Nightingale’s blood analysis introduced in Terveystalo's occupational health services

Translation: Original comment published in Finnish on 8/31/2023 at 6:00 am EEST.

Blood analysis will be introduced as part of regular health checks and related follow-up examinations in Terveystalo’s occupational health services. Terveystalo's occupational health services cover more than 700,000 workers and the closer cooperation could bring Nightingale significant new business. If successful, the partnership will also provide the company with a reference implementation for wider disease risk identification and prevention. The news is obviously positive for Nightingale, but at first glance it does not put significant upward pressure on our growth estimates. We will review our estimates and our view of the company by September 29, when the company publishes its annual report.

Cooperating to build a reference implementation of Nightingale's vision of a preventive healthcare chain

Nightingale had already announced in June that it would deepen its cooperation with Terveystalo, so the news was not a surprise, although the details of the new cooperation were new. Nightingale uses technology to identify risks and prevent lifestyle diseases. The company is already able to identify a wide range of disease risks from a single blood sample. Using this information to reduce the risk of disease requires health promotion interventions, for which the company intends to rely more heavily on partners. The expanding cooperation with Terveystalo is one such partnership.

Terveystalo will introduce Nightingale’s technology in regular health checks for its occupational health customers. Nightingale's blood analysis is used to identify disease risks, which Terveystalo's healthcare professionals work to reduce through measures based on existing guidelines. In addition, Nightingale's blood analysis will be used to monitor the effects of the measures. If successful, the collaboration would provide Nightingale with evidence of the use of its technology in nationally significant preventive healthcare activities. If the model proves to work, we believe that the cooperation will give the company clear leverage for new commercial negotiations to introduce a similar model internationally. The introduction of Nightingale blood analysis in occupational health checks at Terveystalo is expected to start in January 2024, so the reference value of the collaboration will only be more clearly established during 2024. In the light of Terveystalo’s comments in the press release, the benefits of using Nightingale's blood analysis focus on improving the quality of service and clarifying the work of professionals.

The cooperation can also be commercially significant for Nightingale

Terveystalo provides occupational health services to more than 700,000 employees. We estimate that only a proportion of these people are covered by regular health checks each year. In addition, we estimate the cost of blood analysis to be below the list price of Nightingale's research sample analysis (EUR 19/sample) due to the high volume and reference value. Assuming that the collaboration would produce 70,000-350,000 blood analyses per year at a unit price of EUR 10-15, it would generate roughly EUR 0.7-5.3 million in annual revenue for Nightingale. This would bring a good growth leap to Nightingale’s revenue level (FY2022: 2.2 MEUR). We note that this estimate is indicative as, in the absence of more precise data, it relies heavily on assumptions. Our estimates already include an expectation of strong growth for Nightingale, so there is no immediate pressure for revisions. For Terveystalo, the cooperation is naturally smaller given the much bigger size of the current business.