Neofect shares on fire on U.S. telemedicine reimbursement program

2020.03.18 11:56:34 | 2020.03.18 16:01:20

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Shares of Neofect are on fire in Seoul Wednesday on expectations of increased revenue upon news that telemedicine service for patients contracted with COVID-19 will be covered by health insurance in Massachusetts, U.S.

The Kosdaq-listed stock price survived the broad secondary index’s 5.6 percent loss by finishing the day 30 percent higher, the daily limit-high, at 3,675 won ($2.97).

The company recently scored a nod from the U.S. state government that medical expenses related to its remote medical care solution are eligible for reimbursement and is focusing on expanding its reach to local patients, according to industry sources.

Earlier, the Korean IT solutions company acquired Boston-based clinic Community Rehab Care for $1.1 million to increase its presence in the U.S. The rehab clinic founded in 1996 is dedicated to patients with brain damage.

Neofect will provide telemedicine services around the clinic and plans to apply its remote rehab solutions to meet the needs to increase its business competitiveness in the region. COVID-19 has so far killed 100 people across the U.S. and nearly 85 percent of the deaths were over 60 years of age. President Trump signed an emergency budget of $8.3 billion approved by Congress to respond to the outbreak and the budget package includes the federal government’s support for telemedicine in the federal health insurance system.

The news also boosted shares of U.S. companies in the similar business. Teladoc Health, a leading telemedicine provider in the U.S. saw its stock price rise 15 percent over the past month.

By Minu Kim

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