- Trxade Group provides a digitalized supply stream for pharmaceutical and health care services as part of its founding focus on empowering small, independent pharmacies that historically have struggled to compete against large corporate chains
- The company reported second quarter results July 27 that showed its revenues had grown 244 percent to a record $6.6 million in year-over-year quarterly results, triple the amount garnered during the first quarter of the year
- The global COVID-19 pandemic caught world markets by surprise during the spring, but Trxade’s emphasis on telemedicine and other online-accessible services positioned it as a visionary company well able to weather the health emergency
- The company has more than 50 percent penetration of its community pharmacy market nationwide and foresees further growth not only in member participation, but in fee revenue from sales-per-pharmacy metrics
The second quarter financial report of emerging pharmaceutical supplies and services provider Trxade Group (NASDAQ: MEDS) is a modern-moment testament to the hardiness of American entrepreneurial solutions under the most difficult of situations. While large segments of the population have faced easily understandable worries about the economic impacts of governmental and corporate policies responding to the potentially deadly and disabling coronavirus pandemic, many small businesses have found ways to not only survive, but to thrive.
“Revenues for the second quarter of 2020 increased 244% to a record $6.6 million, compared to revenue of $1.9 million in the same quarter last year. Sequentially, this represents an increase of 199% when compared to revenues of $2.2 million in the first quarter of 2020,” Trxade CFO Howard Doss told investors during the company’s first earnings call July 27 (http://nnw.fm/JbpUq).
Trxade’s large revenue increase was primarily due to its ability to deliver personal protective equipment at a crucial time when the pandemic was provoking a worldwide scramble to keep workers safe and businesses’ doors open to their customer bases. While the PPE-related revenue boost is unlikely to be sustainable at such a high percentage as the surprise of the pandemic’s emergence wears off, analysts have noted that Trxade’s strategy has kept it on a steady footing with a stable balance sheet, low debt and wide market penetration.
In fact, company executives have described the low-profit-margin PPE products as the reason the company’s margin dropped while revenues were increasing. CEO Suren Ajjarapu told AlphaStreet gross margin remained steady at 70 to 75 percent during the quarter in the company’s tech product sector, and that gross margins could improve once the revenue balance tips away from PPE products once the pandemic subsides (http://nnw.fm/Q9bF2).
Trxade designed its virtual platform to increase the purchasing power of small, independent pharmacies after observing the difficulties those community pharmacies faced in obtaining drug cohorts in a time-efficient and cost-effective manner. The pharmacies had “no insight or transparency into a fair market price or what others are paying for the same drug. Traditional wholesalers would provide unfavorable payment terms, (and) slow delivery,” Ajjarapu said.
The company’s B2B web-based market platform began drawing together the United States’ estimated 22,000 independent pharmacies and has now achieved more than 50 percent market penetration.
While the platform’s emphasis on transparency saves pharmacists the time-intensive tasks of having to manually compare prices across distributors and brings revenue to the company through a fee model similar to those employed by PayPal and Visa, Trxade has also expanded its own market presence through affiliated services such as those provided by its telemedicine subsidiary, a licensed online pharmacy, and a mobile application through which patients can order drugs online and get them delivered on the same day.
The affiliated services support Trxade’s push for a digitalized supply chain in the pharmaceutical space. The company’s strategies for driving growth are to increase the average purchases per pharmacy on Trxade’s platform, increasing fee revenue in the process, and to continue adding more pharmacies to the company’s network.
“I was particularly pleased with our growth in the second quarter compared to 2019, achieving record quarterly revenues, while continuing to grow average spend per pharmacy on our proprietary platform,” Ajjarapu said. “We continue to meet or exceed internal projections, while regularly attaining key milestone achievements. As a Founder of Trxade, I firmly believe that we are better positioned to create a sustainable value for our shareholders than any prior time in our history. I look forward to continued operational execution into the second half of 2020 and beyond.”
For more information, visit the company’s website at www.TrxadeGroup.com.
NOTE TO INVESTORS: The latest news and updates relating to MEDS are available in the company’s newsroom at http://nnw.fm/MEDS
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