately $250 billion of U.S. healthcare spending could potentially be virtualized. This year, 46% of U.S. consumers used virtual healthcare services compared with only 11% last year.
According to Global Market Insights, the telemedicine market was $45 billion last year and could reach $175 billion by 2026, growing at a CAGR of 19%.
CHART 1: S&P 500 (black) vs Loblaw (red) – 1 Year Chart
