Six years ago, driven by an intense passion to help eradicate heart disease and cancer, Dominick Sartorio, formed a consortium of professionals who shared his dreams and founded Millennium Healthcare (OTCPK:MHCC). To establish revenues and build a strong presence, Millennium began by helping physicians and healthcare organizations process complicated billings to Medicare and private insurance companies. Today, Mr. Sartorio is the CEO of Millennium Healthcare that is one of the fastest growing healthcare companies in the world.
Recently enacted, and effective January 1, 2014, the Affordable Care Act (Obamacare) provides that all preventative test costs shall not be applied to a patient's deductible for medical insurance, meaning that Medicare, private medical insurance, and reimbursement agents will now pay for 100% of the costs of these tests. This single change will create a tremendous surge in demand for early detection diagnostics and will make them available to millions of additional patients across the nation.
With the Affordable Care Act now in effect, medical costs and reimbursements are some of the most important items being addressed across the industry. It is also creating very high interest in healthcare stocks. For example, Castlight Health (NYSE:CSLT) just launched its IPO March 14th at $16 per share and it closed at $39.80, up $23.80 or 148% in one day. Castlight provides cloud-based software for enterprises in the United States. The company offers Enterprise Healthcare Cloud through a suite of applications that transforms complex data from various internal and external sources into transparent and useful information for employers and their employees and families. Total Castlight revenues last year were $13 million and its market cap is about $2.65 billion meaning that Castlight is selling at close to 200 times revenues.
Another example is AthenaHealth (NASDAQ:ATHN), a medical services company providing cloud-based services for records, billing, and communication to over 50,000 medical practices. Athenahealth is trading at close to $175 and supports a $6.7 billion market cap. With revenues of almost $600 million for the year ending 2013, Athenahealth is selling at about 10 time revenues.
Millennium's model is substantially different from Castlight and AthenaHealth. It focuses on increasing physician's revenue earning opportunities and helping them to cost-effectively provide the best possible healthcare with the best possible patient outcomes. For the following reasons, along with a well-established model, the number of offices and locations with Millennium placed products is anticipated to grow at a hyperbolic rate.
With hundreds of physicians' offices already contracted, and with potentially over one thousand additional offices in the sales cycle, Millennium is positioned to benefit greatly from the swelling need for their services and diagnostics devices. Millennium's back office support services and diagnostics products are second to none and are strongly aligned with the Affordable Care Act and the new ICD 10 reimbursement codes.
Millennium's Explosive Sales Curve
Now that Millennium has achieved a strong presence in a substantial number of physician practices and a growing line of novel diagnostic products, the Company is beginning to realize a potential growth rate that could exceed expectations. On March 10, 2014, Millennium announced that annual revenues could exceed $150 million as a result of the recent signing of 300 doctors' offices through Network Selling Agreements. These network agreements call for Millennium to provide two early detection diagnostic products: VasoScan and OralCDx to physician practices within these national networks.
The Company believes that not only are these potential annual revenues attainable but even surpass-able, as these network agreements are based on a minimum contracted usage of only 350 procedures per month, per office, per product. Furthermore, these current Network Selling Agreements are for the placement of only two of the Company's diagnostic products, and Millennium also has exclusive distribution agreements for additional products that the Company anticipates introducing to the markets at a later date. With such a large and captive marketplace (there are over 400,000 physicians in the U.S.), Millennium is positioned to grow at exponential rates.
Millennium's Preventive Diagnostic Devices
Millennium has acquired the exclusive marketing rights to preventative cardiovascular and cancer diagnostic devices and testing programs that are state-of-the-art. They are non-invasive; FDA cleared; can provide early detection of disease; are affordable and provide accurate results. The company has currently in-licensed the exclusive rights to VasoScan, OralCDx and DermCDx, and is continually evaluating other devices and testing programs that meet their high standards for inclusion into their growing pipeline.
VasoScan For Early Detection of Cardiovascular Disease
VasoScan is a breakthrough, FDA cleared, diagnostic assessment test for the early detection of cardiovascular disease. The procedure is non-invasive and uses a small LED clip and sensor that utilizes photodiodes placed on the finger. The test requires three minutes and is easily performed and integrated into the eleven-minute examination window when a technician takes a patient's vital signs while waiting to see the doctor. "This test will enable doctors to identify and assess high risk cardiovascular issues years in advance" says Chris Amandola, President of Millennium HealthCare.
With early detection using the VasoScan assessment test, a positive reading would be followed up with additional advanced imaging to further pinpoint the problem(s), and then further result in prompt treatment with the most cost-effective treatments and/or procedures available. When used as part of routine early detection and assessment programs, VasoScan has the potential to save millions of lives and billions of dollars.
Millennium Medical Devices, a wholly owned subsidiary of Millennium HealthCare, has secured the exclusive rights from Heart Smart to market and distribute the VasoScan device in the United States and began rolling out the first 150 units to its first customers in November 2013. The Company believes VasoScan could potentially become a Standard of Care with general practitioners, in conjunction with blood pressure and cholesterol testing in the assessment of cardiovascular disease.
OralCDx For Early Detection of Mouth Cancer
OralCDx is a highly accurate brush biopsy test kit that is completely non-invasive. It is used to test the small white and red tissue spots commonly found in the mouth and/or tongue to rule out precancerous change. According to the oral cancer foundation, close to 42,000 Americans will be diagnosed with oral and oropharyngeal cancers this year. This disease will cause over 8,000 deaths. Through the exclusive distribution agreement secured by Millennium Medical Devices, primary care physicians will now have available and be able to easily administer this test to their patients. OralCDx is FDA cleared and anticipated to be easily performed and integrated as a standard practice within the eleven minute examination window where a technician takes a patient's vital signs while waiting to see the doctor. Millennium Medical Devices has secured the exclusive distribution rights to OralCDx from CDx Diagnostics.
DermCDx For Early Detection of Skin Cancer
DermCDx is similar to OralCDx and is also a highly accurate brush biopsy test kit that is completely non-invasive. The DermCDx brush biopsy tests for potential cancers of the skin, such as basal cell carcinoma, which is currently the most common form of skin cancer. The test is FDA cleared and produces highly accurate results. When used as part of routine, early detection and assessment programs, DermCDx has the potential to save millions of unnecessary scalpel chunk biopsies where a physician surgically removes a substantial amount of tissue mass for examination and evaluation. Scalpel biopsies are surgical procedures that are performed at higher costs than a brush biopsy and can expose patients to infection, discomfort, and additional recovery time. The Company believes that the DermCDx can be easily performed and integrated as a standard practice within a physician's office when a technician takes a patient's vital signs while waiting to see their doctor.
At a time when physicians are being challenged by rising patient needs and falling revenues, Millennium Healthcare presents a compelling case to several hundred thousand physicians across the nation. According to the Kaiser Foundation, there are 397,130 primary care physicians, 437,639 specialist physicians, and a total of 834,769 physicians in the United States.
Millennium provides physicians with cutting edge, state-of-the-art early detection and assessment tests for cardiovascular disease and oral and skin cancers, while providing them with new and innovative ways to significantly increase their practice revenues and achieve optimal patient outcomes and results. Millennium has already secured and contracted with 300 physicians' offices, and that number is anticipated to grow significantly at a rapid pace throughout the year and beyond.
Millennium Healthcare has a market cap of $66 million and closed at $.98 per share on Friday, March 14, 2014.
Working capital and cash is a constant challenge for emerging companies, and Millennium has been no exception. However, as a result of the Company's recent customer growth and overall performance, Millennium's management team has successfully secured and raised $3 million in a private placement. The private placement consisted of 3,000,000 units in which each unit consists of one share of the Company's common stock, and one share of the Company's Series F Preferred Stock. The Series F Preferred Stock, with other preferences, rights and limitations, will pay a quarterly dividend of 10% of the Company's earnings before interest, taxes, depreciation and amortization and shall expire or be redeemable for $1.00 immediately after the holders of the Series F Preferred Stock have received an aggregate of $1.20 for every share of Series F Preferred Stock they hold.
Millennium has risk challenges typically associated with emerging, small-cap companies, including, but not limited to; inadequate capital reserves, not being able to raise adequate capital to further implement and/or execute its business plan, product risks, legal/compliance risks and potential change(s) in overall market conditions. However, with an established and well-known billing & coding service business, exclusive distributorship for breakthrough cancer and cardiovascular diagnostic and assessment products, ample capital reserves, a nearly debt free balance sheet, an experienced, dedicated management team, sales on the verge of exploding, and a market cap of only $66 million compared to Castlight's $2.6 billion plus and Athenahealth's $6.6 billion, Millennium Healthcare shares have been rising and appear to be positioned to continue rising along with projected sales and growth.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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