MedPeer operates in the medical care and healthcare fields. It has two core segments: the Doctor Platform segment, which is centered on MedPeer, a social media platform for physicians (74.2% of sales and 83.0% of operating profit in FY09/20), and the Healthcare Solutions segment, which focuses on health promotion and disease prevention (25.8% of sales and 17.0% of operating profit in FY09/20). In the past three fiscal years through FY09/20, the company’s total sales grew at a CAGR of 50.5% to JPY5.3bn and operating profit, at a CAGR of 137.6% to JPY1.1bn. The company reported an OPM of 20.8% in FY09/20 (+2.5pp YoY).

In the Doctor Platform segment, the company runs the MedPeer website, a doctors-only membership community where physicians can share reviews of drugs and other medical information. The website has a membership of over 140,000 physicians of various specialties. This number accounts for approximately 40% of Japan’s 300,000 physicians. The site also serves as a knowledge management tool, which gathers the knowledge and experience of doctors on the ground into a collective medical intelligence*. The company generates revenue from pharmaceutical companies by offering access to the accumulated information and by providing ad placement opportunities on the MedPeer site.

It generates additional revenue by leveraging its collective medical intelligence to support pharmaceutical companies in their planning, execution, and management of marketing strategies, as well as creating content for pharmaceutical companies and medical device makers (subsidiary COLBO Co., Ltd.). Other sources of revenue include research outsourcing services, such as online physician surveys on behalf of pharmaceutical companies, and a job information service referring doctors using the site to physician placement agencies. The company refers to these services as its Collective Intelligence Platform. The company receives compensation associated with the Collective Intelligence Platform from clients such as pharmaceutical companies Pfizer Japan Inc. (NYSE, PFE) and Takeda Pharmaceutical Company Limited (TSE1: 4502).

In addition to the elements above, the company is expanding sales of kakari (a support service within the company’s Doctor Platform segment that helps pharmacies become family pharmacies) through a business alliance with Nichi-Iko Pharmaceutical Co., Ltd. (TSE1: 4541). Furthermore, the company launched kakari for Clinic through Nichi-Med, Inc., a joint venture formed in collaboration with Nichi-Iko Pharmaceutical, in September 2020. Nichi-Med runs the marketing, customer support, and other operations of kakari for Clinic. The company refers to these two services as its Primary Care Platform. It receives compensation for these services from family pharmacies and clinics.

The company acquires earnings in its Healthcare Solutions segment from corporations and health insurance associations (effectively a B2B2C business model). Subsidiary Mediplat Inc. is operating the company’s Industrial Health Support platform (comprising “first call,” which provides online medical consultations with doctors through online chat and videoconferencing) and, through collaboration with companies such as Sugi Pharmacy Co., Ltd. and Nikkei, its Lifelog platform. Through first call (JPY20,000–JPY120,000 or more per month based on plan and size of workforce), the company concludes agreements with companies and health insurance associations (573 agreements as of September 30, 2020), providing corporate employees with online medical consultations, online interviews with industrial physicians, stress checks, and examination management.

Meanwhile, subsidiary FitsPlus Inc. forms agreements with health insurance associations and dispenses specified health guidance services either by dispatching dieticians from its own network to meet with employees of these associations on site at their offices or by holding face-to-face interviews using information and communication technology. The company refers to these services as the Preventive Healthcare Platform segment.

According to MedPeer, it is currently the only company operating in both the healthcare and medical care fields. Its business is doctor-centered, whereas rival online medical platforms tend to be supplier (pharmaceutical companies)-oriented. The company was established in December 2004 and listed on TSE Mothers in June 2014. Later, in September 2020, it moved to the First Section of the TSE. Representative Director, President, and CEO Yo Iwami (M.D., Ph.D.) still works on the ground as a physician once a week. The company had about 225 employees (consolidated basis) as of end-September 2020.

Trends and outlook

FY09/21 results: sales were JPY7.4bn (+40.0% YoY), operating profit was JPY1.8bn (+61.5% YoY), recurring profit was JPY1.8bn (+60.3% YoY), and net income attributable to owners of the parent was JPY1.3bn (+78.2% YoY).

Sales improved 40.0% YoY. Sales in the Doctor Platform segment were up 46.5% YoY. Orders and sales expanded, mainly in drug assessment bulletin board and webinar operations in line with the progress of digital transformation (DX) initiatives at the company's clients. The acquisition of the medical student learning support platform "Minkore!" resulted in the membership base expanding to about 140,000. Sales in the Healthcare Solutions segment were up 21.4% YoY. In addition to growing demand for industrial health programs contributing to a steady expansion in the number of "first call" contracts, specified health guidance revenue also grew on the expansion of the number of contracted health insurance companies and increased utilization of the company's proprietary online consultation model.

Operating profit improved 61.5% YoY. Operating profit was up 48.2% YoY in the Doctor Platform segment and 6.4% YoY in the Healthcare Solutions segment. With GPM dipping 0.7pp YoY to 65.3% and the SG&A to sales ratio dropping 3.9pp YoY to 41.3%, OPM improved 3.2pp YoY to 24.0%.

The company’s FY09/22 forecast calls for sales of JPY10.5bn (+41.2% YoY), operating profit of JPY2.5bn (+40.1% YoY), recurring profit of JPY2.5bn (+39.1% YoY), and net income attributable to owners of the parent of JPY1.8bn (+36.8% YoY).

For the Doctor Platform segment, the company forecasts sales of JPY2.4bn (+44.2% YoY). In addition to improving the content of its website to make it more attractive to physicians, the company intends to develop the "Minkore!" business to attract younger physicians and increase the service utilization. It aims to further expand its physician membership base through these efforts and improve the advertising value within the MedPeer site. In line with its policy of advancing the infrastructure for pharmaceutical marketing and responding to changes in the marketing activities of pharmaceutical companies, the company is strengthening services contributing to improved medical representative productivity, including MedPeer Talk. The company is also focused on expanding earnings by working with pharmaceutical companies to create new marketing styles that meet the specific needs of individual physicians. Finally, the company also aims to create a new revenue stream by expanding sales in the “kakari” app service for pharmacies and “kakari for Clinic” app service for clinics through partnerships.

For the Healthcare Solutions segment, the company forecasts sales of JPY2.4bn (+44.2% YoY), aiming to attract more corporate users of its one-stop industrial health support service “first call.” In addition, it will work to expand the lifelog platform service, cultivate new partner companies and develop new services, and establish a patient base. It will also launch businesses that utilize the data gathered from these services. In specified health guidance services, the company will promote the shift to online services and deepen collaboration with medical institutions and health check providers to expand the business.

MedPeer has not been announcing targets under a medium-term management plan. However, the company stated that it would aim for FY09/23 sales of JPY15.0bn when announcing Q3 FY09/20 results. The company previously indicated that it would aim for market capitalization of over JPY50.0bn in 2020, which it has already achieved. MedPeer’s market capitalization exceeded JPY100bn on September 30, 2020.

The main growth drivers are the Collective Intelligence Platform segment (Doctor Platform segment), which is primarily supported by a foundation of member doctors and a client base of pharmaceutical companies; the Preventive Healthcare Platform segment (Healthcare Solutions business); and the Primary Care Platform segment (Doctor Platform segment; launched in Q3 FY09/19), which is positioned as a third earnings pillar. The company plans to accelerate growth by establishing and forming a business partnership with Nichi-Med, Inc., a joint venture formed with Nichi-Iko Pharmaceutical Co., Ltd., from FY09/21 onward. MedPeer forecasts sales of JPY15.0bn in FY09/23 (versus FY09/20 sales of JPY5.3bn) to be achieved through the growth of its three main businesses.

Strengths and weaknesses

MedPeer’s strengths include the aggregation of physicians’ review data, being a pioneer of integrated medical and health platforms, and specialized professional content, because the data is supplied by doctors and other health professionals. Weaknesses include not being the first platform in either the medical or health field, low brand recognition among consumers (which the company is addressing through collaborations with Sugi Pharmacy and Nikkei, but has still not been fully established), and, despite rapid growth, its small scale (the company is not in an advantageous position in terms of economy of scale and its ability to negotiate with major pharmaceutical companies).

Key financial data

Income statement		FY09/12	FY09/13	FY09/14	FY09/15	FY09/16	FY09/17	FY09/18	FY09/19	FY09/20	FY09/21	FY09/22
(JPYmn)		Parent	Parent	Parent	Parent	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Est.
Sales		325	575	958	1,040	974	1,559	2,199	3,046	5,311	7,435	10,500
	YoY	134.1%	77.1%	66.7%	8.5%	-6.4%	60.1%	41.1%	38.5%	74.4%	40.0%	41.2%
Gross profit		271	495	850	890	752	1,177	1,632	2,117	3,506	4,855
	YoY	-	82.7%	71.8%	4.7%	-15.5%	56.4%	38.7%	29.8%	65.6%	38.5%
	Gross profit margin	83.4%	86.1%	88.7%	85.6%	77.3%	75.5%	74.2%	69.5%	66.0%	65.3%
Operating profit		23	89	265	136	58	82	368	558	1,105	1,784	2,500
	YoY	-	291.7%	196.8%	-48.5%	-57.7%	42.6%	346.8%	51.8%	97.9%	61.5%	40.1%
	Operating profit margin	7.0%	15.5%	27.6%	13.1%	5.9%	5.3%	16.7%	18.3%	20.8%	24.0%	23.8%
Recurring profit		22	88	245	136	51	66	379	555	1,131	1,812	2,520
	YoY	-	294.1%	177.6%	-44.6%	-62.3%	28.8%	474.9%	46.3%	103.7%	60.3%	39.1%
	Recurring profit margin	6.9%	15.4%	25.6%	13.1%	5.3%	4.2%	17.3%	18.2%	21.3%	24.4%	24.0%
Net income		22	114	151	70	24	-363	206	395	726	1,293	1,770
	YoY	-125.9%	412.9%	32.6%	-53.3%	-66.5%	-1,638.6%	-156.8%	91.4%	83.9%	78.2%	36.8%
	Net margin	6.8%	19.8%	15.7%	6.8%	2.4%	-	9.4%	13.0%	13.7%	17.4%	16.9%
Per-share data (JPY)
Shares issued (year-end)		14,670,000	14,670,000	16,822,000	16,862,000	17,333,900	17,468,900	18,386,100	19,762,900	21,743	21,574.2	-
EPS		1.5	7.7	9.9	4.2	1.4	-20.9	11.5	21.0	35.0	60.1	82.1
EPS (fully diluted)		-	-	9.5	3.9	1.3	-	11.3	19.8	32.7	56.3	-
Dividend per share		-	-	-	-	-	-	-	-	-	-	-
Book value per share		4.3	12.0	62.8	67.0	69.7	46.6	89.1	164.1	248.8	310.5	-
Balance sheet (JPYmn)
	Cash and cash equivalents	66	121	951	946	850	946	1,824	3,129	4,703	5,701
Total current assets		147	318	1,229	1,170	1,140	1,354	2,332	3,662	6,103	7,243
Tangible fixed assets		5	4	4	55	48	42	42	62	104	197
Investments and other assets		13	14	54	57	339	89	120	153	471	619
Intangible assets		1	0	0	166	227	127	117	133	449	480
Total assets		166	336	1,288	1,447	1,754	1,611	2,570	4,010	7,127	8,538
	Accounts payable	-	-	-	-	-	6	7	7	51	87
	Short-term debt	10	22	-	31	77	140	138	54	69	56
Total current liabilities		95	134	231	178	217	534	648	497	1,306	1,337
	Long-term debt	7	25	-	109	301	231	152	98	134	80
Total fixed liabilities		7	25	-	124	316	251	153	98	239	221
Total liabilities		103	159	231	302	533	786	801	596	1,545	1,558
Total liabilities and net assets		166	336	1,288	1,447	1,754	1,611	2,570	4,010	7,127	8,538
Total interest-bearing debt		17	48	-	140	377	371	291	152	203	136
Cash flow statement (JPYmn)
Cash flows from operating activities		12	28	212	90	4	179	344	374	930	1,361
Cash flows from investing activities		-18	-3	-44	-253	-368	-52	-114	-139	-469	-345
Cash flows from financing activities		-10	31	662	158	258	-46	648	1,070	1,111	-15
Financial ratios
ROA (RP-based)		16.4%	35.2%	30.2%	9.9%	3.2%	3.9%	18.1%	16.9%	20.3%	23.1%
ROE		42.7%	94.9%	24.4%	6.4%	2.0%	-35.9%	16.8%	16.2%	16.9%	21.5%
Equity ratio		38.0%	52.6%	82.0%	78.1%	68.9%	50.5%	63.7%	80.8%	75.0%	78.5%

Source: Shared Research based on company data
Note: Figures may differ from company data due to differences in rounding methods. Per-share data are adjusted for stock splits.

Segment sales and profit				FY09/12	FY09/13	FY09/14	FY09/15	FY09/16	FY09/17	FY09/18	FY09/19	FY09/20	FY09/21	FY09/22
(JPYmn)				Parent	Parent	Parent	Parent	Cons.	Cons.	Cons.	Cons.	Cons.	Cons.	Est.
Sales				325	575	958	1,040	974	1,559	2,199	3,046	5,311	7,435	10,500
	YoY			134.1%	77.1%	66.7%	8.5%	-6.4%	60.1%	41.1%	38.5%	74.4%	40.0%	41.2%
	Doctor Platform			325	575	958	1,040	974	1,273	1,794	2,283	3,939	5,771
			YoY	134.1%	77.1%	66.7%	8.5%	-6.4%	30.7%	41.0%	27.2%	72.5%	46.5%
			% of total	100.0%	100.0%	100.0%	100.0%	100.0%	81.6%	81.6%	75.0%	74.2%	77.6%
		Collective medical intelligence service		244	493	882	961	882	na	na	na	na	na
			YoY	194.0%	102.0%	78.9%	8.9%	-8.2%	na	na	na	na	na
			% of total	75.2%	85.8%	92.0%	92.4%	90.6%	na	na	na	na	na
		Physician job listing service		81	81	76	79	92	na	na	na	na	na
			YoY	44.6%	0.0%	-5.8%	3.8%	15.8%	na	na	na	na	na
			% of total	25.0%	14.1%	8.0%	7.6%	9.4%	na	na	na	na	na
	Healthcare Solutions			-	-	-	-	-	287	405	762	1,372	1,665
			YoY	-	-	-	-	-	-	40.8%	88.4%	79.9%	21.4%
			% of total	-	-	-	-	-	18.4%	18.4%	25.0%	25.8%	22.4%
Operating profit				23	89	265	136	58	82	368	558	1,105	1,784	2,500
	YoY			-	291.7%	196.8%	-48.5%	-57.7%	42.6%	346.8%	51.8%	97.9%	61.5%	40.1%
	Operating profit margin			7.0%	15.5%	27.6%	13.1%	5.9%	5.3%	16.7%	18.3%	20.8%	24.0%	23.8%
	Doctor Platform			23	89	265	136	na	345	594	820	1,328	1,968
			YoY	-	291.7%	196.8%	-48.5%	na	na	72.1%	38.0%	61.9%	48.2%
			% of total	100.0%	100.0%	100.0%	100.0%	na	172.0%	109.6%	89.7%	83.0%	87.2%
			Segment profit margin	7.0%	15.5%	27.6%	13.1%	na	27.1%	33.1%	35.9%	33.7%	34.1%
	Healthcare Solutions			-	-	-	-	na	-145	-52	94	272	289
			YoY	-	-	-	-	-	-	-	-	188.9%	6.4%
			% of total	-	-	-	-	-	-	-	10.3%	17.0%	12.8%
			Segment profit margin	-	-	-	-	-	-	-	12.4%	19.8%	17.4%
	Segment profit adjustments			0	0	0	0	na	-118	-174	-356	-495	-474
By main customers
Pfizer Japan Inc.				42	101	126	130	114	na	na	-	-	-
	YoY			-	138.4%	24.8%	2.9%	-12.5%	-	-	-	-	-
	% of total			13.1%	17.6%	13.2%	12.5%	11.7%	-	-	-	-	-
Takeda Pharmaceutical Co., Ltd.				na	na	na	na	100	158	269	-	-	-
	YoY			-	-	-	-	-	58.1%	70.0%	-	-	-
	% of total			-	-	-	-	10.3%	10.1%	12.2%	-	-	-
Otsuka Pharmaceutical Co., Ltd.				5	71	120	116	na	na	na	-	-	-
	YoY			-	1,321.7%	68.8%	-3.0%	-	-	-	-	-	-
	% of total			1.5%	12.4%	12.5%	11.2%	-	-	-	-	-	-
Sanofi K.K.				25	61	73	na	na	na	na	-	-	-
	YoY			-	147.1%	-	-	-	-	-	-	-	-
	% of total			7.6%	10.6%	7.6%	-	-	-	-	-	-	-
GlaxoSmithKline K.K.				36	48	na	na	na	na	na	-	-	-
	YoY			-	35.4%	-	-	-	-	-	-	-	-
	% of total			11.0%	8.4%	-	-	-	-	-	-	-	-

Source: Shared Research based on company data
Note: Figures may differ from company data due to differences in rounding methods. From FY09/19, costs for the company's public relations and hiring departments, which had been included in the Doctor Platform segment results, are classified as companywide expenses in the consolidated results. The aim is to enable more appropriate understanding of the segment's performance given the increasing role the departments are playing in the overall group's public relations and hiring activities. The change resulted in a JPY119mn increase in Doctor Platform segment profit for FY09/19 compared with the previous methodology.

Trends and outlook

Quarterly trends and results

Cumulative		FY09/19				FY09/20				FY09/21				FY09/21
(JPYmn)		Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4	% of Est.	FY Est.
Sales		763	1,545	2,247	3,046	941	2,312	3,659	5,311	1,939	3,805	5,503	7,435	99.8%	7,450
	YoY	39.2%	44.1%	40.0%	38.5%	23.4%	49.6%	62.8%	74.4%	106.0%	64.6%	50.4%	40.0%		40.3%
Gross profit		525	1,073	1,536	2,117	644	1,526	2,405	3,506	1,351	2,570	3,640	4,855
	YoY	35.1%	37.4%	29.6%	29.8%	22.7%	42.2%	56.6%	65.6%	109.6%	68.4%	51.4%	38.5%
	Gross profit margin	68.8%	69.5%	68.3%	69.5%	68.5%	66.0%	65.7%	66.0%	69.7%	67.5%	66.2%	65.3%
SG&A expenses		350	743	1,154	1,559	461	1,041	1,671	2,401	724	1,457	2,265	3,071
	YoY	18.1%	24.6%	29.6%	23.3%	31.6%	40.2%	44.9%	54.1%	57.0%	40.0%	35.5%	27.9%
	SG&A ratio	45.9%	48.1%	51.3%	51.2%	49.0%	45.0%	45.7%	45.2%	37.3%	38.3%	41.2%	41.3%
Operating profit		175	330	382	558	183	484	734	1,105	627	1,112	1,376	1,784	99.1%	1,800
	YoY	89.9%	78.7%	29.7%	51.8%	4.8%	46.6%	92.2%	97.9%	242.2%	129.6%	87.5%	61.5%		62.9%
	Operating profit margin	22.9%	21.4%	17.0%	18.3%	19.5%	21.0%	20.1%	20.8%	32.3%	29.2%	25.0%	24.0%		24.2%
Recurring profit		177	318	367	555	206	509	757	1,131	638	1,132	1,396	1,812	99.0%	1,830
	YoY	97.9%	57.1%	20.1%	46.3%	16.6%	59.9%	106.2%	103.7%	209.5%	122.6%	84.4%	60.3%		61.9%
	Recurring profit margin	23.2%	20.6%	16.3%	18.2%	21.9%	22.0%	20.7%	21.3%	32.9%	29.7%	25.4%	24.4%		24.6%
Net income		128	225	253	395	151	341	486	726	437	770	943	1,293	105.2%	1,230
	YoY	155.1%	122.2%	51.5%	91.4%	18.4%	51.4%	91.5%	83.9%	189.1%	125.6%	94.3%	78.2%		69.4%
	Net margin	16.7%	14.6%	11.3%	13.0%	16.1%	14.8%	13.3%	13.7%	22.5%	20.2%	17.1%	17.4%		16.5%
Quarterly		FY09/19				FY09/20				FY09/21
(JPYmn)		Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Sales		763	782	702	798	941	1,371	1,347	1,652	1,939	1,866	1,698	1,932
	YoY	39.2%	49.2%	31.9%	34.3%	23.4%	75.3%	91.9%	106.9%	106.0%	36.1%	26.0%	17.0%
Gross profit		525	548	462	582	644	881	879	1,101	1,351	1,219	1,071	1,214
	YoY	35.1%	39.6%	14.6%	30.1%	22.7%	60.8%	90.2%	89.3%	109.6%	38.3%	21.8%	10.3%
	Gross profit margin	68.8%	70.1%	65.8%	72.9%	68.5%	64.3%	65.3%	66.7%	69.7%	65.3%	63.1%	62.8%
SG&A expenses		350	392	411	405	461	580	630	730	724	734	807	806
	YoY	18.1%	31.0%	39.8%	8.4%	31.6%	47.9%	53.3%	80.2%	57.0%	26.4%	28.1%	10.4%
	SG&A ratio	45.9%	50.2%	58.5%	50.7%	49.0%	42.3%	46.8%	44.2%	37.3%	39.3%	47.5%	41.7%
Operating profit		175	156	51	177	183	301	249	371	627	485	263	408
	YoY	89.9%	67.5%	-53.0%	140.1%	4.8%	93.5%	385.5%	110.1%	242.2%	61.1%	5.6%	10.0%
	Operating profit margin	22.9%	19.9%	7.3%	22.1%	19.5%	22.0%	18.5%	22.5%	32.3%	26.0%	15.5%	21.1%
Recurring profit		177	141	49	188	206	302	249	374	638	494	264	416
	YoY	97.9%	24.9%	-52.4%	155.0%	16.6%	114.1%	404.7%	99.0%	209.5%	63.4%	6.2%	11.4%
	Recurring profit margin	23.2%	18.1%	7.0%	23.5%	21.9%	22.1%	18.4%	22.6%	32.9%	26.5%	15.5%	21.5%
Net income		128	98	28	141	151	190	144	240	437	333	173	350
	YoY	155.1%	90.1%	-57.4%	262.6%	18.4%	94.6%	414.1%	70.1%	189.1%	75.2%	20.0%	45.7%
	Net margin	16.7%	12.5%	4.0%	17.7%	16.1%	13.9%	10.7%	14.6%	22.5%	17.9%	10.2%	18.1%

Source: Shared Research based on company data
Note: Figures may differ from company data due to differences in rounding methods.

Cumulative				FY09/19				FY09/20				FY09/21
(JPYmn)				Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4	Q1	Q1–Q2	Q1–Q3	Q1–Q4
Sales				763	1,545	2,247	3,046	941	2,312	3,659	5,311	1,939	3,805	5,503	7,435
	YoY			39.2%	44.1%	40.0%	38.5%	23.4%	49.6%	62.8%	74.4%	106.0%	64.6%	50.4%	40.0%
	Doctor Platform			594	1,185	1,704	2,283	692	1,722	2,682	3,939	1,610	2,990	4,272	5,771
		YoY		26.5%	30.5%	28.3%	27.2%	16.5%	45.3%	57.4%	72.5%	132.7%	73.6%	59.3%	46.5%
		% of total		77.9%	76.7%	75.8%	75.0%	73.5%	74.5%	73.3%	74.2%	83.0%	78.6%	77.6%	77.6%
	Healthcare Solutions			169	360	543	762	249	590	978	1,372	329	815	1,232	1,665
		YoY		114.9%	118.8%	96.1%	88.4%	47.6%	63.8%	80.0%	79.9%	32.0%	38.2%	26.0%	21.4%
		% of total		22.1%	23.3%	24.2%	25.0%	26.5%	25.5%	26.7%	25.8%	17.0%	21.4%	22.4%	22.4%
Cost of sales				238	472	712	928	297	786	1,254	1,805	588	1,235	1,863	2,581
	YoY			49.2%	62.0%	69.3%	63.6%	24.8%	66.6%	76.2%	94.4%	98.2%	57.1%	48.5%	43.0%
	Cost ratio			31.2%	30.5%	31.7%	30.5%	31.5%	34.0%	34.3%	34.0%	30.3%	32.5%	33.8%	34.7%
Gross profit				525	1,073	1,536	2,117	644	1,526	2,405	3,506	1,351	2,570	3,640	4,855
	YoY			35.1%	37.4%	29.6%	29.8%	22.7%	42.2%	56.6%	65.6%	109.6%	68.4%	51.4%	38.5%
	Gross profit margin			68.8%	69.5%	68.3%	69.5%	68.5%	66.0%	65.7%	66.0%	69.7%	67.5%	66.2%	65.3%
SG&A expenses				350	743	1,154	1,559	461	1,041	1,671	2,401	724	1,457	2,265	3,071
	YoY			18.1%	24.6%	29.6%	23.3%	31.6%	40.2%	44.9%	54.1%	57.0%	40.0%	35.5%	27.9%
	SG&A ratio			45.9%	48.1%	51.3%	51.2%	49.0%	45.0%	45.7%	45.2%	37.3%	38.3%	41.2%	41.3%
Operating profit				175	330	382	558	183	484	734	1,105	627	1,112	1,376	1,784
	YoY			89.9%	78.7%	29.7%	51.8%	4.8%	46.6%	92.2%	97.9%	242.2%	129.6%	87.5%	61.5%
	Operating profit margin			22.9%	21.4%	17.0%	18.3%	19.5%	21.0%	20.1%	20.8%	32.3%	29.2%	25.0%	24.0%
	Doctor Platform			238	460	597	820	274	585	864	1,328	735	1,225	1,536	1,968
			YoY	48.0%	44.6%	29.0%	38.0%	15.0%	27.2%	44.7%	61.9%	167.9%	109.5%	77.8%	48.2%
			% of total	92.2%	91.2%	92.2%	89.7%	89.2%	82.6%	80.3%	83.0%	97.5%	90.9%	88.7%	87.2%
			Segment profit margin	40.1%	38.8%	35.0%	35.9%	39.6%	34.0%	32.2%	33.7%	45.7%	41.0%	36.0%	34.1%
	Healthcare Solutions			21	44	51	94	33	123	211	272	19	122	196	289
			YoY	-	-	-	-	61.1%	178.8%	316.3%	188.9%	-43.7%	-0.6%	-7.2%	6.4%
			% of total	7.9%	8.8%	7.8%	10.3%	10.8%	17.4%	19.7%	17.0%	2.5%	9.1%	11.3%	12.8%
			Segment profit margin	12.2%	12.3%	9.3%	12.4%	13.3%	20.9%	21.6%	19.8%	5.7%	15.0%	15.9%	17.4%
	Adjustments			-84	-174	-266	-356	-124	-224	-341	-495	-127	-235	-357	-474
Quarterly				FY09/19				FY09/20				FY09/21
(JPYmn)				Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Sales				763	782	702	798	941	1,371	1,347	1,652	1,939	1,866	1,698	1,932
	YoY			39.2%	49.2%	31.9%	34.3%	23.4%	75.3%	91.9%	106.9%	106.0%	36.1%	26.0%	17.0%
	Doctor Platform			594	591	519	579	692	1,030	959	1,258	1,610	1,380	1,281	1,499
			YoY	26.5%	34.8%	23.6%	24.1%	16.5%	74.3%	84.9%	117.1%	132.7%	33.9%	33.6%	19.2%
			% of total	77.9%	75.6%	73.9%	72.6%	73.5%	75.2%	71.2%	76.1%	83.0%	74.0%	75.5%	77.6%
	Healthcare Solutions			169	191	183	219	249	340	388	394	329	486	417	433
			YoY	114.9%	122.5%	62.9%	71.6%	47.6%	78.1%	111.7%	79.8%	32.0%	42.7%	7.4%	9.9%
			% of total	22.1%	24.4%	26.1%	27.4%	26.5%	24.8%	28.8%	23.9%	17.0%	26.0%	24.5%	22.4%
Cost of sales				238	234	240	217	297	489	468	551	588	647	628	718
	YoY			49.2%	77.6%	85.7%	47.1%	24.8%	109.0%	95.1%	154.2%	98.2%	32.3%	34.1%	30.4%
	Cost ratio			31.2%	29.9%	34.2%	27.1%	31.5%	35.7%	34.7%	33.3%	30.3%	34.7%	36.9%	37.2%
Gross profit				525	548	462	582	644	881	879	1,101	1,351	1,219	1,071	1,214
	YoY			35.1%	39.6%	14.6%	30.1%	22.7%	60.8%	90.2%	89.3%	109.6%	38.3%	21.8%	10.3%
	Gross profit margin			68.8%	70.1%	65.8%	72.9%	68.5%	64.3%	65.3%	66.7%	69.7%	65.3%	63.1%	62.8%
SG&A expenses				350	392	411	405	461	580	630	730	724	734	807	806
	YoY			18.1%	31.0%	39.8%	8.4%	31.6%	47.9%	53.3%	80.2%	57.0%	26.4%	28.1%	10.4%
	SG&A ratio			45.9%	50.2%	58.5%	50.7%	49.0%	42.3%	46.8%	44.2%	37.3%	39.3%	47.5%	41.7%
Operating expenses breakdown
Cost of sales and SG&A expenses				588	627	651	622	758	1,070	1,098	1,281	1,312	1,381	1,435	1,524
	YoY			29.0%	45.2%	53.8%	19.4%	28.9%	70.7%	68.7%	106.0%	73.1%	29.1%	30.7%	19.0%
	% of sales			77.1%	80.1%	92.7%	77.9%	80.5%	78.0%	81.5%	77.5%	67.7%	74.0%	84.5%	78.9%
	Personnel			258	293	327	318	360	501	580	635	648	677	699	723
		YoY		37.2%	65.5%	66.8%	36.5%	39.5%	71.0%	77.4%	99.7%	80.0%	35.1%	20.5%	13.9%
		% of sales		33.8%	37.5%	46.6%	39.8%	38.3%	36.5%	43.0%	38.4%	33.4%	36.3%	41.2%	37.4%
	Advertising expenses			63	69	64	57	81	70	95	120	141	141	154	153
		YoY		14.5%	56.8%	39.1%	-21.9%	28.6%	1.4%	48.4%	110.5%	74.1%	101.4%	62.1%	27.5%
		% of sales		8.3%	8.8%	9.1%	7.1%	8.6%	5.1%	7.1%	7.3%	7.3%	7.6%	9.1%	7.9%
	Various expenses			258	257	251	246	308	479	410	517	507	551	569	637
		YoY		27.1%	28.5%	46.8%	20.0%	19.4%	86.4%	63.3%	110.2%	64.6%	15.0%	38.8%	23.2%
		% of sales		33.8%	32.9%	35.7%	30.8%	32.7%	34.9%	30.4%	31.3%	26.2%	29.5%	33.5%	33.0%
Operating profit				175	156	51	177	183	301	249	371	627	485	263	408
	YoY			89.9%	67.5%	-53.0%	140.1%	4.8%	93.5%	385.5%	110.1%	242.2%	61.1%	5.6%	10.0%
	Operating profit margin			22.9%	19.9%	7.3%	22.1%	19.5%	22.0%	18.5%	22.5%	32.3%	26.0%	15.5%	21.1%
	Doctor Platform			238	221	137	223	274	311	279	464	735	490	311	432
			YoY	48.0%	41.2%	-5.3%	69.7%	15.0%	40.3%	103.5%	107.8%	167.9%	57.8%	11.5%	-6.9%
			% of total	92.2%	90.3%	95.4%	83.7%	89.2%	77.5%	76.0%	88.4%	97.5%	82.5%	80.8%	82.2%
			Segment profit margin	40.1%	37.5%	26.4%	38.6%	39.6%	30.1%	29.1%	36.9%	45.7%	35.5%	24.3%	28.8%
	Healthcare Solutions			21	24	7	43	33	90	88	61	19	104	74	93
			YoY	-	-	-	514.8%	61.1%	281.4%	1,237.1%	40.0%	-43.7%	15.2%	-16.3%	53.5%
			% of total	7.9%	9.6%	4.6%	16.3%	10.8%	22.5%	24.0%	11.6%	2.5%	17.5%	19.2%	17.8%
			Segment profit margin	12.2%	12.3%	3.6%	19.8%	13.3%	26.4%	22.7%	15.4%	5.7%	21.3%	17.7%	21.6%
	Adjustments			-84	-90	-92	-90	-124	-99	-118	-154	-127	-109	-121	-117

Full-year FY09/21 results (out November 11, 2021)

Progress: The company lifted its FY09/21 profit forecasts on August 12, 2021. Achievement rates against the company's revised forecast were largely in line with the company's forecasts, coming in at 99.8% for sales, 99.1% for operating profit, 99.0% for recurring profit, and 105.2% for net income attributable to owners of the parent. Sales were in line with the company's initial forecast, while operating profit, recurring profit, and net income exceeded the respective initial forecasts by 10.8%, 12.5%, and 20.9%.

Sales up 40.0% YoY: Sales in the Doctor Platform segment were up 46.5% YoY. Orders and sales expanded, mainly in drug assessment bulletin board and webinar operations in line with the progress of digital transformation (DX) initiatives at the company's clients. The acquisition of the medical student learning support platform "Minkore!" resulted in the physician membership base expanding to about 140,000 individuals. Sales in the Healthcare Solutions segment were up 21.4% YoY. In addition to growing demand for industrial health programs contributing to a steady expansion in the number of "first call" contracts, specified health guidance revenue also grew on the expansion of the number of contracted health insurance companies and increased utilization of the company's proprietary online consultation model.

Operating profit up 61.5% YoY: Operating profit was up 48.2% YoY in the Doctor Platform segment and 6.4% YoY in the Healthcare Solutions segment. With GPM dipping 0.7pp YoY to 65.3% and the SG&A to sales ratio dropping 3.9pp YoY to 41.3%, OPM improved 3.2pp YoY to 24.0%.

Note: One of the company’s core businesses is the Doctor Platform business centering on the MedPeer doctors-only community website. In the Doctor Platform segment, the company provides support services for doctors and medical sites, while the Healthcare Solutions segment focuses on consumer health promotion and disease prevention. The company also has a Healthcare Solutions business, which has a strong affinity with its established business and opens doors to the disease prevention and health improvement fields, which are business areas with growth potential.

Quarterly sales and YoY change

Source: Shared Research based on company data
Note: Figures may differ from company data due to differences in rounding methods.

Quarterly operating profit and OPM

Earnings by business segment

Doctor Platform

FY09/21 sales were JPY5.8bn (+46.5% YoY), while segment operating profit was JPY2.0bn (+48.3% YoY).

Full-year sales were up about 50% YoY on an expansion in orders, mainly for webinars and drug assessment bulletin board services as clients moved forward in their digital transformation (DX) efforts. Sales for the three months of Q4 were up about 20% YoY, and roughly double compared to Q4 FY9/19 (i.e., pre-COVID-19 pandemic levels).

In the Collective Intelligence Platform, the company enhanced content of the MedPeer website, which about 40% of Japanese doctors uses, and took steps to stimulate member activity. MedPeer acquired medical student learning support platform "Minkore!" from Minkore Co., Ltd. in August 2021, which contributed to the number of physician members expanding to 140,000.

In response to the COVID-19 pandemic, pharmaceutical companies shifted their marketing activities online, and MedPeer accordingly worked to expand sales by promoting its existing services, including its drug assessment bulletin board and webinars. At the same time, it has been working to drive digital transformation in the pharmaceutical industry, including through expanded sales of algorithm solutions developed by MedCross K.K., a joint venture with PKSHA Technology Inc., and increased sales of MedPeer Talk, its direct communication tool for doctors and medical representatives (MRs).

In the Primary Care Platform, the company launched medical-pharmaceutical collaborative functions in its “kakari” app service for pharmacies and “kakari for Clinic” app service for clinics, including functions that allow the sharing of prescription images and the linking of apps. The company is promoting the creation of a platform-based system providing end-to-end support, from medical consultations to medication guidance and post-medication follow-up services.
In the "kakaki" app, the number of app downloads and the number of prescriptions sent, which are both considered important KPIs, expanded substantially, supporting the shift to family pharmacies as the service of choice of patients.

Healthcare Solutions:

Full-year sales were JPY1.7bn (+21.4% YoY) and segment operating profit was JPY289mn (+6.4% YoY).

Segment sales improved about 20% YoY. The steady increase in contracts resulted in "first call" sales improving about 60% YoY. For the three months of Q4, segment sales were up about 10% YoY, but when excluding the impact from special factors related to METI projects last year, sales were 30% YoY. Alongside "first call" contracts improving roughly 50% YoY, the number of first-time interviews for specified health guidance increased about 70% YoY thanks to the expansion of unique online interviews, which offset the effects from restrictions on face-to-face meetings due to COVID-19.

In terms of specified health guidance, the number of initial consultations supported by the company rose in Q4 to 3,717, up about 70% YoY thanks to an expansion of the company’s proprietary online medical consultation model, an area of particular focus for the company since FY09/20.

This segment provides healthcare support for consumers, including health promotion and disease prevention.

The cloud-based health management "first-call" service run by subsidiary Mediplat expanded one-stop support services for everything from daily employee health management services to mental health services, including health checkup management services that allows the online management of employee health checkup results.

In the lifelog platform business, MedPeer is working to expand operations, including through cooperation with Ajinomoto Co., Inc. (TSE1: 2802) in the joint development of “amino step,” a smartphone app that supports lifestyle improvements.

The specified health guidance service run by subsidiary FitsPlus saw a record number of consultations, even amid the spread of COVID-19, thank to positive reception of its enhanced remote consultation system.

For details on previous quarterly and annual results, please refer to the Historical financial statements section.

FY09/22 company forecast

		FY09/20			FY09/21			FY09/22
(JPYmn)		1H Act.	2H Act.	FY Act.	1H Act.	2H Act.	FY Act.	FY Est.
Sales		2,312	2,999	5,311	3,805	3,631	7,435	10,500
	YoY	49.6%	99.9%	74.4%	64.6%	21.0%	40.0%	41.2%
Cost of sales		786	1,019	1,805	1,235	1,345	2,581
Gross profit		1,526	1,980	3,506	2,570	2,285	4,855
	Gross profit margin	66.0%	66.0%	66.0%	67.5%	62.9%	65.3%
SG&A expenses		1,041	1,360	2,401	1,457	1,613	3,071
	SG&A ratio	45.0%	45.3%	45.2%	38.3%	44.4%	41.3%
Operating profit		484	621	1,105	1,112	672	1,784	2,500
	YoY	46.6%	172.1%	97.9%	129.6%	8.3%	61.5%	40.1%
	Operating profit margin	21.0%	20.7%	20.8%	29.2%	18.5%	24.0%	23.8%
Recurring profit		509	622	1,131	1,132	680	1,812	2,520
	YoY	59.9%	162.6%	103.7%	122.6%	9.3%	60.3%	39.1%
	Recurring profit margin	22.0%	20.7%	21.3%	29.7%	18.7%	24.4%	24.0%
Net income		341	385	726	770	523	1,293	1,770
	YoY	51.4%	127.0%	83.9%	125.6%	36.0%	78.2%	36.8%
	Net margin	14.8%	12.8%	13.7%	20.2%	14.4%	17.4%	16.9%

Source: Shared Research based on company data
Note: Figures may differ from company data due to differences in rounding methods.

Segment earnings forecast

Doctor Platform

The company forecasts FY9/22 sales of JPY8.2bn (+42.1% YoY).

In addition to improving the content of its website to make it more attractive to physicians, the company intends to develop the "Minkore!" business to attract younger physicians and increase the service utilization. It aims to expand its physician membership base further through these efforts and improve the advertising value within the MedPeer site.

In line with its policy of advancing the infrastructure for pharmaceutical marketing and responding to changes in the marketing activities of pharmaceutical companies, the company is strengthening services contributing to improved medical representative productivity, including MedPeer Talk. The company is also focused on expanding earnings by working with pharmaceutical companies to create new marketing styles that meet the specific needs of individual physicians. Finally, the company also aims to create a new revenue stream by expanding sales in the “kakari” app service for pharmacies and “kakari for Clinic” app service for clinics through partnerships and other means.

Healthcare Solutions

The company forecasts FY9/22 sales of JPY2.4bn (+44.2% YoY).

The company intends to attract more corporate users of its one-stop industrial health support service “first call”. In addition, it will work to expand lifelog platform service, cultivate new partner companies and develop new services, and establish a patient base, as well as launch businesses that utilize the data gathered from these services. Further, in specified health guidance services, the company will promote the shift to online services and deepen collaboration with medical institutions and health check providers to expand the business.

Medium-term outlook

Medium-term growth strategy

MedPeer has not been announcing targets under a medium-term management plan. However, the company stated that it would aim for FY09/23 sales of JPY15.0bn when announcing Q3 FY09/20 results (at the time of the announcement, it was forecasting sales of JPY5.3bn in FY09/20; actual results were JPY5.3bn). The company previously indicated that it would aim for market capitalization of over JPY50.0bn in 2020, which it has already achieved. MedPeer’s market capitalization exceeded JPY90bn as of end-August, 2021.

The main growth drivers are the Collective Intelligence Platform business, which is primarily supported by a foundation of member doctors and a client base of pharmaceutical companies; the Preventive Healthcare Platform business (Healthcare Solutions segment); and the Primary Care Platform business, which the company launched in August 2019 and positions as a third earnings pillar. The company aims to accelerate the growth of the Primary Care Platform business (Doctor Platform segment) by expanding and deepening its partnership with Nichi-Iko Pharmaceutical Co., Ltd. (TSE1: 4541), from FY09/21 onward.

The company forecasts sales of JPY15.0bn in FY09/23 (versus sales of JPY5.3bn in FY09/20) to be achieved through the growth of its three main businesses.

Along with its Q3 FY09/21 results (out August 12, 2021), the company announced its progress toward achieving FY09/23 sales of JPY15.0bn and the group's long-term outlook. It explained that the existing business continues to grow steadily and is proceeding according to the plan to achieve the target. MedPeer also added the following targets for FY09/23.

Sales: JPY15.0bn (full-year FY09/21 forecast: JPY 7.4bn)

Operating profit: JPY4.0bn (JPY1.8bn)

Physician members: 200,000 (140,000)

Number of consumers using MedPeer services (e.g., healthcare apps): 10 million people (versus 5 million people)

While further developing the well-established Collective Intelligence Platform business, the company will focus on strengthening sales at the Preventive Healthcare Platform business (Healthcare Solutions segment) to create its second stable foundation for revenue. In addition, the company is actively promoting investment in FY09/21 to make the Primary Care Platform business (Doctor Platform segment) its third basis for revenue.

According to the company, as of August 2021, the prospect of achieving the sales target of JPY15.0bn in FY09/23 is rising compared to when the target was announced in August 2020, owing to successful measures the company had been implementing.

Furthermore, as a longer-term objective beyond FY09/23, the company aims to expand sales at a CAGR of over 40% and to maintain an OPM of over 30% while accelerating investments for further growth. To achieve that goal, in addition to establishing and solidifying three platforms, the company will enter the nursing care platform business, starting with the discharge support business, to make it the company's fourth base of revenue.

The company's medium-term management policy is to establish a growth base as a medical center IT company, and maintain a CAGR of over 40% in sales and an OPM of over 30% after FY09/23. Specifically, the company aims to:

Evolve as a medical product marketing infrastructure

Evolve the MedPeer platform into a service that all 300,000 Japanese physicians will use
Contribute to improving the productivity of pharmaceutical companies' marketing activities

Establish a healthcare value chain that supports the health of the people

Bolster the strength of the Preventive Healthcare Platform business and the Primary Care Platform business.
Launch a Nursing Care Support Platform business.

Aspire to create new businesses by utilizing the company's unique data accumulated in the respective platforms.

The following comments are based on the company's announcement in August 2020. Shared Research plans to update details regarding the company's progress toward achieving FY09/23 sales of JPY15bn and the group's long-term outlook (announced by the company on August 12, 2021) at a later date.

MedPeer’s medium-term growth strategy (until FY09/23)

Source: Company data

MedPeer added the Healthcare Solutions segment (Preventative Healthcare Platform business), which includes “first call” and DietPlus (see Business section for details), on top of its mainstay Doctor Platform segment (Collective Intelligence Platform segment and the Primary Care Platform segment) to provide platforms that cover both healthcare and medical treatment through all of their stages (health maintenance, disease prevention, pre-symptomatic care, care during onset, and therapeutic care).

Although it was not the first to offer either healthcare or medical platforms, MedPeer is the only company that operates platforms covering both. The company has networks with member doctors (about 120,000) and dietitians.

It plans to continue working to raise the value of the MedPeer website and will promote cross-selling and upselling of “first call” and DietPlus. The company also looks to broaden its client base from pharmaceutical companies to also include health insurance societies, companies, and consumers.

Further, through its partnership with Sugi Holdings, the company aims to build an integrated platform of online and offline services in the areas of health, medical care, and nursing care, and expand into new business areas. The underlying concept is a business with data as its primary asset (see below). As well, it plans to grow the Primary Care Platform business into a third earnings pillar by concluding a business alliance agreement and forming a joint venture with Nichi-Iko Pharmaceutical (see below).

Market potential

Previously, the online marketing market for pharmaceutical companies had played a supplementary role for offline, MR-focused activities. However, the shift to online activities has accelerated in response to the COVID-19 pandemic.

In next-generation marketing, traditional one-way communication (e.g., video, images, and text) is being joined by methods like chat and videoconferencing to bring in a new style of communication that allows direct conversations with MRs and doctors.

First generation (through 2016): offline (over JPY1tn) and online (market scale of JPY10.0–20.0bn according to company estimates)

Second generation (through 2020): offline (over JPY1tn) and online (market scale of JPY40.0–50.0bn according to company estimates)

With the expansion of online communication, information will be shared mutually between the real and online worlds, accelerating personalization. Pharmaceutical companies will be able to communicate with doctors based on information obtained from viewing logs related to videos from company members (physicians) and viewing and posting logs related to the MedPeer-hosted drug assessment bulletin board and other posting services. Moving forward, the company will achieve two-way, personalized marketing.

Third generation (through 20xx): next-generation marketing (based on estimates, the company targets a market scale of JPY1.0–1.5tn with expansion in integrated online and offline marketing elements)

M&A

The company has not incorporated impact from M&A into its target of JPY15.0bn in sales. However, it regards M&A as one of its important strategies for achieving medium- to long-term growth. It aims to conduct M&A throughout the entire healthcare field, which is wide-reaching.

Segment information

Doctor Platform (Collective Intelligence Platform business)

MedPeer plans to convert the MedPeer site from an ad delivery platform to a marketing platform and raise the value of its marketing products. At the same time, it intends to make its currently “helpful” services “indispensable” to doctors in their clinical practices and research. As a way to utilize the data held by the MedPeer Group more effectively, MedCross K.K. was established in November 2020 to provide data analysis-based services such as product development, providing solutions, and marketing support.

In August 2020, the company began a recruitment service (including employment agency) for doctors, expanding into new business areas to grow earnings.

Furthermore, the company is aiming to expand sales generated from “kakari” (a support service helping pharmacies become family pharmacies) and “kakari for Clinic” (assists clinics aiming to become family clinics) primarily through its partnership with Nichi-Iko Pharmaceutical Co., Ltd. and targeting the establishment of new earnings pillars.

Specifically, the company will promote the following measures:

Expansion of the MedPeer member base: focus on dramatically increasing the number of member doctors (over 120,000 as of January 2019) through alliances* in FY09/19 and onward while sustaining organic growth by jump-starting the use of existing services. The company concentrates on forming alliances with academic societies, university medical offices, and companies (such as medical publishers and research and recruitment companies) with a member base of physicians, and other steps to achieve leaps in membership.

*Total member base including physicians registered as members of MedPeer and those who are registered members of alliance partner organizations to which MedPeer can disseminate information

Expanding the MedPeer member base (physicians)

Source: Shared Research based on company data

Business alliance with Anterio Inc. and Plamed Inc.: In November 2018, MedPeer formed a business alliance with Intage Holdings Group company Anterio Inc., a medical/healthcare marketing research company, and its wholly owned subsidiary, Plamed Inc. The alliance increased the number of MedPeer members to more than 120,000. Alliance partners will share membership, build a value chain for marketing support targeting physicians, and collaborate in product development.

Transition from ad delivery platform to marketing platform: In addition to establishing a new content production team, the company converted COLBO Co., Ltd., which has a proven track record in designing and creating medical content, into a consolidated subsidiary in January 2020 and is strengthening the system it has in place for providing comprehensive marketing support. As a way to utilize the data held by the MedPeer Group more effectively, MedCross K.K. was established in November 2020 to provide data analysis-based services such as product development, providing solutions, and marketing support. Through these actions, the company is promoting the development of new services that will establish consistency throughout the pharmaceutical marketing value chain. Meanwhile, it is providing an integrated marketing support service covering strategy formulation to content production, content distribution, assessment of effectiveness, and improvement. MedPeer plans to fully utilize its own unique data, including review data, articles posted by members, and influencer information (doctors who are next-generation key opinion leaders). Instead of simply broadcasting a program like on television, the company will also measure the effectiveness of its marketing activities (by establishing a metric that quantifies customer loyalty, observing changes in doctors’ prescribing behaviors through the drug assessment bulletin board, etc.), and use the information to adjust strategies. MedPeer is the only company capable of this kind of cyclical business model.

Content production: Main content includes webinar plans and web pages containing information such as doctor interviews and disease information that pharmaceutical company ads on the MedPeer site link to. Before forming the alliance with Anterio and Plamed, MedPeer was not involved in producing content linked to by pharmaceutical company ads, but it plans to engage in content production going forward. With the consolidation of COLBO Co., Ltd., which has experience in the planning and production of medical content, in January 2020, the company is looking to further strengthen its one-stop marketing support system. The company is confident that it can create content that is understandable and easy to view, thanks to the expertise it gained from its website on how to achieve high click rates by adjusting ad presentation (format and wording).

Product development based on data analysis, solution dispensation, and marketing support: The company established a joint venture with PKSHA Technology Inc. in November 2020 with the goals of developing products for pharmaceutical companies and medical device manufacturers, providing solutions, and performing marketing support activities.

The company will analyze the thought processes and priorities that doctors use and set when selecting drugs and promote measures such as sales estimations for pharmaceutical companies using data obtained from its Doctor Platform and algorithmic technology from PKSHA. With these efforts, it will support the implementation of corporate marketing activities.

Using Lifelog, its healthcare database, and algorithmic technology from PKSHA, the company will make proposals related to effective marketing and solutions primarily through the creation of individual “Patient Journeys.”

Patient Journey: Displays the sequence behaviors, thinking, and emotions that patients display from the moments at which they become aware of their diseases or symptoms to the times at which they receive treatment (eventual examinations at medical facilities, administration of medicine, etc.)

Vertical and horizontal rollout of collective medical intelligence platform: MedPeer Career, which was derived from MedPeer, refers doctors wishing to change jobs or work part-time to physician job placement agencies. Business succession is becoming an issue for clinics run by older doctors (in Japan, around 7,000 clinics open and a similar number of them close every year). To deepen its involvement in this area, in February 2019, MedPeer launched Clinic Support—a collective medical intelligence platform for doctors wishing to open their own clinics. During the same year, the company also provided career-building support for doctors through efforts such as its launch of MedPeer SCOUT, which provides scouting-based career change assistance. In the summer of 2020, MedPeer Career Agent Co., Ltd. (a fully owned subsidiary established in May of the same year) launched a recruitment business targeting doctors. To jointly promote this business, the company formed a business alliance with MHA, Inc., which possesses job vacancy information for more than 2,500 medical institutions in Japan. Rakusai, MHA’s recruitment support system for medical institutions, is utilized by 150 employment agencies, and more than 700 agents, throughout Japan. Through its business alliance with MHA, the company, which has a network of 120,000 member doctors, will develop a recruitment business that meet the needs of doctors and medical institutions alike by applying the strengths of both companies.

The company launched YakuMed, a platform for pharmacists, in spring 2019. With the MedPeer platform, the company has gathered collective medical intelligence (including drug reviews) and made it available to a specific peer group (physicians). YakuMed applies this use of collective medical intelligence to a related profession (pharmacists). The company has created a platform for pharmacists and is utilizing collective medical intelligence in marketing, because doctors’ drug reviews on the MedPeer site are useful and of great interest to pharmacists as well. Physicians and pharmacists perceive drugs differently; According to the company, although doctors do evaluate compliance benchmarks like daily dose frequency (taking a drug once a day is easier to continue than three times a day) and dosage form (size of tablet or pill, powdered medicine is not easy to swallow, etc.), pharmacists have a more in-depth understanding of compliance issues. Due to their daily experience handling pharmaceutical products, pharmacists will also provide collective intelligence from perspectives that are different from those of doctors regarding topics such as which generic drugs are easier to remove from bulk packaging. MedPeer believes the pharmacist platform has potential as a marketing business, considering that pharmacists control which generics are dispensed as the government pushes to increase their use.

Developing a new platform to support pharmacies and pharmacists

MedPeer is developing a new platform to support pharmacies and pharmacists (launched spring 2019). It plans to develop and grow the Doctor Platform business by laterally expanding its MedPeer collective medical intelligence platform for physicians in order to target pharmacists as well. The company started providing two services for pharmacists—YakuMed, a collective medical intelligence platform for pharmacists, and kakari, a platform providing support when dispensing pharmacies transition into family pharmacies (See bordered note below for details).

Collective medical intelligence platform for pharmacists: Collective medical intelligence shared by pharmacists is used by other pharmacists to solve problems and challenges they face on the job. The platform features a drug review sharing service (the MedPeer drug assessment bulletin board for doctors adapted for pharmacists) and a pharmaceutical dispensing casebook.

Doctor Platform segment (Primary Care Platform segment)

The company is actively investing in its Primary Care Platform segment with aim of transforming it into a third growth axis for the company’s businesses. The segment consists of kakari, which was launched in June 2019 and is the target of sales expansion efforts between the company and partner Nichi-Iko Pharmaceutical Co., Ltd., and kakari for Clinic, which was launched in October 2020 through Nichi-Med, Inc., a joint venture established by the two companies.

With kakari and kakari for Clinic, the company will construct a Primary Care Platform that will provide consistency that spans all the way from clinics to pharmacies. The company will evolve this platform into one that links medical institutions (family clinics) both to patients and to other institutions by expanding sales of kakari for Clinic using its pool of kakari member locations (family pharmacies) and strengthening collaboration between the two services.

Platform providing support when dispensing pharmacies transition into family pharmacies: An app service that connects pharmacies with patients. In June 2019, the company began offering kakari, a service that helps pharmacies expand their roles to become family pharmacies, such as patient–customer relationship management (allowing patients to contact pharmacies directly via the app) and patient medication support.

Purpose of the new services: To support the value-related and functional transitions required of pharmacies and pharmacists (see below) using collective medical intelligence and IT.

Context of the new services: The government has been promoting the separation of medical practice and dispensing so that doctors and pharmacists can separate their functions while maximizing their professional knowledge and skills, thereby improving the quality of medical care. Under these conditions, problems have arisen in recent years due to the increase in “monzen pharmacies*,” which are dispensing pharmacies located near hospitals. Patients attending a hospital will usually have their drugs dispensed at a nearby pharmacy (rather than one near their home). As a result, pharmacies do not have a full record of each patient’s medications, while patients suffer an increase in medical fees and must go to different pharmacies to have their drugs dispensed. The government formulated a “Pharmacies for Patients” vision to address this problem in October 2015, pushing dispensing pharmacies to enhance their roles and become family pharmacies.** Specifically, dispensing pharmacies are expected to transition^*1 from monzen pharmacies to family pharmacies and from businesses that deal with goods (drugs) to businesses that deal with people^*2.

*Monzen pharmacy: Literally, a pharmacy right in front of the hospital gate. These are dispensing pharmacies located near hospitals that primarily dispense prescriptions issued by those same hospitals.
**Family pharmacy: A pharmacy that keeps comprehensive information on a patient’s prescription and OTC drug usage; other functions include periodic checks on whether patients have any leftover or duplicate medications, or are experiencing side effects
*¹ Transition from monzen pharmacies to family pharmacies: Dispensing pharmacies, whose main value is convenience, are being required to enhance their roles in order to become family pharmacies and to support the health management of local residents by providing professional pharmaceutical skills and services, such as 24-hour service and home visits.
*² Transition from businesses that deal with goods to businesses that deal with people: Pharmacies must shift their priority from dealing with goods (dispensing) to dealing with people (such as providing advice and instructions on how to take medication) to attract patients as family pharmacies. This means that dispensing pharmacists must improve their professional knowledge and communication skills.

The majority of dispensing pharmacies are small or owner-operated businesses that are not equipped financially or trained to undertake the new role required of pharmacies. Thus, many pharmacies and pharmacists are struggling to cope with the challenge of taking on new functions and providing new value.

In November 2019, the company formed a business alliance with Nichi-Iko Pharmaceutical Co., Ltd. in pursuit of joint goals such as expanding sales generated by kakari. The company is promoting kakari online while MRs from Nichi-Iko Pharmaceutical, which establishes contact with pharmacies by providing information on generic drugs, are promoting kakari through in-person meetings with pharmacies.

The health insurance pharmacy industry is a small-scale, decentralized one; small pharmacies with less than five locations comprise half of all pharmacies.

Kakari primarily targets small to medium-sized pharmacies with less than 50 locations, which account for about 80% of all pharmacies.

Platform that helps clinics become family clinics: In September 2020, Nichi-Iko Pharmaceutical Co., Ltd. and the company launched as a jointly operated service kakari for Clinic, a support service that helps clinics become family clinics. The two companies also established joint venture Nichi-Med, Inc., which is responsible for marketing activities, customer support, and other elements of kakari for Clinic. To contribute to comprehensive community care, the company will strive to form collaborative relationships with pharmacies, patients, and clinics (including local clinics) while supporting the conversion of clinics into family clinics (with primary care physicians). As with kakari, both companies will endeavor to expand associated sales, and MedPeer will handle system development and operation.

Kakari for Clinic is an app-based service that supports communication between clinics and patients. Its features include chat functionality that establishes two-way connections between clinics and patients, medical appointment-making capabilities, and clinic PR attributes that enable clinics to promptly transmit information. In December 2020, one-on-one conversations between patients and physicians also became possible through a video calling feature. The company also plans to add a payment feature in January 2021.

Healthcare Solutions (Preventive Healthcare Platform segment)

MedPeer plans to develop a preventive healthcare service that covers both medicine and diet. In FY09/18, the company established three businesses (a business alliance with Sugi Holdings, the “first call” service for companies, and the DietPlus specified health guidance service provided by FitsPlus Inc.) as the foundations for the new service, which it plans to grow into solid sources of earnings. By effectively leveraging MedPeer’s network of doctors and dietitians along with Sugi Pharmacy’s physical stores and app/online members, the company plans to expand services using both its online and offline strengths. The company aims to develop its Healthcare Solutions segment through the Preventative Healthcare Platform segment.

With the goal of providing self-care services that take advantage of customer contact points from both Sugi Pharmacy’s store network and other partner companies, the company will develop its Lifelog platform on a full scale. At the same time, it will promote the cultivation of new partner companies and service development, establish a patient base, and strive to launch a business that fully utilizes its repository of accumulated data.

The company aims to attract more corporate users of its one-stop industrial health support service “first call.”

With regard to DietPlus, its specified health guidance service, the company will promote the shift to online services and deepen collaboration with medical institutions and health check providers to expand the business further.

Main initiatives are as follows:

Strengthen “first call” service for companies: MedPeer is developing the “first call” service for companies, which is provided by Mediplat Inc. (joint venture with Sugi Pharmacy), into a health and labor management solution by adding an app-based stress check service to “first call’s” online medical consultation and Internet-based industrial physician services. The company is making a business opportunity out of the sharp rise in demand for health and labor management solutions ahead of the work style reform law taking effect in spring 2019. MedPeer began its collaboration with Mediplat four years ago, when it became a group company. After much trial and error, the companies concluded that the online industrial physician service and the app-based stress check service were the best fit for clients’ needs. MedPeer plans to sell the three products (online medical consultations, Internet-based appointments with industrial physicians, and stress checks) as a set.

Online medical consultations: “first call” provides chat-based medical consultations. The service had 573 client companies as of September 2020 and adds roughly 20–40 new companies per month.

Internet-based appointments with industrial physicians (launched July 2018): The service provides video call consultations with industrial physicians. The service aims to maximize convenience as a management tool for HR departments (for example, by scheduling consultations or issuing reports afterward). Businesses with 50 or more employees were previously required by law to have a contract with an industrial physician, but these policies had not produced adequate results. However, with the passing of a workstyle reform-related bill in Japan during April 2019, companies have faced a greater need to focus on ensuring occupational health through the industrial physicians. These physicians have diverse duties that they must perform in a limited time. They must cover all fields of medical study in addition to their own (e.g., an internist may need to treat a patient with mental health issues). Accordingly, MedPeer provides Internet-based appointments with industrial physicians that facilitate mutual support between physicians of this type. It also refers industrial physicians to companies and provides support for industrial physicians that have already concluded contracts with companies through these Internet-based appointments. At the same time, it provides daily, chat-based online medical consultations through specialists with professional knowledge regarding all matters covered by the consultations.

App-based stress check service (launched January 2019): A free option to the online medical consultation service. Companies that use the service together with the Internet-based industrial physician appointment service benefit from a one-stop service that includes everything from an online stress check to an interview-based guidance from a doctor. The stress check system was established as a way to prevent workers’ mental health problems after the revised Industrial Safety and Health Act went into effect in December 2015, making it a legal requirement for businesses with 50 or more employees to conduct stress checks on all employees. Employees who request a consultation after receiving the results of the test will be referred to a doctor (recommended by an industrial physician).

Rather than seeking a share in the stress check market itself, MedPeer decided to provide a free app that connects Mediplat service with business people. The company made this decision because, while the market is worth billions of yen, the statutory stress check is not a service through which it can differentiate itself. MedPeer intends to leverage the app and encourage users to sign up for the industrial physician or online medical consultation services.

The number of industrial physician consultations—particularly at major companies—is on the rise due to these legal revisions. Meanwhile, scheduling has become a constraint since industrial physicians only visit these companies on certain days. Bringing these consultations online generates benefits, such as enabling appointments on days other than designated visitation dates and allowing individuals to make their own arrangements with industrial physicians. Demand for this service is likely to grow as a result of these benefits.

Strengthening specified health guidance service provided by FitsPlus: The company aims to outpace market growth in the specified health guidance service (see Business section) provided by FitsPlus Inc. To this end, it will pursue expanded utilization and application of IT (in which FitsPlus excels), strengthen its dietitian base, and improve operations. The government’s focus on specified health guidance has provided a tailwind for the company. The government has been urgently implementing initiatives, such as increasing the rate at which it collects healthcare support money for senior citizens aged over 75 (essentially serving as a financial penalty). Previously, specified health guidance sessions were held after registered dieticians had made visits to offices and other places of business. However, at present, progressive deregulation has simplified procedures for providing online guidance using information and communications technology. Many physicians consider diet to be important in terms of preventing lifestyle diseases. The company plans to expand the scale of its specified health guidance operations by providing dietary guidance through its expert registered dieticians.

Market growth: The government’s target rate for implementation of specified health guidance in 2023 is 45% (versus an implementation rate of 23.2% in FY2018), which suggests the market is likely to grow. Incentives aimed at encouraging more people to take up specified health guidance include diversifying the guidance requirements (e.g., shorter guidance period, use of ICT, model programs, etc.), setting incentives for insurance societies, and starting distribution of health scoring reports (source: “Implementation status of specified health examination and health guidance in fiscal 2016,” MHLW.)

Measures to increase market share: The company plans to reduce the workload of insurance societies and business operators through the use of IT, and increase service levels through measures such as affiliated support programs for people with severe diseases. It also intends to devise a system for recruiting and training licensed dietitians.

Starting up lifelog platform: Together with partner companies, Mediplat will develop a Lifelog platform that will enable personalized marketing based on lifestyle records. The foundation for this platform will be provided by Sugi Support Walk and other dietary habit and footstep tracking apps developed by Mediplat through Sugi Pharmacy.

Sugi Pharmacy has around 1,000 stores, which are visited by around 200mn people per year. Distributing flyers in stores or conducting face-to-face sales is difficult for the company, which does not have a direct line of contact with consumers. Accordingly, the company believes that it can generate synergy in this regard through collaborative efforts. It will expand its database using offline points of contact such as Sugi Support Walk, which awards points for units of distance walked by users. Through these measures, the company aims to establish a system through which it can accumulate data by providing services. By responding to issues and challenges associated with brick-and-mortar stores, which are important for companies engaging in online business, the company expects that it can combine and expand the efficacy of online and offline operations.

Business

Business description

Overview: Aggregates doctors’ knowledge as collective medical intelligence and generates revenue from pharmaceutical companies and others

Two core business segments

The company has two core business segments: Doctor Platform (74.2% of sales and operating profit of JPY1.3bn in FY09/20), which is centered on MedPeer, a doctors-only community website, and Healthcare Solutions (25.8% of sales and operating profit of JPY272mn in FY09/20), which targets health promotion and disease prevention. MedPeer is the only company in Japan that operates in both of these spaces. With “Supporting Doctors, Helping Patients” as its mission, the company’s vision is to reinvent medical care by harnessing collective medical intelligence*.

*Collective medical intelligence: Medical information generated by collecting knowledge from a large and unspecified group of doctors, which is subsequently analyzed and organized systematically.

In the past three fiscal years through FY09/20, sales grew by 50.5% per year (to JPY5.3bn in FY09/20) and operating profit by 137.6% per year (to JPY1.1bn), absorbing upfront spending in the Healthcare Solutions segment. OPM was 20.8% in FY09/20 (+2.5pp YoY).

The company was founded in December 2004 and its stock was listed on TSE Mothers in June 2014 before moving to the First Section of the TSE in September 2020. CEO Dr. Yo Iwami (M.D., Ph.D.) still sees patients in a clinical setting once per week. MedPeer had 225 employees on a consolidated basis as of September 2020.

Sales by business segment (FY09/20)

Source: Shared Research based on company data

Sales, operating profit, GPM, and OPM

Source: Shared Research based on company data
Note: Figures may differ from company data due to differences in rounding methods.

Business overview

Doctor Platform

Collective Intelligence Platform

In the Doctor Platform segment, the company operates the MedPeer website, an online doctors-only community and knowledge management tool that allows doctors of different specialties and locations to share live reviews based on clinical experience. MedPeer has over 120,000 members, which is around 40% of Japan’s approximately 300,000 physicians.

In this segment, the company generates revenue mainly from pharmaceutical companies by offering access to collective medical intelligence gathered via MedPeer and providing opportunities to place product ads on the website. It also generates additional revenue by leveraging this collective medical intelligence to support pharmaceutical companies with the planning, execution, and management of their marketing strategies. Other sources of revenue include research outsourcing services (B2B), which include running online physician surveys on behalf of pharmaceutical companies, and a job information service (B2B) that refers doctors using the site to physician placement agencies (see the Business model section for details). The company collectively refers to these services as its Collective Intelligence Platform.

Primary Care Platform

Additionally, the company is expanding sales generated by “kakari”, a support service for converting pharmacies into family pharmacies, through a business alliance with Nichi-Iko Pharmaceutical Co., Ltd. (TSE1: 4541). The companies launched “kakari for Clinic”, a jointly operated service that supports the conversion of clinics into family clinics, and established joint venture Nichi-Med, Inc., which is responsible for marketing activities, customer support, and other elements of kakari for Clinic (more details in the section entitled “Business model”). The company refers to these two services as its Primary Care Platform.

Healthcare Solutions

Preventive Healthcare Platform

In the Healthcare Solutions segment, subsidiary Mediplat is developing a Lifelog platform through the company’s industrial health support platform (first call) and collaboration with Sugi Pharmacy, the Nikkei, and Satudora Holdings (TSE1: 3544), Ajinomoto (TSE1: 2802).

Through first call (JPY20,000–JPY120,000 or more per month based on plan and size of workforce), the company concludes agreements with companies and health insurance associations (573 agreements as of September 30, 2020) and provides corporate employees with online medical consultations, online interviews with industrial physicians, and stress checks.

Through its Lifelog platform services, the company and partner companies provide self-care assistance for general consumers, including pedometric and meal recording services. Along with these same partners, the company also distributes advertisements to users and accumulates lifelogs (records of lifestyle-related data).

Meanwhile, subsidiary FitsPlus Inc. is rolling out a specified health guidance* service that primarily focuses on dietary guidance provided through registered dieticians. It provides these services by forming agreements with health insurance associations (comprising corporate employees) and dispensing guidance through registered dieticians who conduct consultations by visiting offices or other places of business or via information and communications technology. The company refers to these services as its Preventive Healthcare Platform.

*Specified health guidance: Health guidance provided to individuals determined to require improvements in their living environments based on the metabolic syndrome risk numbers (the number of associated criteria for which the patient tested positive) they were assigned after receiving examinations aimed at preventing lifestyle-related diseases. Through DietPlus, registered dieticians provide lifestyle guidance either online or through direct meetings in response to requests from health insurance associations.

In the Healthcare Solutions segment, the company broke even in Q3 FY09/18 despite prioritizing investment and reported profit in Q4 of the same financial year. Since then, performance in terms of operating profit has been strong.

Management structure

Parent company MedPeer, Inc. operates the Doctor Platform segment. The Healthcare Solutions segment comprises “first call,” operated by subsidiary Mediplat Inc., and DietPlus, operated by FitsPlus Inc.

Business model

Doctor Platform

Overview

The segment includes the company’s core business, the collective medical intelligence service (the MedPeer doctors-only community website) and the doctor job information service (refers doctors using the MedPeer site to physician placement agencies).

This is a core segment that accounted for 74.2% of sales and 83.0% of operating profit in FY09/20.

MedPeer, a doctors-only community website: Free for doctors, revenue from pharmaceutical companies

The company operates MedPeer (knowledge management tool used to share firsthand information generated by physicians working in medical settings), which is both a specialist community site for doctors and the company’s foundational business.

Over 140,000 doctors are members of the MedPeer website. This means nearly 40% of the roughly 300,000 doctors in Japan use this website. The website serves as an online platform where doctors can share experiences (members can post and read posts for free) regardless of location or specialization.

It is also a knowledge management tool for sharing live information from doctors on the ground. The company generates revenue by gathering a collective medical intelligence (see above) on the website and providing it to pharmaceutical companies* for use as a marketing support tool, as well as by offering ad placements to pharmaceutical companies (collective medical intelligence service: B2B service that earns revenue from ads, marketing support, and research services). According to the company, in contrast to similar websites that mainly use information provided by pharmaceutical companies and other suppliers, its website is based on information provided by users (physicians; see below).

The company generates additional revenue by referring MedPeer member doctors to physician placement agencies (job information service: B2B service that earns commission from referrals).

The main costs are personnel expenses and loyalty points (advertising and promotional expenses; see below).

Positioning of MedPeer website

Source: Shared Research based on company data

Members and clients

The MedPeer website is based on the idea that one doctor’s question is likely to be shared by others. The company prepares diverse content to support the medical community and provides a free platform for doctors and medical students^* to share questions and experiences.

Pharmaceutical companies (including Pfizer Japan Inc. and Takeda Pharmaceutical Company Ltd. [TSE1: 4502]) pay for access to content such as the bulletin board-style drug assessment website (the first of its kind, launched in spring 2010). The company currently has over 60 clients. The value of the MedPeer website content grows as the number of active users increases.

*Medical students (members) are able to view content on the MedPeer website, but not write or respond to posts. This is because the company’s various services are intended to provide reference information for doctors with medical practices.

Characteristics of MedPeer member doctors (over 140,000 in total)

30% are private practitioners
Most are 30–50 years old
More than 80% are male

Characteristics of member doctors: practitioner type and gender