Innovative Pharmaceutical Technology
This profile is part of a paid investor education campaign.*
Avricore Health Inc. (TSXV:AVCR,OTCQB:AVCRF) is a healthcare technology company focused on health innovation in the nutraceutical, medical cannabis and endocannabinoid industries. The company has developed HealthTab™, a point-of-care screening system that allows patients to directly measure and monitor the 21 key biomarkers of chronic disease.
The system utilizes Abaxis’ Piccolo Xpress® point of care analyzer, which was initially designed by NASA to test the health of astronauts. HealthTab™ is Health Canada certified and trusted worldwide by medical clinics, physician offices and government health screening programs, among others.
Avricore Health charges approximately $350 for the HealthTab™ software installation, in addition to a monthly fee for the use of the equipment. Avricore Health has installed the system in pharmacies in British Columbia, Alberta and Ontario through various pharmacies, including Shoppers Drug Mart. The company intends to install HealthTab™ in an additional 30 pharmacies in Ontario in the near term, with up to 200 expected within 18 months.
Avricore Health is also exploring additional applications for the technology such as data collection. The company also intends to penetrate the endocannabinoid and medical cannabis markets further. To this aim, Avricore Health has signed agreements with FoodRocket, Molecular You Corporation and Emerald Health Therapeutics (TSXV:EMH).
In addition to the company’s HealthTab™ platform, Avricore Health also offers an over-the-counter iron supplement called Hema-FerTM. The product is available for purchase at London Drugs throughout British Columbia and Alberta. Hema-FerTM generated $400,000 in sales in 2018 with a profit margin of 81 percent. Avricore Health expects Hema-FerTM to make $1 million in sales moving forward as the company expands its distribution into Atlantic Canada and Quebec.
Avricore Health is led by a strong board of directors and management team. Heading the company is CEO Bob Rai who has pioneered in-pharmacy testing for HIV/AIDS and chronic kidney disease. He is also the recipient of the Queen’s Jubilee Medal Award in 2013. Other notable members include Chairman and Director David Hall, who is a former member of the BC task force on PharmaCare, and Director Dr. Robert Sindelar, a professor at the University of British Columbia and part-time President of the Global Drug Commercialization Center in Chengdu, China.
- Global pharmaceuticals market to reach $1.17 trillion by 2021.
- Focused on serving the nutraceutical, medical cannabis and endocannabinoid industries.
- Charges $350 for software installation and a monthly fee for the use of the equipment.
- HealthTab™ can directly measure and monitor the 21 key biomarkers of chronic diseases.
- Utilizes Abaxis’ Piccolo Xpress® point of care analyzer, which was initially designed by NASA to test the health of its astronauts.
- Hema-FerTM generated $400,000 in sales in 2018 and has an 81 percent profit margin.
- Partnerships and agreements in place with FoodRocket, Molecular You Corporation and Emerald Health Therapeutics.
- Approximately 60 percent of Avricore Health’s shareholders are institutional.
- Led by a strong board of directors and advisory team.
The global pharmaceuticals market was worth $934.8 billion in 2017 and is expected to reach $1.17 trillion by 2021. Factors affecting the growth of the market include disease prevalence, affordability, consumer attitudes, government and insurance policies and supply and demand dynamics.
A significant influence on the market has been drug pricing as the government reigns in out-of-control budgets, which has led to cuts in pharma. In May 2017, Health Canada proposed an update to the Patented Medicine Prices Review Board (PMPRB) regulations. The upgrades are intended to help determine if drugs are unreasonably priced, however they could also make it harder for pharmaceutical companies to patent drugs and turn a profit via traditional revenue models.
With drug prices dropping, pharmaceutical companies may need to look elsewhere for revenue generation. As a result, many companies are looking towards a value-based payment model versus the traditional fee-for-service model while developing other innovative service offerings, such as medical devices.
HealthTab™ is a point-of-care screening system that allows patients to take charge of their health. Patients can directly measure and monitor the 21 key biomarkers of chronic diseases such as cholesterol, triglycerides, blood sugar and liver and kidney function. The system is simple to use and offers lab-accurate results in 12 minutes.
The HealthTab™ system utilizes Abaxis’ Piccolo Xpress® point of care analyzer, which was initially designed by NASA to test the health of astronauts. HealthTab™ is certified by Health Canada and trusted worldwide by medical clinics, physician offices, government health screening programs, the Center for Disease Control and Prevention (CDC) and the US military.
Avricore Health does not manufacture the hardware for the platform. The company purchases the hardware needed to keep its overhead low and charges approximately $350 for the installation of the software for the platform. Pharmacies are also charged a monthly fee to use the equipment. The company has installed HealthTab in two British Columbia Pharmasave locations, one Alberta Pharmasave and six Shoppers Drug Marts in Ontario. The company intends to install its products in 30 pharmacies in Ontario in the near term, with up to 200 expected within 18 months.
How it works
Patients find a pharmacy that carries the HealthTab platform and either register or log-in to their accounts. Patients are then prompted to choose a panel and provide a finger prick blood sample, which is carried out by the pharmacist. In 12 minutes the pharmacist will have the patient’s results which can be accessed online or at the pharmacy. After receiving their own test results, patients are free to seek the appropriate professional to create actionable steps for improving their health if necessary.
Avricore Health is exploring different applications for the HealthTab™ platform, such as in the cannabis industry and data collection. The company collects data from users to help track their health and to provide government agencies with information about the health of its citizens.
Avricore Health, for example, has participated in a government-funded pilot program for the early detection of chronic kidney disease in partnership with the Kidney Foundation of Canada. The study concluded that 1 in 10 Canadians have unidentified kidney disease. Of the patients tested, 11 percent of patients required immediate referral to a physician.
The company is also looking at ways the HealthTab™ platform can be used in the cannabis industry. The ability to track data created by medical cannabis patients will help licensed producers tailor their products to address patient needs better. It also provides an avenue for pharmacists and medical cannabis patients to educate themselves about the benefits of cannabis and how to integrate it into their daily lives. Avricore Health is currently looking to partner with a licensed producer to run a pilot program.
Partnerships and agreements
In November 2018, Avricore Health signed an LOI with FoodRocket to form a collaborative partnership that aims to integrate FoodRocket’s precision health offerings and genomics with the HealthTab platform. By combining the HealthTab and FoodRocket platforms, Avricore can offer pharmacists the opportunity to implement a first-of-its-kind health management program in Canada. It will allow pharmacies to track key health metrics and implement a comprehensive nutritional and dietary patient management program through the pharmacy.
FoodRocket has developed a nutrigenomics-based “DNA to Diet” system that allows clients to tailor their nutrition and diet to their genetic makeup. The platform’s personalized health and wellness software provides users with a detailed report that includes nutritional and dietary recommendations such as customized recipes. The platform is connected to community pharmacies, local grocers, meal kit services, restaurants and workplace cafeterias.
The following month, Avricore Health signed an LOI with Molecular You to distribute Molecular You’s pharmacogenomic tests, which are designed to ensure the safe and effective use of cannabis. The company intends to integrate its HealthTab platform with Molecular You’s pharmacogenomic tests to help new medical cannabis patients safely incorporate cannabis into their current health regimes.
“We are building a range of tests that the HealthTab platform can deliver to community pharmacy. This agreement with Molecular You continues our initiative to identify partners with clearly differentiated offerings. Pharmacogenomic tests are now almost universally available, but tests that build on that concept by offering value-added insights will offer Avricore Health unique positioning and a competitive advantage,” said Rai.
Avricore Health also offers an over-the-counter iron supplement called Hema-FerTM. The supplement utilizes high-quality heme iron that is naturally obtained from bovine sources, such as those found in red meat. Hema-FerTM has a high absorption rate, can be taken anywhere and comes in small, easy to swallow tablets. Patients do not need to consume the tablets on a full stomach and generally experience fewer side effects. Hema-FerTM has been approved to be used by expectant mothers who need additional iron in their diets.
The product has been available for purchase in all 82 London Drugs locations in British Columbia and Alberta since 2017. In 2018, Hema-FerTM generated $400,000 in sales and was made available at Calgary Co-op, Value Drug Mart Alberta and Sobeys. Avricore Health expects to generate $1 million in sales moving forward and intends to expand its distribution reach into Atlantic Canada and Quebec. Hema-FerTM has an 81 percent profit margin for the company.
Strategic Partnerships and Agreements
Emerald Health Therapeutics
In November 2017, Emerald Health acquired shares in Avricore Health. In April 2018, Avricore Health entered into a supply and distribution agreement with an Emerald Health affiliate where the company obtained the rights to sell and distribute proprietary endo-cannabinoid products in Canada to licensed pharmacies. Current retail prices for endocannabinoid products range between C$54 and C$69, creating a 60 percent profit margin for Avricore and a 40 percent profit margin for pharmacies.
“Pharmacies provide a safe and trusted place to purchase medicine, while also offering expert advice regarding the use of medicines. They are the ideal channel for the distribution of medicinal cannabis,” said Avricore Health CEO Bob Rai. “We plan to work closely with Emerald, focusing on generating information and products most relevant to the pharmacy channel, to help ensure that we will be ready to market through this channel if the distribution of cannabis is ultimately approved by one or more provinces.”
Bob Rai, BSc. Biochem., BSc. BioPharm, R.Ph. — CEO and Director
Bob Rai has pioneered the in-pharmacy testing for HIV/AIDS and chronic kidney disease using HealthTab. He is also a pioneer in online pharmacy and is a partner in PharmacyBC.com Medicine Shoppe locations. He is the chair for A Night of Miracles with the BC Children’s Hospital and a director for the St. Paul’s Hospital Foundation. He is the past presidents for the Philippines Canada Trade Council and Vancouver Fraserview Rotary Club. He is also the past director of the Tapestry Foundation with the Rotary Club. Rai is a Faculty of Pharmaceutical Sciences representative for UBC Alumni Advisory Council and was the recipient of the Queen’s Diamond Jubilee Medal Award in 2013.
Alan Arnstein — Director
Previously, Alan Arnstein worked for the Katz Group Canada where he oversaw the development of the Medicine Shoppe from 28 stores to 175 stores (corporate and franchised) before its successful sale to McKesson Canada. He also was involved in expanding the Rexall pharmacy brand across Canada including responsibility for acquiring and consolidating independent pharmacies under the Rexall banner.
David Hall — Chairman and Director
David Hall is the chairman for RepliCel Life Sciences and was the company’s CEO and President between 2012 and 2015. He is chairman for Providence Healthcare Research Institute and the founder, CFO, CCO, Treasurer and Secretary of Angiotech Pharmaceuticals Inc. Hall has provided consultancy services to the government, pharma and biotech industries, eHealth and NGOs. Hall is the former chair and board member for Life Science BC and is a former member of the BC task force on PharmaCare. He holds an honors degree in economics and an honors degree in finance from the University of Manitoba.
Dr. Robert Sindelar — Director
Dr. Robert Sindelar is a professor with the faculty of pharmaceutical sciences at the University of British Columbia (UBC). He holds the role of Advisor of External Relations to the Centre for Health Evaluation & Outcomes Sciences, Providence Health Care Research Institute and UBC. He is an elected fellow to the International Pharmaceutical Federation and the chair of the organization’s Global Pharmacy Observatory Advisory Board.
Dr. Sindelar is the part-time president of the Global Drug Commercialization Centre (GDCC) in Chengdu, China and is part-time VP of GDCC Worldwide. He is a member of the External Advisory Board for the School of Pharmacy and Pharmaceutical Sciences at Trinity College in Dublin. Dr. Sindelar holds a B.A. in Chemistry from Millikin University and an M.S. and Ph.D. in Medicinal Chemistry and Natural products from the University of Iowa.
Sherif Guorgui — Director
Sherif Guorgui is a third-generation pharmacist with extensive experience in various pharmacy sectors, such as retail, specialty, regulatory, industry, government and professional affairs. He is the VP of Pharmacy of the Ontario Pharmacists Association, CEO of the United Pharma group and was the President of the Ontario College of Pharmacists between 2011 and 2012. He is also a board member of the Canadian Foundation for Pharmacy, the Ontario Pharmacists Association and the Neighbourhood Pharmacy Association of Canada. Guorgui is an advisory board member of the Humber College Pharmacy Technician Program, and mentor at the University of Toronto Career Centre Information Interview program.
Zula Kropivintski — CFO
Zula Kropicintski is a certified public accountant and CGA with over 10 years of public company and international experience. She is involved in all areas of financial reporting and corporate finance. She acts as the CFO for a number of public companies with a combined market capitalization approaching $80 million. She received her Certified General Accountant professional accounting designation from the Certified General Accountants Association of British Columbia and later obtained her ACCA designation from the Association of Chartered Certified Accountants based in London, UK. She has obtained a Master of Mathematics and Master of Economics degrees from universities in Russia.
Rodger Seccombe — Head of the HealthTab Division
Rodger Seccombe is the Co-founder and former CEO of HealthTab Inc. He has 20 years of experience in launching and running companies in the software, healthcare technology and clean energy sectors. He is a recognized industry expert in direct-to-consumer and point-of-care testing technology. Prior to HealthTab, designed and developed cloud-based informatics system currently in use by the world’s leading medical laboratories and instrument manufacturers. In 2006, joined the start-up team at Canadian Bioenergy Corporation and helped pioneer the development of the renewable fuel industry in Canada. He has a B.Com (Hons) from UBC’s Sauder School of Business and is a Chartered Professional Accountant (CPA-CMA).
Phillip Ugnat — Senior Advisor to CEO and Board of Directors
Phillip Ugnat is a recognized leader known for crafting the requisite strategic vision to develop and achieve business goals. He is a strategic thinker having implemented innovative solutions targeting public and private company growth. He has built and led teams in Russia, Europe and the Americas focused on delivering product innovation and development, geographic expansion, customer partnerships and M&A. Ugnat has played a key role in the development and implementation of business and corporate development strategies for various North American and international companies, including M&A, financings, strategic alliances, joint ventures, intellectual property rights, R&D projects and tax matters.
Ugnat possesses a unique combination of international business experience and transactional legal experience. He has practiced law in Ottawa and Toronto in the areas of M&A, corporate finance and general corporate matters, helping both domestic and international companies, from startups to public companies, achieve their objectives. He was called to the Province of Ontario Bar and Law Society of Ontario in 1998. He has a Bachelor of Laws (L.L.B.) from the University of Ottawa and is fluent in English and French.
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