Quipt Home Medical Corp. (Nasdaq: QIPT) continues to see improvements across its operations, despite unique challenges that 2024 has presented, such as the Change Healthcare cyberattack and aftermath.
Company leaders spoke about Quipt’s progress and shared their vision for the future during a fiscal third-quarter earnings call on Aug. 15. In particular, Quipt executives highlighted gains in the company’s respiratory business and its overall setup volumes, while also minimizing the impact of GLP-1 medications, prescribed to treat diabetes and in some cases, used for weight loss.
“At this time, respiratory care accounts for approximately 80% of our product mix, showcasing our ongoing commitment to serving the needs of patients with pulmonary and cardiovascular diseases,” CEO and Chairman Gregory Crawford said on the call. “With our ongoing dedication to patient care and the scale we are achieving, we are poised to capitalize on the expanding need for respiratory care delivered in the home setting.”
Cincinnati-based Quipt offers in-home monitoring and disease management services, specializing in comprehensive respiratory solutions for patients within the U.S. health-care system.
In recent years, the company has shifted its focus toward patients with heart or pulmonary diseases, sleep disorders, mobility limitations and other chronic health conditions.
Quipt also reported a significant year-over-year increase in the number of patients served.
During the first nine months of 2024, Quipt served 270,087 unique patients, a 12.9% increase over 239,146 patients during the same timeframe last year.
There was also a surge in unique setups and deliveries. Specifically, Quipt completed 641,786 unique setups and delivered during the first nine months of 2024, as compared to 547,038 during the same stretch of time last year – a 17.3% increase.
Respiratory resupply setup also increased by 10.8% on a year-over-year basis.
Quipt reported Q3 revenue of $64 million, marking a 6.1% year-over-year increase compared to $60.3 million in Q3 2023. The company’s revenue for the nine months ended June 30, 2024, reached $193.3 million, a 21.4% increase compared to the prior period.
Sleep apnea and GLP-1 drugs
Crawford said he is proud of the company’s improvement despite challenges, including the end of Medicare’s 75/25 blended relief rate, the Change Healthcare cyberattack and the withdrawal of Medicare Advantage members.
“We have observed strength in our referral patterns across our product offerings in real time, which has helped mitigate the impact, and we anticipate a return to historic levels of organic growth in time,” he said. “Turning to our sleep business, as it relates to the continued emphasis on GLP-1s, we have not seen any negative impact from GLP-1s whatsoever.”
In line with competitors at ResMed (NYSE: RMD), Crawford said that Quipt’s sleep apnea business continues to perform well, with no negative impact observed from the introduction of GLP-1 drugs, which are increasingly being prescribed off-label for sleep apnea.
“GLP-1 drugs are really driving more people into the health-care system,” he said. “Ultimately, they’re not just going to address their weight problem; they’ll take care of everything they need to in order to live a healthier, happier life.”
Strategic focus on M&A
The company is actively identifying synergistic acquisition candidates that meet stringent criteria, Crawford said. He noted that the recent acquisition of a “larger peer” in the industry underscores the significant valuation gap that Quipt currently faces in the marketplace compared to its fundamentals.
The company has a strong track record of successful integrations, having incorporated 19 acquisitions since 2018, contributing more than $150 million in revenue, he added.
“We anticipate that dislocation will occur in the marketplace due to M&A activity, leading to organic growth opportunities that we are prepared to take advantage of, allowing us to capture additional market share,” he said.