These 2 telehealth companies should unite


Last week, as rumors circulated about PayPal funds maybe acquire Pinterest, some contributors had a discussion of other possible mergers they would like to see. Taylor Carmichael nominated Proximity (NYSE: DOCS) and OptimizeRx (NASDAQ: OPRX) like two companies that fit together well in the telehealth space.

This episode of “The 5” was recorded on October 21.

Taylor Carmichael: I love the telehealth space, I am a big fan of telehealth in general. I think there is going to be a big transition for our society because the Internet is faster, faster, cheaper. I think more and more healthcare is going to move online and this is transforming healthcare more. The internet has been around for 20 years, 25 years, but it continues to make these changes.

Two companies that I really love about telehealth, one of them is Doximity, just went public this year. DOCS is their ticker. Doximity is fundamentally the Facebook health care, the health care LinkedIn. Eighty percent of physicians are on the Doximity platform, 90% of medical students are on the Doximity platform. It’s a huge networking site for healthcare, for doctors, and they have three businesses that they run from their website. One is LinkedIn for people in the health care industry looking for a job, that networking thing. You don’t go to Facebook and you don’t go to LinkedIn, you go to Doximity because that’s where they all are. The other thing they do is they do telehealth so they are competing with Teladoc and they have made many more telehealth visits than (Teladoc) in the past year. This is actually why I entered the stock because I was just blown away.

They deployed Dialer, it’s called Dialer. They deployed it at the start of the COVID pandemic. The doctors on their platform love Dialer because it allowed them to do telehealth through this network with their real patients. It protected them, protected their privacy so that patients couldn’t call them in the middle of the night or whatever. It was the other. Then, of course, the third activity is to have this Facebook-like activity where drug companies and other people can contact doctors and other medical professionals. The advertising business, monetizing all those medical eyeballs. It’s a big part of Doximity’s plan.

OptimizeRX is another much smaller telehealth company that I own both to warn you about, I guess, my own bias. But I like both of these actions. Optimize is much smaller, but they focus on a different area than Doximity. OptimizeRX focuses on electronic health records. Electronic health records are the things your doctor sees when they look at their iPad. Virtually all of your medical records will be online, but there is no Microsoft in this area. There are about 500 or 600 software vendors or a thousand. There are just a ton of little ones. OptimizeRX sets up a whole network. They put it together. I think it’s like 60% or 70%. 100 of physicians have reach in this electronic health network. Maybe the idea is to give a little link to a Harvard study when the doctor looks at his notes on this new drug so that pharmaceutical companies can reach a doctor during this workflow without interrupting their workflow and bring new ones – because doctors always have to keep abreast of new things, new studies, new drugs, new things. Optimize is a specialist in this field. And I thought, wow, these two companies would really fit into Doximity’s wheelhouse because it’s all about connecting, and connecting to healthcare, and reaching out to the doctors. That would be my suggestion.

But I agree with you, I don’t know if anyone is listening to me [laughs] but both stocks actually did very well. In fact, OptimizeRx did better. I think it’s roughly doubled this year. They’re still small, I think it’s a billion (market cap). It’s a very small business. Doximity is a lot bigger, but they could be a good combo.

Jason Hall: It’s interesting because it’s one of those spaces where there are only dozens and dozens of companies doing these things. The potential for consolidation is enormous throughout this space. It’s an interesting mix there, an interesting potential mini-power, Taylor.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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