Will Novita’s Victorian deal be the step-change it needs?
Health & Biotech
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Special Report: At the end of last month, Novita Healthcare quietly announced a deal with the Victorian Education Department which could be the beginning of a step-change for the company.
Novita’s (ASX:NHL) flagship technology, Tali Train, helps children with attention disorders regain focus on the classroom with a scientifically designed and validated video game — bypassing the need for harmful drugs such as Ritalin.
While the company has been successful in getting Tali Train in classrooms both here and in the US thanks to a suite of deals with education sectors and distribution partners, it’s Tali Detect which could be the absolute game-changer.
“I don’t think the market has really appreciated just how big this could be for both the company and for the children who go through the program,” Novita’s managing director, Glenn Smith, told Stockhead.
While Tali Train helps children with attention deficits train their minds to retain more focus, Tali Detect helps detect the issues in the first place.
“One of the issues you have in early childhood is that parents and teachers don’t have the information and knowledge about their child, and there’s no simple way to do a robust assessment,” Smith said.
“Because they don’t have that knowledge they have to go through a healthcare setting just to begin the process — that’s really costly, and it’s not comfortable for children.
“These new digital tools offer a scientifically validated dataset around whether or not a child is at risk of attention deficit, so it makes it really easy and quick for parents and teachers to get information and knowledge about a child and then make the appropriate decisions from there.”
One of those choices, of course, is Tali Train.
The deal with the Victorian Education Department will see Tali Detect in the hands of up to 200,000 children, with a 12-month rollout of no cost to the school or parents (although discussions on a long-term pricing and delivery model post this initial 12-month rollout will be initiated with the department).
Novita says (citing government figures) that one in 20 children in Australia suffer from Attention Deficit Disorder — and these kids would be ideal for Tali Train.
While the rollout won’t deliver an immediate sugar-hit to the company’s bottom-line, Novita is hoping this will be the beginning of a virtuous circle.
The sheer amount of children set to use Tali Detect in the Victorian system will mean that Novita will get access to a robust set of anonymised data, which in turn will make Tali Detect better in the future.
“The more data we get, the more specific and more robust options we’ll be able to provide. The more validated it will get, the more beneficial it becomes to education departments and government departments as well,” Smith said.
It will also play a vital role in the rollout of the technology to the potentially lucrative US market, one where Novita has experience.
It has done a swag of deals in the US with the likes of the Portland Public School System, the Nampa school district in Idaho, and healthcare platform CareStarter.
Those deals were the result of a trip to the US Novita took last year, one which Smith discussed with the Star Investing podcast (which you can find below)
Smith told Stockhead that key to those deals was the de-identified data it was able to generate in Australia.
“That Australian [anonymised] data from Tali train was really important, because the technology and the research behind it was seen as world-class, and we had the real-world data to back up the proposition,” he said.
“It really helped us get our foot in the door and start doing some initial sales and partnerships with schools in the US.”
While the Australian market is robust in its own right, the US could be where the main game is for Novita.
According to the ADD Resource Centre, 6.4 million children have been diagnosed with ADHD while one in every 59 children suffers from Autism Spectrum Disorder.
Tali Detect could help detect signs of ADHD and attention deficits in American children and get them help (with Tali Train) sooner rather than later, and that’s a good outcome for parents, children, and Novita.
“We’ll be able to assess many, many more children quickly and that will have massive flow-on effects to the amount of children who will use Tali Train,” Smith said.
Smith said investors should have their eyes peeled on the first set of data from the Victorian trial, due out in November, to get a feel for how children who are assessed using Tali Detect ‘graduate’ to Tali Train.
“The amount of downloads and traction we get on Tali Detect will be a really good lead indicator around how many children will be assessed,” Smith said.
“Then based on the current data around how many children are at risk of attention deficits…that will play a big part in how many children will move onto applications like our Tali Train.
“That will give them [investors] a really good insight into how the company will grow and perform this financial year and other years.”
Novita, its investors, and more crucially, parents will be hoping that the Victorian deal is just a sign of things to come from the company, helping get its products into the hands of more children, more quickly.