The Company provides healthcare information technology solutions and pharmacy benefit management services to the pharmaceutical supply chain in the US and Canada.
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Systems Xcellence Inc. (SXC) is involved in the business of providing healthcare information technology solutions and services primarily in U.S. and Canada. It offers pharmacy benefit management services and software products to different variety of customers in the pharmaceutical supply chain, though payor customers that include managed care organizations, blue cross organizations and government agencies, contribute over 60% to the revenue tally. SXC’s total revenue comprises of inflows from transaction processing, maintenance, systems sales, and professional services. The transaction processing and maintenance generate about 65% of the revenues, and as they are recurring in nature, it gives a level of certainty to the future cash flows.
The influence of IT on the pharmaceutical supply chain is witnessing a growing influence. With approximately more than 3.6 billion pharmacy prescriptions written in U.S in a year, the potential for providing specific software and solutions is robust. Moreover, an aging population base, rising drug prices, and increased advertisings are having a positive impact on the industry, creating a possible market opportunity of around $4.5 billion annually.
SXC is currently observing a strong performance, with revenues rising by over 50% due to growth in the Transaction Processing, Maintenance, Professional Services and System Sales segments. Net Income also more than doubled as a result of improved margins. Looking ahead in 2007, the transaction processing volumes are expected to be strong, leading to sturdy recurring revenues for the company. Moreover, the strong fundamentals of the pharmaceutical industry, the growing adoption of IT for pharmaceutical benefits management, and growing volumes of customer base, makes SXC a healthy investment.