Ann: Acquisition of Advanced Healthcare Technology Company, page-17

Australian healthcare informatics provider Alcidion will list on the Australian Securities Exchange later this year after agreeing to be taken over by mining shell company Naracoota Resources, in a $12 million deal to kickstart its ambitious US expansion plans.
The company, which was founded by the former chairman and CEO of the South Australian Health Commission Ray Blight and Professor Malcolm Pradhan, has just completed a $2 million capital raise, and is looking to rapidly scale up its US presence in order to take advantage of looming opportunities for health tech companies as a result of the ObamaCare Affordable Care Act.
The transaction is being backed by Allure Capital, the private investment vehicle of technology entrepreneur Nathan Buzza, who is also now Alcidion's executive director, as well as BlueSky Private Equity and Patersons Securities. Mr Buzza was previously the second-largest shareholder of listed clinical tech provider Azure Healthcare, which boomed from 3.3¢ to 34¢ during his two and a half year tenure.
Naracoota went into a trading halt on Friday and Mr Buzza told The Australian Financial Review that there would be a further month of due diligence, with Alcidion likely to start trading on the ASX in mid-November

The company provides hospitals with a technology platform called Miya, which brings together disparate tech systems in different areas, such as pathology, oncology or the emergency departments and centralises data so that patient diagnosis, care history and test results are available in one place. It means that by carrying an iPad around the ward, doctors can have all relevant information at their fingertips, to help avoid misdiagnoses, mistakes in medication and ensure all relevant test results are viewed and acted upon.
Mr Buzza said the IPO represented a good way to raise capital quickly as it targets a company-defining opportunity in the US next January.
US opportunity

Under the so-called ObamaCare Act, $US1.3 billion has been allocated towards a bigger plan to roll out electronic medical records (EMR) across all US hospitals. On January 1 punitive damages kick in to hospitals that are not making progress towards adopting EMR, and Alcidion wants to be over there ready to take advantage

"I have seen previously that when legislative requirements kick to the healthcare sector, the market opportunities only present themselves when the punitive effects start, because that is when everyone starts to take notice," Mr Buzza said.
"With the January date there is an immense level of pressure to get Alcidion across to the US in the quickest possible timeframe, but we need to do it intelligently."
Mr Buzza said the company would need to demonstrate its solid foundations in Australia before taking on the might of international competitors in the US, which included the likes of Cerner, McKesson, Allscripts and EpicCare.
Last year Alcidion achieved $5.05 million revenue and recorded a loss of about $330,000, but Mr Buzza said the Australian market alone could comfortably provide annual revenues of about $40-50 million. On June 30 it signed a contract with NT Health, which was worth $1.75 million despite only being for the computerised physician order entry component of its product in three small hospitals.

There are about 1300 hospitals across Australia so there is big opportunity here… but certainly the US is where the greatest base is for Alcidion overall," Mr Buzza said. "We know how big the industry is globally and I really don't see anything stopping Alcidion becoming a $100 million revenue business if we execute."
Growing need for tech help

With Mr Buzza driving the sales and marketing push, the company's founders will be able to focus on the product and explaining the benefits of the technology to healthcare professionals. They founded Alcidion in 2000 and have invested a significant amount of their life savings to get the company to this point.
The pair's background in the health industry has led them to believe that the system cannot survive without technological intervention.

"Healthcare will be unsustainable due to generational changes with a three to four times increase in complex patients – the only viable solution to develop a sustainable healthcare environment requires that health informatics play an integral role in healthcare delivery," Professor Pradhan said.
Mr Blight said the Miya platform had been designed to extract information about a particular patient and highlight their clinical risk factors in order to provide real-time clinical decision support. He said clinicians using it would be able to better understand a patient's clinical risk and make the best possible decisions as a result.
"We are able to gather expert knowledge about a particular condition and present that in the context of a specific patient, thereby assisting the clinician in making the best possible care decisions," he said.
Mr Buzza said technology like Alcidion's in hospitals would help both in patient care and in saving money from inefficiencies and duplicated patient testing.
"There is such a myriad of examples where results get missed or omitted ... I read an AMA report, which said that 30 per cent of lab results that are ordered in a hospital are never actually viewed by anyone, which is scary," he said.
"In an emergency department real-time data is crucial for quality of care, and also financially, because better care means more efficient care and people spending less time in precious hospital beds."