IN the past year since Clearbridge Health was listed on the Singapore Exchange's Catalist board in Dec 2017, the healthcare group has been busy.
Starting in January, it acquired a 65 per cent stake in Philippines-based Marzan Health Care, a comprehensive ambulatory medical centre which also owns and operates a diagnostic centre in Manila, providing a wide range of healthcare services. Then in April, Clearbridge Health took an effective 55 per cent stake in renal care provider PT Tirta Medika Jaya (TMJ) in Indonesia. Since the acquisition, the number of TMJ's joint operations agreements with public hospitals has increased to 28 from 15, and is expected to increase further to about 50 by the end of 2019.
Its subsidiary SAM Laboratory also signed a memorandum of understanding in August for a proposed subscription of a controlling stake in Indo Genesis Medika, which will allow the group to operate diagnostics laboratories in Indonesian public hospitals under joint operations contracts.
The company is rapidly penetrating the healthcare systems in these markets in a quest to provide quality, low-cost healthcare. It deals specifically in precision medicine, which aims to improve clinical outcomes through more precise medical technologies that can make diagnostics more accurate and treatments more effective.
For instance, technologies that identify potential for chronic diseases can help patients arrest them with appropriate lifestyle changes, and reduce the likelihood that they will end up with multiple chronic diseases in old age and have to take cocktails of drugs to manage them.
However, while precision medicine is particularly useful for tackling such problems in ageing populations like Singapore's, the high cost of setting up specialised facilities and encouraging adoption of these new technologies can make widespread deployment difficult, executive director and chief executive officer Jeremy Yee told The Business Times.
The challenge then is to choose a strategy that balances business viability with the company's core mission.
"Even though profit is important for a private healthcare player, clinical outcomes are what drives the initiative of healthcare," said Mr Yee.
"As an industry, healthcare companies are typically very much focused on creating stakeholders' value rather than shareholders' value. With stakeholders' value, you deal with the government, the patient, education of medical professionals, and clinical outcomes which are difficult to quantify using profits or dollars and cents. (But) that's what we focus on."
Clearbridge Health's plan is to focus on establishing partnerships with primary healthcare providers and health systems in populous countries and cities with high nexuses of demand. For instance, its alliance with TMJ made sense because the renal care provider works with multiple public hospitals, where large volumes of patients walk in for medical services on a regular basis without any need for marketing.
Clearbridge Health assists in managing the facilities and helping hospital staff and specialists to administer quality care to the patients. In return, it enjoys lower operational costs when it deploys its medical technologies to patients in the existing facilities.
While the company added a second clinic in Singapore in early April, it will not be expanding aggressively here. Saying that he finds the local healthcare space too crowded, Mr Yee will steer Clearbridge Health towards reaching the entire South-east Asian region, China and India.
When choosing countries to expand into, Clearbridge Health targets highly populous countries with youthful populations and a growing middle income group, which usually translates to greater demand for quality healthcare. Mr Yee said the markets of Vietnam, Indonesia and the Philippines are the most promising ones it will focus on for now.
Clearbridge Health has also spent much of the past year navigating a pivot from its former business as a technology accelerator to become an operating healthcare entity.
To do so, it divested several non-healthcare assets and is working to enhance the remaining healthcare assets like its cancer diagnostics business Clearbridge Biomedics, which was recently renamed Biolidics as it seeks its own listing on the Catalist board. It recently partnered Hunan Agen Medicine Laboratory Technology Co in China to start clinical validation for its main product ClearCell FX1 System, a medical device used to perform liquid biopsies.
Clinical validation of this product will allow Biolidics to reach a larger market and provide oncologists with a quicker and less invasive way of monitoring cancer mutations and responses to treatment, using blood samples instead of tissue samples. The laboratory partnership will also serve as an entry point into China's healthcare scene in future, Mr Yee said.
Another asset, Clearbridge Biophotonics, has attracted attention from venture capitalists in the US and collaborative work with Israeli digital microscope developer Scopio Labs Ltd for its cell imaging solutions, which make use of algorithms to read cells on multiple plates at once. Clearbridge Biophotonics obtained the technology from the California Institute of Technology and has licensed it to two other companies, indicating its potential for commercial use.
Mr Yee said Clearbridge Health continues to look out for new technologies it can acquire and deploy, as part of its low-cost strategy. He describes the company as "agnostic" to the technologies it deploys, as long as they are clinically viable, licensed, internationally accredited and scalable. The technologies are selected based on how feasible it would be to deploy them, with some constraints being high costs or unsuitable demographics in the target market.
"We don't spend time reinventing the wheel," he said. "When you come up with a technology of your own, you have to try your very best to recover the costs within the lifetime of the patent. We don't have that extra layer of costs, so when a vendor or technology partner gives us a price, we just price (the tech) a certain margin up and that's it. It's essentially capex-free."
In its latest third-quarter results, Clearbridge Health's revenue was S$2.05 million compared with S$90,000 a year ago, while net loss narrowed to S$2.7 million from S$3.2 million. It will continue to seek out inorganic targets even as its organic businesses continue to grow, said Mr Yee. "Our revenues have been consistently increasing quarter-on-quarter and our Ebitda (earnings before interest, tax, depreciation and amortisation) loss has been consistently narrowing, so it's just a matter of time that we'll break even," he said.
"I project that hopefully by sometime next year, we will cross the inflection point and become profitable."