OptimizeRx Corp (OPRX) 2020 Q4 法說會逐字稿

Good afternoon. Thank you for joining us today to discuss OptimizeRx Corporation's Fourth Quarter and Full Year Ended December 31, 2020. With us today is the Chief Executive Officer of OptimizeRx, William Febbo; and the company's President and Chief Strategy Officer, Miriam Paramore. They are joined by Company Chief Financial Officer, Doug Baker; and Chief Commercial Officer, Stephen Silvestro. Following their remarks today, we will open the call for questions.

Before we conclude today's call, I'll provide some important cautions regarding the forward-looking statements made by management during today's call. I'd like to remind everyone that today's call is being recorded and will be made available for telephone replay via instructions in today's press release in the Investors section of the company's website.

Now I'd like to turn the call over to OptimizeRx CEO, William Febbo. Sir, please go ahead.

Thank you, Greg. Good afternoon, everyone. Thank you for joining us today. I mean we have record numbers, which is great, and everyone's welcome.

I'd like to begin once again expressing our gratitude for the countless healthcare professionals across the country who have continued, frankly, to work tirelessly and selflessly in battling the pandemic and keeping us all safe and who are now leading the charge in administrating the vaccine to the most vulnerable and those on the front lines as they work their way to the general population.

Over the past year, the pandemic has clearly accelerated the shift towards digital health by both physicians and patients, and especially for physicians looking to keep their operations going and adapt to the new widespread challenge of delayed treatments.

According to a recent study done by the American Medical Association, nearly 90% of doctors in the U.S. see significant advantage in using digital tools to engage with and treat patients. Moreover, over half the physicians in the study say they are looking for more access to clinically relevant data and workflow improvements at the point of care where they are treating their patients.

If there is any silver lining around the pandemic, it would be how the compelling and important benefits from the adoption of telehealth and especially the digital health solutions like we provide have been accelerated by at least 5 to 10 years. As one of the first major movers in the point-of-care digital health space, we've been able to reap the benefit of this industry transformation as well as be a leader in setting the high standards through reaching physicians and patients in a way which supports decision-making around care. This includes delivering the most innovative solutions that better support patients and health care providers with affordability, access and adherence.

While this shift was already well underway before the pandemic, as evidenced by our growth over the last few years, we are now witnessing an even more astonishing acceleration towards digital solutions. And this has transformed and vastly expanded our total addressable market. In fact, in Q4, we more than doubled our top line while generating positive GAAP net income, and this was largely a result of a strong organic revenue growth. We see this combination of organic growth and innovation for solutions will drive us forward in 2021 and beyond.

We also practice what we preach. That is we have continued to drive our own internal digital transformation as a company. Earlier last year, we restructured our organization to align with what McKinsey refers to as the digital factory, or DF model. This model has been shown to bring products to market faster, do more with existing resources and create a dramatically reimagined experience for clients. It can also reduce tech development costs by 1/3, and most importantly, attract the great talent required to compete in a digital world [and boarded] that payoff last year.

Powered by our own digital transformation, we successfully broadened our platform to encompass more solutions that enable doctors to garner access to important information for their patients at point of care. We are now at the right place at the right time, facilitating critical and timely communication between life science companies, physicians and patients.

Our results also reflect how we have made great strides with innovation during the pandemic and particularly with the launch of TelaRep, our new virtual communication solution. This cloud-based solution enables providers to reach the right pharma contact from within the EHR workflow with just one click, helping fill the communication gap created by limited face-to-face interactions due to COVID. In fact, last December, PM360 Magazine recognized TelaRep as one of the most innovative solutions for life sciences. Very proud of that.

In addition to existing solutions in the platform, we are now leveraging real-world data to deliver real-time information at the point of care with our new AI-powered, real-world evidence solution. Our sophisticated proprietary algorithms that power this solution also enable us to derive additional revenue from our existing network.

Over the last year, we have continued to shift our business model toward enterprise level engagements with recurring revenue streams by leveraging the trust we built with our clients over the last several years. Client renewal rates at the end of 2020 reached an all-time high, all while adding 60 new brands to our platform.

We have also found that we can help to digitally commercialize new products for pharma at a time when face-to-face sales are virtually impossible. That is no visiting reps, industry conferences or in-person presentations. This supports an ever-expanding available market and tremendous growth opportunities.

Our solutions are now providing essential communication pathways for pharma to connect with physicians and patients through the patient journey with a focus on affordability, access and adherence. Our digital health footprint continues to expand with more pharma clients onboarding onto our platform, and we are working relentlessly to steward health data in ways that can effectively yield better outcomes for all the stakeholders, and especially for the millions of patients who are connected to us.

Now before I go further, I'd like to turn the call over to our CFO, Doug Baker, who will walk us through the financial details for the fourth quarter and year. Doug?

Thanks, Will, and good afternoon, everyone. Earlier today, we issued a press release with the results of our fourth quarter and full year ended December 31, 2020. A copy is available for viewing and may be downloaded from the Investor Relations section of our website. We expect to file our Form 10-K with our full results in the second week of March.

Now turning to our financial results for the fourth quarter and full year 2020. Our revenue for the quarter totaled a record $16.4 million, which was up 123% compared to the same year ago quarter. Our revenue for the full year increased 76% to $43.3 million, driven almost entirely from organic growth of our core solutions and patient engagement.

Gross margin for the fourth quarter totaled $8.6 million, which was nearly double that of a year ago. Gross margin for the full year was $24.1 million, up from $15.4 million in 2019. For the quarter, our gross margin percentage came in at 52.4% versus 60.6% a year ago. For the full year, it was 55.7% versus 62.8% in 2019. This lower percentage in Q4, which impacted the full year as well, was a result of our solution mix. Most of the incremental business that came in Q4 was related to lower-margin solutions that were very easy to launch and fulfill in short time periods. Even though our gross margin was lower, this incremental business almost all falls to the bottom line, which demonstrates the leverage in our model. Looking ahead, we expect our margins to remain in the 56% to 58% range in 2021.

Our operating expenses increased to $7.2 million in the fourth quarter of 2020 compared to $6.8 million in the same year ago period. This is almost all the result of variable expenses associated with the added revenue. However, even though our revenue was up over 100% for the quarter, operating expenses were up less than 10%, once again demonstrating the substantial leverage of our model. Operating expenses for the full year of 2020 increased to $26.2 million compared with $19.1 million. The increase in operating expenses in both periods were largely due to the scaling up of our operations to support continued customer and solution growth, including additional staffing as well as the full year impact of the acquisition we made in late 2019.

GAAP net income for the fourth quarter of 2020 was $1.4 million or $0.08 per fully diluted share compared to a net loss of $2 million or $0.14 per share in the same year ago period. Net loss for the full year of 2020 totaled $2.2 million or $0.15 per share, which improved by about $900,000 from a net loss of $3.1 million or $0.23 per share in 2019.

Our non-GAAP net income in the fourth quarter of 2020 was $2.7 million or $0.16 per fully diluted share. This compares to a non-GAAP net loss of $400,000 or $0.03 per share in the same year ago period. Non-GAAP net income for the full year of 2020 was $3.2 million or $0.20 per fully diluted share compared to non-GAAP net income of $900,000 or $0.07 per fully diluted share in 2019.

Now turning to our balance sheet. Cash and cash equivalents totaled $10.5 million at December 31 compared to $12 million on September 30, 2020. Earlier this month, we raised $71 million in an equity offering. We plan to use these funds to further expand our business and accelerate revenue growth. Our receivables are very high quality because of our customer base. They continue to pay regularly and predictably, and our days sales outstanding continues to be constant. We remain debt-free and do not anticipate needing to raise additional capital in the near future needed for operating preferences or to fund our growth.

That wraps up the discussion of our financial results. Now I'd like to turn the call back over to Will. Will?

Thanks, Doug. Today, more than ever, OptimizeRx is evolving into the nation's critical communication platform for patients, physicians and life science companies. Bold statement, but we're really living it. Like no other digital health platform in the market, we deliver important information in real-time at the point of care right when clinical decisions are being made. We have access to tens of millions of patients and most physicians as well as the technology, compliance, operational support to continue to play a major role in the ever-evolving digital health market.

Our partnerships with EHR and prescribing companies enable us to augment the physician workflow with actionable insights. By providing additional real time-critical information to clinicians who are dealing every day with complex health care scenarios, we can improve the patient and physician experience and, ultimately, treatment outcomes.

As Doug mentioned, over the last year, we've continued to expand our team in preparation for the growth opportunities ahead. We've enhanced our leadership team across financial, legal, compliance and strategic planning.

To help us unlock more reach into our client base, recently, Angelo Campano joined us in November of 2020 as our new Senior Vice President, Principal, Agency Channels. His experience with developing partnerships that bring digital touch points together at the point-of-care greatly complements our mission of helping life sciences be present through that care journey. You might have noticed in the press release we filed, Angelo was named MM+M's 40 Under 40. And just -- it's just a positive thing for our company. And it's perhaps not surprising that we've seen immediate results from his efforts that will positively impact our growth.

We've had a great start to the year and remain focused on key growth drivers of land and expand within our clients, selling our platform solutions across brands and connecting more doctors to more patients. We see our real-world evidence solution accelerating all of this by a factor in a way that works for everyone involved. We are, however, very much looking at enhancing our reach to certain therapeutic areas and additional patient populations. We continue to be focused on unlocking access to patients via our channel partners as a differentiator with the patient engagement solutions.

The funds from our recent equity raise will be used to invest in our current platform, fund continued innovation, open additional M&A opportunities and further solidify our market dominance in this space. It was clear from those who participated in the raise, that our story is very understandable, defensible and scalable, all while still being very early in our evolution.

In 2021, we expect to see a continued favorable shift to higher-margin recurring revenue enterprise deals, and we believe our pipeline growth has been driven by a permanent shift to more digital enablement. We have 46 enterprise engagements in our pipeline as we start 2021, valued at more than $50 million, a significant increase over this time last year, and we expect that to continue to grow in in size this year. This breaks down to about 31 potential deals valued at up to $0.5 million, 11 up to $3 million and 4 $3 million or over. This does not include several that have already closed in all of the above ranges, including the $3 million plus. It's safe to say our shift away from tactical and towards enterprise engagement is being very well received by our clients.

For all those prospective engagements, we expect to realize our traditional annual closing rate of between 35% and 50% over the course of the year. All of this represents great progress. And when adding in the in-year buying and year-end buy-out potential, we see another year of strong growth ahead. As we continue to invest in innovation and enhance the scalability of our technology and commercial teams, we believe we have the momentum, at least aspirationally, to reach $100 million revenue run rate with the clients, network and team we have today.

Deloitte recognized OptimizeRx as one of the top 500 fastest-growing companies in North America, and we expect to remain on that list.

Now with that, we'd like to open it up to your questions. Greg?

(Operator Instructions) First, from William Blair, we have Ryan Daniels.

Yes, congrats on the strong performance this year. Will, you talked a little bit about the need to drive more preventive care going forward because of some of the lapses that occurred during COVID and people avoiding offices or office shutdowns. Can you talk a little bit more about your patient engagement platform and some of the things you can do to help doctors generate that revenue stream? Number one.

And then number two, as that revenue stream comes in, does that also have a multiplier effect on your core messaging business because they're in the office and these doctors will start receiving sort of the marketing and branding campaigns as well?

Sure. Ryan, thanks for the question. The first part, we strategically decided that you really have to look at the benefit -- the ultimate beneficiary of everything we're doing, which is the patient. And as everyone knows, about 2 years ago, we -- through 2 acquisitions, we bought the technology that enabled that one to connect directly to the mobile, but frankly, to deliver content to patients anyway they want.

And while that's a crowded space, we liked it because we were one of the only ones that had such a broad network of physicians. And so the unlock here potentially, which is a tool to facilitate less meetings between doctor and patient, not more, is the ability for a doctor to enable a patient right in the workflow to join an adherence or compliance program, which really helps the patient understand the medication treatment, both emotionally and intellectually. It also helps them afford it because we can obviously attach any kind of savings that is available for that same communication, and it's right on the mobile. So that answers a little bit of your second part of the question.

Aside from just the unlock we feel is coming, the other piece of it is it drives some of our core messaging solutions that physicians enable today in just another format, which help patients afford the medications, which is obviously a very large issue in the market. Certainly, with many people being disrupted from work, that's even more important today than it was a year ago.

Okay. That's helpful color. And then one of the things you highlighted both via press release intra-quarter and then in your comments is kind of your investments you've made in artificial intelligence and machine learning. And I'm curious if you can talk a little bit more about how that actually changes the deployment of your solutions and integrates into the physician workflow to kind of make it a smarter technology for both your patients and your provider partners.

Yes. I'll start, and then I'll ask Steve to jump in because he's really driving this effort. But if you think about what we've been doing to date, the triggers were fairly straightforward, disease code, some search functionality around the patient. But there's just so much more data available today from a real world-based evidence, which allows you to be smarter with how you message and what creates the message. So where we may have had 1 trigger, maybe 2, we may have 4 or 5 now that allow us to deliver the right information to the doctor at the right time based on the profile of that patient they're seeing. And it's just something that our clients have been looking at RWE for years, using it for training, to drive marketing messaging, but rarely have they been able to use it to actually directly connect into point-of-care in a way that doesn't require someone to remember something. So hence, the machine learning, the algorithm. But Steve, maybe you could give a little more color from the client perspective on that.

Yes. I think you did a great job there. Ryan, good to hear from you. The only thing that I would add to what Will has already said is that what this allows us to do is to plug into the broad ecosystem of these massive real-world evidence databases. And you saw the announcement on Komodo, there will be some other subsequent announcements pending. Obviously, we've got a partnership with EVERSANA that's got a great repository of data as well. And what happens is essentially, we have access to patient records that are longitudinal, historic in nature and that are being refreshed real time.

And so the algorithms can train on that history at a patient level, rolled up to a physician level, and they can begin to be predictive in nature, Ryan. So you can start to understand if the patient is tracking toward a positive diagnosis, that means we can be preventative in messaging that physician, helping them understand that they should contemplate or think about running some certain tests, et cetera, to intervene and help that patient in different ways. So that kind of comes back to the question that you asked previously around patient engagement, the one thing that's in there also helps in a preventative way.

But it essentially connects this to the broad ecosystem, and as you heard Will say, it's a force multiplier around messaging because our messages have been limited up until we give this to whatever we could see inside the ecosystem of connection that we have. Now it's the entire health care record across multiple repositories of data that we use with all of these patients.

Great. That's very helpful color. And maybe last one for me. Just thinking about the $180 million of pipeline opportunity, maybe the strength in close rates, the move towards digital marketing for manufacturers in general, obviously, the right opportunity for you to capitalize on. Can you talk a little bit more about what you anticipate from an SG&A spending perspective in 2021 as we think about, in particular, sales and marketing investments, whether it's direct sales force or just other kind of digital or brand marketing capabilities for the organization as you grow to drive awareness of your offering?

Yes. Thanks, Ryan. So I think as people digest what they're seeing in Q4, I want to just mention 2 things. One, this company clearly has tremendous leverage in SG&A, right? Given when we don't generate content, we are a tech company and we facilitate connections through our network, and so you should not expect heavy growth in SG&A as we continue to scale the business. We will selectively add in areas that make sense, like we did Q4 with a couple of people. And when you're growing like this and you're in the right place at the right time, you'd be highly selective with people. So we really feel honored to have that position and are able to get some terrific people onboard. So you should not expect dramatic. You should continue to see leverage as we scale through the year.

Okay. Great. And congrats again.

Thanks, Ryan.

All right. Moving on. Our next question is going to come from Andrew D'Silva with B. Riley Securities.

Congrats on the progress. So a lot of my questions were just touched on, but just to start, obviously, the fourth quarter saw a very significant increase in just seasonal spend across our platform. I'd be very interested if you could just kind of discuss what you learned as it relates to your platform's ability to scale just based on that. And then maybe you could just tie that in with a little bit more color on how that translates to the operating leverage that you're seeing and thoughts about how that looks going forward.

Thanks, Andy. Yes, I've been in the pharma world for over 20 years, and Steve has as well. And you just know in Q4, there's always a magic that comes your way, and that the fear is the magic is something you can't do, right? Because that's just very frustrating. So one of the reasons why I just love this business so much is we can turn on a dime and react to our clients' needs on really important stuff, like taking real clinical messaging, financial assistance, patient engagement and enabling it very quickly based on activity at point of care. And so Q4 was an example of good buy-up. As a matter of fact, we saw higher buy-up than we traditionally see and I think we can safely say that there was excess budget because of some of the lack of spending on the direct -- in conferences.

But the good news is we were able to capture every dollar that we were asked to. And as you can see in the P&L, as Doug referenced in his section, the leverage screens through. So that will hold true as we go forward. It is not something we have to stop, build, adjust, call our partner. It's very simple. And obviously, we've been working really hard as we've been growing to make sure the team is right, the tech is scalable and compliant and secure. So feeling really good about that leverage.

Okay. Great. Useful color. And really interested in your insight in the pipeline. Just curious if the cadence from RFPs coming in and contracts being awarded is following what's historically been seen or if you expect to see off-cycle RFPs and contract awards come in similar to what you saw last year.

Well, I'll say a little bit and then pass it to Steve. There's -- obviously, there's always seasonality to pharma. They start a little slow and build-up and you look at the first half, and you can definitely look at a bigger second half traditionally. So we have seen a stronger start this year, which is great. I think that's a testament to the enterprise-type deals we have, our renewal rates, the team, the operational team, just be -- our account managers are exceptional, being very connected to both the clients and anyone that supports the clients. So I see a similar profile to last year, just more business.

Steve, do you want to comment anything on that?

Yes, I think that's right. The only addition that I would make is one of the other pieces, Andy, that we've seen sort of accelerating business for us are -- is pharma's pivot a little bit from using, in the field, physical reps and looking for different ways to reach physicians. I think you probably saw the [fight here]. The Pfizer announcement, excuse me, the Amgen announcement. There will be similar announcements that will follow and whether they're public or that's just being done without actual announcements. But those broad sweeping layoffs or reductions are going to happen. And so of course, those funds will be deployed, and that is also strengthening the case of the business because we do have an ability, as Will has said, to reach the physicians that pharma wants to speak to and to communicate those messages. And we can do it in real time, which is essentially better than putting a physical representative in front of the physician. It's less disruptive, it's more organic and germane to what they do. And of course, with TelaRep, if they still need to speak to a physician, they can just click the button and reach back out to speak with the rep. So for that reason, I think that's also helping to accelerate.

That's a great point. I wasn't necessarily thinking about, but very useful context, nonetheless. And then the last question I have is related to the $180 million plus pipeline number that you noted in your prepared remarks. Is that net of contracts already awarded? Or is that a gross or cumulative number?

That is net of.

Moving on. From Lake Street, we have Eric Martinuzzi.

Congratulations on Q4 as well. Let's dive into the Q4 gross margins. So the 52.4% was certainly below what I was modeling. And I know you said it was due to the change in the solution mix. I know in years past, sometimes in Q4, you are either re-upping or trying to win new distribution business. Did that have anything to do with it? Or is it really more product choices?

Yes. Eric, all about solution mix. I think that's what it is there. And the beautiful thing about our business is -- and it's -- you're here in this team. It's just so large, right? So we're not concerned about the gross margin. We know how to manage it. We -- it's -- a lot will be driven off activity, and we still feel over time that continues to improve. But if there is ever a chance to bring in the revenue and execute it for our clients as needed, we will do that, and that's what you saw in Q4. Just a heavy ask around some of the legacy solutions and legacy partnerships, which have a higher rep share.

Okay. And then is this something just -- you talked about kind of Q4 seasonality. Is that something we should just anticipate in our model? So if you're telling us, hey, gross margins are going to be 56% to 58% over the course of the year, should we just naturally be anticipating sort of that, I don't want to call it a budget flush, you have a better term for it, the buy-in, is that just kind of this model to buy-in in Q4? Or is that wrong to assume that?

Yes, I think you can go with the ranges you gave annually. If these weigh 1% or 2% either way, it's not going to be material. But obviously, if they're going up, that's great for everyone. If they're going down, that means the top is growing. So I think just taking that sort of directional guidance or aspirational guidance towards that range is plenty for models, both for you and the investment community.

Okay. And then speaking of aspiration, I know that you didn't give us a year of which you're going to have $100 million in revenue. So we've got a potential revenue of $100 million. I just wanted to dive into that. You have talked about a shift to more subscription-type revenue or recurring-type revenue. In this year where you do achieve that $100 million of revenue, what percentage is subscription?

That's a good question. I mean, I would think we're at least half, if not more, in terms of enterprise -- we call that enterprise. That's contracted nature, 12 months, very recurring. And I think that would be our goal. And yes, we don't give guidance, so we don't put a date on it. I think what's more important is we have the team to get there, right, aside from maybe a few select hires. So we -- that should scream we're going after it hard, and there's that leverage we keep talking about.

Okay. Last one is for Doug on the operating expense side. I would actually think the OpEx was going to be a little bit higher in Q4 than it turned out to be. I think it came in at $7.2 million. What should we be thinking about either for full year or Q1, if you wanted to just focus on the near-term here as far as operating expense goes?

So I would say, if we look at the full year, absence us deciding to make some larger investments in growth, you should see less than 10% -- no more than 10% growth in OpEx. You could even see some declines in Q1 from the $7.2 million because there is a little bit of relationship to revenue. So...

Okay. And then just last housekeeping item here. The share count we should be using for Q1 given the raise, can you give me a cheat sheet here?

You could add as somewhere in the $16.8 million, something like that.

Moving on from RBC Capital Markets, we have Sean Dodge.

This is Thomas Kelliher on for Sean. I've got one kind of going back to revenue growth. A lot of momentum here. Is there any way to kind of unpack how much of a tailwind COVID was for you in 2020 or even into 2021? I guess, kind of when we look ahead, is there any sense you can give us what you think kind of a more sustainable, longer-range growth trajectory could or should be?

Yes. So we've talked about a little bit in Q3. So we didn't feel like we saw any revenue up until Q3 from COVID. We saw a lot of internal referrals, we saw a lot of learning, a lot of exploration. Clients tend not to move quickly on these things. They have to digest it. Q4, though, I would say, we saw a couple of million in additional buy-up just from budget -- excess budget.

Going forward, I think because of this shift, ourselves, we've got big expectations to keep growing this business. I've always said, there's 25% to 30% growth is -- there's so much room for us, but that is achievable and I feel like we're not doing our job if we're not doing that or beating it. So we don't give the guidance, but I think given all these things we mentioned between our -- we're really embedded well in the clients, there's tons of white space there, we've got the solution set that's critical, and we've got the reach today. And obviously, we're always looking to augment that.

So I would say we'll feel just overall macro tailwinds. And this year will continue to be disruptive for pharma. So I think both to Eric and to your question, as we get to the end of the year, there probably will be additional excess budget as well.

Yes. Very helpful. And then kind of one more on physician reach. You had mentioned integration now, hoping you get to 60% of docs. Is that kind of a fully penetrated number there? Or are there kind of more EHR platform or things you think you can add to get to an even higher proportion? Or are you feeling closer to that kind of 90% daily EHR users to [get a reference]?

Yes. For us, as we shifted to largely specialty medications, which are smaller populations, harder to reach, both physician and patient, it's less of a volume gain for us at this point. It's really fine-tuning the network and finding areas where if we added reach, it would immediately add revenue and provide solutions for our clients. So we're really focused on that. We're not focused on going after the big numbers. There are plenty of EHRs still that we're not fully integrated into, and of course, we work on those every day. But I think the important takeaway is we're not reliant upon that. If you see analysis come through, I would focus in on therapeutic area because that's a bigger unlock for us in terms of revenue potential.

Congrats on the quarter.

And then moving on, ladies and gentlemen, from Venator Capital, we have Brandon Osten has our next question.

Just -- I know you guys don't guide. So I just want to sort of work around what you guys have put out there. So in terms of in terms of your sales breakdown right now, roughly how much of your quarterly revenues at this point are enterprise SaaS recurring versus messaging? Like what kind of run rate are you guys running at right now if we sort of bunch everything that isn't volume dependent?

Yes. It's a good question. It's a fair question. We're -- we'll be able to dive into that a little bit better based on -- for '21 based on reporting Q1, right, because we'll have had a lot of conversion by then. We can look at the percentages. But it's -- the -- it's around 50%. It's -- right now, based on last year. And it makes sense, right? I mean, for our clients, why would they do this? It's multiple solutions. So it takes them working with maybe a few other providers to just work with us. It's one measurement. The measurement tends to be in terms of the ROI. It's exponentially better when you just have more outreach to the same patient and physician populations through one platform, and you can watch prescription behavior. So I would expect it will be there for a while and then hopefully tip heavier as we get more and more people onboard.

Right. And if I look at 2019, I would assume that it was less than 50% at that point because this is not a completely...

Oh, yes.

Yes -- as much. So basically, the enterprise SaaS nonmessaging, nonvolume dependent part of the business is clearly growing over 100% then. Is that safe to say?

Yes. That part? Yes. That's safe to say and it's also -- it's not -- there is still a volume dependency in some of this. It's not 100% pure bill monthly, thank you very much. It's still -- I think it will move that way more and more over time. That's the only thing I would carve-out from that statement.

And if I'm trying to sort of interpret your pipeline, your pipeline comments, the $180 million, the enterprise is $50 million. Is that -- when you guys talk about the pipeline enterprise, is that all additive to the current run rate of enterprise sales right now? Like if you guys executed on $50 million of -- and a product, all $50 million, obviously, you won't. But all $50 million of enterprise sales, would that be addable to your current run rate? Or does your current run rate include -- does that pipeline include renewals or something?

Yes, yes. No, it's not additive. It's unique. It's the full year again. Not additive.

It's not -- sorry. Sorry, just when you say it's...

The run rate is part of that. Yes, that's what driving...

The run rate is part of that pipeline. Right. Okay. But in terms of the pipeline, so is it included as part of the pipeline?

Yes, it is. That $180 million includes the $50 million right now of enterprise.

Right. But if you closed on $180 million of pipeline, your revenues -- your current run rate of revenues would go up something less than $180 million. Is that maybe good way of framing it? If you closed $180 million then your revenues would be whatever you did last year, plus $180 million?

No, no. It would be -- it doesn't go on top of a run rate. It is the total number we're going after for the year. Yes.

Moving on. From Poptech, LP, we have Harvey Poppel.

Yes. Will, great job and congratulations. As you know, we've been [followers] for many, many years, and this has really been a blowout quarter. I just want to make sure that I've got this right, that you just reported numbers that were actually higher than what you pre-announced only a month ago. In other words, you went from $16 million to $16.4 million in the -- in terms of fourth quarter revenue. And your pipeline went from $170 million to $180 million, that's up about 6% just in 1 month. Is that -- have I got it right?

That is right. And it also includes us closing some business, right, so -- which we won't tell you what it is. But that certainly means there was probably greater than a 6% increase in the pipeline.

Right. Getting back, and I know you've had a number of questions on this, but I'm going to come at it from a different direction to interpret the pipeline and try to understand its ultimate effect on revenue. If one were to simply take 35% to 50% and multiply it by $180 million, you get $63 million then $90 million. Does that imply the range of revenue that you might be able to achieve this year? Or is there something about the $180 million that takes us out much further?

Yes. We talked about that in Q3. The pipeline is generally an 18-month view. So it's not apples-to-apples. There's a little bit of spillover into 2022. But you need to give a little bit to that, maybe 4 to 6 months into next year.

Okay. Lastly, on the new cash that you've been able to raise, and you've mentioned in the course of raising, and then again today, that M&A is part of that. Is there a sense of -- in your M&A strategy at this point of whether that's earmarked to just 1 or 2 large deals? Or is it more likely to be a whole series of much smaller deals?

I'll start, and then I'll ask Miriam to chime in because she's going to be running point for us on that effort. But no, I think we feel very sufficient with technology, sort of start-up technology add-ins. If we're going to do something, we want to have it be more substantial and accretive inside our guardrails just because of the effort that it takes to do those.

But Miriam, why don't you add a little bit of color to that, if you don't mind?

Okay, sure. We have a number of opportunities that we're looking at, and it is as easy to buy or as easy or as hard to buy something big as it is to buy something small. So without knowing, because a little bit of it's opportunistic and everything is timing, as you know. So we think we've got a good filtering process. We've got a number of opportunities we're looking at. We've got some that we kind of pulled out. But I think we prefer something a little more substantial without -- nobody has a crystal ball, Harvey. So -- but we certainly don't need to buy anything that's infrastructure-related or that improves our tech base because we're really pretty solid there. But anything that's innovative that's additive, we want to look at.

Great. I'll step aside. Congratulations.

And moving on, we have Ron Chez.

So somebody already or you commented about $100 million aspirational goal. So that's not aspirational for '21, right? I mean that's [out there a bit]. You don't want to do that in '21?

No way. Why would I -- no, why would I want to do that? No. It's we -- the point of that number is we absolutely have the team to do it. We've got the reach to do it, and we have clients who have certainly plenty of appetite to do it, but I would never commit to that guidance. This is really, I think, to give our investors and future investors just a glimpse that, one, this is really early. Two, we've got the current infrastructure to get there. And, yes, we all want it to happen faster, always. We're a pretty aggressive group and -- but we can see we've got the team to do it, which is really exciting.

So given the market and customers, this is still early innings?

Oh, yes. And Steve can comment. But I think this -- I think that we're seeing really good adoption. It wasn't the early believer sale anymore, even pre-pandemic. But post-pandemic, you had massive internal referrals for us, just more awareness in the corporate setting of digital enablement. I think we all use Zoom a lot. That's -- trickles into the market. And then doctors and patients are just more attuned to using technology to help maintain their practice or patients just manage their lives basically. So Steve, maybe you can comment to the client side?

Yes, sure. Ron, I mean part of the growth that you've seen in the numbers that we've talked about, obviously, the new brands is critical, but the incremental gains in enterprise, it's clients that may have already been on the platform, scaling up to other solutions, to Will's point. And so that continues to go. We have a large number of brands that are on. They'll scale up to the different solutions on the platform by brand, but they'll also do that at a disease level. So in many cases where brands are operating 4 or 5, 6 different diseases, that represents 60 different programs for OptimizeRx. So there's tremendous -- in a sense it's very early. There's tremendous white space for us to go out and continue to capture.

Okay. One other aspect of growth is number of EHRs and HCPs. You want to comment on that at all?

I think we've covered a lot of it. I think the key is focusing in on the specialty therapeutic areas, where -- yes, like oncology, which will dominate the marketing spend for a decade. So we're really focused in on that. At this point, it's a fine tuning, it's not a volume gain. And we, by the way, have a lot of capacity in our existing network. So when we talk to white space on the brand side, we can also say the same thing on reach to physicians.

But I think our partners through this change, and you imagine what they're going through adding telehealth and all sorts of services, I just think there's a really good atmosphere for collaboration [and patience] at the channel level. And we really, I think, do a great job being collaborative and innovative with them. So I expect some good things there this year.

And folks, moving on. The last question we have in the queue is from Sid Kapoor with Silver Mount Capital.

Just 2 quick ones for me, please. Firstly, would it be fair to say that the patient engagement piece is the key driver of ROI for pharma companies, and would you think that's what's driving the shift in customers from a pay-as-you-go to an enterprise contract model? That's the first question.

And the second question is in terms of your addressable market or your serviceable addressable market. Do you believe that this extends beyond branded patented drugs? Or rather, how do you think about this from a patented versus an off-patented perspective?

Sure. Sure, Sid. Good to hear you. So I would not say that patient engagement is driving, by itself, the shift to enterprise deals. I think, just to remind everyone, when we, about 2 years ago, decided to really focus in on the patient journey and the critical places to reach doctors and patients along that for our clients, patient engagement is certainly a critical piece of it. And it's one we can all kind of relate to as people, patients and consumers of health care.

But the awareness, the amount of drugs coming to market and the amount of interactions between those drugs, whether they're branded or branded with generic, is complex, and it's really hard to keep up. So what's really driving the enterprise is, one, it's just easier to buy more from the same company, so we do that. Two, we have more touch points than anyone in the market relative to getting information inside of the workflow at point-of-care for doctors and then have a wonderful way to stay with the patient and help them understand and afford the medication. So it's not the sole driver of patient engagement, but it's definitely a piece of it. That's why we did it strategically.

And relative to TAM in the total available market. Brand, brand is the majority of our revenue. You've seen companies like GoodRx and RxSense helping people get discounts on any product and really getting that down to a transparent level to even picking the pharmacy you should go to. So we really like that. It brings awareness, transparency. Doctors are more aware that there's discounts available, consumers are certainly -- this whole consumerism trend. And while we are largely a B2B type company, any awareness at the consumer level helps drive awareness for what we do. And so I do think it fits along with just the expansion of things like telehealth, have largely expanded our total available market and open the eyes to pharma and others that this is a really good channel to connect and share and help deliver the right information at the right time. So yes, great questions.

All right, everyone. At this time, it does look like that concludes our question-and-answer session. I'd now like to turn the call back over to Mr. Febbo. Please go ahead, sir.

Well, thanks, everyone, for joining the call today. We hope your main takeaway from our discussion is the understanding of our ability to generate tremendous value for our shareholders and everyone involved. And that this is thanks to our strong organic growth, our sustainable competitive advantage and our favorable market timing. But beyond all the numbers, we hope you appreciate that we continue to foster a unique culture, one dedicated to do something truly valuable and which will make a difference in people's lives from patients, to physicians and beyond.

We do not provide guidance as an early stage public company, and especially in this current environment. But given everything you've heard today, we hope you are optimistic as we are as we navigate this transformative period.

Now with that, let's wrap up the call. Good night. Thanks, Greg.

All right. Thank you, sir. And before we conclude today's call, I'd like to provide the company's safe harbor statement that includes important cautions regarding forward-looking statements made during today's call.

Statements made by management during today's call may contain forward-looking statements within the definition of Section 27A in the Securities Act of 1933 and amended in -- excuse me, Section 21E at the Securities Act of 1934 as amended. These forward-looking statements should not be used to make investment decisions. The words anticipate, estimate, expect, possible and seeking and similar expressions identify forward-looking statements. They may speak only to the date that such statements are made.

Such forward-looking statements in this call include statements regarding the estimation of total addressable market size, market penetration, revenue growth, gross margin, operating expenses, profitability, cash flow, technology investments, growth opportunities, acquisitions, upcoming announcements and the need for raising additional capital. They also include the management's expectations for the rest of the year and adoption of the company's digital health platform. The company undertakes no obligation to the publicly -- excuse me, to publicly update or revise any forward-looking statements, whether because of new information, future events or otherwise.

Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future events and actual results could differ materially from those set forth in, contemplated by, or underlying these forward-looking statements. The risks and uncertainties to which forward-looking statements are subject to, include, but are not limited to, the effect of government regulation, competition and other material risks. Risks and uncertainties to which forward-looking statements are subject to could affect business. And financial results are included in the company's annual report on Form 10-K for the fiscal year ended December 31, 2019. This form is available on the company's website and on the SEC website at sec.gov.

Before we end today's conference, I would like to remind everyone that this call will be available for replay starting later this evening, running through March 17. Please refer to today's press release for dial-in replay instructions available via the company's website at www.optimizerx.com.

Thank you for joining us today. This concludes today's conference call. You may now disconnect.