Ranae previously worked as an analyst for the Hedge Fund Aravt Global – one of the largest shareholders in the company. She is not only the Head of Investor Relations, but she is also part of the business development group looking at acquisitions with the goal of becoming a multi-platform company. Se has worked in M&A before.

She’s looking for products that might not be revenue generators for Semler’s customers, but that can drive costs down similar to Insulin Insights – which will help reduce hospital admittances and help the non-insulin medication costs.

QuantaFlo

Marketshare: There are 80 million people with PAD in the USA. Medicare Advantage covers 28 million Americans and it’s expected to double in the near future. This is Semler’s target population.

QuantaFlo has a penetration rate in the mid teens of those 28 million so there’s still room to grow.

Semler recommends testing every year. I asked Ranae why. It’s not as if a PAD patient get cured. So why should they test every year? It turns out that if a patient is assympthomatic, there are lifestyle changes that can be adopted. And Medicare Advantage zeros the registry every year. That’s good, but might also constitute a risk. 

When I asked her if they’re seeing increased interest from the Nevada Paper I got the feeling that they’re getting new clients (which is nice to know), but it’s hard to separate what is a result of the Nevada Paper and what isn’t. 

Insulin Insights 

It’s an algorithm that sits on the desktop of the care providers. There’s so many people in the US that there aren’t enough endocrinologists. And they’re not that specialized. So the algorithm helps them adjust the doses. Medicare Advantage isn’t reimbursing. It’s more of an avoidance of costs.

Doctors can use Insulin Insights as a standalone software, without opting for the Abbott, and JnJ’s solutions that are built on top of Insulin Insights.

New Product

They’re talking to their clients about the new product. It can be as valuable if not more valuable to the customers.

Conclusion

Regarding share buybacks, Ranae is “teaching” the management about the benefits of repurchasing shares when the valuation is so depressed, but the main strategy is to reinvest the money into more products in the future. It makes sense, although it can be a riskier strategy.

I got off of this call pretty excited and bullish about Semler’s future. This could be a good time to add to my position. 

Semler will be kept in the Portfolio as a long-term position.