At the end of September, Epocrates' worldwide user base for its mobile drug reference tools topped 1.4 million healthcare professionals, of which 340,000 are US physicians, according to a recent SEC filing. The company says that figure makes up more than 50 percent of all physicians in the US. For its interactive services business, Epocrates has had the 20 top pharmaceutical companies as clients as well as 350 individual brands. Almost all of its customers are based in the US.
Epocrates said that the number of its users who are US physicians increased by about 13 percent: At the end of September 2010 the company boasted 300,000 US physician users, and that number climbed to 340,000 by the end of September 2011. Epocrates said that the substantial growth in physician users was because of physician adoption of iPhone and Android devices. While Epocrates expects its overall user base to increase, it will do so by a lower rate than was experienced this past year. In other words, it seems Epocrates believes that the rate of physician adoption of smartphones was unusually aggressive over the course of the last year and it may slow down over the course of the next 12 months.
Not surprisingly, the majority of Epocrates users have downloaded its free apps, while users who paid for a subscription to Epocrates premium offerings decreased from 15 percent at the end of September 2010 to 13 percent at the end of September 2011.
"We expect paid users to represent a decreasing percentage of total active users," Epocrates stated in its filing. "As a result, we expect revenues from subscriptions to our premium products to decrease as a percentage of total revenue in the future."
Epocrates stated that it was still in the "beginning stages" of launching a number of new interactive services, including SmartSite and Epocrates App Network. SmartSites will be websites that host content from Epocrates pharmaceutical company clients. The App Network will include customized medical apps developed by Epocrates for the iPhone and iPad. In late October Epocrates launched a redesigned version of its drug reference tool that aims to make the company's interactive services more visible to potential users: EssentialPoints, Contact Manufacturer, Mobile Sample Closet, among them. The new app also includes an app directory that Epocrates says could help its selected partners reach its extensive physician network.
The filing did not include too much new information about Epocrates EHR rollout, but it did note that it had spent about $5.4 million in sales, marketing, research, and development for its EHR product during the first nine months of 2011.
Other financial metrics from the quarter: Epocrates brought in $26.6 million in net revenues for the quarter ending in September, up about 10 percent from the three month period ending on September 30, 2010. Net income for the quarter topped $680,000, up from $336,000 the year before. Total cash, cash equivalents and short-term investments increased from $54.7 million at December 31, 2010 to $84.2 million at September 30, 2011, in part thanks to the company's IPO.