Novita Healthcare (ASX:NHL) has been stringing together wins after a recent trip to the US, so Star Investing caught up with Glenn Smith to talk through that trip, and to get a flavour of what’s to come.

SI: Thanks for joining me today Glenn. Just in a nutshell, can you explain Novita and go into Tali — and how it’s unlike anything else on the market?

Glenn Smith: Yeah sure, thanks James. So Novita is a listed company on the Australian Stock Exchange, and we’re wholly focused on technology, particularly health care and education sector.

And commercialising that technology with our skillset to bring to the market, really high quality products.

Speaking of high quality products, one of those is Tali. Tali is a platform technology that’s being built out of 25 years of research from an institution here in Australia called Monash University, and it focuses on building attention in children particularly early on in life — particularly when they’re between the ages of three to eight.

That’s a really important thing to do because having great attention, as we all know during our adult lives, really allows us to make informed decisions, listen carefully and be part of both business and social arenas and really contribute as contributing members to society.

SI: That sounds like a really sort of noble cause. So the reason I wanted to catch up with you today is that I believe Novita has been making some moves in the US recently — and in particular it all seems to stem from a trip you took last month.

So I’m wondering if you can tell me about that trip and where the company went.

Glenn Smith: Yes, absolutely. So late February through March we went to the US, particularly California, Texas, Philadelphia, and went to some industry conferences.

And that’s because Tali is classed as a new breed of digital therapeutic and that simply means that the treatment is delivered through an iPad or tablets in a digital format as opposed to someone in school or in a clinic getting a treatment from a doctor or some type of other equipment in a clinic — for example in a school.

So we’re classed as a new type of digital treatment and that’s really important because there’s a massive multi-billion dollar involving commercial opportunity — particularly in the US where these new digital treatments make a lot of sense for hospitals and pediatric clinics, but more important and make a lot of sense in the education system in the US.

They have a whole lot of hardware from Google and Apple that are delivered to children, particularly in the early years, and they need our type of applications or technology to sit on that hardware so they get for utility over hardware but also so they can value-add to deliver more value to the customers, who are the children and the teachers there.

So that the US trip was really commercially focused.

We wanted to find some new partners, and we found a couple to begin — and one of those is CareStarters, and I’ll talk a little bit about later — but really talking to schools.

We wanted to acquire schools and onboard schools, and we have done that. We’re piloting or onboarding schools in Idaho, in Portland, in Texas and they’ll be using Tali just as schools use Tali here in Australia.

SI: Great, we’ll kind of get into those deals a little bit later on but you’re speaking before about sort of the unique conditions in the U.S. that makes Tali a really good fit for that market. if there was one sort of experience from that trip that kind of pointed to you maybe even reiterated the value of Tali — what would that be?

Glenn Smith: We went to a very focused education conference at the South by Southwest events called South by Southwest EDU — and all that means is that literally thousands of teachers and administrators from the school system the US turn up to this one conference and they’re looking for new applications or content to deliver out to their children so that their schools or their districts are delivering greater value back out and the students will come to them.

So the core message we got from those teachers and administrators was that in the early years their biggest issue is getting the children to focus and be attentive in the classroom.

And so our technology is a direct commercially available product, that can help them right now to solve an issue. And that’s a multi-billion dollar issue in the US because inattentive and unfocused children in the classroom cause massive disruption not only the teachers but also the other children — and makes that education system very inefficient.

So fixing that or helping to fix that inefficiency and increase productivity at the school level, a classroom level, is a massive federally and state recognised issue in the North American market.

SI: Would it be fair to describe the partnership between Novita and CareStarter as one of the effects of that trip? Talk me through that deal and what sort of value it creates for Novita.

Glenn Smith: Absolutely, it’s a direct result of that trip and the assistance we got from Australian Government representatives, but also our own network. If we didn’t go to the US and put ourselves on the ground there we would not have this partnership with CareStarter.

And they’re a really important and influential new technology leveraging company. They effectively have a software program and an application for parents and for doctors to manage the pediatric care system much better in the North American market.

They started in Texas is rolling out nationally, but that platform automatically connects parents and children who have conditions like autism or attention-related issues, with doctors and allows them to get content or other services where their health insurance will pay for it, or their employer health insurance — or might be an out-of-pocket expense for that parent.

All of that is seamlessly taken care of by CareStarter.

Now we are a featured partner of CareStarter, so that means our Tali program is accessible through the case on the platform. Parents and physicians in the US can access Tali and deliver Tali, and we’ll be a featured partner — and because they are a venture-backed company, that partnership will mean will do marketing activities to build on brand awareness and recognition in the US.

SI: Okay so that sounds really awesome stuff, you also talked to me about trying to get into the US school system — and I believe you may have struck a deal to do just that. Talk me through that deal.

Glenn Smith: So those deals directly with the schools, or the districts in the schools. So the US is made up of states obviously, and in those states you have schools that act by themselves, or they might act as a district.

And so some of those districts have been 10 to 15 thousand students, so we have struck pilot agreements where they will pay for Tali to be introduced into those schools, and you know one of those has eleven a half thousand students.

The other has twelve and a half thousand students.

And so initially Tali will be used by a small group within that school and will prove out the benefits of Tali to that small population and they will be rolled rolled out right through the Independent School District, and that will mean a much-needed and much-increased revenue for this company.

SI: Yeah that sounds fantastic. I mean more broadly, what do you ultimately think about the potential of the U.S. market? What conversations did you have during that trip to kind of reiterated that?

Glenn Smith: So we’ve been dealing with other partners, or potential partners.

One of those partners, and we don’t have an agreement with them yet so I won’t disclose who they are, but they are… and this is gives them away in a sense, they are the largest marketplace for education content in tools in the American market…

SI: Okay. So I guess I’ll start Googling furiously?

Glenn Smith: Yeah, that’s right — But I say that because of that they have their reach and leverage in the market is really important for us. The conversation we’re having, is not just to sit on that marketplace and for teachers and others just try to find it, but an actual co-marketing with actual objectives in that relationship where we promote Tali and try and encourage Tali be used by many many thousands of teachers in that North American market.

They’ve got to reach the distribution already, we need to place Tali well and co-market with that large organisation doing well, and get a whole lot of customers — hopefully very seamlessly through that partnership.

SI: Great. So just as outside looking in at Novita, it seems like the US is a sort of blue sky market where you know you plant sort of long term foundations down…but Australia seems like a place where you kind of give these quick runs on the board. I just wonder if you can talk me through what you’ve done in this market to date?

Glenn Smith: Yeah, absolutely. And so it’s been really important.

We’ve proven out the clinical maket here — so we have 174 psychologists here in Australia for example who we certify to use Tali. All that means is that we train them up to deliver Tali up to their patients and their patients might have attentive or attention-related issues.

They might be on the autism spectrum for example, or have other behavioural issues — so Tali is distributed through that channel.

We have well over fifteen hundred schoolchildren through different schools now who have used Tali, and they’re on paid — which is schools purchase Tali and deliver it out to the children.

We’ve collected all that data, which is really important to show that data in the North American context…that we’ve actually got proof here that it works.

We’re also looking at our insurance schemes here, such as the National Disability Insurance Scheme, where children with autism sit in that scheme and we’re able to deliver Tali, and that’s an insurance scheme so we can show how the insurance model works in Australia, and then give a view to the North American market about how health insurance model might work for Tali as well.

So proving out what we’re doing here in our home market is really valuable.

It also allows us to talk to other partners that we may not have otherwise spoken to. And they’re pharma companies who deliver our pharmaceuticals to children and have a real interest in seeing what’s happening in this new digital therapeutic area.

And so longer term we know is relationships with pharma companies could possibly potentially deliver very exponential results to Tali and Novita Healthcare.

SI: Yeah, it’s interesting you’ve touched on the pharmaceutical companies. I’m just wondering what sense you get about US healthcare providers and pharmaceutical companies — how are they thinking about this area?

Would it be fair to say that US providers are more on the ball when it comes to stuff, or Australian providers kind of thinking around the stuff as well?

Glenn Smith: The pharma companies as well advanced. The large companies, for example in North America and in Europe, have set up their own digital therapeutics divisions. They’re actually creating new digital products or acquiring new digital products and bring into their product portfolio.

So that’s already happening, and it’s really accelerated the last 12 to 18 months.

Physicians in the states have been well-trained to look at new technologies very early on, so they’re really receptive to putting in new technologies into clinical trials or using on their patients.

We’re talking to, for example, Duke University in the US, Stanford, the Texas Medical Center — where we’re trying to wrap up not only in clinical trials and keep validating our product, but using Tali on their clinical population.

So there are children in those clinics and we’ll use Tali on the children in those clinics.

Physicians here are receptive, but a little bit more conservative in their approach. So we’ve had to really take the time to educate them a little bit more, and really identify the type of children that Tali should be delivered to.

But that conservatism has allowed us to build up a really great customer delivery model and really get our customer experience right. So that’s really important going internationally.

We’ve proven out all these reliable indicators in terms of customer delivery model and customer experience and got that right…we have a greater chance of success in international markets.

SI: Yeah it’s interesting you talk about the conservatism of Australian providers — does that mean you have to work harder to prove up what you’re doing and the value of it?

Glenn Smith: I think so, it’s at both the provider or the school level.

If you think about it, we went to the U.S. in February-March and in a couple of conversations we had an independent school district who is going to use Tali — and that independent school district has 11,000 children.

For that amount of effort, it’s taken us a lot longer to acquire five or six schools here who don’t have anywhere near that population — so you can see the advantage of going to that market.

The same is true in a physician model or clinician model in that we go to these laws institutions like the Texas Medical Center, which has many thousands of young children and many hundreds of doctors and we have a relationship there all of a sudden with one relationship, potential relationship, we’re going to have more physicians in one go than we’ve got in the Australian market right now so we do have to work harder here.

But the advantage is that Australia is seen as the quality medical and one of the quality education development countries in the world both on technology level and the clinical and research level.

So we do stuff right here, we’ve got a major advantage in selling internationally.

SI: So if I’m in the US looking what Novita has done in Australia, I’m thinking ‘Okay it’s done this in Australia. Medical people in Australia have given it the okay with their conservative view…’ So they’re thinking that it’s all Hunky-Dory…

Glenn Smith: Yes, absolutely.

We do things really well. We validate all our research, all our clinical trials — that’s true for Tali and a whole bunch of companies here — so our R&D and our commercialisation is world class and is recognised internationally.

So we can then build on that and we can we can shorten the commercialisation or the sales cycle in international markets because we have that core advantage being Australian.

SI: Just finally, would it be reasonable to expect the more news from the Novita on the US front in the next couple of months, or are you kind of switching to more look at the Australian market — or maybe even both?

Glenn Smith: Yeah I think it’s reasonable to say that I’m excited about what we’re going to tell the market in terms of the United States and in what we’re doing there.

We’ll continue to complement that with you know what we’re doing here in the domestic level in the Australian market, but we’re also doing some really interesting early sales work in areas like Hong Kong and Singapore and other Asia-related markets.

And I look forward to informing the market appropriately about those as well.

SI: Great. Thanks for joining us.