VOLUNTIS: too early, too optimistic, too ambitious!

The company created seventeen years ago presents itself as a “digital biotech”, a sector in vogue on the American stock markets and which as a result obtains very generous valuation ratios. In fact, they are software publishers designed to help patients follow their treatments for chronic diseases, heavy treatments such as cancer.

Authorisations are required because of the impact on health, as medical devices, the risk being in the delivery of care. These schemes may be reimbursed to a greater or lesser extent depending on the country and health systems. They can only be issued on medical prescription. This is actually the only difference with a traditional publisher. The barrier to entry is not that of a conventional biotech or pharmaceutical.

The basic principle put forward by society is that prescriptions are poorly followed up due to painful side effects (in the case of cancer) or fatigue (need for continuous daily monitoring).

The company now has two software programs for type I and type II diabetes. They allow remote monitoring via a web portal allowing follow-up by the doctor to adjust the insulin dose and manage side effects. The patient sends their blood glucose levels and insulin intake frequency. The device works for all insulin brands and is authorized in France by the Haute Autorité de Santé. According to initial clinical data, 80% of patients would reach their glycated hemoglobin target at six months of treatment follow-up compared to only 40% without the software.

In France, the company has an exclusive agreement with Sanofi, which distributes it with its insulin Lantus, Sanofi’s flagship product. Voluntis will receive 30% royalties on the sales of the device. Another example of sources of income is the agreement with an American mutual insurance company, the only one at the moment, but which is rich in lessons, even if it is a small structure on an American scale with 850,000 policyholders. Insured persons using insulin on WellDyne Rx’s list will systematically be prescribed the VOluntis device. Indeed, proper compliance with diabetes treatment would result in a saving of $4,690 per year because complications would be avoided.

In addition, the company is developing similar devices for oncology to improve the monitoring of side effects that often lead to discontinuation or inadequate monitoring of therapy.

The company, which has raised more than €43 million since its creation, raises €32 million in funds for its initial public offering. In 2017, the company posted revenues of 8MM which are milestone payments by its partners and the annual loss amounts to 10M. This means that the fundraising will represent just under two years of operation at this rate. EBITDA would be in balance in 2020, or even positive. The company aims for a turnover of 50 million euros in 2021, which would allow it to achieve operational balance “from 2022”.

We are not in a position to comment on these figures, as no financial analysis has been distributed except to a few referenced persons, as is now the practice despite Europe’s desire to make progress in terms of market information and efficiency and its Mif2 text. This practice reminds us of the transactions made under the columns by the “wet feet” at the Palais Brongniart not so long ago. Except that this practice of the unregulated market is now protected by lawyers.

Apart from the absence of financial information, the following reservations lead to strong reservations about the advisability of subscribing.

First of all, this assumes that the patient is equipped with a smartphone and is able to use it.

Then, what will be the degree of adoption of the system? Once adopted, how long will the patient comply with this discipline? It is striking to note that at the time of the connected objects, the patient must read his blood sugar level and then transfer it to his smartphone. Tedious and not very modern. For example, how many people persist in transferring data to a paper document? Why should it be different with this device?

What about the doctor’s remuneration for the follow-up? In France, remuneration is based on consultations. However, it must be acknowledged that we finally have a more modern, pragmatic and professional Minister of Health who is ready to modernize a system that is based on outdated economic analysis. There are fewer and fewer general practitioners and less and less time.  Assuming that the numerus clausus is removed, the situation will not improve all at once.

The current Facebook scandal is a timely reminder of the importance of confidentiality and the value of health data. There is a real risk here.

Finally, if diabetes is THE disease of the 21st century, it is not certain that measures or new treatments will not be able to contain it. In addition, there are competing systems including the connected pump. Insulin sensors, which are currently very popular with patients, the first concerned and ultimately decision-makers, provide information on the insulin dose to be taken. Without violating data confidentiality and in a way that diabetics consider simple.

If we believe in this project, it is certainly too early to judge its potential success. Especially since the valuation is ambitious with a market capitalization of 128 M now for a turnover of 50 M targeted in 2021.

To early, too ambitious, too expensive.

Antoine NODET

Antoine NODET

Antoine NODET, analyste financier de formation, 30 ans de pratique des marchés financiers, conseille les entreprises dans leur stratégie financière et les aide dans leurs problématiques d'évaluation et de levée de fonds. De formation franco-américaine, il est diplômé d'intelligence économique de l'IHEDN et enseigne au CNAM et à L'ELSLCA ainsi que dans différentes formations à l'international.


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