Turnaround story: Opyl’s new look
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Special Report: The eHealth technology company was a company with great tech and too many ideas, now it’s a business with great tech and one sharply defined purpose.
18 months ago Opyl (ASX:OPL) was a company with a promising martech platform and too many options.
Today it’s still a company with promising tech but now has one clearly defined, major problem to solve — using AI to make clinical trials better in two key ways: improving the way studies recruit patients, and fundamentally changing the way trials are designed to reduce failure rates and improve the chances of success.
CEO Michelle Gallaher says Opyl’s decision support technology will not only vastly widen the pool of people open to participating in clinical trials improving recruitment numbers and speed, but also save the companies running studies millions of dollars by using AI to optimise the most-likely-to-succeed trial design .
“Shareroot was a company with a good tech concept that went looking for a problem to solve,” she told Stockhead.
“Today we have a short, sharp focus on the big problem, clinical trials, and instead have gone about creating the technology to solve it. It’s always better to start with the problem before the technology, not the other way around.
“We have a scale strategy in play, generating revenue and significant upside in the emerging AI-driven platforms”.
Analysts say it won’t take much to get the company’s small market cap — just $3m — moving upwards once these projects in development start bearing fruit in the near future.
But before the company’s big shift in late 2019, from Shareroot to Opyl, the story and strategy still needed some tightening up.
US company Shareroot listed on the ASX in 2015.
It’s technology and expertise was around using social media data for a variety of purposes, from giving account owners the ability to consent to their information being used by media outlets to bespoke social media campaigns for companies in the STEM industry — a company named The Social Science which Gallaher founded and sold to Shareroot in 2018 – and making online games.
Gallaher says the critical changes following her appointment as CEO in March 2019 were less a shift in direction and more of a refinement of focus.
“The business I sold into Shareroot had a clear niche focus around health and lifesciences,” she said.
“When the board changed over and there was a companywide strategic review of the US and the Australian operation, we went with our position of strength which was The Social Science.”
“We had a solid health and life science client base for which we understood their needs, a revenue generating business, and deep expertise and networks in that industry.”
Long-time biotech director and investor Dr Julian Chick rounded out the new board filled with AI and tech experience.
Morgans Financial health analyst Scott Power says the company has been set up for scale over the last 18 months.
“If you look about 18 months ago, before Michelle assumed control, the company was engaged in a range of different activities in the US and Australia and all pretty much loss making,” he told Stockhead.
“They’ve closed all that down and sharpened it into the core areas of the social media side and some of these more interesting aspects of clinical trial recruitment and prediction.
“These last two areas are where the company’s potential lies in the future.”
The basic facts have also changed.
Opyl has reduced its headcount as well as completely refreshed the board.
The register is now very tight after a share consolidation, and the top 20 holders control 40 per cent of the company’s 37 million shares on issue.
“With a market cap of $3m, it won’t take much to get the stock moving once they start signing new contracts and turning what is clearly a very lucrative operation into a revenue generation and profits,” Power said.
The company has gone from burning about $3m a year in 2018 to an anticipated cashflow breakeven in the coming quarter.
“We’ve turned the business around from one that had a huge cash burn to one that fits our budget, generating near-term revenue by consulting our way to product market fit,” Gallaher said.
“As a health technology developer we are unusual as we are also revenue generating, thanks to the legacy consulting division which gives us valuable insight, profile and a direct relationship delivering social media insight solutions with our target market – global pharmaceutical and medtech companies.
“The next step will be to convert our clients into the emerging clinical trial software solutions we are developing. The good news is that those target clients are already on our doorstep.”
Opyl today is targeting clinical trials.
It has a proof-of-concept clinical trial predictor tool that calculates the likelihood of a clinical trial to complete each phase and successfully reach its endpoints.
The tool uses an emerging area of AI known as ‘explainable AI’, to determine the optimal trial design and how the individual variables in the protocol can be adjusted to improve the overall confidence score.
So far, the predictor tool has ingested over 500,000 past and current clinical trials across a wide range of disease areas.
It is also building out a clinical trial recruitment enterprise platform and expanding its recruitment consulting service that leverages social media to find patients.
And it has a partnership with UK sales and medical communication company huumun, through which gives Opyl accelerated access for deal flow to huumun’s global pharma and medtech clients, some of which are the biggest global pharmaceutical companies in the world.
“The biggest problem in randomised controlled clinical trials is that patient recruitment is too slow and fails to meet the minimum requirement or the timeframe, blowing out budgets and putting trails at risk of failure,” Gallaher said.
“Our expertise is in using social media to recruit efficiently, on time and in budget. As many as 85 per cent of clinical trials fail to recruit and retain enough patients in order to meet their enrolment timeline.
“Only about 3 per cent of cancer patients are even aware that they may be eligible to access new therapies offered in clinical trials. We have been successfully recruiting to clinical trials using social media for about three years now.
“The second major issue with clinical trials is poorly designed studies. We really understand the two big problems in clinical trials. That is our strength. We’re playing the niche.”
One criticism of the company is that it’s ‘just a consulting firm’.
Gallaher says this is one part of the business, one that brings revenue and the right kind of clients to their door, but it’s not where the real value lies for Opyl.
“Our real strength today is in converting those consulting clients into enterprise clients using the platforms we’re developing,” she said.
“Our services arm provides us with critical market intelligence and direct access into our target market when our platforms go live. It’s almost like we are being paid to do market research and business development.
“What we have now is a business with a clear mission to create a scalable enterprise solution that will solve the biggest challenges in clinical trial recruitment, retention and study design.”