InfuSystem sees growth potential in oncology

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Friday, March 8, 2019

MADISON HEIGHTS, Mich. – With one of its largest competitors changing its offerings in the oncology market, InfuSystem has a chance to pick up significant market share, said CEO Rich Dilorio on a recent earnings call.

“The feeling is that most of the customers they had are going to come to our site,” he said. “That should lead to material and sustained growth that’s expected to show up in the second half of this year.”

InfuSystem reported net revenues of $17.6 million for the fourth quarter of 2018, a 7% decrease compared to the same quarter in 2017. It reported net revenues of $67.1 million for 2018, a 5.5% decrease compared to 2017.

Increased market share, however, means investors can expect to see increased costs in the second quarter of 2019, as the company ramps up hiring and investments in infrastructure to support growth in the oncology market, said Dilorio, who sought to reassure investors.

“I realize that our long-term investors have heard this before—that the higher spending today will lead to growth in the future,” he said. “But this is a different InfuSystem. Over the last (18 months) we have communicated that our priority was on pursuing operating efficiencies and improving cash flows, and I believe we’ve delivered.”

To that end, the company reported $11.4 million in operating cash flow in 2018, an increase of 48% compared to 2017, driven by an improvement in profitability by $2.8 million, primarily due to net revenue growth and decreased selling, general and administrative costs; and an improvement in working capital net inflows of $900,000, primarily due to increased accounts receivable collections.

The company is also banking on InfuSystem Mobile, a patient safety app it debuted in May 2018, to help it grow market share. It connects patients with the infusion provider’s products, expertise and registered nurses.

“The rollout is going well as we continue to set the standard for patient safety,” said Dilorio. “Anecdotally, we hear tremendous feedback from not just the clinicians but the patients themselves. It’s completely changed the oncology market.”