TRxADE HEALTH, Inc. (NASDAQ:MEDS) Q4 2022 Earnings Call Transcript

Surendra Ajjarapu: As you’re aware of that, Allen, that TRxADE Prime was started last year, we’re still trying to stabilize that model to understand so that we can give you a more accurate information going forward in a couple of quarters?

Allen Klee: Okay. And then maybe my last question. But if your salespeople talk to the independent pharmacies, what did I say is that the reason that they’re not buying more — I mean, they’re buying a small percent of what they could potentially buy from you guys. And what do you think are the reasons why they’re not buying more? And what are you focused on to try to maximize that.

Surendra Ajjarapu: It’s an excellent question. That’s what the TRxADE is focusing on that inorganic growth. As you are aware, average pharmacy that does like $3 million to $3.5 million annual revenue by anywhere between $0.25 million to $300,000 worth of goods. But the primary contracts are dictating them, how much they can buy through the secondary sources. That’s what we’re trying to change and reminding that the 10% to 15% or 10% to 20% that if they can bring it into our platform. So the two ways that we were trying to improve on adding the additional catalog to provide them not only the prescription drugs, the OTCs and stuff and providing the other technological tools, whether the DIR fees and so on and so forth. So we want to empower them the technology to the technology so that they can buy more to our platform.

Allen Klee: Okay. Got it. So then like going forward, is the way to look at the segments, you’ll have the TRxADE segment. You won’t have community specialty Integra, you’ll still have because that’s TRxADE Prime. And I guess other is probably not material. It’s until something gets decided with Bonum Health, is that the way to look at it?

Surendra Ajjarapu: Yes. Our 100% focus is now on the B2B, business to business. So it’s a marketplace and as well as Integra Pharma, correct.

Allen Klee: And Community, that goes away effective the second quarter of ’23?

Surendra Ajjarapu: Correct.

Allen Klee: Okay. Thank you so much. Appreciate it.

Surendra Ajjarapu: No problem.

Operator: Thank you. Our next question is from Howard Halpern with Taglich Brothers. Please proceed with your question.

Howard Halpern: Good afternoon, guys. In terms of the core TRxADE platform, what are you seeing in terms of the mix right now between branded and generics. And will that shift maybe more to generics help accelerate growth over the next couple of years?

Surendra Ajjarapu: Yes, great question, Howard. Yes, we’re currently the mix approximately 60% generics and 40% brand. That’s the reason our fees are low. But yes, that dynamic is changing to move more into the generics. Our goal is to reach up to 70% to 75% on the generic side and 45% on the brand.

Howard Halpern: Okay. And you’re not seeing any constraints like we had in the past with overseas manufacturing and such. Everything is back to more normal?

Surendra Ajjarapu: Yes, back to more normal because the COVID is — I wouldn’t say it’s gone, but at least the impact on the supply side is gone. So yes, it’s back to normal.

Howard Halpern: And in terms of looking at operating expenses, you’re obviously going back to the B2B, so you’d be able to streamline. Where should we see some of the streamlining acceptable being technology spend, professional fees, if you could –

Surendra Ajjarapu: Sure. More on the technology spend and a little bit on the professional spend to take it to the next level.

Howard Halpern: Okay. Thanks guys. Everything else has been asked and answered.

Surendra Ajjarapu: Thank you.