HealthBeacon puts an €11m question to its brave investors

A statement issued two weeks ago revealed recurring revenue is far below what was previously forecast, its CEO is gone, and it needs to find another €11m to fund costs over the next two years or so.

A trading update last week tried to put a brave face on things, saying the firm is making progress with the roll-out of its technology. But the firm’s share price did not budge and is now down about 95pc since its IPO, just under two years ago.

This is not how things were supposed to go for HealthBeacon.

The Dublin-based company is focused on medical technology, with its flagship product being a ‘Smart Bin’ for people who self-inject at home.

Aimed at those suffering from conditions such as diabetes or multiple sclerosis, the product ensures patients keep on track with their medication routine and securely shares their treatment data with family, caregivers and healthcare providers.

The company’s listing on Euronext Dublin in December 2021 was a rare bright spot for an exchange which has been devastated by a series of high-profile departures. Making it better was HealthBeacon was an alumnus of Euronext’s ‘IPO Ready’ scheme, a six-month programme detailing the listing process for businesses.

While dozens of firms have graduated since the initiative began in 2015, HealthBeacon was the first to take the plunge and list on the Irish exchange, raising €25m in a move which valued the firm at just under €100m.

The move was hailed as a “milestone” transaction for the exchange, with hopes that it could serve as a beacon for other promising homegrown SMEs.

But investors have had a rough ride since. Shares, which first listed at €5.85, hovered around the €5 mark before an update in July 2022 when the company announced “unanticipated delays” in the supply of parts, which it said would reduce the number of ‘Smart Bins’ it produced that year.

Shares fell sharply to €2.80 – and kept dropping, hitting a low of €0.61 in March 2023.

Shares rebounded to €1.90 by July, something Jim Joyce, HealthBeacon’s founder and CEO, attributed to progress the company was making with securing partnerships in the US.

Joyce said it had reached deals with American pharmacy groups, whereby patients on certain types of medication would be offered the ‘Smart Bin’ product. He hailed this as a significant step forward.

​However, then came the September update.

HealthBeacon revealed Joyce had left, while also issuing a sales warning.

The firm had previously guided that it would have annual recurring revenue in the “mid-teen millions” by the end of 2023. However, the update revealed it now expects that to be just €3.2m.

HealthBeacon also primed that it will be looking for more cash: “To achieve cash break-even and scale at the pace now expected, the company has a gross funding requirement of approximately €11m over the next 18-24 months.”

Though the interim results showed sales to the end of June were flat year-on-year at €0.9m, the firm has assured investors it is making headway and said it is on track to secure €17m of recurring revenue by the end of 2024.

The key issue is now funding, and €11m is a lot to ask backers for, when the firm itself was valued at just under €4m at the time of writing.

Decision time, with HealthBeacon’s future in the balance.