Business Services, Healthcare
ParcelShield offers predictive parcel surveillance technology, driven by machine learning algorithms, to protect critical package deliveries primarily for specialty pharmacies, mail order pharmacies, and specialty pharmaceutical distributors in the United States. The Company’s primary service offerings include (i) predicting potential route disruptions and package distress using predictive analytics, (ii) monitoring shipments in real time through a customer-facing surveillance portal, (iii) intercepting distressed shipments and coordinating successful delivery, and (vi) proactively engaging consumers to manage on-time deliveries. The Company’s services are enabled by a proprietary data model and analytics platform based on more than 17 years of shipping data that allows ParcelShield to protect high-cost, temperature-sensitive, and life-sustaining pharmaceuticals on behalf of its clients.
Top Down Investment Thesis
Excellere’s investment in ParcelShield is based upon the convergence of several long-term themes in the pharmaceutical supply chain and broader healthcare industries, including (i) expansion of the overall specialty pharmacy pipeline increasing the supply of high-price, patient-specific medications in the marketplace, (ii) growing demand for home delivery of medications and heightened consumer expectations for timely and reliable delivery, and (iii) new and evolving regulatory requirements, such as URAC 4.0, that demand greater visibility of product in the pharmaceutical supply chain. ParcelShield’s innovative predictive parcel technology platform solves these complex issues and generates a highly compelling financial ROI for its customers of greater than 25x, alongside tangible benefits to patient satisfaction and retention rates.
The parcel shipping market is experiencing substantial growth as the surge in e-commerce is driving increasing consumer expectations for express delivery direct to homes. Global package shipping volume rose 48% from 2014 to 2016 and is expected to continue to rise more than 20% annually through 2021. E-commerce has been the biggest contributor to shipping volume trends with consumers spending $517 billion online in 2018 in the US alone, which was up from 15% in 2017. Healthcare-specific online spending has continued to grow as well with the percentage of online and mail-order drug spend projected to increase from 25% in 2017 to 36% in 2022. A large portion of this growth will be through online and mail-order pharmacies, which are expected to grow at 10% annually through 2022. Rising consumer expectations of convenience coupled with increased pricing pressure will drive a greater percentage of prescription drug spending online in the years to come.
Buy and Build
The market for predictive parcel surveillance and engagement services has substantial tailwinds due to declining profitability margins for specialty and mail order pharmacies driving a need for cost mitigation measures, pharmacies’ need to improve the consumer’s overall experience, and tightening regulations in drug distribution channels. ParcelShield is well positioned to capitalize on these opportunities as a result of its proprietary parcel surveillance technology platform that is unmatched by anything currently in the market. To the extent you are interested in learning more about ParcelShield, please contact Brad Cornell at , Mike Vieth at , or Chris Flight at .