Healwell AI Inc. - HWAIF STOCK NEWS

HEALWELL AI Inc. (TSX: AIDX) (OTCQX: HWAIF), a healthcare technology company, has provided a corporate update on its capital allocation program and value creation strategy. The company aims to achieve run rate revenues of nearly $100 million by year-end, up from the current $65 million. This goal is supported by a robust M&A pipeline, including one signed LOI.

HEALWELL's four acquisitions have positioned it to leverage health data with AI for three key stakeholder groups: clinicians, large enterprises, and the pharmaceutical industry. The company plans to continue growing both organically and inorganically, focusing on early disease detection AI capabilities and mature healthcare software companies.

HEALWELL recently strengthened its balance sheet by reducing total liabilities by $15.5 million and had cash exceeding $14.5 million at Q2 end. If all in-the-money warrants are exercised, the cash balance could grow to over $39 million.

WELL Health Technologies Corp. and HEALWELL AI Inc. have jointly launched an AI-powered co-pilot for cardiologists to improve detection of cardiovascular disease (CVD). This tool, an extension of WELL AI Decision Support (WAIDS), will be deployed in WELL Diagnostic Centres, Canada's largest cardiology and medical diagnostic group with over 40 locations in Ontario.

The co-pilot aims to assist cardiologists in identifying high-risk CVD patients, addressing a critical health issue that accounts for 32% of global deaths. This technology is expected to enhance preventative care, improve patient outcomes, and reduce healthcare costs. Additionally, HEALWELL plans to leverage this technology to accelerate life sciences research and development opportunities related to CVD, potentially tapping into the growing global market for cardiovascular drugs, projected to reach USD 207.8 billion by 2033.

HEALWELL has improved its balance sheet significantly in Q2 2024 by reducing total liabilities by approximately $15.5 million.

The reduction includes $3.9 million in future liabilities and $2.5 million in arrears payments related to MCI Ontario, $7.9 million in loan forgiveness from First Canadian Wellness, and $1.3 million from eliminating a Put option liability by acquiring the remaining 20% interest in PolyClinic.

HEALWELL now owns 100% of PolyClinic, aligning it with its recent acquisition of BioPharma to foster growth in clinical research. The company has a cash balance of approximately $14.5 million, which could rise to $39 million if all outstanding in-the-money warrants are exercised.

HEALWELL's remaining debt includes $11.6 million in convertible debentures and loans from FedDev and BDC, which could convert into equity, further reducing debt.

HEALWELL AI has successfully closed acquisitions of VeroSource Solutions and BioPharma Services, enhancing its financial and operational profile. The deals increase HEALWELL's annual revenue run-rate to over $65 million. VeroSource, serving multiple provincial health clients, provides cloud-based data interoperability platforms, while BioPharma, a leading CRO, has completed over 2,200 clinical trials. The acquisitions were completed for a combined consideration of $32.1 million, including earn-outs. The integration is expected to bring significant synergies, leveraging HEALWELL's AI capabilities to enhance healthcare data management and clinical research offerings. CEO Dr. Alexander Dobranowski emphasized the strategic fit and potential for improved patient outcomes through advanced technology.

HEALWELL AI has made a $2,000,000 strategic investment into xAI, an AI company founded by Elon Musk, through the Think 1st Principles (T1P) investment fund. This investment is designed to accelerate HEALWELL's development of healthcare-focused large language models by leveraging xAI's resources and expertise. The partnership grants HEALWELL access to the closed xAI Developer Program, which aims to enhance product development capabilities using advanced technical tools and unique datasets. The investment is facilitated by Massimo Agostinelli of the Agostinelli Family Office, offering HEALWELL a unique opportunity to integrate with the Muskonomy ecosystem.

HEALWELL AI's subsidiary, Pentavere, has demonstrated the efficacy of its DARWEN AI system in identifying patients with radiotherapy-related toxicities through a collaboration with Princess Margaret Cancer Centre. This AI-driven approach significantly enhances the early detection of severe toxicities in cancer patients, potentially improving their quality of life and survival. The findings will be presented at the American Society for Radiation Oncology on September 29th and the Canadian Association of Radiation Oncology on September 11th. This collaboration highlights the potential of AI-powered clinical decision support in providing critical insights for oncological decision-making.

HEALWELL AI announced its agreement to acquire BioPharma Services, a major Canadian Contract Research Organization (CRO) specializing in early-stage clinical trials and bioequivalence studies. BioPharma has a strong track record, having completed over 2,200 trials with 250 pharmaceutical clients. The acquisition aims to enhance HEALWELL's clinical research capabilities using AI technology. BioPharma is projected to generate $35-$40 million in revenue in 2024 with a 5% EBITDA margin. HEALWELL will pay $11.9 million in cash and shares, with an additional $2.5 million performance-based earn-out. The deal also includes leveraging HEALWELL's AI for improved patient recruitment and trial design, potentially increasing the company's revenue run-rate to over $65 million annually.

HEALWELL AI announced its agreement to acquire VeroSource Solutions, a Canadian company specializing in healthcare data interoperability, for $24.5 million. The acquisition will be completed in two stages: an initial 51% share purchase for $12.5 million by July 1, 2024, and the remaining shares by January 1, 2025. VeroSource, serving five provincial health clients, is expected to generate over $8 million in revenue in 2024, with an EBITDA margin exceeding 10%. The acquisition aims to enhance HEALWELL’s AI capabilities, integrating VeroSource's platform to boost data management and early disease detection efforts.

VeroSource has demonstrated strong performance with a 3-year revenue CAGR of 30%, over 80% gross margins, and a high proportion of recurring revenue. The acquisition will be strategically accretive, leveraging VeroSource’s technology and client base to expand HEALWELL’s footprint in the healthcare sector.

HEALWELL AI's subsidiary, Pentavere, announces a partnership with Takeda to enhance real-world evidence analysis for patients with hereditary angioedema (HAE) having normal C1 inhibitor. This collaboration has generated one of the largest global datasets for HAE patients, aiming to improve clinical outcomes. The initiative builds on Pentavere's win in the Takeda Canada Innovation Challenge 2022. The Canadian Organization of Rare Disorders praises this partnership for its potential to revolutionize rare disease diagnosis and care in Canada. A manuscript and an abstract on the dataset are in preparation for publication.